Recognizing a dynamic business opportunity when it presents itself, and being ready to act, are keys to the success of any business.
Thomas J. Miller, owner of Pinnacle Farms near Milan, IL, can attest to that. During a visit to Ocala, FL, a few years back, Miller made a fateful observation: Although more than 15,000 horses from all over?the country spend winters?in that Florida area, its local supply of high-quality horse hay was limited.
“There's a lot of Coastal bermuda hay grown in the area that can be fed to horses as basic filler,” says Vince Heyer, Pinnacle Farms executive vice president. “But to get the kind of high-quality hay horses need for energy, people had to drive 30-40 miles one way.”
Miller directed Heyer and farm manager Brian Johnson to start researching prospects for building a retail feed store in the area. The store would sell high-quality hay produced at Pinnacle's home base in Illinois.
In spring 2007, Pinnacle managers expanded the amount of ground devoted to hay production from 80 to 400 acres. A year later, they opened the store - Pinnacle Farms Hay and Feed Sales - near Morriston, FL.
Finding the right location for the store was a major challenge.
“It's not simply a matter of buying a piece of property and putting up a hay barn,” says Heyer. “We had to deal with zoning regulations, water management issues, lots of paperwork and inspections. It was definitely challenging.”
Pinnacle chose a site on a high-traffic state highway. A major plus for the parcel is that it borders a state forest trailhead frequented by pleasure riders. A high-volume convenience store-gas station also borders the property.
“You always hear that everything in the retail business boils down to location, location, location,” says Heyer. “It might sound simplistic, but it is true.”
The hay storage-retail facility measures 60 × 120'. With 16' sidewalls, the building can hold up to 12 semi loads of hay. There's also an outside loading dock plus outside storage for drop trailers. Along with the Illinois hay, the store sells Coastal bermuda hay produced by local growers, bedding, a full line of Nutrena feed products, equine veterinary supplies and some tack supplies.
In Illinois, the goal is to put up high-quality alfalfa and alfalfa-orchardgrass hay. Typically, first crop is put up in 3 × 3 × 8' square bales. Second, third and fourth cuttings are put up in small square bales weighing 60-65 lbs.
“The first crop is usually a little stemmier,” says Heyer. “The later cuttings are finer, so the small square bales make more sense.”
Minimizing bale handling to retain as much quality as possible is a major emphasis point. A Bale Bandit that follows the baler packages small square bales into 21-bale units. As soon as possible after baling, the units are loaded onto a trailer and carted off to one of two storage sheds.
“We want to get them off the field and out of the sunlight quickly, so we don't lose that green color horse owners like so much,” says Heyer.
Low labor input is another priority. Using a skid-steer, Heyer can load a 53' van-type semi trailer in less than an hour. Fully loaded, the trailer holds 30 of the 21-bale units (630 bales). Total weight per load is around 20 tons.
“I've been at places where they have a crew of four or five people loading individual bales by hand and it takes two to three hours,” he says. “The bales get tossed around, handled and rehandled, and you have all kinds of dust floating around. That dust is actually dry leaves falling out of the bales. The accumulated-bale method preserves the nutritional value of the hay while also being so much more efficient.”
Currently, a Pinnacle employee makes one delivery run a week between Illinois and Florida, a 2,400-mile round trip. A backhaul arrangement with a local mulch supply company helps make the run economical.
“One of the mulch company's suppliers is located in Georgia, just a few miles off our return route,” says Heyer. “The backhaul is absolutely critical. It pays for the fuel down and back. Any truck running empty is not a good truck.”
Early on, he says, trucking posed some challenges.
“We had some problems, at first, moving bales long distance from a cold, dry winter climate to a warm, humid climate in the enclosed trailers. We'd get some condensation over the course of the trip, and that would lead to surface mold problems. We solved that by putting some vents in the trailer to get more air movement.”
Pricing at the retail store is on a per-pound basis.
“We think it's a better route to go than a per-bale price,” says Heyer. “Even with the small bales, the weight can vary quite a bit from one bale to the next. Doing it this way is fair to the customer and to us.”
Pinnacle also delivers to customers' farms on request.
“We take a skid-steer to their place, take the 21-bale units off the trailer and set them right in the barn alley,” he says. “Like us, customers don't care to handle bales any more than they absolutely have to. It's really been a popular option for many of them.”
While Heyer says it's early to determine how successful the venture will be, he's encouraged by how things have worked out so far. Especially positive is the opportunity to secure a premium price for his product.
“Here (Illinois), small square bales will bring about $4/bale,” he says. “In Florida, we're getting almost four times that. Even with trucking and other costs, we're still getting a very good return.”
To learn more about Pinnacle Farms, visit the company's Web site at www.thishayisforyou.com.