Beef and Hay Market Snapshots

With first quarter’s Market Snapshots here is Northwest Farm Credit Services Michael Stolp sharing the beef snapshot.
Stolp: “Cattle markets stabilized after a volatile second half of 2015. Prices will continue moving toward equilibrium in 2016, with traditional cyclical price trends anticipated. Although a strong U.S. dollar presents export challenges, rising U.S. beef production and lower prices support USDA forecasts for higher beef exports in 2016. U.S. cow numbers are expected to increase for the third consecutive year.”
Beef prices have moderated since the end of the year with less volatility and more seasonal patterns driving price movements. Stolp continues with the hay snapshot
Stolp: “The Northwest hay market is lackluster, challenged by a shortage of quality hay, low dairy profitability, tepid export markets and excess hay inventories. After a challenging 2015 production season, the region continues to experience a general shortage of quality hay. Conversely, stocks of lower quality hay are relatively high and finding little marketplace interest. Hay growers’ strategy for reversing near breakeven returns in 2015 includes quality versus quantity in 2016.”
The snapshot continues with stating that USDA estimates that overall alfalfa hay production across the Western United States was down 6.3 percent in 2015, primarily due to lower acreage. Drought conditions and a lack of financial incentive drove many growers to stop watering or to plow out alfalfa stands, particularly in California and Nevada. Production declines in the West were led by a 22.3 percent drop in California.