Depending on your geography, the 2025 forage season is underway or in the final planning stages. Regardless of where you crop, questions regarding ag and trade policies, input costs, labor, planting, production and prices may linger. Here’s a review of what we do know about hay and forage markets as you continue to look for answers.
U.S. Drought Monitor maps indicate regional moisture conditions changed little to start March, with areas under moderate or more intense drought still double what they were one year ago.
As of March 4, approximately 37% of U.S. hay-producing acreage (Figure 1) was considered under drought conditions, down 2% from a month earlier. The estimate of alfalfa hay-producing acreage (Figure 2) under drought conditions declined slightly to 51%, down 1% from a month earlier.
Arizona, South Dakota, Wyoming and Nebraska remain the states with highest drought ratings.
A snapshot of hay prices
USDA price data for 27 major hay-producing states is mapped in Figure 3, illustrating the most recent monthly average price and one-month change. The lag in USDA price reports and price averaging across several quality grades of hay may not always capture current markets, so check individual market reports elsewhere in Progressive Forage.
Dairy hay
The top milk-producing states reported an average price of $242 per ton for Premium and Supreme alfalfa hay in January 2025, a $12 increase from December 2024 (Table 1). The average price was $32 lower than January 2024.
Alfalfa
The U.S. average price for all alfalfa hay dipped $3 in January to $161 per ton. Compared to a month earlier, prices were lower in 12 of 27 major forage states, with the largest declines in California, Montana, Nebraska, Nevada, New Mexico and Wisconsin. Prices were up in 10 states, again led by increases in New York and Pennsylvania.
With few exceptions (Kentucky, Missouri, Nevada, New York, Ohio and Pennsylvania), year-over-year alfalfa hay prices were down substantially, with the U.S. average down $41 compared to January 2024.
Other hay
At $140 per ton, the January 2025 U.S. average price for other hay was down $5 from December. Prices rose in just five of 27 major hay-producing states, with the largest month-to-month increase in Iowa. Declines were recorded in 18 states, led by Montana and Wyoming.
Expanding the timeline, the January 2025 U.S. average price for other hay was $34 less than a year earlier, with declines of $60 or more in Colorado, Minnesota, New Mexico, Texas and Wisconsin. In contrast, prices rose slightly in Michigan and Ohio.
The gap between average U.S. alfalfa and other hay prices was about $21 per ton in January, maintaining the narrowest monthly spread in five years.
Organic hay
The USDA’s latest National Organic Grain and Feedstuffs report offered a small sample of price summaries for spot transactions (free on board [f.o.b.] farmgate). For the two-week period ending March 5, Supreme alfalfa in 3x4x8 bales averaged $325 per ton, with small squares selling for $10 per bale. Wheat straw in 3x4x8 bales averaged $200 per ton.
Exports
At deadline, tariff implementation on Canada and Mexico was delayed, but some tariffs were imposed on China. What, if any, retaliation and implications in agricultural markets will play out in your tractor or truck cab.
At 155,286 metric tons (MT), January exports of alfalfa hay remained fairly steady since last June. China remained the top buyer, importing 75,725 MT during the month, about 49% of the total. January shipments to Japan also maintained a steady eight-month trend at 28,946 MT, 19% of the total for January.
Exports of other hay were also steady, at 87,737 MT in January. As usual, Japan and South Korea led buyers in the other hay category: Japan purchased 44,693 MT during the month, followed by South Korea’s 23,173 MT.
U.S. exports of most categories of alfalfa cubes and meal were up to start the year, totaling about 13,500 MT. Japan imported about 57% of the total.
Regional markets
Regional hay sales and USDA Ag Marketing Service market reports picked up as March began.
- Midwest: In Iowa, all grades of hay sold steady in a light test. Trade was low with light to moderate demand for light offerings.
In Kansas, demand was light and trade remained slow to moderate. Prices were mostly steady with some downward pressure on grinding alfalfa and grass hay. Hay supplies were plentiful with a few folks thinking of getting rid of last year's hay before it is time for a new crop.
