Exporting works best when the extra production and marketing integrate seamlessly into your overall farm management…— Russell and Darren Chapman
It started with a vague kind of wondering, not with a turn-on-thelightbulb, eureka sort of moment. Probably, it’s how most success stories in farm exporting get started,
based on tying a winning concept together with a lot of no-nonsense business thinking.
It was the mid-1970s and Manitoba farmer Russell Chapman wanted to start taking the hay business a bit more seriously. It wasn’t a completely new line for the family’s operation, just south of the community of Virden. They’d always grown hay for a small cow-calf operation that complemented their larger grain operation and they had been selling excess hay since the 1950s.
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Russell had a hunch, though, that they could earn a better dollar by taking the business up a notch.
The question was how to identify, target and gain markets for an agriculture product that was often an afterthought for farms that primarily either grew grain or raised livestock.
The answer was to go door-to-door — literally. He soon found himself in a pickup truck bumping up and down farm roads south of the 49th Parallel in the neighbouring state of North Dakota. He was looking for dairy operations that might be interested in buying the farm’s hay. He initially didn’t have much luck, but says he did garner a bit of valuable market intelligence from the trip.
“There wasn’t much call for it, but when I got talking to the people there, we found out where the hay was going to from that area,” Russell explains.
What those North Dakota farmers told him was the best-developed markets were a bit to the east in Minnesota and also in Wisconsin, known worldwide as The Dairy State. Armed with this information, the farm was able to complete its first sales into the U. S. in the mid 1970s.
Was the whole project ultimately a success? Well, a few years later a younger member of the operation was forcing instructors at the University of Manitoba to reconsider their preconceptions about hay markets. While studying agriculture at the university, he’d been called on to complete cost-of-production estimates for a farm management class.
“They were telling him ‘There’s no way you can sell hay for that much,’” says Russell with a chuckle. “And he was telling them ‘Well, that’s how much we’re actually getting.’”
What the Chapmans and other pioneers of the hay export industry had discovered was that in some hay markets such as dairies, quality really counts — and if you can find those niches you can make a fair return to your operation.
Late this winter the Russell and nephew Darren Chapman took the time to sit down with Country Guide in their cluttered but functional combined coffee room and office to discuss the ins and outs of the hay business. As the old tomcat greeted the stranger with the tape recorder, they laid out a very practical — but sometimes challenging — business model that makes the most of their farm’s unique assets and complements other facets of their operation.
“We have some lighter land that produces pretty good hay (alfalfa or alfalfa-grass) once you get it established,” says Darren. “And your input costs are not as much.”
It’s this combination of better returns on “poorer” land that’s led the industry to expand dramatically since its inception, says a forage specialist with the provincial agriculture department.
Glenn Friesen says because the industry is primarily made up of independent operators making private deals, it can be tough to quantify just how big the hay business is in the province. What he does know is that more than 100 growers in the province have signed up to the voluntary Manitoba Hay Listing, an online directory designed to give buyers a opportunity to find Manitoba farmers with hay to sell.
“We know that not all of the growers volunteer to go on the list,” Friesen says. “I’ve been doing this for quite a while, and every now and then I’ll still hear a new name that I don’t know.”
Friesen says what export hay growers understand is that quality and service are the keys to this market, so they treat the crop with the respect it deserves.
“It’s not an input-free crop, particularly when your getting it established,” he says. “It’s also one that you’ve got to take a lot of care with when harvesting and storing.”
Industry estimates says that exports to the U. S. account for nearly half the province’s $20 million in annual hay receipts.
When he’s asked what drove him to explore the business, Russell says in the end, it’s the dollars and cents that will bring — and keep — any grower in the hay industry.
“Why do you do anything on a farm?” he asks, rubbing his thumb and forefinger together.
