A new alfalfa valuation tool will simplify hay pricing decisions for growers and give them more confidence when dealing with buyers, says one of its developers.
The online tool, set to be launched at this month’s Mid-America Alfalfa Expo in Kearney, NE, “will give growers a more accurate picture of what their hay is actually worth,” says Kyle Lechtenberg, a Spencer, NE, grower and Nebraska Alfalfa Marketing Association (N.A.M.A.) board member.
“If somebody calls and says, ‘I’d like to buy your hay,’ you can say, ‘According to my valuation, this is what it’s worth,’ rather than saying ‘Maybe it’s worth this’ or ‘What do you think it’s worth?’ ” he says.
Lechtenberg and three other N.A.M.A. members developed the tool with input from nutritionists, Extension agents and other growers. It involved some complex calculations, but the end product is “very simple to use,” he says.
It lets users calculate hay’s value based on its nutrient content or on current market prices. The nutrient-based model compares the value of alfalfa’s nutrients with those in corn and soybean meal. Users each enter their local corn price and best estimate of the soybean meal price. They also input the TDN and crude protein percentages from a relative feed value (RFV) hay test, although actual RFV scores aren’t used.
“The nutrient-based model could change daily because the corn and soybean market is changing that fast nowadays,” he says.
The market-based model combines forage-test results with current USDA-reported hay prices for the user’s area. Inputs include the hay’s RFV score and crude protein percentage, plus the highest price being paid for supreme-quality hay and the lowest local grinding-hay price.
The model factors in buyers’ willingness to pay a premium for high-quality hay, but not for average- or low-quality hay. The resulting prices should reflect market conditions more accurately than charging a certain amount per RFV point, says Lechtenberg.
He expects prices provided by the two models to be fairly close. They should serve as a starting point in buyer-seller negotiations, but higher prices for growers wasn’t one of Lechtenberg’s goals. Rather, he wanted “to build a tool that is just as good for the buyer as it is for the seller.”
N.A.M.A. members can access it free on their Web site, www.nebraska-alfalfa.com. It may eventually be available to non-members, too, and expanded to calculate values of forages other than alfalfa, he says.
Working with Lechtenberg on the tool were Dan Larsen, Palmer, NE; Chuck Essay, Alliance; and Art Anderson, Arcadia.