In Illinois, better grade of hay sold mostly steady, with average hay selling lower. Trade was active with moderate demand.
In Missouri, the roller coaster ride of the changing seasons was well underway. Hay prices were unevenly steady on most types of hay; extremely high-quality equine hay was steady to firm. The supply of hay was moderate to heavy, and demand was light to moderate.
In Nebraska, alfalfa hay, grass hay and alfalfa pellets sold steady; ground and delivered hay was steady to $5 lower. Demand was mostly light, instances moderate for hay bales. Lots of bales of feed are still waiting to be sold.
In South Dakota, movement of hay was light to end February.
- East: In Alabama, hay prices were steady, trade moderate with moderate supply and good demand.
In Tennessee, there was a noted decline in demand for hay commodities, primarily on high-quality alfalfa being bought/sold within the state. Movement of grass hay continued to be slow
In Pennsylvania, heavy rains hampered regular auction hay movement.
- Southwest: In California, trade activity and demand were moderate. Retail hay demand was good. Dairy hay demand was moderate. Export hay demand was very light. The first cutting of new alfalfa was approaching
In Oklahoma, demand for hay was slow to steady, and prices remain steady. There was still a lot of holdovers and barns full of hay.
In Texas, hay prices were firm to $10 higher across all regions, with limited supplies on higher-quality hay being the largest driving factor. There was still adequate supplies of lower-quality hay on the market.
- Northwest: In Montana, hay continued to move as reductions in prices spurred sales. Producers continue to market old-crop 2023 hay as the carryover from that year was very heavy. Many producers hoped this tightens supplies of hay going into the 2025 marketing year.
In Utah, producers were selling out of hay from last season, with most sales to ranchers buying multiple loads in fear of a drought.
In Idaho, hay movement increased significantly, especially for feeder hay, as more farmers were selling supplies to get ready for next growing season.
In the Washington-Oregon Columbia Basin, all grades of hay sold steady. Trade remained slow with light to moderate demand. Large supplies of unsold inventory weighed on the market. North-central Oregon showed limited movement with a few sales for horse hay. In Klamath Basin, some first- and second-cutting hay was being moved, with producers waiting for demand to pick up.
In Wyoming, demand picked up with more hay moving in small loads.
In Colorado, prices remained unchanged on all hay types. Alfalfa standing offers in the northeast dropped to $100 on 90% dry matter.
Other things we’re seeing
- Dairy: Delayed implementation of new tariffs on Canada and Mexico provided a somewhat better outlook for dairy exports, helping slow the decline of milk futures prices. Nonetheless, prices were forecast to decline into summer.
- Fuel: National average fuel prices were slightly lower to start March, according to the U.S. Energy Information Administration (EIA). The U.S. retail price for regular-grade gasoline averaged $3.08 per gallon on March 3, down 4.7 cents from the previous week and 27 cents less than the same week a year earlier. The average U.S. on-highway price of diesel was $3.64 per gallon, down 6 cents from the prior week and almost 39 cents less than early March 2024.
- Trucking: Spot flatbed prices were mostly higher to start March, down in the West but higher elsewhere and averaging $2.52 per mile nationally, according to DAT Trendlines. Regionally, average spot prices per mile were: Southeast – $2.52, Midwest – $2.63, South – $2.41, Northeast – $2.46 and West – $2.17.
- Other costs: The USDA’s January index of prices paid for commodities and services, interest, taxes and farm wages were mixed. Machinery costs were unchanged from December but up 1.3% from January 2024. Compared to a month earlier, fertilizer prices were mixed, with higher prices for potash and phosphates offset by lower prices for nitrogen. Total feed prices were also mixed.
- Interest rates: Fourth-quarter 2024 interest rates reported by Federal Reserve districts were down, but USDA Farm Service Agency (FSA) interest rates for farm operating loans (5.5%) and direct ownership loans (5.875%) were higher for March. The Fed’s Open Market Committee was scheduled to meet after Progressive Forage’s deadline.
