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Oklahoma State University Stillwater, OK |
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Oklahoma Alfalfa |
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Oklahoma State University Stillwater, OK |
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Oklahoma Alfalfa |
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Alfalfa Hay Markets |
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This is the fourth of several brief articles containing information from a study to examine potential markets for alfalfa hay. The specific topic covered in this article is the model estimated and its results using data for 1995. Least-Cost Transshipment Model: Several linear programming models were estimated to find the least-cost movement of alfalfa from production to consumption regions given the assumed set of transportation costs. Agronomists were asked to identify common load sizes and transportation rates for alfalfa hay. Truck size varied. Since not all states allow the larger sizes, we chose the 44,000 size load to use in our least cost transportation model. Similarly, a relatively wide range of transportation rates were identified, ranging from $1 per loaded mile to $2.75/mile. We chose a midrange rate of $1.65/loaded mile to use in the transshipment model for lower quality alfalfa and $1/loaded mile for higher quality alfalfa. Two qualities of alfalfa were assumed. Dairy quality alfalfa was defined as alfalfa with a crude protein (CP) of 20 percent or more or a relative feed value (RFV) of 150 or more. Based on a survey of agronomists, we assumed 33 percent of each state's total alfalfa production was dairy quality alfalfa. The model allowed dairy quality alfalfa to satisfy alfalfa demand by dairy cattle with a transportation rate of $1.00/mile. We assumed that dairy quality alfalfa would be harvested in larger bale packages thus enabling lower cost handling and transportation. We also assumed higher valued alfalfa would more likely be transported longer distances, thus reducing the cost per mile. Dairy quality alfalfa also was allowed to satisfy the Japanese demand for alfalfa. Any dairy quality alfalfa remaining after satisfying the demand by dairy cattle and the international demand could be used to satisfy the alfalfa demand by other species and be shipped at the same domestic rate. Lower quality alfalfa was allowed to satisfy only the demand by other livestock species and a transportation rate of $1.65/mile was assumed. Much alfalfa of lower quality is harvested in less efficient bale packages for long distance transport. Results: Two figures are shown. Figure 1 shows the least-cost movement of alfalfa from production to consumption regions for the ten leading alfalfa production states. Figure 2 shows the least-cost movement of alfalfa from production to consumption regions for the ten leading alfalfa consumption states. An overview look at Figure 1 shows that more higher quality alfalfa moves longer distances (solid lines) than lower quality alfalfa (dotted lines). Nevada and Nebraska are two of several possible examples. Idaho ships higher quality alfalfa to three states (California, Nevada, and Wyoming). Nebraska ships higher quality alfalfa to five states (Florida, Kentucky, Maryland, Missouri, and Virginia) in addition to satisfying in-state demand. In addition, it ships lower quality alfalfa to Kansas and Oklahoma to satisfy non-dairy demand, as well as satisfying in-state demand. The model indicates that Oklahoma ships all higher quality alfalfa and a small amount of lower quality alfalfa to Texas. Most lower quality alfalfa remains in Oklahoma. Figure 2 shows where alfalfa originates to satisfy the demand in the ten leading alfalfa consumption states. Note that in Wisconsin, the leading dairy state, all alfalfa imported from other states (from Illinois, Iowa, South Dakota, and Wyoming) is higher quality alfalfa for dairy cattle to supplement the instate production of higher quality alfalfa. In contrast, Texas is the leading alfalfa demand state but a sizeable percentage of its demand is for lower quality alfalfa. Therefore, it imports some higher quality alfalfa for its dairy demand (from Kansas, New Mexico, and Oklahoma), some higher quality alfalfa for its non-dairy demand (from Colorado and Kansas), and some lower quality alfalfa for its non-dairy demand (from Arkansas, Illinois, Iowa, Kansas, Missouri, New Mexico, and Oklahoma). It also supplies some of its in-state demand for lower quality alfalfa from its own production. Information from:. "Domestic and International Markets for Alfalfa Hay." Oklahoma State University, Department of Agricultural Economics, Final report to AMSUSDA, January 1998.
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| Clement E. Ward, Extension Economist
Solomon Kariuki, and Ray Huhnke Department of Biosystems and Agricultural Engineering Department of Agricultural Economics Oklahoma State University |
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