|
Oklahoma State University Stillwater, OK |
|
Oklahoma Alfalfa |
|
|
|
Oklahoma State University Stillwater, OK |
|
Oklahoma Alfalfa |
|
Alfalfa Hay Markets |
|
This is the final of several brief articles containing information about potential markets for alfalfa hay. This newsletter specifically covers the implications for Oklahoma alfalfa producers. Implications for Marketing Alfalfa from Oklahoma The previous newsletter indicated that model results suggest all higher quality alfalfa
produced in Oklahoma should be shipped to Texas and most lower quality alfalfa should be
fed in Oklahoma. We used the model to assess market potential for Oklahoma-produced
alfalfa. First, alfalfa production in Oklahoma was increased 20 percent above the 1995
production level, assuming a constant 33-67 percent split between higher and lower quality
alfalfa, respectively, and no change in demand. This first alternative was to consider a
supply change effect. Second, we considered Results for an assumed 20 percent increase in Oklahoma alfalfa production are interesting in that total exports from Oklahoma increase, but the composition of exports changes. In the base model, Oklahoma shipped 433 thousand tons of high quality alfalfa and 95 thousand tons of lower quality alfalfa to Texas for the Texas dairy demand. Another 1,006 thousand tons of lower quality alfalfa remain in Oklahoma to satisfy the alfalfa demand for non-dairy livestock. With the assumed 20 percent increase in Oklahoma's alfalfa production, Oklahoma ships significantly more alfalfa to Texas, both for the dairy and non-dairy demand in Texas. The model indicates that 572 thousand tons of high quality alfalfa are exported to Texas to satisfy the dairy demand in Texas. Another 823 thousand tons of lower quality alfalfa are shipped to Texas to satisfy non-dairy demand, while 338 thousand tons remain in Oklahoma to satisfy its non-dairy demand for alfalfa. Therefore, a 20 percent increase in Oklahoma's alfalfa production, ceteris paribus, results in more of both higher and lower quality alfalfa being exported to Texas than in the 1995 base model. This suggests that increases in alfalfa production would likely increase alfalfa exports to Texas, but not all at dairy-quality alfalfa prices. Some producers have expressed an interest in exporting Oklahoma alfalfa to Mexico. According to our model results, Oklahoma does not have a comparative advantage to satisfy the Mexican demand for high quality alfalfa. We considered shipping all exported alfalfa through El Paso, Texas and also considered shipping all alfalfa through Laredo, Texas. In both cases, New Mexico is the primary supplier of alfalfa to Mexico. The lead author of this study has worked with alfalfa growers in Oklahoma for about 16 years. During that time, Texas and Oklahoma have been considered the primary markets for Oklahoma-produced alfalfa. Our model results confirm the conventional wisdom. Further, our model suggests Oklahoma could increased the supply of alfalfa and supply a larger percentage of the Texas demand. Opportunities exist in unique situations or under special conditions to market alfalfa profitably to other markets (such as Florida, Tennessee, Ohio, Missouri, and elsewhere) besides Texas and Oklahoma. However, on balance, Oklahoma alfalfa growers should concentrate most on satisfying nearby customers in Texas and Oklahoma.
|
|
| Clement E. Ward, Extension Economist
Department of Agricultural Economics Solomon Kariuki, and Ray Huhnke Department of Biosystems and Agricultural Engineering Oklahoma State University |
 |
