Most all of the hay produced in the eastern US is consumed in the area while much of the hay produced in the west is shipped elsewhere.  Some of this western hay may travel east to horse markets or dairies and large amounts are shipped to overseas markets. If you include all of the hay produced in the east including tall fescue, orchardgrass, and grass/legume mixtures, the price is quite different than western produced timothy and alfalfa.  However, if you look at the alfalfa as a stand-alone crop then eastern alfalfa hay producers can compete nicely with western hay prices.

One of the main reasons for the lower alfalfa prices in the west is the transportation cost incurred when shipping western produced hay to the east or overseas.  Sometimes the actual cost of the shipping can exceed the price of the hay received on farm.

~ Tom Keene, 36th Annual KY Alfalfa and Stored Forages Conference. Full proceedings are available here.