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Hay, Alfalfa Prices Stun N.M. Farmers

LAS CRUCES — Hay prices are spiking in Dona Ana County and throughout the state — part of a larger-scale disruption that’s stretching across the West, experts said.

Not only is the price soaring, but the crop is becoming increasingly scarce. The situation is impacting the pocketbooks of horse owners and dairy farmers across the area.

Dean Horton, owner of Las Uvas Dairy southwest of Hatch, said he’s paying as much as 30 percent to 50 percent more for forage crops, which include alfalfa, than a year ago. Even locating hay has been a challenge, he said.

“It’s a mess,” he said. “I’ve been doing it 31 years, and this is a first for me.”

A perfect storm

Behind the skyrocketing prices is a perfect storm of factors that originate locally, regionally and, in at least one instance, internationally, growers and experts said.

Part of it stemmed from a extreme, nearly four-day freeze that struck a multi-state region in early February, Horton said. That freeze dramatically hurt the first harvest of alfalfa, a crop which stays in the ground several years and is cut a handful of times each year, and another forage crop called triticale, a hybrid of wheat and rye, he said.

The first and second alfalfa harvests each summer are considered the best-quality, said Justin Boswell, executive director of the New Mexico Hay Association. They usually fetch a premium price, which usually declines with subsequent cuttings. But that wasn’t the case this year.

“This year, most farmers are seeing hay prices equal to those higher-quality cuts or greater than” the first cuttings, he said.

Also factoring in locally is a shift away from alfalfa. There’s been a gradual shift over the past five years toward more pecan acreage, growers noted.

But heightening that effect this year is a shift on other acreage away from alfalfa and toward cotton, thanks to a couple of factors, growers have said. Record cotton prices is one of them, Horton said.

Also, going into the spring planting season, Do-a Ana County farmers were anticipating a small supply of river water. Cotton is less water intensive than alfalfa, growers said.

The official cotton acreage numbers aren’t yet available from the U.S. Department of Agriculture.

Not only is the drought affecting New Mexico, but it’s also reaching into other states, affecting their hay supply, Boswell said.

“I’d love to say there’s going to be some relief in sight, but high hay prices are probably going to extend into next year,” he said.

Not a pretty picture

Boswell said hay is selling to dairies on the eastern side of the state at about $220 per ton.

In mid-July last year, alfalfa sold for about $157 per ton, according to the National Agricultural Statistics Service.

The cost of smaller bales — often bought by people who own just a few horses — has ranged from about $8 to $12 a bale, Boswell said.

“Probably last year at this time of year, you’d be looking probably at $7 a bale, maybe $8,” he said.

In addition, other pressure on the market stemmed from alfalfa that was being purchased by Japan from California and Washington, Horton said. California moved into Arizona’s market, which New Mexico also relies upon.

Jason McClure, owner of Landmark Mercantile in Mesquite, said he’s seen a 30 percent increase in the cost of alfalfa the purchases for resale over the past year. That’s mostly from freight costs alone, he said. The problem has escalated during the past six months.

“We just have to take it and deal with it and move on,” he said. “If there’s less product out there, there’s going to be a higher demand and a higher price.”

McClure said the price for a 150-pound bale in his store is selling for about $24 now, compared to $14 a year ago. He said the public often doesn’t understand that farmers are facing increasing production costs, such as fertilizer and fuel expenses.

“Personally, I’m having to dig a little deeper into my pockets to find a little more money because I’m committed to feeding my horses alfalfa,” said Don Patterson, vice president of the Back Country Horsemen in Las Cruces.

Patterson said he owns two horses so the impact is not as pronounced.

“But for somebody with 10 or 20 horses, it’s quite a bit,” he said.

How is Horton coping?

“We’ve switched to oats and straw, whatever you can find. We’re just doing whatever we need to do to get it done.”

Horton also said he has contracted with farmers to grow Sudan grass in the late summer to help fill the hay void. But, the dairy industry struggled in 2009 and 2010 because of the economic recession and isn’t in the best position to cope with another economic hit, he said.

“It’s not a pretty picture,” he said. “The end result will be, as long as we have these high feed prices, that milk production in this six-state area is going to be down,” he said.