ELLENSBURG, Wash. — U.S. hay exports to China have slowed significantly since July because of trace amounts of genetically modified alfalfa that were discovered in tests.
China uses a more sensitive test for GMOs than U.S. exporters, industry members say.
China has been a new market of rapid growth, wanting high-quality U.S. hay for its beef cattle. Some 700,000 metric tons of U.S. alfalfa were imported by China in 2013.
“China had a run-in with GMO corn and decided to check their alfalfa,” said Mike Hajny, vice president of Wesco International, an Ellensburg hay exporter.
Exporters thought they were safe with strip tests showing less than 5 percent GMO contamination, but China used a chemical DNA test with a standard of .01 percent, Hajny said.
Few exporters can find product to meet that standard and sales have slowed significantly since July, said Nick Gombos, supply chain manager of ACX Global in Bakersfield, Calif., a leading exporter that also has facilities in Ellensburg, Wash.
Producers are trying to grow non-GMO alfalfa but the “high rate of contamination leads us to believe it could be cross contaminated seed,” Hajny said.
The industry is working with USDA, GMO developer Monsanto and China to reach new protocols to address Chinese concerns, Gombos said.
Hopefully that will work or sales to China may stagnate for the foreseeable future, Hajny said.
The West Coast dominates U.S. hay exports, but only 11 percent of Western alfalfa is exported. The United Arab Emirates, Japan and China are the main buyers.
Exporters have been dealing with other issues besides China.
In June, a drought-induced hay shortage in California’s San Joaquin and Sacramento valleys drove up prices. Brokers and dairies reached farther from their normal purchase areas to buy premium alfalfa for California dairies. Fueled by high milk prices and benefiting from lower feed corn prices, dairies were able to pay top dollar for premium alfalfa and exporters took a backseat, Gombos said in June.
Since then, dairies have gotten their fill, high quality early cuttings were followed by rain-damaged later cuttings and dairies have been buying cheaper hay for dry cows, Gombos said.
Prices have fallen $40 to $45 per ton since June and exporters “have been able to get what they need at prices they can afford,” Hajny said.
Overseas buyers have been more willing to take lesser grade hay because prices for top grades are so high, he said.
Supreme alfalfa sold for $250 to $275 per ton in Washington, Oregon and Idaho in June, according to the USDA Market News Service. The price was $300 to $340 per ton in California.
On Sept. 18, premium alfalfa was $255 in Washington and Oregon, $220 in Idaho and $225 to $300 in California.
Washington’s first-cutting alfalfa was excellent in volume and nutritional value, Hajny said. Second-cutting was a little less in nutrition and third-cutting was lower yet and 40 percent rain damaged, he said. Fourth-cutting, now wrapping up, has been good quality and average on nutrition and volume.
Last cuttings are finishing in Oregon and Idaho while Southern California’s Imperial Valley and Arizona can go into early November.
Dairies may run short of premium hay in the winter, Hajny said.
Idaho and Utah produced a lot of rain-damaged hay in the last couple of months, Gombos said.
“Exporters have too much low grade hay and not enough high end,” Gombos said. “Right now, most of us are comfortable with our inventories because sales have been below average through the summer because of high prices and the situation in China.”