Square Baling and Hay Market

[matt21]

I have a very small square baling operation. I usually bale between 2,500-3,000 bales per year. I am wanting to expand the operation to close to 10,000 bales per year. I know my equipment could easily handle it. Basically i am wondering how to market the hay. I had some trouble selling the last 1,000 bales i put up last year. I took some to auction last weekend and the most any brought there was $2.25/ bale where normally it brings between $3 and $5. So, how do i market this much hay? We have had an over abundance of hay here the past few years so there's a lot of leftovers for most people. Should i market out of state as well?

 

[jimg]

Good question. I think it would be pretty hard to make any $ unless you're selling a premium product. My guess is hooking up a hay broker, advertising in places read by your target market or directly contacting consumers in your target market. The hay broker ave would likely net you less since he's going to want a cut for services rendered. The other 2 will/may take considerable time to pay off. I wouldn't ramp up to 10k immediately but work up to that point as I found customers. My choice would be to contact potential customers directly. That way I cultivate a lasting relationship and am knowledgeable about their particular needs. Thats just me though.

I think it becomes tougher once you're outside your own region (if thats the way to intend to go). Then you're into what people prefer thats diff from whats locally accepted.

From what I'm told 10k bales isn't that much. My neighbor, for instance, once supplied a race track not far from where we live. He was making 40k bales just for the track. So, I suspect you'll also need to find someone interested in smaller amts of hay.

 

[Mickey_Fx]

What kind of hay and what qlty? Is there a way to market on type and qlty? In other words, is your hay better than the average? Is there a need out of state, can you sell for the price you'd like, add in transportation cost and compete with local out of state prices?

 

[flusher]

I have a very small square baling operation. I usually bale between 2,500-3,000 bales per year. I am wanting to expand the operation to close to 10,000 bales per year. I know my equipment could easily handle it. Basically i am wondering how to market the hay. I had some trouble selling the last 1,000 bales i put up last year. I took some to auction last weekend and the most any brought there was $2.25/ bale where normally it brings between $3 and $5. So, how do i market this much hay? We have had an over abundance of hay here the past few years so there's a lot of leftovers for most people. Should i market out of state as well?

So how do you connect with buyers now? Walk-in business? Local advertising? Sell to neighbors?

One of my neighbors does about 30 acres of alfalfa. He has his crop pre-sold to locals before it's cut and baled (3-twine, 100-120 lb bales).

Same with another neighbor who does over 200 acres of oat hay, also 3-twine. Some of it goes to the feed lot guys South of Sacramento.

 

[AKfish]

I am wanting to expand the operation to close to 10,000 bales per year. Basically i am wondering how to market the hay. So, how do i market this much hay? We have had an over abundance of hay here the past few years so there's a lot of leftovers for most people. Should i market out of state as well?

Some questions to ask yourself: What does the demand side of the equation look like in your area and/or just outside of your location? Alfalfa.. grass hay.. mixed hay.. native grass??

How does that demand picture fit your current operation? How does the production from the increased acreage fit with what area folk's buy as well as what will sell if you could arrange shipping?

If what you're currently producing is surplus to area needs; can you adjust what you're growing? Would that help you to tap into other areas of market demand?

Cow-calf operators don't totally feed the same as dairy producers. Feed lots are more in line with dairy production (with some variation). Horse owners are a different demand picture than these other operators. Race tracks and high performance horse owners are a different market than most run-of-the-mill horse owners.

Long - short story... what do you have currently; can you make adjustments to better fit the market; what is the increased production acreage; can you make it better fit the market? Do you see a niche market (native grass, etc.) that your operation could fill.

Of course, as mentioned, you could individually contact area operators and try to establish a relationship as well as learn about their particular feed uses and suppliers. That can't hurt. Even if somebody doesn't have room on their "dance card" at the moment... if they have your name - when a problem comes up - they just might give you a call.

Most of this is likely a re-hash of what you already know... sometimes it's just a matter of somebody else asking the questions to get your head into better focus!

Best of luck.

AKfish

 

[zzvyb6]

Well, price is a good way to generate buyers. And buyers have friends and acquaintences who might need hay. Make up some flyers and start the marketting process. I got more buyers than I could supply by going to the auction myself, not to buy but to talk with buyers to suggest they could get a consistent, regular source of hay with delivery for a lot less trouble (but more money) than they were getting via the auction. Most of my buyers are women: they want certain weight (easier to handle), good intake (the horses like it and don't waste it) and some social contact with the producer (that would be me). Treat them right, deliver on the day when they call, help them with other issues around the barn: water, fences, garden, repair, babysitting (horses) and dog raising ! I'm all sold out by mid winter !!

 

[jimg]

"Well, price is a good way to generate buyers."

Good point...know what your cost of production is. You do intend to make $$ at this venture...right?

The hay market is anything but standardized. However, I suspect many producers and buyers are going to price by weight and feed value. Perhaps this isn't the case for all markets but I would at least be aware of it. Knowing feed value is an advantage. At least if your product is priced above most in your market you can explain why.

 

[chh]

I live on a Hwy, in the last 2 years I've sold 300 to 400 round bales just off of a hand painted plywood sign about 2' high and 4' wide. I advertised on Craiglist year before last and sold 120 from those ads. Most of my sales and custom baling though is neighbors and them recomending me to someone else. You have to be very honest about the hay quality and price it to give a good value to your customer(while remembering your input cost). If anyone complains or if there is a problem handle it ASAP and do your best to make them satisfied.
As an example, last summer 1 verbal reference from a friend to his neighbors got me 2 more sales. 1 for 25 bales picked up and 1 for 50 delivered. The 50 bale order called in January and bought another 30 delivered and ordered 100 for summer delivery. The hay quality is just average cow hay and the price I charge was on par with the area prices or slightly above. He was just impressed that I delivered on the days and at the times I said I would be there.

 

[blueriver]

Have you explored sales to construction ... a lot of square bales are bought by Construction companies ... in large orders for good money.

 

[mjarrels]

Local farmer up the road sells premium square bales to Circus' (they also own a large trucking Co.)

mark