An extended new year holiday will likely delay new hay purchases. This comes as inventories busted at the seems most of the fall but may tighten as workers remain on holiday.
Spanish alfalfa exports to China reached record highs mid summer 2019 as the US and China edged nearer a trade deal. Exports from Spain grew 171,000 metric tons, 256%, as traders hurried to ship hay before US alfalfa tariffs were removed. In September, trade tensions eased between the US and China bringing Spain's fears to fruition. Tariffs on US alfalfa dropped from 32% to 7%. Alfalfa exports from the US to China boomed. October tallied the third highest alfalfa export total on record.
The combined surge of Spanish and US hay imports clogged chinese ports. There was little hay trade activity from the end of October to the Chinese new year.
On fears of the deadly coronavirus, China extended the new year holiday an additional week. Sentiment around cattle and dairy markets faltered as fears of slower trade took hold driving milk and cattle prices lower this week.
Exports of alfalfa hay willl likely be stiffeled by the extended holiday. However, China has signaled a need for US hay and will be back to the negotiating tables as concerns around the coronavirus ease.