Market analysis: Stability remains as spring approaches in agriculture sector

Hay and feed markets are currently in a holding pattern as the winter season begins to wane and spring approaches. Producers are cautiously managing their inventories due to lingering drought conditions and overall economic uncertainties. The market remains stable, with cost pressures and weather conditions playing a significant role in shaping expectations for the upcoming spring season.

Moisture patterns across different regions of the United States continue to be mixed. While the Midwest and Northeast are experiencing dry conditions, the Southeast is relying heavily on supplemental feeding. The Western regions, particularly the Pacific Northwest and Great Basin, are monitoring snowpack levels closely as early deficits persist. With about one-third of hay acreage still affected by drought, the market is exercising selective buying strategies, closely monitoring inventory levels, and anticipating late-season storms that will set the tone for early spring.

As of January 27, approximately 39% of hay-producing acreage in the U.S. was deemed to be under drought conditions, a slight improvement from the previous month. In comparison, around 27% of alfalfa hay-producing acreage was under drought conditions, a decrease of 2% from the prior month.

The price of hay varies across different states, as indicated by USDA data for 27 major hay-producing states. The prices reflect the most recent monthly average and one-month change. Price reports lag behind current market conditions, and averages encompass various quality grades of hay. Therefore, market participants are advised to refer to individual market reports for more up-to-date information.

For dairy hay, the average price in the top milk-producing states for Premium and Supreme alfalfa hay was $211 per ton in December 2025. This represented a $5 decrease from the previous month. Prices for alfalfa hay and other hay also experienced fluctuations in December, with some states reporting decreases and others reporting increases compared to the previous month.

Exports of alfalfa hay and other hay held steady as global demand remained selective due to currency fluctuations and freight costs. The top buyers for alfalfa hay were China and Japan, with varying levels of imports. The U.S. experienced declines in exports of alfalfa cubes and meal in November, with Japan being the primary importer.

Regional hay markets are generally stable as the winter season winds down. Most areas report adequate supplies, with selective premiums observed for high-quality alfalfa. Beef demand remains conservative as producers manage their feed budgets, while freight and fuel costs continue to influence prices. Interest rates are affecting forward contracting decisions, and regions are closely monitoring late-season weather patterns and inventory levels in preparation for early-spring buying.

Overall, the forage market remains cautious and stable as producers navigate through uncertain economic conditions and weather patterns. Planning and inventory management are crucial as the industry prepares for the transition into the spring season.