Asked how things are going in Manitoba’s timothy hay business, Irwin Helwer’s answer said it all.
“I got out of it two years ago,” said Helwer, who used to operate Canadian Greenfield Forages, exporting compressed timothy hay for Japanese dairy herds.
Helwer, who farms near Teulon in Manitoba’s Interlake, is not the only timothy exporter who is no longer in business.
“Fisher Branch closed up, Portage closed up and Dauphin just recently sold,” said Helwer.
Two years ago, double compressing timothy hay into small, square bales was seen as a tremendous opportunity for Manitoba forage growers.
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But a combination of market forces, adverse weather and finicky customers has knocked the industry down, said Pam Iwanchysko, a farm production and forage specialist with Manitoba Agriculture.
“When prices were really good (last year), a lot of forage (acres) were tilled under and went back into canola or wheat production,” said Iwanchysko.
Consequently, the supply of timothy hay, and forage in general, is down significantly from previous years, said Iwanchysko. However, she couldn’t provide numbers on how many forage acres in Manitoba have shifted to crops.
On top of that acreage loss, wet weather in 2008 made it nearly impossible to produce hay below 12 percent moisture, which must also smell and look a certain way to satisfy Japanese inspectors.
“It’s a very risky business. The Japanese are very particular in the product they want,” said Iwanchysko. “They have rejected containers of hay that get shipped over there.”
Growing nearly perfect timothy every year just didn’t work in Manitoba’s Interlake, Helwer said.
“In the Interlake, we get lots of rain …. It’s too wet to do anything like that,” he said.
Several sources said Intermountain Forage in Dauphin recently sold its timothy compression business to investors from Quebec. However, the Producer could not confirm this with the company.
Although other Manitobans are getting out of the timothy trade, or selling their business, Garry Halwas maintains faith in the industry.
Halwas, who operates Sunridge Forages near Russell, Man., said compared to six months ago, the fundamentals now look much rosier for Canadian timothy exporters.
“The Canadian buck is weak, which is good, and the ocean freight has come off quite a bit,” said Halwas, who expects to export 9,000 to 10,000 tonnes of compressed timothy bales this year, down from a peak of 17,000 tonnes a few years ago.
“Also, the last couple of years you couldn’t get a (shipping) container …. But since the whole world has stalled out, all of a sudden there’s containers sitting all over.”
The rapid decline in freight rates, Halwas said, has cut his cost by 30 percent.
In addition to lower costs, Halwas said world demand is only going to grow because Japanese buying is steady, Europeans are buying more and Dubai is an emerging market for timothy hay.
The only question, he said, is whether there will be enough timothy on the Prairies to satisfy local and international markets.
“With the high grain prices, a lot of the timothy acres came out. Whether they will come back or not, who knows?”
