Mike Schuppe, along with his family, raises corn and wheat, as well as alfalfa, oats and millet, which are baled and sold as livestock feed.
Schuppe Hay Farms LLC, is located in Logan County, Colorado, in the state’s northeast corner, on sprinkler-irrigated land in the basin of the South Platte River, less than two hours from Denver. (The above photo is courtesy of Kamathy Schuppe.)
Alfalfa and hay growers are adjusting to two macro factors, and one possibly temporary factor that, together, are putting pressure on alfalfa prices, Schuppe told High Plains Journal.
One is the ending of the drought over the past couple of years. During the drought, demand and therefore prices for alfalfa and other forage soared, leading to overproduction that glutted markets when the rains returned.
Another possible factor affecting alfalfa and forage prices in the Midwest, he believes, comes from the Pacific Northwest growing region, which normally exports a lot of forage overseas.
“I don’t know what happened, but it seems like a lot of alfalfa and forage from the Northwest moved into the Midwest beginning about two years ago,” Schuppe said.
The main long-term affect on prices is the continuing consolidation of dairies, he said. Dairies take about two-thirds of the alfalfa crops each year. Alfalfa is a high-quality, preferred feed for dairy cows, although it remains more expensive than soymeal, dried distillers grains with solubles and corn, with which it is often mixed in dairies.
The number of licensed United States dairy herds fell by more than half between 2002 and 2019, according to the U.S. Department of Agriculture. The rate of decline in overall dairy numbers accelerated even as milk production continued to grow. Production has been shifting to larger but fewer farms. Larger operations realize lower costs of production, on average, and those advantages persist.
Despite the decrease in the number of farms, total milk production continued to rise, reaching 226.4 billion pounds in 2022, up from 215.5 billion pounds in 2017, as dairies learn how to produce more with fewer inputs. This increase is attributed to higher milk yields per cow and the consolidation of smaller farms into larger operations.
“It’s not like it used to be 10 years ago,” Schuppe said. “The relationships with my dairy customers feel different, more corporate.”
One way dairies reduce their input costs, Schuppe said, is by buying up irrigated land around themselves and growing their own forage, so this trend puts a downward pressure on prices.
Alfalfa growers can still make money in this market, however, Schuppe said. Schuppe Hay Farms LLC exports about 50% of its feed crops out of state – to dairies, horse farms and Amish goat milk producers. Their farm, 3,000 acres, gets four cuttings of alfalfa per year from May to October.
From forage crops raised to supplemental business ventures
Diversification is one recommendation Schuppe has for anyone in agriculture. In 2013, the Schuppes started an excavation company, which focuses on irrigation-related ditches, ponds and pipelines. As he waits for markets to adjust and prices to stabilize, Schuppe remains optimistic.
“To be successful, you have to know the commodity and know the market,” he said. “It’s the quality of your relationships that will grow your business. As long as you put in the effort to maintain a high-quality product, the demand will always be there.”
It makes sense to focus on quality, as Schuppe does, even at the expense of yield. However, according to Peter Robinson, writing in Hay and Forage Grower recently, there may be good opportunities for dairies even with lower-quality hay. The growing conditions of the past year in the Midwest have resulted in larger amounts of lower-nutritional-value alfalfa hay, Robinson said. “Could this be an advantage to dairies?” he asked.
Robinson’s answer is yes, if the nutritional elements in the lower-quality hay are carefully balanced with other types of feed. While lower quality hay has more less-digestible fiber and less easily-digested carbohydrates and protein, it also encourages more ruminative chewing, which buffers rumen fermentation and can help prevent acidosis.
David Murray can be reached at journal@hpj.com.
