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Objectives-
A hay producer
needs to identify the particular market that he (or she) wants to serve.
The more clearly the market is identified and the better the unique
needs of the market are met, the easier it will be to market the hay.
Some considerations that might come into play are forage species,
quality, color, smell, feel, type of hay package, and especially the
nutritional needs of the animals that will consume the hay.
The
objective of the buyer is to obtain hay of the type he (or she) needs
and to purchase it at a reasonable price. Otherwise he will likely pay
more than is necessary, and/or fail to obtain hay that will meet the
nutritional needs of his animals. The need for a seller to make a profit
and the need for a buyer to purchase hay at a reasonable price seem to
be in direct opposition, but in most cases there is room for both
objectives to be satisfied
Finding
The Deal- Most
hay producers need to advertise their hay, at least when they first get
into the business. There are many ways to do this including periodicals,
local newspapers, or computer listings. Signs placed in front of the
farm are often associated with people who are not really in the hay
business year-in and year-out, but even this simple technique is
effective for some large scale commercial producers. The principle is
simple: advertising must reach potential buyers.
Buyer/Seller
Discussions- The
seller needs to understand what the buyer wants and needs, and the buyer
needs to understand what the seller has to offer. If the buyer
cannot inspect the hay in advance of delivery, the terminology used when
hay is discussed is critically important. For example, what
"leafy" means to one person may mean something different to
someone else. The same is true for many terms such as "stemmy,"
or "bright green," or "soft."
Agreement
on price is obviously important. The ball is in the seller’s court
first because he sets the price at which his hay will be offered. A hay
producer won’t be in business for long if he is making little or no
profit, so determining the input costs is a first important step in
pricing hay. Costs associated with hay include production, harvesting,
advertising, and perhaps storage and transport.
Storage
is an area in which expenses can easily be underestimated. Storage costs
can include shrinkage (5 to 10% is possible), storage building
depreciation (5% per year is a good figure to use), repairs (2% is
usually about right), taxes, and insurance. Other price factors may
include nutritive analyses, appearance (which, unfortunately, is often
more important than nutritive value), and the cost of alternate feeds.
Hay buyers often talk to other buyers and also to other sellers, which
tends to keep hay prices from getting too far out of line.
The
current market for hay is a final determinant of price. Hay can be sold
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