Factors Impacting Alfalfa Hay Prices in Seven Western States: An Explanatory Model Used for Extension Forecasting

Dillon M. Feuz and Ryan Larsen

Western Economics Forum, 2023, vol. 21, issue 01

Abstract: Alfalfa is an important crop for the seven western states in the U.S. However, price reporting is inconsistent across the states and there is no futures market for alfalfa hay. This creates price uncertainty within these hay markets. This paper looks at how closely alfalfa hay prices in one state track with hay prices in another state. Further, the paper seeks to determine what factors have influenced alfalfa hay prices over time. Alfalfa prices for the last 30 years, 1992-2021, for each of the seven western states of Arizona (AZ), California (CA), Idaho (ID), Nevada (NV), Oregon (OR), Utah (UT), and Washington (WA) were analyzed and compared. The hay prices between the states are correlated between 0.85 and 0.96. California and Oregon had the highest prices over time and Idaho and Utah had the lowest prices. A regression model was developed to explain what factors influence western state alfalfa hay prices. The findings indicate that larger May 1 hay stocks for the seven-state total leads to lower alfalfa hay prices. Additionally, increased hay exports increase hay prices. Higher corn, feeder cattle and milk prices all positively impact alfalfa hay prices with corn having the biggest impact and milk prices having the smallest impact.

Keywords: Crop Production/Industries; Demand and Price Analysis (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ags:weecfo:337176

DOI: 10.22004/ag.econ.337176

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