Alfalfa in the Red: Rising Costs, Falling Returns

By Daniel Munch

Key Takeaways

• A major U.S. field crop without a safety net: Alfalfa is the fourth most valuable field crop in the U.S., generating roughly $8.1 billion in farm-gate value in 2024, yet it remains largely outside core farm safety-net programs.
• Prices collapsed while costs stayed high: After record prices in 2021–2022, alfalfa prices fell more than 40%, while production costs remained elevated, pushing average returns into negative territory since late 2023.
• Export demand has weakened sharply: Shipments to key markets, especially China, have fallen amid global dairy market shifts and ongoing trade conflicts, reducing a critical outlet for Western hay producers.
• Losses are large with limited relief: Estimated 2025 economic losses total roughly $2.9 billion, or about $203 per acre, with no access to commodity support or the Farmer Bridge Assistance Program.

Alfalfa is a core input into U.S. dairy and beef production and one of the country’s most economically significant crops. In 2024, it ranked as the fourth most valuable field crop, generating an estimated $8.1 billion in farm-gate sales, behind only corn, soybeans and wheat.