When Jeff Stephens quit raising tobacco last year, he started growing more hay. Some of it is stored in a new hoop barn partially paid for by a trust funded by four major tobacco companies.

Stephens and his dad, Jackie, own their own farms but work together near Ewing, KY. They built the 37 × 84' hoop barn on Jackie's farm, with $4,000 of the $14,000 cost coming from one of the trust's cost-share programs.

The younger Stephens recently received approval to build a second hoop barn, this time on his farm. He also got money to help defray the costs of putting up a manure storage facility for his beef herd. That building doubles as hay storage during summer and fall. Other funds were used to interseed grasses and clover into old alfalfa stands for grazing.

“These cost-share programs have been great,” says Stephens, who used to harvest up to 20,000 lbs of tobacco annually. “I've used them to expand my hay and beef cattle businesses.”

The National Tobacco Growers Settlement Trust was established by tobacco companies to compensate growers for income losses expected to result from the Master Settlement Agreement. That $206-billion court settlement between cigarette makers and 46 state attorneys general compensates state governments for the expenses incurred in the treatment of tobacco-related illnesses.

To finance settlement, cigarette makers raised their prices substantially — a move they anticipated would lower demand for tobacco. To lessen that impact, the trust was established and divided among tobacco growers in 14 states.

In Kentucky, the trust money is allocated by the Kentucky Agricultural Development Board and administered by county extension offices. Cash payments, based on production, have been made to tobacco-quota holders.

Some money is also used to fund various cost-share programs, including the one that helps with hay barn construction.

“The program's having a very positive impact on our state's hay industry,” says Tom Keene, University of Kentucky hay specialist. “As of late last year, $15.8 million has been used to help build hay-storage structures.”

Getting hay bales under cover is important, says Keene. “Most of the state's hay is packaged in round bales. The majority of those are stored outside, so we suffer tremendous losses — upwards of 50% or more if the bales are on the ground.

“Once these structures are built and we can move the bales inside to covered storage, our losses are reduced to 2-5%. The program's a tremendous help in keeping the quantity and quality of hay that we've made.”

Stephens' new hoop barn has helped in two ways. “My round bales used to sit outside and I estimate I was losing over 25% of the forage due to spoilage,” he says. “Now I have better hay and more of it.”

He puts up his first cutting of alfalfa-orchardgrass hay in round bales for his beef herd. The next three cuttings are put up in small bales and sold to horse owners.

“I used to have to sell and truck the horse hay right after it was harvested because I didn't have enough storage. Now I can store it in the hoop barn and sell it later in the fall, when I have more time to deliver it and prices are higher.”

Doug Overhults, a University of Kentucky ag engineer, says nearly three-fourths of the state's 120 counties have participated in the hay-storage program, which began in 2003.

“The maximum amount a hay grower can get to build or renovate a storage structure is $5,000,” says Overhults. “Most of them are either hoop or pole barns or post-frame buildings.

“The program includes renovating tobacco barns, but I don't think a lot of that's been done. Additions to existing buildings can be included, too.”

Each participant must agree to use the structure only for hay storage for at least five years, and it must be insured. He or she also must attend a short educational program provided by the extension service.