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A patchwork of profitability

FG Editor Darren Olsen Published on 01 April 2010
baling hay

For Tyler and Randy Brown of Gillespie, Illinois, becoming the local suppliers of quality alfalfa hay for several of the area’s dairies has been a successful ride that neither one anticipated.

Although alfalfa hay has been a part of their farm production strategy since Tyler was in grade school, it has only recently been a push for quality that has made it a trademark of their business.

For Tyler, the beginnings were just like every other producer around them.

“Our operation started out as a family business, back when I was 12 years old. Over the last few years, I went out and received my college degree and came back. It was at that point I decided I wanted to bale hay for a living.”

“Over all the years I have been helping my dad and now taking on a leadership role with the hay business, I have found that quality is king, quality sells, and it is consistent quality that keeps people coming back to you time and time again.

It used to be that we treated an alfalfa field no different than a grass field, and a lot of people still do, but I have learned that if you want to get the most out of your alfalfa investment, you have to do what it takes to make quality hay.

I used to watch all the dairy hay come in from out west and realized if we could produce the same quality product much closer to home, we would be able to capitalize on a market and save a significant amount on shipping costs.”

“In our area, people miss the opportunity to put up quality hay because they continue to treat it just like any other crop. They put it in and cut when they can get to it, put it up either too wet or dry and just feed it out to whatever needs feed through the winter.

Because alfalfa hay treated that way is no better than what they can pull off of their grass fields, they don’t see the potential alfalfa can have in our area.

The demand is there if they will just take the time to make it work, but most people continue to do things the way they always have and don’t take advantage of those opportunities.”

When Tyler returned from college, the challenge of finding land to grow hay on was met with a unique use of idle land around the area.

By going at it as custom operators and utilizing the relationships Randy was able to build working at the local seed cooperative, the Browns were able to create a scenario that benefitted everyone.

Tyler explained the expansion and growth of the business. “The operation is made up of custom hay production and share production with several of the other farmers around our area.

We come from an area that continues to grow corn on top of corn and there are getting to be a lot of smaller fields that don’t lend themselves to that type of continual growing.

“My dad also works and sells seed for one of the local cooperatives. Many of the people he interacts with come to him with these problem fields and ask if we would like to take them over for a few years and produce alfalfa on them.

We usually pick up fields around 40 to 60 acres and arrange to work some kind of shares with them or in some cases, rent out the ground directly if they have no need or interest in the hay itself.”

The contract itself with the land owners is kept as simple as possible, with a 50-50 split of the hay when it is sold or taken for use.

The inputs are generally taken care of by the other party and the Browns contribute the equipment and labor to get the job done. Although it might mean a little give and take, Tyler feels it is a good way for them to easily distribute both the costs and profits between everyone.

“When it comes to setting up a shared contract, we look at doing things from beginning to end. We have the ability to go in and work the soil and get it ready to plant.

This continues through seeding, spraying and full stand establishment until the hay is ready to cut, bale and haul away. We will continue to maintain the fields until they are ready to go back into corn or soybeans after a few years.

“Everybody forgets about the 20-acre fields they bought several years back and now that they have upgraded to huge 24-row planters and combines, that ground automatically becomes a big headache.

I will usually have 40 to 60 acres nearby, so for me to step in and put it into hay is easy and they usually are glad to have it in production without having to keep the weeds down or pull their big equipment in for just a couple of passes.

Because we can fill a niche in using these smaller fields, we have been able to get a lot of good ground into alfalfa production that would otherwise just sit there without anything going on with it.

It saves us a huge outlay in land costs and inputs and allows us to concentrate on equipment and quality. It has proven to be a great way to help each other out.

“For the land owners, it is a matter of taking care of all the inputs. They pay for the lime, fertilizer and seed while we supply the equipment and labor.

For insects and other pests, we typically let them decide if they want to spray or pay us to take care of those potential problems. Most everyone is more than happy to work with our suggestions in getting the best crops produced, as they are getting part of the hay back, either for themselves or to sell.

If they decide to have us market it for them, the agreement usually finalizes with us cutting them a check for their half of the hay. We have found that by splitting the revenue or bales in half, both parties are able to meet their financial needs while keeping things as easy as possible for everyone involved.”

As their business has grown, so has their role in supplying hay to a greater number of buyers. This has brought Tyler into the role of not only being a custom operator but a hay broker as well. While not originally part of the idea behind the family business, the idea of being a one-stop place for buyers to obtain their hay and bedding needs has become part of expansion plans for the future.

“As we have taken on more of a role as hay brokers, I realize the more quality hay we can produce and be able to sell locally, the happier everyone is. It is much easier to know exactly what I have in a bale I have produced than to buy hay for some of our customers from out west and end up receiving something that didn’t meet our standards.

We now service 11 dairies in our area and my goal is that when they need hay, they only have one person they need to call. It is critical to have the quality they want when they want it – and the more we can grow, the better control we have on what they eventually receive.

I am not saying there isn’t good hay grown elsewhere and I know we will continue to have needs for hay from other growers, but I still want to keep people happy and quality is the key to happiness.

“In addition to high-quality alfalfa, I want to be a source of low-potassium grass, heifer hay and low- and high-quality alfalfa hay. It would also be good for us to be able to supply their straw and corn stalks if the dairy wants it.

I want to be able to say, ‘Yes, I have that’ or ‘Here is what I can get you, when I can get it to you and this will be your price’. My overall goal is to be able to produce all the products my buyers need, but realistically, there will be times I need to bring other hay or straw in.”

With the expansion of buyers for their hay, the Browns have been able to grow their equipment use and employee base, as well. Tyler points out it is not always easy to meet timing needs of their hay fields versus the custom work they do for others, but the rewards typically outweigh the headaches.

“In addition to myself and my dad when he isn’t working, the last few years we have had a couple of retired coal miners and a couple of local high school kids help fill in during the busy parts of the season.

When the weather is cooperating, we will have five or six guys working about as hard as they can to keep up with the demand of getting hay cut, dried and put up before the weather changes.

“Right now, most of our hay goes up with a 7433 Hesston 3 X 3 baler and a 575 New Holland small square baler with a self-propelled conditioner.

With the buyers we have in our area, the big 4X4 balers are just too big for their operations, so we have found the 3X3 will keep the handling down to a minimum while still keeping the bale size small enough for most of our dairy-quality customers.

Because so many people are still used to buying hay by the bale, it is a lot easier to bale with a 3X3 baler, which is much more comparable to a large round bale than a large 4X4 square bale. The weights are a lot closer to each other and people don’t seem to mind as much.”

For Tyler, the future holds a lot more in both ideas and opportunities than he first thought when he approached his dad a few years ago about custom hay production in Illinois. The growth has been fast and the ride a little bumpy, but he knows there are opportunities yet to come.

“You will find that patience is one of the biggest parts of growing hay in Illinois. No two days are alike, so you end up spending just about as much time dealing with the unknown factors of a given day or production cycle as you do planning it all out. Constant management and watching the fields every day becomes a never-ending process through the entire spring, summer and fall.

“The demand for quality alfalfa hay in our area is bigger than I ever realized. When I went to my dad with the idea of raising high-quality hay, neither of us had any idea that we would have the success we have had in as short a time as we have.

I now work with nutritionists who could sell all the hay I can produce, so there doesn’t seem to be a lack of buyers any time soon in our area.”  FG

PHOTO:
If you want to get the most out of your alfalfa investment, you have to do what it takes to make quality hay. Photo courtesy of Tyler Brown

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