Marketing versus selling hay by Doug Mayo
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S A COUNTY agent for the past 20 years, one of the things I have noticed is that there are two general categories of hay operations. There are “sellers” and “marketers.” The real difference in these two operations is the focus of the owner or manager. In general, farmers spend most of their efforts on production. When it comes to hay production, there are a lot of variables to deal with: machinery, weather, fertilizer, pest control, harvest, and storage. While all of these are vitally important, one area that tends to be overlooked is the sale of the product. “Sellers” focus on what is most important to them and simply try to find customers who like what they produce. While this can be successful, a challenge is inconsistent sales. The goal is to sell at a fair price and move hay as quickly as possible. The problem with this approach is that there is no real relationship forged with the customer. Deals are made based on quantity, price, and perceived quality. One year a customer buys a large quantity and the next year you don’t hear from them. One year all the hay sells in just a few months, but the next year hay sits in the shed and sells only after prices have been significantly reduced. Sellers also tend to rely 10 | Hay & Forage Grower | April/May 2016
more heavily on a local market, which are greatly influenced by local supply and demand.
Shift the focus Certainly for part-time operations, or producers who are mainly focused on producing hay for their own needs, this “seller” system may be the only real option. It’s also true if your inventory varies greatly from year to year. However, if your goal is to truly develop a business where significant income is going to be derived from producing hay, then shift your attention. A true “marketer” is focused on the needs and desires of their customers. Making this transformation to become a “marketer” requires several key paradigm shifts. The first step is to figure out the profile of the “ideal” customer. In many cases, it is not the large volume buyers. Volume buyers expect a discounted price and special services, like free or reduced delivery. In Florida, the ideal hay customer is the small to medium-sized horse farm that buys square-baled hay almost year around for stalled horses. Typically, these farms lack adequate storage to purchase large quantities of hay soon after harvest. Instead, they need a constant supply and recognize that they
will be paying a premium for their hay. Selling to these customers means you will either have to provide storage directly for the customer, or work through a local supplier such as a feed store or hay broker for continuous sales throughout the year. Either way, this will require a shift from immediate sales to year-round sales. While this shift in cash flow may not be feasible for your entire inventory in the first year, it may be something you can slowly work toward.
Build a relationship The second step is communication. Whether sales are direct with the customer or with a retail outlet, communication is paramount for building customer relationships. This does not have to be elaborate newsletters or a fantastic professional website, but at least enough two-way communication to stay connected. DOUG MAYO The author is an agricultural extension educator in Jackson County, Fla.