Marketing hay requires strictly adhering to sound business practices that ensure maximum return for your product, says Glenn Friesen, provincial forage specialist with Manitoba Agriculture, Food and Rural Initiatives (MAFRI). Here are some of his recommendations:
Know your cost of production. "It's unfortunate, but a lot of hay growers shy away from recordkeeping," says Friesen. "They don't really know what it's costing them to run the tractor during harvest or how much to pay themselves for their own labor. Keeping accurate records is absolutely essential if you want to price your hay appropriately."
Calculate shipping costs carefully. "Good recordkeeping will help you decide whether it's worthwhile to ship hay a few extra miles to get a few extra dollars per ton."
Find out what others are charging. Hay type, quality and bale package will play a role in determining the price you can command for your product. Checking with hay brokers, auctions, local and regional farm newspapers and magazines and the Internet will give you an idea of what similar hay is selling for in your target marketing area.
Establish a price up front. "A pre-priced load of hay is likely to command more interest from buyers and sell more quickly than one where the price is subject to negotiation," says Friesen. "Everybody is extremely busy these days, and nobody likes the idea of making one more phone call to haggle over price. It's simply more comfortable for the buyer to know where price negotiations will begin."
Deliver what you describe. In the grand scheme of things, the hay marketplace is relatively small. "Word travels quickly among hay buyers when someone gets a load of hay that doesn't measure up to what they were expecting," he says. "It doesn't matter what business you're in, the goal of every marketer should be to build a good reputation."
Protect yourself from a bad sale. Take steps to check the customer's credit reputation and reliability for paying. "Requesting advance payment or partial payment via certified check is an option worth considering, especially when you're dealing with a new customer."
Consider working with a broker. "Commissions will vary from broker to broker, so you'll want to shop around," says Friesen. "But cost shouldn't be your only consideration. Look for someone who has a reputation for getting the best price for his or her clients. As with your customers, you'll want to do some legwork up front to make sure the broker is financially reliable and will pay you for your hay."
For more ideas on this topic, check out "The Basics Of Marketing Cash Hay" on the MAFRI Web site.