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Successful Marketing Requires Constant
Focus
Most hay customers expect a consistent, high-quality
product at a fair price. To provide that, hay producers need to think
daily about who they market to and where, says Ken Vaupel. Vaupel, CEO
and general manager of Alfagreen Supreme, Toledo, OH, spoke at the
recent Western Hay Business Conference & Expo.
"If we aren't focusing on our customers every day, we are missing the
target," Vaupel said. He urged hay producers to put together marketing
plans to help identify the best market for a particular hay product and
to help determine how customers will be served. "Where are you going to
market your hay?" Vaupel asked. "Are you going to prioritize where the
financial return is the greatest? Will you be marketing where the
competition is limited?"
Producers should first focus on what makes their hay product better or
different from other products to find out if or where they may have
competitive or cost advantages. Once a target market has been defined, a
producer can analyze supply and demand and focus on how to promote the
product.
Define a target market based on criteria such as age, sex, profession,
income level and educational level, suggests the U.S. Small Business
Administration (SBA). SBA also offers tips on analyzing the competition.
For example, identify the five nearest direct competitors and the
indirect competitors offering similar products to your own. Start a file
on each competitor, identifying weaknesses and strengths.
Develop a promotional strategy that uses varying methods of promoting
the business to the correct audience, SBA suggests. That strategy might
include using newspapers, magazines, classified ads or the yellow pages.
Or maybe the target market could be reached with a brochure or Web site.
Business cards, hats, pens or other promotional items can be important
tools. But monitor the success of different promotional tactics to
figure out which worked.
A marketing plan should be simple, yet dynamic, Vaupel emphasized. "It
needs to include setting a competitive price point in addition to
providing a consistent product and consistent service," he noted.
Producers must constantly monitor prices and operating costs to ensure
profits. "Set clearly defined expectations," Vaupel said. "A goal could
be to earn 1 1/2 times what your cost of money is, whether it be
interest rates or your own money. Set minimum expectations, and then
think about that 'blow-out-the-top' expectation." He also urged
producers to monitor their businesses regularly. "Look at changes in
sales revenue, cost analysis, increases or decreases in productivity,
rate of return and potential for the growth of your business."
Vaupel oversees one of the largest companies engaged in the dehydration
of alfalfa in the U.S. Alfagreen Supreme includes between 12,000 and
20,000 acres of alfalfa. The company controls everything from the seed
it buys to when hay is cut. "We produce, process and dehydrate hay," he
said. "Our main focus is on the specialty species market, with emphasis
on the equine industry. Our niche is serving the feed manufacturing
industry."
Contact Vaupel at 800-834-8563, or via email at kvaupel@alfagreenspreme.com.
Learn more about the U.S. Small Business Administration at www.sba.gov/.
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More Dairy Cows Go To Market
Hay growers targeting the dairy industry may be
interested to note heavy culling is cutting into cow numbers, according
to Hoard's Dairyman. The magazine reports more than 955,400 dairy
cows were slaughtered from May through September this year. This total
represents 9.7% more cows slaughtered than a year ago.
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Idaho
Hay production was down significantly in extreme
western Idaho, says Robert Bumgarner, Robumco Hay Company, Cambridge.
"Production was down by 40% in some areas. The supply is very tight."
Bumgarner supplies a 4,000-cow dairy with total hay consumption at
30,000 tons/year. He buys most of the hay that he sells almost
exclusively to the dairy market. "Big dairies are relocating to the
area," he explains. "Since 1984, we have seen an average growth of
around 22,000 milk cows/year. We also continue to see expansion going on
in heifer-raising operations." Bumgarner says feeder hay, at less than
150 RFV, is selling for $100/ton and up in his area. USDA reports demand
is good but supplies are light in the state.
A three-month moratorium on issuing dairy permits will end Nov. 20 in
Cassia County, ID, which is expected to lead to more dairy expansion in
Magic Valley, according to the Idaho Ag Weekly. Many of the new
Cassia operations are expected to add cattle in stages rather than
filling their permits immediately. The Idaho State Department of
Agriculture (ISDA) reports the county holds 45,000 milk cows and is
fourth largest in the state for number of dairy cows. But that ranking
may soon change. Since May 2005, the county has either issued permits
for or has permits pending on 150,000 new cattle, according to county
records. The issuing of permits will likely resume Dec. 7, when the
first hearing for a large dairy is scheduled. Gooding County leads the
state in dairy cow numbers with 139,057 as of December 2005. Jerome
County is second with about 69,000 cows, and Twin Falls is third with
62,000. Twin Falls County officials recently permitted the county's
first large dairy in more than five years. As of last December, Idaho
had 475,000 dairy cows, according to ISDA records.
Contact Bumgarner at 208-257-3409.
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Montana
This past summer brought some good haymaking weather to
southwestern Montana along with some stretches of unusually hot
conditions, according to Lenny and Jamie Melhoff, Ruby Mountain Hay &
Grain, Inc., Twin Bridges. "We had a lot of heat in July, which cut some
of the yield and some of the quality," Lenny explains. "We had good
irrigation water for the season and were able to get hay up quickly
without rain." They produce alfalfa and alfalfa-grass mixtures and sell
small square, 3 x 4' and big round bales to the horse and feeder hay
markets. "We are getting lots of demand from out of state, which creates
a vacuum in the area," Jamie says. The Melhoffs sell hay within a
100-mile radius and deliver to customers themselves. They attended the
recent Western Hay Business Conference & Expo in Spokane, WA, to
investigate the organic hay market.
