Exports from West Coast up in 2015 — down to Japan

Exports from West Coast up in 2015 — down to Japan

According to the U.S. Department of Commerce, baled hay and straw exports from the West Coast from July through November 2015 were 3,582,640 short tons, up 7 percent from the same period in 2014. The main reason for the increase was a 31 percent increase in alfalfa hay exports to China and stronger alfalfa hay exports to the United Arab Emirates and Saudi Arabia. Hay and straw exports from the West Coast to Japan were down 3 percent in 2015 compared to 2014, according to Japanese Port data. The work slowdown at West Coast ports early last year had a big impact on shipments, as Japanese buyers were forced to purchase hay in other parts of the world. These supplies, along with heavier shipments to Japan when the West Coast labor issues were resolved, resulted in an oversupply situation that reduced West Coast hay shipments to Japan in late spring and summer.

Saudis buy more U.S. alfalfa farmland

Saudis buy more U.S. alfalfa farmland

In an apparent effort to save their own water, Saudi Arabia is buying farmland in the Southwest to grow alfalfa and ship it back to their country’s dairies. According to the CNBC report, the Saudis recently purchased 1,790 acres of farmland in Blythe, Calif., for nearly $32 million. Blythe is in an agricultural area that borders the Colorado River.

The Blythe-area purchase is not the first. A couple of years ago, 10,000 acres of farmland in Vicksburg, Ariz., were purchased by Almarai, a large Saudi food company. Again, alfalfa was the end game.

The Saudi purchases are in areas where water restrictions are comparatively low. In Vicksburg, there are virtually no regulations on groundwater use, according to the CNBC report. Likewise, in Blythe, the Colorado River provides ample “first rights” water resources.

As one might imagine, this trend is rubbing some people in the area the wrong way. Drought and water issues have plagued the region for several years. Some officials feel this business model is analogous to exporting an already limited supply of water. A public meeting was held last week to hear the concerns of residents.

Saudi-purchased land or not, a lot of alfalfa production in the region is grown for export to other countries. Apparently, the Saudis feel the safe play is to control the entire production system, ensuring a consistent supply of feed to their dairies.

December hay prices hold steady

December hay prices hold steady

In last week’s USDA Agricultural Prices report, December hay prices held about as firm as firm can get. The all-hay price held steady from November at $142 per ton while alfalfa hay did the same at $150 per ton (see table below). Hay other than alfalfa increased slightly from $127 to $129 per ton (data not shown).

The USDA price averages account for all qualities of hay sold and the final U.S. estimate is a volume-weighted average. In other words, it’s not a simple average of states. Those states with the most volume sales will impact the final U.S. dollar value more than those states with fewer sales.

The December alfalfa price is $30 per ton lower than one year ago. The largest month-to-month price movement among states included Michigan (minus $40), New York (plus $25), Pennsylvania (minus $22), Oregon (minus $20) and Oklahoma (plus $18).

 

The USDA average November price for alfalfa fell from $156 to $150 per ton.

The USDA average November price for alfalfa fell from $156 to $150 per ton. This is the lowest November price since 2010 and was $32 below the November 2014 value.

The USDA market price figures account for all qualities of alfalfa hay sold and are weighted based on volume. The lower month-to-month November price is not atypical; only once in the past 10 years did the November price exceed that of October.

The largest per ton price decline for alfalfa hay came from Colorado (-$20), Kansas (-$15), Minnesota (-$15), New York (-$13) and Ohio (-$10). There were some states that bucked the national trend. Those with higher November prices included: Idaho (+$20), Michigan (+$20), Oregon (+$15) and Oklahoma (+$12).

The November all-hay price movement was similar to alfalfa with a month-to-month price drop of $4 to $142 per ton.

This Year Looks Just Like 1997’s Insanely Terrible El Niño

This Year Looks Just Like 1997’s Insanely Terrible El Niño

This year’s winter “will definitely not be normal,” NASA has said. It is, however, awfully familiar.

It’s not just the sea surface heights, like those above, that look alike—NOAA and NASA both confirm that they’re also seeing wind patterns and water temperatures that look eerily similar to the ‘97 conditions.

Researchers have been noting the budding similarities between 1997’s El Nino and our current conditions since early last year. With El Niño definitely having kicked off now though, it will almost certainly peak this winter. So what did we get last time an El Niño that looked like this hit hard in the winter?

1997-1998 was one of the warmest and wettest winters we’d seen over a century. There were record-breaking levels of snow, sleet, and rain all over the country. There were deadly floods in California, intense ice storms in the East, and a rash of tornadoes in Florida.

Exactly what particular cocktail of winter storms El Niño is mixing this year is still unclear—but if history is any guide, it will be a tough one.

Top image: NASA Earth Observatory map by Jesse Allen, using Jason-2 and TOPEX/Posideon data provided by Akiko Kayashi and Bill Patzert, NASA/JPL Ocean Surface Topography Team.