Technology in trade
for Tri-State Livestock News
Growing hay is as ancient as the Bible, but the spectrum of systems to trade forage today rival the methods of making it.
From a verbal commitment to an auction gavel to an iPhone app – balers and feeders can meet with a wide spectrum of trade and price discovery options. Extreme weather situations of rainfall, floods, drought and wildfire situations in the past several years have put an increased level of urgency and necessity on hay trade to many producers.
Bob Sazama is a hay broker who for 25 years has made a living trading hay from across the west, mainly high quality alfalfa rounds and squares from Montana and North Dakota, and selling it to Minnesota dairies. As a broker, Sazama both buys and sells the hay personally, as well as provides transportation. He averages 90,000 miles a year. He bases his pricing on two large hay auctions in Minnesota, which set the regional market, noting that high quality dairy hay is normally sold on a base price plus a dollar per point for relative food value. Sazama says large square bales have a distinct advantage in inter-state trade, as they can be hauled without oversized load restrictions, and thus able to travel at night. He and his wife both drive semis, but also work on brokering back hauls of freight from Minnesota.
He notes that over the span of his career he has built up a strong clientele, but those customers are slowly retiring. “I have had to start a whole new chain,” he says. It was Sazama’s circle of hay sellers which brought Bob and his wife from their roots in Minnesota to Eastern Montana, where they live today. “We were staying with hay vendor friends near Fallon (Mont.) and saw there was a farm for sale nearby – it was a perfect location for what we do, close to a major road and not too muddy to get trucks in and out,” says Sazama. He and his family moved there in 2014.
Sazama has always operated on a cash basis: “When I buy hay I pay for it right away and when I sell hay I collect money before I unload,” he says. “In the hay business you don’t want to be in a position of dropping off a load of hay in a different state and having someone send you the check. Once it’s off the truck, it’s theirs. Possession is 9/10ths of the law.”
Even though he still takes precautions, Sazama says he has been blessed to never once have gotten in a bind with money. “I’ve gotten paid for every load I’ve ever delivered. The good Lord takes care of me,” he says.
Hay auctions are another traditional method of dispersing hay. Willy Groeneweg, along with his wife, JoAnn, owns and runs Dakota Hay Auction in Corsica, S.D. He started the auction in 2010 after working in the dairy industry in Iowa for years and witnessing the hay industry inside and out. They auction off about 1,100 loads of hay a year, most directly to cattle and sheep ranchers in about a 60-mile radius of their location. Groeneweg says normally fall and winter are their busy times, and summer slows down, but due to the high rates of winter kill and spring rains in major hay producing regions, he says hay demand is currently strong and they’re seeing some of the biggest runs of the year right now.
The Groenewegs sell hay the old fashioned way at their auction – by sight, smell and opinion. Hay racks line up at auction time, bids get placed, and the trucks roll out, usually within a 30 minute window each week. Sellers pays a $4.75/ton commission, and buyers are provided 10 miles of free transportation, with the balance of $4.50 per mile added to their ticket. The hay rarely gets unloaded and reloaded, although they do provide that option for a $50 fee.
Groeneweg says some buyers will bring their own moisture probe, but as an auction they don’t make any guarantees and all hay is sold at the buyers’ discretion. He says that although livestock auctions sometimes will also sell hay, hay auctions are specialized and are price-setters for the region. Their sale has their own USDA report and a tremendous amount of hits on their website which reports hay prices.
Online hay marketplaces are gaining traction in the hay market, with site leaders like HayMap.com facilitating trade nationwide.
Shaun Baker started HayMap.com, an online hay and forage marketplace, in 2015 after bucking bales and running a hay company for years in his home area near Houston, and looking for a better way to trade his product. He noted that while many government and university websites offered hay hotlines, there was no aggregate site with funds and time devoted to maintaining a current database. After taking some software classes, he developed the iPhone marketplace app that has grown from a small, self-funded startup to one of the leading websites for Google hits for hay sales. Baker says it has literally been a bootstrap effort – in the beginning he hand-delivered flyers to auction barns, horse shows and extension offices to populate the site with hay sellers and buyers. Today the site has facilitated thousands of trades across the nation and during peak seasons sees more than 100 new listings appear daily.
Baker says he is most amazed at the variety of demographics of users of HayMap. “I thought initially we would be popular among the 25-50 year olds, but we have users up to 75, 80 years old who say, ‘Just tell me what to do so I can sign up,’” he says.
A true entrepreneur who sees a need and then creates a solution, Baker also has plans for an escrow and credit service, an Android version of the app, membership discounts from a variety of hay equipment, input and services vendors, and an opt-in price reporting system.
“Over the years we have seen everything from people putting signs ‘Hay for Sale’ on fence posts and gates, flyers posted at businesses, classified ads, even Craigslist listings. We are just looking for a way to create a secure marketplace that brings hay buyers and seller together on one platform and helps people in agriculture, especially in times of drought or extreme weather, get a product sold or bought.”