Source: American Farm Bureau Federation®

Since 2023, rising production costs and lower hay prices have resulted in many U.S. alfalfa farmers operating at a loss. Inputs like fertilizer, fuel and land remain expensive, while market prices have fallen well below breakeven levels. In 2025 alone, the USDA reported a $203 loss per acre, equating to a $2.9 billion economic shortfall that puts significant pressure on the crop.

Increasing the challenges, alfalfa producers are lacking risk management tools to cushion the blow. Unlike major row crops, alfalfa does not have access to core farm bill PLC and ARC programs and available insurance options offer limited protection. Some alfalfa farmers are turning to Pasture, Rangeland, Forage (PRF) insurance to help manage forage availability risk, which covers a lack of precipitation when selected grids fall below the historical average. With alfalfa’s foundational role in livestock production and rural economies, a stronger long-term solution is needed. With the lack of a standardized price discovery mechanism for alfalfa and uneven disaster assistance during recent droughts, continued losses could accelerate acreage reductions and raise questions about the long-term stability of forage supplies.

Read more on the production and risk management challenges for alfalfa farmers.