Since they started growing their own hay, Wally Holmgren and his son Mike have had a consistent supply of high-quality organic alfalfa for their 400-cow Jersey herd. But their hauling costs haven’t changed much.

Holmgren Dairy is at Myrtle Point, a few miles from the coast in western Oregon, while their hay farm is 420 miles away in eastern Oregon near Frenchglen.

The far-from-home hay production began a few years ago, when consumer demand for organic milk was growing and organic hay was in short supply. The Holmgrens were expanding their herd but couldn’t find the volume of hay they needed at reasonable prices. So they decided to buy more land and grow it themselves.

“We had looked at doing if before, but it never penciled out because the hay was always so cheap,” recalls Mike Holmgren. “We could buy it cheaper than we could produce it. But then the price kept going up and up, and the main thing is it was harder to find.”

A neighbor, Bob Ross of Lee Valley Dairy, set a precedent a few years earlier when he bought 1,800 acres in central Oregon, about 300 miles from Myrtle Point, and had it certified for organic hay production.

The Holmgrens were looking for 500-600 acres but got a good deal on a 2,200-acre parcel in the semi-arid Catlow Valley. Surrounded mostly by Bureau of Land Management rangeland, it’s the only farm in the area, and the nearest shopping center is 70 miles away.

“The price was right and the location didn’t scare us away like it did everybody else who was looking at it,” says Holmgren. “The location was a big turnoff for them, but the cost per acre was a third of what it was in other places.”

Transitioning the existing alfalfa fields to organic production was easy because the previous owner didn’t use many chemicals. Most fields were certified right away; the rest were transitioned within two years.

“Having had an organic dairy for 10 years, we already knew how to do everything,” says Holmgren. “There’s a lot of paperwork involved and a lot of things you can’t do, but we already knew all of that.”

Learning the ins and outs of alfalfa production was more difficult, he adds. Wally worked on the farm the first summer. Then Mike, who had been in charge of the dairy, moved his family there in 2008.

“I was getting a little burned out on the dairy and wanted to try something different,” he says. “I was tired of all the rain and mud. So I wanted to learn how to make the hay.”

Their teacher the first three years was a farm manager who they agreed to hire as a condition for getting the loan to buy the farm.

“There was a big learning curve,” says Holmgren. “We had put up grass hay over on the coast, but that’s totally opposite of putting up alfalfa."

The Holmgrens have added a 125-acre pivot-irrigated field. They now have 12, and own the water rights for two more. Most of the existing stands were weedy, but have been replaced, and Holmgren says weeds aren’t much of an issue in the newer fields. “Nice, thick stands take care of most of the weed problems.”

Their rotation crop is a mixture of oats and peas, harvested as hay and fed mostly to their heifers, which are raised at the hay farm, and their dry cows.

For fertilizer, they’ve experimented with rock phosphate and sulfur on some fields, and have used annual springtime applications of fish fertilizer or a commercial organic product. But no fertilizer was applied the past year.

“It got to be too expensive to justify putting on,” says Holmgren.

Gophers have been one of the biggest problems. Poisoning isn’t permitted in organic fields, so traps are used, along with a Rodenator, which injects a mixture of propane and oxygen into the rodents’ burrows and ignites it.

“It works pretty good, but it’s labor-intensive,” says Holmgren.

Hay is grown and harvested with help from a full-time employee and his wife, plus a retired couple who do the swathing. Holmgren bales at night with a 3 x 4’ baler, finishing a 125-acre pivot-irrigated field in about six hours. Three alfalfa cuttings per year total 3½ tons/acre on average, with the best fields yielding close to 5 tons/acre.

About a third of the production is stacked at the farm and trucked to the dairy as needed; the rest is sold to other organic dairies. The original goal was to feed the best and sell the rest.

“But in reality we end up selling the best hay and feeding our cows what we can’t get premium dollar for – some of the hay that isn’t so pretty or doesn’t test quite as good,” says Holmgren.

The primary clients are two large organic dairies near Modesto, CA, and Granger, WA, with some going to smaller dairies in other areas. Holmgren gives clients a break on transportation costs, delivering hay for $35/ton, well below the amount usually charged by commercial truckers.

The demand for organic hay was strong the first two years, but fell off in 2009 and 2010. Hay prices overall were way down from their 2008 peaks, and Holmgren wasn’t able to charge a premium for his organic product. This year, though, he’s getting $260/ton for dairy-quality hay, and all of it has already been sold.

“This year will make up for those last couple of years,” he says.