When row-crop farmers Steve and Scott Rice started testing the dairy hay business 11 years ago, they didn't envision it as the smartest move they've made.
But it turned out that way, thanks in large part to smart marketing and careful cost control.
It started back in 1993, when they were raising 1,300 acres of row crops and just 175 hay acres near Wilsonville, NE. Today their operation is almost exclusively devoted to hay production that involves more than 750 acres of irrigated alfalfa. The brothers also custom harvest 250 acres of alfalfa.
“If we hadn't switched to hay production as our main focus, we may not be involved in farming anymore,” Scott says.
“I can't emphasize enough the importance of making sure you have a handle on your costs,” Steve adds. “Understanding our costs helped us to admit we were going in the wrong direction by focusing on the row-crop side of the business.”
The two also took a hard look at available marketing resources, making a commitment to keeping a low overhead and focusing toward producing a quality product.
A neighbor started the switch by suggesting that they consider marketing premium dairy hay. He and others involved in the Nebraska Alfalfa Marketing Association (NAMA) helped the Rices make contacts through that organization. They sold their first year's dairy hay crop after attending World Dairy Expo in Madison, WI.
Now the brothers also go to major trade shows in Pennsylvania and California to promote their dairy hay. Plus, they take advantage of NAMA's Web site to market hay on the 'Net.
Maintaining low overhead costs was vital in making the switch.
“We started out the first couple years with a pull-type, hydro-swing swather, an old International tractor with a loader and a $2,000 truck. We would take both the truck and tractor from the field to the shed and back again in order to load and unload,” Steve remembers.
Their hay was custom raked and baled until they could afford additional equipment.
“We followed a slow process to work up to where we had a reliable line of equipment. We couldn't afford to spend a quarter of a million dollars to get into the hay business. It was a slow, slow process.”
The brothers didn't invest in hay sheds until the balance sheet supported the construction. They went from covering hay with tarps to putting up a 150 × 60' shed that stores over 1,200 tons of alfalfa.
Then they realized they could save more by transporting hay to customers with their trucks. This gave them additional flexibility and one of their strongest customer service and marketing tools, Steve points out.
“It has proved invaluable to have one of us standing right next to the customer when the hay is being unloaded,” Steve notes. They always let customers know payment is expected upon delivery.
“Before we leave home, we call to remind customers that we will be collecting their certified checks when we arrive,” Scott states.