Contact Ruby Mountain Hay & Grain at 406-684-5011.
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Conferences Target Organics, Marketing
Organic production and marketing to consumers are the
topics to be covered Dec. 6-7 in two back-to-back conferences hosted by
the University of Illinois. Entitled "A Recipe for Success," the
conferences will be held at the Interstate Center, 2301 West Market St.,
Bloomington.
On Dec. 6, the Illinois Organic Production Conference will provide
science- and farmer-based information for producers interested in
organic agriculture. Organic farming practices and certification will be
covered for livestock, grain, specialty crops and more. Break-out
session topics include perennial weed control in organic systems,
organic certification, and state and university organic programs.
The Dec. 7 conference theme is "Marketing Strategies for Consumer-Driven
Agriculture." Speakers will address "The Top Ten Retailers' Top Ten
Tactics To Top Last Year's Sales" as well as other topics. Other
break-out sessions will address market development, market penetration,
using online marketing tools, Web design ideas to attract and keep
customers, and principles of target marketing.
Products and services pertaining to organic production and marketing
will be available in a trade show during the conferences.
Registration for one conference is $60/person; for both conferences,
$100/person. Prices after Nov. 22 will be $90/person and $150/person.
Visit asap.aces.uiuc.edu/orgconf/, or contact Dan Anderson,
conference chair, at 217-333-1588 or aslan@uiuc.edu, or Crystal Bartanen at
217- 244-8160, or bartanen@uiuc.edu.
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Calendar
**Nov. 14-15 -- 2006 BEEF Magazine's Quality
Summit, Clarion Hotel, Oklahoma City. Learn more and sign up at www.beef-mag.com.
**Nov. 21 -- Kentucky Grazing Conference, Fayette County
Extension, Lexington. Learn more at www.uky.edu/Ag/Forage.
**Dec. 11-13 -- Western Alfalfa & Forage Conference, Reno, NV.
Contact Dan Putnam at 530-752-8982 or dhputnam@ucdavis.edu, or Glenn
Shewmaker at 208-736-3608 or gshew@uidaho.edu.
**Dec. 13-14 -- Kansas Hay & Grazing Conference, Kansas State
Fairgrounds, Hutchinson, KS. Call Gary Kilgore at 620-431-1530.
**Jan. 17-18 -- 2007 Washington State Hay Growers Association Annual
Conference & Trade Show, Three Rivers Convention Center, Kennewick.
Contact the Washington State Hay Growers Association at 509-585-5460.
**Jan. 18-19 -- Southwest Hay Conference, Ruidoso Convention
Center, Ruidoso, NM. Learn more at the New Mexico Hay Association Web
site at www.nmhay.com.
Contact Doug Whitney at dug@plateautel.net or call Gina
Sterrett at 505-626-5677.
**Jan. 24-25 -- Heart Of America Grazing Conference, Holiday Inn,
Mount Vernon, IL. Contact Justin Sexten, University of Illinois, at
618-242-9310 or sexten@uiuc.edu.
**Feb. 6-7 -- The Nebraska Alfalfa Marketing Association's
Mid-America Alfalfa Expo, Buffalo County Fairgrounds, Kearney, NE.
Visit www.alfalfaexpo.com or call Barb Kinnan at
800-743-1649.
**Feb. 7-8 -- Utah Hay & Forage Symposium, Holiday Inn Resort,
St. George. Details for participants and exhibitors are available at utahhay.usu.edu, or
contact Thomas Griggs at 435-797-2259, or tgriggs@ext.usu.edu.
**Feb. 9 -- Ohio Forage & Grassland Council Annual Conference,
Reynoldsburg. Contact Mark Sulc at 614-292-9084.
**Feb. 22 -- Kentucky Alfalfa Conference, Cave City Convention
Center. Learn more at www.uky.edu/Ag/Forage.
**Feb. 26-27 -- 2007 Idaho Alfalfa & Forage Conference, Red Lion
Canyon Springs Hotel, Twin Falls. More details will be available at www.idahohay.com.
**Feb. 28-March 2 -- National Grassfed Beef Conference,
Grantville, PA. Contact John Comerford at 814-863-3661 or jxc555@gmail.com, or Dave Hartman at
570-784-6660, ext. 12, or dwh2@psu.edu.
**March 13-14 -- 2007 Midwest Hay Business Conference & Expo, KCI
Expo Center, Kansas City, MO. Learn more at hayconference.com/conference/index.htm.
**March 14-15 -- 2007 Manitoba Forage Symposium, MacDon Product
Showcase Building, Winnipeg, MB, CA. For more info, visit www.mbforagecouncil.mb.ca or contact Tanis Sirski at
204-768-2781 or tsirski@gov.mb.ca.
**March 21-22 -- 2007 Central Plains Dairy Expo, Sheraton Inn,
Sioux Falls, SD. Learn more at www.centralplainsdairyexpo.com/ or call Kathy Tonneson
at 218-236-8420.
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