One of the challenges to California dairy producers is the high price of feed they need to pay relative to other dairy states. This has not become any easier as production of one of their staple ingredients, alfalfa has trended lower in California in recent years. UC Davis Agricultural Economist Dr. Dan Sumner says many alfalfa acres have transitioned to tree crops.
Sumner… “It's steadily declined over the years. Now, it still makes sense for lots of growers to put alfalfa, even like a four year stand in a rotation. And some of those years they'll make good money. Some years it'll be tough, but including alfalfa, which has some very nice features in terms of nitrogen fixation. And to mix that in with a vegetable crop or processing tomatoes or some other crops can make sense.”
Now alfalfa acres have another rising commodity to compete with: water.
Sumner… “If I can sell water for a $200 an acre foot, that's far too expensive to think I could make a profit, putting that water on another cutting of alfalfa hay. You do the arithmetic on that. And without killing the hay crop, I get fewer tons of hay, but hay is not that expensive that I can afford to put really expensive water.”
Sumner says dairy feed economics are all about tradeoffs between different products that offer similar nutrition.