Hay exporters warn of ‘stale’ market
KENNEWICK, Wash. — West Coast hay growers have enjoyed brisk markets and strong prices for several years but that’s likely to end this summer as exporters buy less hay because they’ll have too much left over from 2014 due to the longshoremen’s work slowdown.
That was the warning three exporters left with hundreds of growers Jan. 15 at the end of the Northwest Hay Expo at Three Rivers Convention Center in Kennewick.
“We will have a lot of carryover unless things turn around at the ports right away,” said Chris Carrow, of the Ellensburg division of AXC Global.
“Yes, we will be like the Maytag repairman. You won’t see us around,” quipped Mike Hajny, vice president, Wesco International, Ellensburg.
“Milk prices are sliding so that takes away from dairy demand. It’s setting up to be a stale market at the start,” he said.
Most West Coast hay exporters are losing about 50 percent of their business per month since the port slowdown started Nov. 1, said Blaine Calaway, of Calaway Trading, Ellensburg. It’s tens of million of dollars and could reach hundreds of millions if it continues, said Shin Sasaki, vice president of Japan sales at Calaway.
“Very few people out of agriculture want to admit it, but it (the slowdown) is historically bad,” Sasaki said.
Truckloads are turned around at ports and sent home, drivers are getting one trip a day from Ellensburg to Seattle instead of two, but Wesco is paying drivers for part of the missing trip, Hajny said.
“We can absorb it for a small amount of time but we’re going on three months now. Cash flow is extremely tight. We’ve been fortunate to not lay people off but we have cut back hours,” he said.
Timothy shipments to Japan are down 24 percent and may never fully recover, Hajny said. Japan is turning to other sources, he said.
John Szczepanski, direcctor of the U.S. Forage Export Council, reviewed how the $1 billion per year industry grew from much smaller beginnings in Japan in the 1960s and 1970s. As recently as 2007, Japan was 91 percent of U.S. hay exports, but now it’s 51 percent as China and the United Arab Emirates have taken off as new markets, he said.
There was much discussion of sales to China being hurt by its zero tolerance for residue of genetically engineered alfalfa.
About 50 to 60 percent of new alfalfa plantings in California are Roundup Ready for domestic dairies, said Dan Putnam, University of California-Davis Extension forage specialist.
Growers need to make sure they use tested, non-detect seed and keep GE and non-GE hay inventories separate, he said. Hay dust in storage and residue on equipment can be problematic, others said.
Matt Fanta, of Forage Genetics International, Shoreview, Minn., and Rob Newell, vice president of North American sales of S&W Seed Co., Five Points, Calif., talked about levels of testing their companies do to ensure non-detect seed.
Luncheon speaker, Michele Payn-Knoper, an agriculture advocate from Lebanon, Ind., challenged growers to get proactive in telling their personal stories of how they grow food.
If they don’t, she said, they will lose their right to farm because environmentalists will be setting the agenda in regulations affecting how food is grown.
She urged growers to shoot video clips to show on social media and tell their stories, person-to-person, whenever they get the chance.