Oil fever in the Northern Plains is creating new marketing opportunities for forage producers like Don Walker.
Last fall, oil companies bought several thousand small square bales of certified noxious-weed-seed-free oat straw from the Glendive, MT, producer. Sold mostly in small lots of 150-200 bales, they were to be used in reclamation projects at well-drilling sites, pipelines and associated construction sites.
“This happened to be oat straw, but they’ll take any kind of straw as long as it’s certified. That’s required by state law,” explains Walker.
He hopes to sell more to the companies later this year. “They’re very good customers; they pay very well. I got as much for that straw as I was getting for the hay I was selling to my regular customers. If I would have had more of it, they would have taken it.”
Demand for certified weed-seed-free straw has definitely been on the uptick in the state with increased oil-drilling activity in recent years, says Jeremy Seidlitz. He’s a noxious-weed-seed-free forage specialist with the Montana Department of Agriculture (MDA).
“We’ve been getting tons of phone calls from oil companies and environmental renovation companies looking to source supplies of weed-seed-free straw and forages,” Seidlitz says. “At this point, it appears that the demand far exceeds the supply.”
MDA launched its weed-seed-free forage program in 1995 after the U.S. Forest Service began requiring horseback riders and other recreationists to feed animals only that forage while on federal lands. Government agencies and public utilities must use weed-seed-free mulches, bedding materials and erosion-control barriers in their work. Private landowners are also encouraged to use such products.
The amount of certified forage produced in Montana dropped from 29,191 tons in 2010 to 23,124 tons last year after rising steadily for most of the past decade, reports MDA.
Walker expects his yields to be lower this year, too. “The second cutting was a bit below average,” he says.
Certified straw is a companion enterprise to Walker’s haymaking and beef-cow operations. He also grows alfalfa and alfalfa-grass hay on 850 irrigated and dryland acres. Most is packaged in large round bales weighing 1,400-1,700 lbs.
In a typical year, he feeds about 60% of what he produces to his 250-cow herd. The rest goes to local ranchers – except for about 5% sold as certified weed-seed-free hay to recreationists.
As with the straw sales, he gets a premium for the hay product. “Usually, it’s about half again as much as we’ll get for our regular alfalfa. So, if alfalfa is selling for $100/ton, this will bring $150/ton.”
Even so, Walker has been reluctant to increase the amount of acreage devoted to weed-seed-free crops.
“You have to have the hay inspected in order for it to be certified, so there is a cost involved,” he says. “And the demand can be variable. One year, you’ll have a pretty good market. Then the next year, sales will drop off sharply. It’s difficult to anticipate how much you might be able to sell from one year to the next.”
In the Montana program, certification currently costs $2.50/acre. To qualify for weed-seed-free status, straw must be inspected within 14 days of harvest and standing hay, within seven days of harvest.
The certification cost and fluctuating demand could keep some producers from getting into the weed-seed-free market, believes Seidlitz. “As an example, one guy who called me had 10,000 acres of straw that he was thinking of certifying,” he relates. “But when he learned what the certification cost was, he backed off. He didn’t want to commit to that kind of expense until he had a consumer lined up for his product.”
For a list of states with similar programs, go to hayandforage.com/links.