Cortez Journal

Alfalfa growers face tough times in market

Sept. 11, 1999

By Jim Mimiaga

A successful farm operation is forever at the mercy of a whimsical beast known as Supply and Demand. And this season that incorrigible monster's sidekick -- unrelenting rain -- has joined in to create a dire market situation for local alfalfa growers.

"We're seeing some good hay, but a lot of it has suffered damage from all of the rain," said alfalfa broker Marti McCabe of The Hey Hay Ladies.

Growers and brokers are reporting that this year's harvest will be of lesser quality and quantity, as above average rainfall has many farmers still waiting for wet alfalfa to dry out. Typically by this time the county's 160,000 acres of alfalfa farms produce a third rotation of the crop. This is unlikely to happen now unless the weather dries out and the annual fall freeze ritual is substantially postponed.

That means farmers will feel the hit in their pocketbooks as less than desirable alfalfa, much of it suffering from mold, hits the market for a lesser price. Quality hay with a high nutritional value and no molding sells for top dollar, about $90 per ton, to dairy farmers across the west, especially Texas, McCabe said. (Yields range from between two and five tons per acre). The low supply this year of the prime grade alfalfa has created high demand as dairy buyers scramble to buy what there is.

"It's going fast, and there is not a lot of it right now locally, so we are starting to see the effect of all the rain (on the alfalfa market)," said Don Woods, broker and owner of Colorado Hay and Feed in Cortez. "The second cutting especially suffered, but if there is a break in the weather, and the third cutting dries out nicely we will see a rebound."

If not, up to 50 percent of the local alfalfa crop this year will likely suffer some damage, he said.

The agriculture market is interdependent, and difficult to predict. Diary cows require alfalfa feed that has a very high nutritional value (relative protein feed value of 160 plus is the benchmark) in order to produce milk that meets the standards of today's dairy market. That's the product Montezuma County alfalfa growers are shooting for because of its good price, but this year producing it was nearly impossible due to the constant rain.

"I have heard from farmers that the last time it has been this wet for this long was in 1957," said Kenny Smith, CSU cooperative extension agent for Montezuma County. "There is still a lot of second cutting hay still lying in the field waiting to dry."

Farming is plagued with Catch 22s, and double-edged-sword-type decisions -- daunting commitments that are exaggerated by atypical weather cycles like we're experiencing now. For example, prime alfalfa must be cut and baled before it flowers and dips in nutritional value, but this cannot be done if it will lie in the fields, soaking in rain water. The result is lower quality alfalfa that has either grown too long, or is swathed and sits collecting mildew in the fields. (Wet alfalfa that is baled generates heat and may spontaneously combust, plus the wet conditions create a toxic mold that can hurt horses).

"It is safe to say that at this point (alfalfa) farmers here are losing an average of $40 per ton this year compared to last year," McCabe said, adding that the average farmer must pull in at least $65 per ton to break even and prepare for next season.

"Farmers who cut hay when they were supposed to now have black hay lying in the field. But if it grows to bloom, it loses 30 points in nutritional value; you can't win this year."

So far the lack of prime alfalfa here has pushed up the price for the little there is around $10 per ton, she said.

The market for grinder hay, or lower quality alfalfa, will be of high supply this year. And, brokers hope, that may be the saving grace for area producers. Feed lots buy up this type of product, add supplements, and sell it as food for (beef) cows and sheep, but it is bought from farmers at a lower price, between $65 and $80 per ton depending on quality.

Factor in the fate of alfalfa crops in Arizona, New Mexico, Utah and California. If those alfalfa crops suffer as those in Montezuma County have, then the demand for the lower quality crop may push up that price and help cover farmers' losses. But dealing in speculative futures is risky, and only time (and weather) will tell what the market will bear.

"On an ordinary year Montezuma Valley hay is of very good quality," McCabe concluded. "But right now dairy buyers can get it elsewhere at a better price," because of market fluctuations created by the above-average rainy weather here.


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