Feeding the masses
June 23, 2016
Whether they are in North Dakota or New Mexico, Montana or Mississippi, cows have one thing in common. They are hungry. This is a good thing for those operators who put up hay but don't have livestock around to eat it.
Jim Fenema, Leiter, Wyoming, sells a lot of hay private treaty. "We have a clientele that's bought hay from us for many years. We sell round bales and net wrap everything. We try to get as much weight as possible on each truck load, so the customer isn't paying too much per ton for freight. We always try to get on about 25 tons, since the hauling will cost the same amount, whether it's 20 tons or 25 tons," he explains.
"Most of the hay we sell is alfalfa. Reputation is the main thing. If you can put up good hay, reputation is a big deal. If it's good hay, with satisfied customers, and word of mouth, you will always have buyers. On dry years like we're having right now, hay is very easy to sell," says Fenema.
“If possible, go and look at it yourself. Then figure out what it will cost for freight. Neal Sorenson, Powder River Ranch at Spotted Horse, Wyoming
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"I expect it to be higher than it was last year, and last year it was averaging about $125 to $130 per ton, for good alfalfa hay. Some people like to have hay tested, but typically we don't test our hay. I have in the past, and I do test our grain hays for nitrates, but we don't need to test for RFV and TDN in our area because it's not being purchased by dairies. A lot of ranchers are buying our hay and feeding it with poorer quality hay (grass hay or straw). That's how our hay is often used; a rancher will buy 100 tons of our alfalfa and 100 tons of straw and mix it and get through winter with a little cheaper feeding program," he explains.
For people trying to locate hay to buy, word of mouth is often how they find some. "There are also some hay auctions. There's a local hay auction in Torrington, Wyoming. I've used those auctions in the past, but word of mouth is usually the best. Once your name gets out, it's pretty easy to sell hay because ranchers are always looking for some. Even on a wet year we've never had a problem getting rid of hay. The price may vary, but there is always a market for hay. It's just a matter of how long you want to hold out for the price you really want," he says.
"The cost of putting it up keeps rising, with price of equipment and diesel, paying for irrigation water, fertilizer, etc. For irrigated hay, I don't know that it will go less than $100 a ton. I'm sure it could, but in today's situation it probably won't. What the hay seller needs to receive, in order to make a profit, will vary from year to year. It depends on machinery breakdowns and everything else, and also varies from ranch to ranch. The irrigators with electric pumps have more expense than the people who flood irrigate, for instance," says Fenema.
"Most of the hay sellers around here have a little niche. There are not very many of us who sell hay because most ranchers are just putting up enough hay for themselves. We can usually sell our hay, because people don't have to go very far and the trucking bill isn't near as high," he says.
Typically the hay seller lines up the trucking and loads the hay. "We do everything, and get it right to the buyer's house. All the buyer has to do is unload it. We don't have our own truck, but I know enough truckers that we can usually line it all out if we need to," says Fenema.
Sometimes buyers worry about weeds in hay. "If I have fields with weeds, I don't sell that hay. That lowers the value, so that's the hay we use for ourselves. We sell the best and our cows eat the rest. Our cows aren't near as picky as the customer's cows!"
Hay sellers can find information about how to certify their crop as weed free here. Certifiable forage products include: straw, alfalfa/grass hay, forage pellets/cubes, alfalfa hay, grain hay and grass hay.
im Sheeler, Sheeler Farms at Vale, South Dakota, grows a lot of alfalfa that is trucked all over the country. "I generally don't call my customers until I see the quality of the hay—after I get through baling. Then I take a few test samples to send to the lab, to check protein and RFV (relative feed value). Then I can price the hay according to how the tests turn out. I try to get quality in the bale first, before I price it."
If the buyer is within 200 miles, Sheeler recommends that the buyer come look at the hay. "Then there is no question about what I am sending, and the customer makes the decision regarding quality. If they can't come look at it, I will send one load. Then if they don't like it or don't feel it's exactly what I told them it would be, they don't have to buy any more hay and I can adjust my price down or whatever it takes to make them happy," he says.
"Last year a woman near Kalispell, Montana bought hay for horses, and she started out that way. I continued to send her about a load a week. She just kept telling me to send another one, so she was happy with the hay. In that particular case we just did a bank transfer each time, since she banked with Wells Fargo and I do, too. She could just put the money from her bank account into mine and it doesn't cost anything, unlike a wire transfer. As soon as it was deposited in my account, I sent the hay." It helps to have good working relationships with customers.