The dollars and cents are definitely the bottom line of the operation, but both Chapmans say there are some excellent benefits that go beyond the balance sheet. For example, there’s the question of the farm’s workforce. With a cow-calf herd and close to 10,000 acres in crops, they have enough work to justify having several men on the operation’s payroll — and the forage operation gives the farm another way to keep them all employed year-round.
“It lets us keep our people — and we’ve got some really good employees working for us — busy and on the payroll,” says Darren.
Having those crack employees on the staff at the right time is also a key to the hay operation’s success, says Darren. The window to harvest top quality hay is narrow, and bad weather can quickly downgrade export quality hay to something best suited to a beef operation, which isn’t a market willing to pay the premium prices it takes to justify trucking it any distance. In the Chapman’s case, it finds a use right at home.
“That’s one of the reasons we’ve got a cow herd,” says Darren. “It also helps to give us more of the year-round work we need for our employees.”
Friesen says it’s the top quality of the hay and hard work of early Manitoba growers like the Chapmans that’s built the market. The province began promoting the industry in the late 1980s, through a trade show booth at the annual World Dairy Expo in Madison, Wisconsin. They’ve even been trying to brand the province’s hay output, which has gained a sterling reputation among the region’s dairies.
“We call it ‘The Northern Advantage,’ says Friesen. “It comes down to our day length and cool nights, which creates forages with good palatability, high energy and high protein.”
Russell says the efforts of the provincial ag department and the industry group the Manitoba Forage Council, which he’s on the board of, have worked hard to build on this natural advantage.
They’re now turning their attention to another potential market that might not at first seem like big business — the equine market.
To Canadians familiar with horses as an expensive hobby for the well-heeled or a holdover from cowboy days, it’s an odd realization that horses can also be a big business. In southern states like Kentucky, there are mile after mile of horse paddocks, and pastures are as common as corn fields.
“We’re trying to learn a bit more about that business right now,” Russell says of a planned trade tour that the province and forage council are about to undertake.
Jane Thornton, a forage and pasture specialist with the province, has been heavily involved in setting up the trip. She says there could potentially be large markets for equine hay in places like Florida and Kentucky
“We need to establish what the potential is for that market, and what they like in a product,” explains Thornton.
Unlike other agriculture markets, there are few hard and fast rules about what makes good hay. Some buyers are interested in colour. Others relative feed value and energy. It means a seller has to know the buyers and their expectations to make a market work.
Another of the perennial challenges to making the hay business work tends to be marketing. Unlike other farmers who are used to marketing through grain companies or to feedlots and large established processors, this trade tends to be farmer-to-farmer.
“Some of it’s sold through hay brokers or at hay auctions in the U. S.,” says Friesen. “But what most producers want to do is establish a good direct relationship with a reliable customer.”
And that process can be a real challenge, say the Chapmans. It can mean a lot of time on the telephone talking to prospective buyers — something that can really add up in time and trouble.
“I bet we make four or five calls for every load that goes out of the yard,” says Russell. “It’s gotten a lot easier these days with cell phones, that’s for sure.”
Inevitably, of course, getting paid can also be a challenge, especially since there don’t tend to be middlemen involved in the deal. But it’s a small business and, inevitably, if a customer proves to be unreliable with payments, it’s only a matter of time before the natural self-correction occurs.
“Word gets around,” Darren says matter-of-factly.
The Chapmans says they’ve got no serious regrets about taking the plunge into the hay business 30 years ago, but caution that it’s not something to take lightly, and no one should ever assume that it’s easy. It’s a business that requires slow and steady effort, careful management and marketing, and is generally a good fit into an existing operation such as their own that’s looking to try something new with existing assets.
“There have been people who jumped right in and thought they’d get rich,” says Darren. “They’re not doing it anymore.” CG
Industry estimates says that exports to the U. S. account for nearly half the province’s $20 million in annual hay receipts.
When he’s asked what drove him to explore the business, Russell says in the end, it’s the dollars and cents that will bring — and keep — any grower in the hay industry.
