U.S. Alfalfa Producers Face Financial Losses Due to Rising Costs and Falling Prices
Alfalfa producers in the United States are currently battling significant economic challenges, as detailed in a report by the American Farm Bureau Federation. The production costs for alfalfa remain elevated, while market prices have plummeted below breakeven levels, resulting in negative financial margins. In 2024, alfalfa was valued at approximately $8.1 billion at the farm gate, but recent shifts mean it no longer benefits from core farm safety-net programs, leaving producers vulnerable to market downturns.
In 2025, the average national price for alfalfa hay was about $171 per ton, a reduction of over 40% from previous highs, while production costs ranged from $165 to over $300 per ton in key regions. This price discrepancy has led to an estimated economic shortfall of $2.9 billion, with losses averaging $203 per acre among growers. Yields have remained stagnant at around 3.5 tons per acre, further complicating efforts to cover costs.
The perennial nature of alfalfa, with stands lasting several years, means that production levels do not quickly adjust to price signals, maintaining high production even as profitability decreases. Export demand, notably from China, has also dwindled. China's imports dropped from 1.66 million metric tons in 2022 to about 560,000 metric tons in 2025, due to softer dairy markets and trade tensions. Despite temporary increases in demand from countries like Saudi Arabia and the UAE, they have not compensated for the decline in Chinese purchases.
U.S. policy has provided limited support for alfalfa growers. The crop is not included in major safety-net programs like PLC and ARC, and risk management options such as the rainfall-indexed Pasture, Rangeland and Forage program offer only partial protection. With alfalfa grown on more than 14 million harvested acres, the limited policy support leaves many producers exposed to revenue losses.