Size and shape of bales can be a factor to consider. "The most versatile package that suits most of my customers is the 3-by-3 by 8-foot square bales. They are easier to haul than round bales. The large square bales come in several sizes—3-by-3, 3-by-4, and 4-by-4. The 3-by-3 seems most versatile for the person who uses it, including horse people, because the flakes are smaller and easier to handle. If a customer has just a small tractor, they can move those around (the bales weigh about 850 pounds). Some people have a big enough loader to handle two at once. In a feedlot situation with a bigger loader they can handle three at a time," he says.
"My stacks are 6 high, so when a semi comes in to be loaded, I grab the top 3 and then the bottom 3, and it's quick and easy to load. When you stack these on a semi they are 3 high, so that works nicely. It's a very efficient way to load and unload. When the semi comes, I load them quickly and try to get them in and out of here within an hour, by the time they are loaded and weighed. Actual loading time is usually half an hour for 24 tons (57 bales) on the semi."
If a hay buyer calls and wants hay, the first thing he asks them is their zip code. "I use a Google map, find their location, and figure out the miles." Scheeler has a favorite trucker he calls initialy for a price quote but will use other companies if his first choice is booked.
"When the customer calls and wants to know the price, I'll have something in mind for my end, and what I need, and I'll add the trucking cost so I can give them the delivery price. It will depend on mileage. I base my load at 24 tons. If it's a new customer, perhaps in Texas, I have that person send a check for 24 tons, for the hay only. Then I am covered for my hay. When the trucker gets there, I set it up so it's COD for trucking (they pay the trucker on delivery, with payment for each load). That way I'm not out the whole cost (for my hay and the trucking), if for some reason they didn't pay. This cuts down my risk," says Sheeler.
"When I receive the check in the mail, or the wire transfer, or however they send the money, I make sure the money's good, and then line up the trucking and send the hay. It's a trust situation; they trust that I'll send the hay, and I'm trusting their check is good. Sometimes there's a broker involved, but I shy away from too many middlemen. That adds cost to the customer. It's not that I won't deal with a broker, but I try to avoid them. If I'm dealing with a broker I make sure I get the money up front, since I don't know where the hay is actually going," he says.
"Our first cutting alfalfa usually goes for horse hay or cattle. Second cutting is often more for horses than beef cattle, and our third cutting usually goes to dairies. The RFV for my third cutting will usually be 175 to 210. Dairies really like our hay because it's clean alfalfa, with a lot of protein—often 24 to 24.5 percent. Every dairy I've sold hay to says their milk production goes up when they feed our South Dakota hay," says Sheeler.
"I've sold hay to Texas and to Amish dairymen in Pennsylvania. I send hay wherever it's needed. Last year most of it went into Montana because it was dry up there. A few years ago when they had the drought and fires in Texas, they needed hay badly. We sent at least 20 semi loads down there, and those folks were really happy to receive decent quality hay," he says.
"Everything on my farm is irrigated alfalfa. I also rent property closer to Sturgis, South Dakota which is more of a grass-alfalfa mix, sold for horse hay. This year it got hot and dry so quickly that the hay is not as good; it looks like there won't be very much horse hay on that farm to put up. Weather makes a big difference on hay quality."
First cutting can often be a challenge, with thunderstorms. "Second cutting usually goes pretty well (it's usually hot and dry in early August, without any rain), and third cutting usually goes well also, for dairy quality hay. We don't have very many weeds. If we get weeds or too much grass, we plow that field and put it in corn a few years. This gets rid of the weeds and we can put it back into alfalfa," he says.
"Once we get it in the stack, if it's not sold immediately, we tarp it. This keeps water off the top; that's one negative factor with square bales. They don't shed water and it soaks right in. We have to tarp the square bales," says Sheeler.
He is sometimes asked what a hay grower must get for hay in order to make a profit. This depends on expenses involved for water, machinery, fuel, etc. and every hay farm is different. "My breakeven price depends on many factors. Tractors and balers are so expensive that a person generally needs at least $100 per ton just to break even, and needs to be putting up between 4 and 5 tons to the acre. At $400 per acre it won't pay much water and taxes, fuel, upkeep on tractors and balers. You'd hope for a little more," he says.