Bill Simon, owner of Simon Farms, Inc., Fairfield, ID, uses his organic certification as a marketing tool. Tom Bailey realized he could sell more hay making small bales from larger ones; today he and his brother, Ken, process and sell 200,000 tons of hay/year domestically and internationally. Both men talked about their marketing successes at last week's National Alfalfa Symposium in Kearney, NE.
Simon sells much of the hay from several thousand acres of alfalfa his family grows to seven organic dairies, one as far away as Seattle, WA. "We get higher prices for organic (hay) products than we do for regular products or we wouldn't be doing it," he said. "We get $25-35/ton more for our organic hay than for commercial alfalfa."
His input costs are lower with organic production, but some organic fields need to be pulled out of production. "We have trouble with noxious weeds and have had to take fields out ... in order to treat the weeds with chemicals," he explained. "Once we have used chemicals, we have to keep the fields out of production for 36 months." Maintaining soil fertility is a challenge, too. There are specific restrictions for using manure on organic fields, and manure is hard to get in Simon's immediate area.
Simon said organic food products are claiming a steadily increasing share of the U.S. food market and consumers are putting health and taste ahead of price. "People like the idea of family farms dedicated to growing food that has no possibility of trace amounts of harmful chemicals. This creates a higher demand, and therefore a higher price, for your organic crops." Simon knows he can make money selling organic hay, but he is also prepared to move out of organic production if it stops being profitable.
"There was a day when we struggled with marketing," said Bailey, who now owns three processing plants selling hay cubes and compressed bales to established markets. "We felt the necessity to broaden our markets and established a game plan that would open up to us additional markets. We did some research on international marketing. The products being offered overseas, when we started, were mainly cubes and two-string bales. We devised an idea to make small bales out of large bales and market those overseas.
"We came up with a system where you take a large square bale, put it in a hay press and hydraulically apply enough force to it that it's sliced without losing the conformity of the bale or the feed value by the loss of the leaf. It's quite a process. It opened up the market and there are a lot of these hay presses today." The Baileys developed another mechanical system that slices 900-lb bales to make the product adaptable to TMR mixers. "The reason for our development of these machines was to gain efficiencies, particularly densification, which allows us to increase the weight in the container and minimize freight costs."
The international market for hay cubes has softened, Bailey said, "but the domestic market has really picked up. Cubes offer ease of feeding." Yet it all comes back to good farming, he added. "We focus very heavily on leaf retention and the process of handling hay. Hay is a fantastic product when it's standing in the field; the minute we touch it, it starts to go downhill. It's very important, as we handle the hay, to do it diligently," he told the audience of 200-plus growers and industry people.
Bailey currently sells to Japan, other Asian countries and the Middle East. "The advantage of foreign markets is that they depend on us completely." The dairyman down the road can find another source of hay more easily, he said.