Larger exports certainly were a factor as Japan, Korea, and Mexico have become important buyers of top quality hay. Horses certainly are strong competition for high quality hay, although it is not clear that horse demand has grown. Less beef feeding in the West probably has lessened competition somewhat, although beef demand may have a greater role in prices of lower quality hay. Much of the uptrend in alfalfa prices appears to be related to the region's growth in milk production. The West can and is expanding alfalfa production.
Recent prices make alfalfa much more competitive for land and water.
However, long-term price prospects are for Western hay prices that will be significantly higher than in the past, even if prices slip from the 1997 peak. Prices within the region have become much more integrated as brokers comb the region for relative bargains. Tightness in Western hay markets even appears to be spilling over into the hay markets of the Northern Plains. The West is becoming a potential customer, rather than competitor, for Northern Plains hay sellers. Alfalfa price increases will have several implications for the dairy industry, particularly in the West.