“Why do you do anything on a farm?” he asks, rubbing his thumb and forefinger together.
The dollars and cents are definitely the bottom line of the operation, but both Chapmans say there are some excellent benefits that go beyond the balance sheet. For example, there’s the question of the farm’s workforce. With a cow-calf herd and close to 10,000 acres in crops, they have enough work to justify having several men on the operation’s payroll — and the forage operation gives the farm another way to keep them all employed year-round.
“It lets us keep our people — and we’ve got some really good employees working for us — busy and on the payroll,” says Darren.
Having those crack employees on the staff at the right time is also a key to the hay operation’s success, says Darren. The window to harvest top quality hay is narrow, and bad weather can quickly downgrade export quality hay to something best suited to a beef operation, which isn’t a market willing to pay the premium prices it takes to justify trucking it any distance. In the Chapman’s case, it finds a use right at home.
“That’s one of the reasons we’ve got a cow herd,” says Darren. “It also helps to give us more of the year-round work we need for our employees.”
Friesen says it’s the top quality of the hay and hard work of early Manitoba growers like the Chapmans that’s built the market. The province began promoting the industry in the late 1980s, through a trade show booth at the annual World Dairy Expo in Madison, Wisconsin. They’ve even been trying to brand the province’s hay output, which has gained a sterling reputation among the region’s dairies.
“We call it ‘The Northern Advantage,’ says Friesen. “It comes down to our day length and cool nights, which creates forages with good palatability, high energy and high protein.”
Russell says the efforts of the provincial ag department and the industry group the Manitoba Forage Council, which he’s on the board of, have worked hard to build on this natural advantage.
They’re now turning their attention to another potential market that might not at first seem like big business — the equine market.
To Canadians familiar with horses as an expensive hobby for the well-heeled or a holdover from cowboy days, it’s an odd realization that horses can also be a big business. In southern states like Kentucky, there are mile after mile of horse paddocks, and pastures are as common as corn fields.
“We’re trying to learn a bit more about that business right now,” Russell says of a planned trade tour that the province and forage council are about to undertake.
Jane Thornton, a forage and pasture specialist with the province, has been heavily involved in setting up the trip. She says there could potentially be large markets for equine hay in places like Florida and Kentucky
“We need to establish what the potential is for that market, and what they like in a product,” explains Thornton.
Unlike other agriculture markets, there are few hard and fast rules about what makes good hay. Some buyers are interested in colour. Others relative feed value and energy. It means a seller has to know the buyers and their expectations to make a market work.
Another of the perennial challenges to making the hay business work tends to be marketing. Unlike other farmers who are used to marketing through grain companies or to feedlots and large established processors, this trade tends to be farmer-to-farmer.
“Some of it’s sold through hay brokers or at hay auctions in the U. S.,” says Friesen. “But what most producers want to do is establish a good direct relationship with a reliable customer.”
And that process can be a real challenge, say the Chapmans. It can mean a lot of time on the telephone talking to prospective buyers — something that can really add up in time and trouble.
“I bet we make four or five calls for every load that goes out of the yard,” says Russell. “It’s gotten a lot easier these days with cell phones, that’s for sure.”
Inevitably, of course, getting paid can also be a challenge, especially since there don’t tend to be middlemen involved in the deal. But it’s a small business and, inevitably, if a customer proves to be unreliable with payments, it’s only a matter of time before the natural self-correction occurs.
“Word gets around,” Darren says matter-of-factly.
The Chapmans says they’ve got no serious regrets about taking the plunge into the hay business 30 years ago, but caution that it’s not something to take lightly, and no one should ever assume that it’s easy. It’s a business that requires slow and steady effort, careful management and marketing, and is generally a good fit into an existing operation such as their own that’s looking to try something new with existing assets.
“There have been people who jumped right in and thought they’d get rich,” says Darren. “They’re not doing it anymore.” CG
