The personal touch is indispensable in successful hay marketing, according to a range and forage specialist with Saskatchewan Agriculture.
“Grain producers have a very well defined marketing system. Hay is traded informally so you have to do a lot more leg work to get the information you need,” said Michel Tremblay, who has experience in the cash hay business with his family’s farm near Langham, Sask.
That leg work includes getting to know potential buyers in the region such as dairy farms, hobby and race horse operations, PMU barns, sun-cured pelleting or alfalfa cubing businesses and beef feedlots and backgrounders.
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“Your goal should be to develop a clientele who are repeat customers on an annual basis,” he told a range and forage conference here last week.
When his father started selling hay in the early 1980s, a local race track was an important customer. Tremblay offered a money back guarantee for hay that was dusty or mouldy. It cost a little more, but it helped build a reputation and developed more customers, he said.
Reputation is also enhanced if the seller keeps prices reasonable for regular customers, even though weather problems might cause hay shortages that drive up prices.
“We find that with repeat customers, the demand fluctuation from one year to the next is quite level because a certain portion is always sold, usually before we put it up in the spring.”
Dealing with familiar customers also reduces worries about reliability of payment, he added.
Deciding what to charge for hay is always tricky, he said.
The first step is to determine the quality of the hay compared to the district and provincial quality. This will help determine whether to ask for the top, middle or bottom of price ranges.
The quality will also help focus marketing efforts. While many buyers want high protein hay, PMU operations want low protein and mature grass.
Next, ask around the district to determine what sellers and buyers think the market will bear.
“But it’s a bit of a poker game in our country because no one wants to tip their hat and say (what) they are going to start pricing at.”
Also useful is a list of historical prices that can be obtained from provincial agriculture departments’ statistical services.
Another source of prices is the classified advertisement section of The Western Producer and other newspapers, he said.
All three prairie provinces have feed and forage listing services that can be accessed by mailing list or by the internet on the provincial agriculture department sites.
Also on the internet are hay listings services that can be found by searching for the word “hay” in a search engine.
“If you are looking at markets farther from home, like hauling into Manitoba, Alberta, Montana or into the dairy area of the U.S., this can be quite useful,” Tremblay said.
