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How to market hay

Jerry Lindquist Published on 05 February 2010

Hay crops in many ways are a unique crop to market.

The demand for hay in the winter is very closely tied to the past summer’s production and supporting weather. This alone does not make it much different than most grain crops and their markets. But it is here that the similarities end.

There is little governmental control on hay market prices except for the indirect effect of land set aside in the conservation reserve program. There is no futures market trading of hay commodities. There are few established delivery points where a sale is guaranteed for hay. Most importantly the commodity is not uniform as there is first cutting, second cutting, etc.

There is also alfalfa hay, alfalfa grass-mixed hay, grass hay, clover hay, etc. Finally there are small square bales, large square bales, round bales, etc. and even those types of bales are not uniform in weight, as small squares can weigh from 30 to 70 pounds per bale. So for someone selling hay for the first time, the task can be daunting. “What to raise? What to charge? Where to sell? How to get it all sold?”

Growers need to first understand the different hay markets and what those markets desire in hay types. Dairy markets are seeking high-quality alfalfa hays for milking cows, and often low potassium grass hays for dry cows.

Beef markets are seeking economically priced hays. Equine markets are seeking mold- and dust- free hays that may or may not contain alfalfa depending upon preference, but always with some grass in the bale.

Also there are many other novelty markets like deer, elk, llamas, alpacas, zoo animals and overseas markets that may have other requirements. The secret is to investigate these markets and produce what they want.

The hay types that are always in high demand are quality alfalfa hays testing approximately 20 percent crude protein, 30 percent acid detergent fiber and 40 percent neutral detergent fiber, and horse hays in small square bales that are dust-free with a little timothy grass.

Timothy grass heads are an icon in the horse industry that everyone looks for in a bale and there is justification for it, as grass-mixed hay has a better chance of being properly dried at baling time and thus is more likely to be free of dust and mold, which can cause colic in horses.

How to price it
First, calculate your cost of production because you don’t want to sell it for less than it cost you to make (at least not for long). Seek professional help on this if necessary because the calculation becomes challenging with a perennial crop like hay.

Check out local hay markets that report sales prices in the newspapers, online or at sales barns and if you have a chance, visit some of these sales to inspect the hay yourself to compare quality. If selling any quantity, sell it by the ton, as a bale is not a bale. At the very least, weigh your bales and provide this information to prospective buyers if you must sell by the bale.

One of the greatest dis-services unscrupulous hay sellers do to the hay industry is to sell “a bale” to someone, say for example for $3.50 per bale. Truth be known, the bale weighs only 33 pounds and in actuality costs $212 per ton while another hay that sells for $4 per bale weighs in at 48 pounds per bale and would only have cost the buyer $167 per ton. If you want long- term repeat buyers don’t turn them away by misrepresenting the hay!

Also, as a check, you may compare hay sales price to the value of competing feeds like corn and soybean meal. Dairy farms will alter rations between these feeds based on the best buy for the nutrients.

If grain markets are rapidly increasing, your asking price for hay may quickly become undervalued. Some university forage websites have feed comparative tables that allow these comparisons to be made.

To accurately do this you will need a feed test on the hay. If you are selling quality dairy hays you will want to have this test information anyway, as the vast majority of hay marketed in the U.S. sells without a feed test. If you have quality hay, prove it with a feed test and you will have a marketing edge over most sellers.

Where to market
Word of mouth is still very effective if your reputation is good. A roadside sign is often overlooked but also very effective as, because of its bulk, most hay is sold within 30 miles of home.

Let those around you know you have hay for sale with a sign at the road. Auction barn bulletin boards, classified newspaper ads, or ads in dairy or equine magazines can all work. Online hay sellers’ lists are now common and are also effective.

Many farms with large hay quantities have developed websites just for their hay sales, with good results in many cases. When looking to target areas in the U.S. for hay sales, check the summertime U.S. Drought Monitor map produced on the Internet to identify dry areas of the nation that may be needing hay.

Hay marketing, depending on how you look at it, can either be very simple or very complex. With a good investigative plan and some marketing effort, it can be quite effective. FG

 

Jerry Lindquist for Progressive Forage Grower

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