U.S. dairies produce more than 20 billion gallons of milk a year, milk that is pasteurized and sold or else turned into cheese, butter, cream, ice cream, and and other dairy products, including infant formula. All those cows that produce all that milk consume a lot of hay—and hay is getting pricey because of competition from foreign buyers. Hay exports might not seem very exciting, but the subject provides insight into some serious food and agro-security issues for us and for some of our allies and trading partners. The story of hay exports and their effect on domestic dairies illustrates the intricacy and complexity of the food system that keeps Americans well-fed—as well as ways our food system is vulnerable.

In particular, robust export demand is affecting the western U.S. by driving up prices for quality hay, according to Dairy Herd Management magazine. The article notes that the seven western states of Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington produce 18 percent of total U.S. hay, but account for 90 percent of U.S. hay exports. The competition for alfalfa and other hay is, in turn, causing difficulties for western dairies that do not grow their own grass and alfalfa hay.

Thirsty crops: Conceivably, we could end up without enough hay to feed our own cattle, given the uncontrollable and unpredictable factors of weather, drought, and wildfires. Although harvested and shipped as dry matter, both grass and alfalfa hay are thirsty crops, and none of these western hay-exporting states is blessed with abundant water. All rely primarily on snow-melt water from federally-managed dams and reservoirs, and increasingly from groundwater aquifers with limited and slow re-charge capacity. In fact, California has dropped hay acreage by 32 percent since 2008 as the state suffered through several years of drought before the 2017 growing season.

There are benefits to using irrigation water for growing hay in arid climates, however. Irrigation makes possible the production of extremely high-quality, weed-free, and rain-damage-free hay. Another result is high productivity, with an extraordinary six to seven cuttings per year in the northern part of California’s Central Valley, and an even more extraordinary eight to nine cuttings per year in Southern California’s Imperial Valley. Compare those yields to just three or four cuttings of hay produced in non-irrigated farming areas, where a significantly higher proportion of the hay also gets rained on while curing in the field before baling. In fact, given the unique combination of premium soil quality and micro-climates supporting unparalleled productivity, agriculture may well be the best long-term use of water in California’s Central Valley.

The implications: We do need to think about the implications of international hay export contracts and markets, however. During the first quarter of 2017, hay exports were up 18 percent compared to last year, and all signs point toward even more significant increases in the future. Six nations purchase more than 95 percent of U.S. hay exports, and at least three of those listed in this article are important U.S. allies or trading partners—China, Saudi Arabia, and South Korea. All are expected to increase their hay imports.

Saudi Arabia, for example, plans to stop hay production entirely by 2019 to preserve that arid country’s own water.  Within two years, Saudi Arabian dairies will be completely reliant on imported hay, which most likely will be shipped by sea. Shipping logistics will become an increasingly important vulnerability for dairy production in the troubled Middle East. Shipping embargoes and blockades—such as the one currently affecting Qatar and its start-up dairy farms—therefore have the potential to not only affect the availability of hay for dairy cattle, but to create critical shortages of infant formula and dairy products in vulnerable countries.

And Saudi Arabia is just one market whose hay imports have soared. Hay exports from the U.S. to China increased 47 percent since 2016, and hay exports to South Korea increased 18 percent during the same time. Experts say the demand is not going to ease in the near future as concerns about water increase.

‘The new normal’: “Water restrictions aren’t limited to California. This is going to be the new normal,” said James Williamson, a dairy analyst for the RaboResearch Food and  Agribusiness group, in a report cited by Dairy Herd Management. RaboResearch is the economic research arm of RaboBank, a Dutch multinational banking and financial services company headquartered in Utrecht, Netherlands. It is a global leader in food and agriculture financing and sustainability-oriented banking.

“RaboResearch projects international demand to increase up to 25 percent in the next three to five years, which will drive up the price for premium quality hay,” Williamson said.

How will this will affect U.S. food security and the independence of U.S. dairies? In a word, negatively. As Williamson noted, “…dairy producers in the (U.S.) western states will need to consider alternative feed sources or pay higher premiums for premium quality hay to remain competitive with international hay buyers.”

On that note, I’d like to put forward three more questions:

  • How should the U.S. safeguard and prioritize our own dairy production capacity?
  • What kind of visibility does this issue have with the current U.S. administration (Secretary of Agriculture/ former Georgia Gov.  Sonny Purdue, DVM) , Congress, etc.?
  • What policy initiatives should be presented to appropriate House and Senate committees for consideration and discussion?

We’ve got a lot to think about. READ MORE

Dr. Stephanie Ostrowski is an associate professor of public health in the Auburn University College of Veterinary Medicine and a member of the Auburn University Food Systems Institute’s Food & Water Working Group. She retired from the Centers for Disease Control and Prevention in 2010 after 20 years of service. Dr. Ostrowski’s current research interests include public health/one health, global sustainability of livestock agriculture, food safety and security, toxicology, and veterinary infectious diseases.