Alfalfa pellets are exactly what the name implies...pellets made out of alfalfa.
There are a number of reasons that these could be included in a horse's diet, and most of them are very valid reasons. However, before we go any further, I must say:
Alfalfa pellets cannot safely replace hay!
Pellets do not have particle sizes that are big enough to stimulate digestive tract motility, therefore they do not assist in the promotion of tract health.
Because they don't have the long-stem fiber, pellets cannot replace hay.
If hay is scarce, pellets can be used in conjunction with either of the above two options to completely replace hay, but they cannot be used alone to completely replace hay.
Now that that is out of the way, back to what they CAN do...
They can be used to add calories to a horse's diet.
They are a great source of calories for horses, because they are forage-based.
Forage based calories will not cause many of the problems that high sugar and starch feeds, such as grains, do. They provide the calories without the "hot" factor.
The majority of the horses out there will not get "hot" on alfalfa. However, there are a few horses out there that are allergic to alfalfa -- these horses will usually get "hot" on alfalfa.
They can also be used to add protein to a diet.
Alfalfa is higher in protein than grass hays, so pellets can be used to boost the protein level of a diet.
However, in the scheme of things, they aren't going to boost the overall protein level that much, unless you are feeding significant quantities of them.
The average horse is going to get much more protein from his pasture and grass hay than he is a few pounds of pellets each day.
For example, 10 pounds of grass hay (the minimum a 1000 pound horse should be eating per day) contains 1.08 pounds of protein if it is 13% protein. In contrast, 2 pounds of alfalfa pellets (assuming 15% protein on dry matter basis) are going to contain just 0.25 pound of protein.
Its also important to realize that the average horse does not need added protein in his diet. Some horses may be lacking in amino acids (OK, probably more than some -- probably a lot of horses out there), but the answer to that problem is not MORE protein...it is BETTER protein.
So, alfalfa pellets can be used to increase protein, but for most horses it isn't necessary, and the impact pellets will have on the dietary protein will be minimal, unless they are fed in significant quantities.
Alfalfa pellets are a great addition to a horse's diet to increase the calories.
They can be found at almost any feed store, and usually come in 50 pound bags.
They can be fed in conjunction with almost any other feed, including beet pulp or alfalfa cubes.
If fed with a long-stem fiber source (grass/pasture, beet pulp, alfalfa cubes) they can be used to replace calories lost when hay is scarce or unavailable, but they cannot be used alone to completely safely replace hay.