Read the current Progressive Forage digital edition
advertisement

Taking your hay business to the next level with exports

Erica Louder for Progressive Forage Published on 31 May 2019

“Diversify” seems to be a buzzword around agriculture these days. Any commodity conference is bound to have a workshop on the topic. Yet what do they really mean for a forage grower?

Can diversifying lead to increased profitability? There is more than one answer to those questions, but one may be found in the export market. Hay exporting isn’t about diversifying your product (at least not in a major way); it means diversifying your customers. Customer diversity means looking beyond the local marketplace and seeing agriculture globally.

Dan Putnam, forage specialist at UC – Davis, says, “While many crops like corn, wheat and soybeans have long been traded on the world market, forages have mostly been fed within a few miles of the animals they nourish. In recent years, long-distance delivery has morphed into exports overseas. The advent of inexpensive containerized shipping, technology for compression of hay and growing world demand has changed the equation. This phenomenon creates new markets for Western hay growers and new business opportunities.”

Exporting hay isn’t as easy as all that, but it’s far from impossible. So if you are serious about taking your hay business to the next level, consider a few tips from the experts in hay export.

Tips from the experts

Know the market

Mark Anderson, CEO and president of Anderson Hay and Grain, says, “Anybody who is in business has an opportunity to look globally at their products, their expertise, at their core competencies, and try to educate themselves on what is going on around the world. Opportunities you never considered may present themselves.” That advice is a bit of a legacy for Mark Anderson.

His father and grandfather were pioneers in the hay export business. In the 1970s, they were the first to export hay (in volume) to Japan’s growing racehorse market. Today, Anderson Hay and Grain is among the largest hay exporters in the world, serving well over 30 countries out of their western U.S. ports. Their success continues because they understand the global marketplace.

Knowing the market often means looking for opportunities where they haven’t existed in the past. In 2014, Saudi Arabia was essentially a non-player in the international export market. In 2017, they skyrocketed into third place as a partner for U.S. hay products, behind China and Japan. This market change was driven by the country’s decision to phase out of domestic alfalfa production while staying committed to its domestic dairy industry. Those growers and exporters who knew and followed the market were well positioned to take advantage of the opportunity.

Build relationships

This doesn’t just mean building relationships with foreign partners; this can also mean building relationships with existing exporters. Idaho hay farmer Mark Barrie participates in the export market, but does it through a middleman. Barrie says, “We don’t actually export hay from our farm. We sell our hay to exporters and have for years. We have built relationships that open another marketplace for our hay without actually getting into the sometimes messy business of exporting.”

Anderson Hay and Grain works with many farmers, like Barrie, who grow the hay and sell to Anderson for export. Anderson credits much of their success to their relationships with these growers, some who have been with the business as long as they have been exporting. Anderson says that for his company, “Relationships are the top priority. Relationships with our customers and relationships with our growers.”

Speaking of the customers, building relationships across oceans and cultures can be difficult, but growers and exporters agree it comes down to providing exceptional products that meets or exceeds the customer’s expectations. That kind of integrity doesn’t need translation. Anderson says for them, “It’s about meeting the needs of livestock producers, whether it’s across the street or halfway around the world.”

Provide quality products

“When a farmer pays to have hay shipped 5,000 miles, they expect quality. No matter which crop, alfalfa hay or timothy hay, quality must be maintained from the cutting state through compression and shipping, if it’s going to be accepted by overseas buyers,” says Washington hay grower Calvin Calaway. Anderson agrees and adds, “Maintaining hay quality is important regardless of shipping across the U.S. or to a world market. Hay must be clean as well as baled and stored properly to assure quality integrity. Foreign material or exposure to weather can always create problems, but working through those issues is part of our job.”

The growers agree that specifics relating to growing conditions, nutrient levels and type of product will vary based on the customer, whether they breed racehorses in the UAE or milk dairy cows in China. Anderson adds, “There are many challenges in exporting, as every country has its own regulations and standards that must be met. If not met, product can be returned, which can be costly. Customers have many different requirements, so it is important to spend time in the markets you sell to. At the end of the day, you need to be able to stand behind your product and know it is quality.”  end mark

Erica Louder is a freelance writer based in Idaho.

Export opportunities

We sat down and talked with Laura Johnson, bureau chief of marketing and development at the Idaho State Department of Agriculture, on hay exporting opportunities.

What is the first thing a farmer should consider when thinking about hay exports?

Johnson: While there is a strong and growing demand for hay products overseas, the only way to keep it cost-efficient for both the importer and the exporter is to ship hay in double-compressed bales. Most farmers will sell their hay to an export business that will compress the hay for export. That’s not to say there isn’t opportunity for a farmer to expand into the export business, but they will need to consider that reality.

Can you tell us about your resources and the trade missions you coordinate?

Johnson: In Idaho, we have three full-time trade offices that cover Mexico, China and Taiwan/Southeast Asia to help our exporters develop relationships with potential buyers and scope out the international marketplace. We also coordinate at least one governor’s trade mission each year and also organize other trade missions on our own or through the Western United States Agriculture Trade Association (WUSATA) for exporters in the 13 Western states. The missions usually include a market briefing with the USDA Foreign Agriculture Service in-country and visits to importers, distributors and end users such as livestock producers.

Are there any trade missions in the works right now?

Johnson: We are working with WUSATA right now to organize a trade mission for livestock feed products to Saudi Arabia and the UAE in October in cooperation with our counterpart in the state of Utah. This is for all livestock feed products, including hay, grain, beet pulp and other byproducts. There should be some information on the WUSATA website on this mission shortly.

Who can attend the trade missions?

Johnson: Mostly it is exporters who attend the missions – businesses interested in meeting with potential customers. But farmers are absolutely welcome to come and learn about the international marketplace. We coordinate the meetings, schedule the translator and work with the officials. The individuals, businesses or participants are responsible for their travel expenses.

How should a producer learn more?

Johnson: If you are in the western U.S., definitely check out wusata.org. They have some great resources and insights on exporting agriculture products, on getting started, and upcoming missions and events. Otherwise, contact your state Department of Agriculture and see what resources your state has available.

Any parting thoughts for our readers?

Johnson: With the tariff situation in China and other international trade issues going on, many people are concerned about the future of agriculture exports. While it isn’t something to ignore, the cows overseas still need to eat, and the U.S. remains the premier producer of quality hay products.

LATEST BLOG

LATEST NEWS