Organic Hay Prices

Demand for Organic Hay

Even though organic hay prices tend to be higher than hay that isn’t organic, there is still a very high demand for it. In fact, demand is so high that it is difficult for producers to keep up. Currently, the demand is about 20 percent higher than the supply. This is great news for anyone considering the addition of organic hay to their farm’s crops.

Organic dairies are the primary market for organic hay producers, although farmers of organic beef are also potential customers. Hay quality is an essential consideration. High quality hay allows for higher milk production, so organic hay farmers with the best quality product are in high demand by organic dairy farmers, who are required to provide organic feed to their herds. They rely on healthy cows to produce as much milk as is possible without compromising the health of the animal.

Hay Quality

While high quality hay is important, that doesn’t necessarily mean that it should consist of only alfalfa. Growers have begun to notice that when their cows are fed strictly alfalfa hay, they are not as healthy due to a lack of fiber in their digestive tracts. In addition, alfalfa has more protein than cattle can use, creating a milk urea nitrogen (or MUN) level that is too high.

The solution to this problem is the addition of grass to the hay mix. A grass/alfalfa mix has actually been found to increase milk production over animals feed strictly alfalfa hay. Talk to your potential customers to find out what type of mix they prefer for their herds and you may be able to fill a niche in your area and make a nice profit as well.

The Organic Difference

You may be wondering what the difference is between organic and conventionally grown hay to command such high prices. Well, there are actually two differences:

• Fertilizer: Organic hay is primarily fertilized with manure. In order to be certified organic, no synthetic, chemical fertilizers can be used so manure is what is used to add necessary nutrients to the soil.

• Pest control: The other difference is how organic farmers implement pest control on their farms. Instead of using harmful chemicals to control unwanted insects, organic hay producers use a combination of biological means of control. Beneficial insects, cover crops, crop rotation and birds all help to reduce insect damage to the hay.

Because organic milk producers must feed organic hay to their cattle, you will need to clearly understand how to use these methods in your fields. Failure to do these things will result in your hay being sold as conventional hay and the money you have invested to produce organic will not generate the return you had hoped for.

Calculating Organic Hay Prices

In order to calculate your hay prices, you need to have an idea of the cost to produce organic hay. Fertilizers alone may cost somewhere in the area of $120 per acre depending on where you live. Other variables to consider include:

• Lime

• Insect control

• Twine

• Fuel

• Maintenance on machinery

Don’t forget to add into your calculations the depreciation of your equipment, interest on your capital investment and even housing and insurance costs. You may find that your cost is in the area of $476 per acre or even more depending on the part of the country you are in. After your expenses are subtracted you may only profit $155 per acre. More accurate figures should be calculated for your individual situation as this is simply an example.

Selling Guidelines

If you have done the math and decided that you are ready to become an organic hay producer, there are a few guidelines that you should use.

• Determine the buyers' needs: Talk to your potential customers and find out the type of hay that they need, the kind of animals that they need it for and if they want their hay mixed with a percentage of grass. This way you can customize your product to meet you customers’ needs.

• Terms of pricing: Is the price you are quoting the customer for pick-up at your barn? Does it include loading? Will the hay be delivered?

• Size of purchase: What will be your contract amount? Does it need to be delivered all at once or over time?

• Effective date of pricing: How long is your quoted price good for?

• Terms of contract: Is payment expected at the time of delivery or will you allow payment later? Will you accept cash or check?

• Delivery: If you will provide delivery, you need to know how accessible the delivery site is. Can you get your truck in? Will there be help to unload and stack the hay? Will the buyer be present to let you in, help with unloading or provide you with payment?

• Follow-up: Contact your buyers after delivery to see how happy they are with your product. Listen for areas that they feel need improvement and work on those areas.

If you tailor your organic hay business to meet the needs of your customers, you will find that your customer base is loyal, even when organic hay prices increase.