China is also a factor in the hay market. "The Chinese dairy industry has grown tremendously and they need Western hay," says hay market analyst Seth Hoyt. "They’re tough on price, but if they don’t buy from us, from where will they buy? It will be interesting to see what China does."
With the strong market for alfalfa in 2011, Hoyt looks for considerably increased plantings in the fall of 2011 and more acres in production in 2012. "I look for the market to be lower, but I don’t look for it to take a drastic drop unless milk prices again go down to unprofitable levels," he says.
"If milk prices hold at profitable levels, I think the hay market in 2012 will be lower than 2011 but not drastically lower. Milk prices will be key."