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Hay co-op survives in Nevada high desert

Dave Wilkins Published on 28 June 2012
Hay Stack

About 12 years ago, Bill Norton joined an agricultural co-op in Nevada even though he didn’t live in the state.

The California resident had just taken over the family hay farm in Eureka, Nevada. Joining the Eureka Producers Co-op turned out to be a smart move for the out-of-state farm owner.

The co-op sells hay for its members, collects payments, handles laboratory testing of samples and provides fire insurance once the hay is in the stack.

Norton didn’t have to worry about any of those things, allowing him to stay in Placerville, California, where he was employed as production manager at a large billing company.

“It worked out really good for me,” he said in a recent telephone interview.

Norton retired from the job a few years ago and moved with his wife to Eureka. They farm about 530 acres.

Ironically, the benefits of co-op membership may not be as obvious now that they actually live on the place.

Norton could choose to handle all the marketing chores himself and would save about $9,000 a year in membership fees. (The co-op charges $5 per ton for its services).

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After carefully weighing the pros and cons, he and his wife recently decided that they would remain co-op members. He’s currently president of the board.

“It’s still a benefit for us to belong,” Norton said.

Eureka co-op members control about 25,000 irrigated acres in the Diamond Valley, all of it under center pivot and deep wells. The valley gets about five inches of rainfall annually.

About 60 percent of the co-op’s production is alfalfa and 40 percent grass hay, including timothy and orchardgrass. At an elevation of about 6,000 feet, growers typically get three cuttings of alfalfa and two cuttings of timothy per year.

Like most U.S. hay growers, Diamond Valley producers have enjoyed good prices the past few years.

“Right now, times are great for selling hay. It almost sells itself,” Norton said. “Very rarely do we have years when it’s tough to sell.”

But it does happen. Three or four years ago, for example, the valley was hit with a deluge of rainfall at the wrong time, reducing the quality of the crop.

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It took awhile, but the co-op sold all of its members’ hay that year. It’s times like that one that really demonstrate the value of a marketing co-op, Norton said.

“When we do have a year when it’s tough, it seems to me that it’s an advantage to be a member,” he said.

Most of the co-op’s alfalfa is sold into the California dairy market.

“We try to get as much money as we can, but we have to be realistic about it too,” Norton said. “If the dairies go out of business, then we are going to be hurting.”

So far, it’s worked out well for both the hay producers and the dairies.

“They like this high-altitude alfalfa. It really produces the milk,” he said.

Hay marketing co-ops and associations don’t seem to be as popular as they used to be, said Donald Kieffer, executive director of the National Hay Association.

As commercial hay farms have gotten larger, many have chosen to do their own marketing.

Dairies, too, have gotten larger. A single dairy with a few thousand cows can often buy a hay farmer’s entire crop, Kieffer said.

Many hay growers have decided that they don’t necessarily need to belong to a co-op or marketing association to move their product, he said.

“I don’t find a lot of co-ops and associations anymore. To be honest, I think their day has passed,” Kieffer said.

Today the Eureka co-op has 10 members; at its peak it had nearly 20. Farm consolidation in recent years has played a major role in reducing membership, said co-op manager Jim Gallagher, who also farms 725 acres.

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Co-op members are mostly small growers, with farm size ranging from 320 acres to about 1,200 acres. The co-op sells about 18,000 tons of the roughly 120,000 tons of hay produced in the Diamond Valley every year.

“We used to have a bigger slice of the pie. We are down in our numbers,” Gallagher said.

The Eureka co-op was formed about 35 years ago to give small producers more marketing clout, Gallagher said. Prior to that, brokers would come into the valley and play hay growers one against the other.

“Now the smaller growers have a little bit more influence,” he said.

Gallagher still believes the co-op offers some good advantages. The group owns the only certified scale house currently in operation in the valley and members can buy rodent control products at a discount through the co-op.

More importantly, the co-op helps to set the price of hay for the entire valley, so its influence is greater than its numbers might suggest.

“We will set our price and others will call to get that,” Gallagher said. “They will pretty much set their prices at the same level.”

Diamond Valley growers – both co-op members and non-members — have worked hard to earn a reputation as quality producers, Gallagher said.

“Everyone in the valley does a good job of growing hay,” he said.

“We have to do a good job because we’re 600 miles from our nearest market,” he said. “We bust our butts to make the best hay that we can, and people keep coming back.”  FG

Eureka co-op members control about 25,000 irrigated acres in the Diamond Valley in Nevada. The co-op sells hay for its members and collects all payments. Photos courtesy of Eureka Producers Co-op.