Setting on their hay

[backhoeboogie]

Alan,

This sounds like an opportunity for you. If you can produce good hay at a reasonable cost, other cattle raisers may appreciate you. The existing producers may reduce prices in order to be competitive with your prices.

 

[Alan]

Nuff said on this one. We are kind of going in circles and I have no intention of becoming a hay producer, just a hay buyer.

I have always had a lot of respect for your and enjoy and learn from your post. I look forward to reading them and debating in the future.

Take care,
Alan

 

[skidboots]

Me, I just shop around. Seems like there's always a good deal when you least expect it. Usually have hay on hand, but this year I haven't bought one bale. Keeps raining, and the grass grows faster than I can shred it!
Saw my hay grower in the Hardware store this morning, asked about the crop, he said it was tall and green, but not so good, seems it's brown about a third of the way up! Never have I seen it this wet for so long in South Texas.
But I'll buy some from him cause he's my neighbor. He's sold me top quality hay for $35 a big,big round bale, and last 2 yrs it's been $90 for the same. Don't know what it will cost this year, but I know he won't sell it all to them Big City bale jockeys. He'll save enough for ole Skid, and some other locals too. He's my neighbor, after all.

 

[backhoeboogie]

Nuff said on this one. We are kind of going in circles and I have no intention of becoming a hay producer, just a hay buyer.

Take care,
Alan

Alan, I never intended to get in the hay business either. It just happened. A man approached me about leasing his place and told me I was the only person he would lease to. There are stipulations in the lease about fertilizer and fence maintenance which are reasonable. It penciled out nicely. Many peers and friends are glad I took the lease. Walla. This does give me some control over securing my own supply etc. My own fields that were dedicated to hay production can now be used for grazing, if needed.

 

[Mahoney Pursley Ranch]

Around here people are not holding onto hay to run up the price they are holding onto it to use in the future in case of another drought like the last two years.

 

[msscamp]

You're absolutely right, but I've noticed that - around here, at least - people who sit on things, be they hay, or whatever, waiting for a shortage to happen so they can capitilize on prices due to the misfortune of others, tend to not be in that business for very long.

Do some folks have more misfortune than others?

It takes two to gouge. :lol:

ALX

No, it does not take two to gouge - it takes one person who doesn't give a **** about anyone or anything but themselves, knows/believes he or she has a product/commodity that is in high demand, knows/believes they have other people over a barrel, and is willing to take advantage of that position - be it due to misfortune, mismanagement, or a combination of both - to line their own pockets.

 

[FROGHOLLOWFARM]

Around here people are not holding onto hay to run up the price they are holding onto it to use in the future in case of another drought like the last two years.

Yes,thats the smart thing to do better safe than sorry.I read as of Dec 1 06 hay stocks are the lowest they have been in almost 20 years.

 

[ChrisB]

Sounds like the hay producer is trying to add value to his product. Funny, that's what I keep reading beef producers need to do.

If someone is direct marketing their beef and charging more than market price are they gouging?

If I have a bin full of corn and my neighbor needs corn but I don't want to sell it until prices get higher am I gouging? How about if my neighbor happens to be Cargil?

You can only gouge if you are the only one with a product that everyone else needs. Or if all owners of the product get together and agree not to sell for under a certain price. Otherwise you are just asking for more than market value and you should have a hard time selling.

Why do hay producers have an obligation to everyone else to make sure they sell their product for a reasonable price when everyone else is trying to get as much as possible for whatever they are selling whether it's corn, beef, cars, or furniture?

 

[AngusLimoX]

No, it does not take two to gouge - it takes one person who doesn't give a be nice about anyone or anything but themselves, knows/believes he or she has a product/commodity that is in high demand, knows/believes they have other people over a barrel, and is willing to take advantage of that position - be it due to misfortune, mismanagement, or a combination of both - to line their own pockets.

Sounds more like free enterprise and capitalism to me - both things I believe in.

What you seem to be asking from the hay producer is - charity.
Well , charity begins at home.

In almost every post that has come up about hay I make it a point to say this - hay is becoming a commodity with newly realized value - things are going to change a lot in the next 5 years when it comes to hay - just my opinion.

ALX

 

[msscamp]

No, it does not take two to gouge - it takes one person who doesn't give a be nice about anyone or anything but themselves, knows/believes he or she has a product/commodity that is in high demand, knows/believes they have other people over a barrel, and is willing to take advantage of that position - be it due to misfortune, mismanagement, or a combination of both - to line their own pockets.

Sounds more like free enterprise and capitalism to me - both things I believe in.

I also believe in free enterprise, but if these producers were engaging in that their hay would be available now - at a fair market price. Instead, they are sitting on their hay, and attempting to create a shortage so they can jack up their prices and make a bigger profit at the expense of someone else - that is NOT free enterprise - and I believe it to be underhanded, dishonest, and amoral. I think it is despicable that anyone would take advantage of an already bad situation in this manner.

What you seem to be asking from the hay producer is - charity.
Well , charity begins at home.

No, I'm not asking for charity - simply a few old fashioned values like honesty, integrity, and honor. Does the phrase "Do unto others as you would have them do unto you" mean anything to you? It is a saying I happen to strongly believe in.

ALX

 

[AngusLimoX]

Does the phrase "Do unto others as you would have them do unto you" mean anything to you? It is a saying I happen to strongly believe in.

Are you seeing a cartel type situation msscamp? Are enough of them sitting on it in your area that you have to go a long ways to buy around them? That would be different.

"Do unto others", now are you quoting me from another thread, or the Bible? :lol: :lol: You betcha I believe in it.

ALX

 

[Brandonm2]

Sounds like the hay producer is trying to add value to his product. Funny, that's what I keep reading beef producers need to do.

If someone is direct marketing their beef and charging more than market price are they gouging?

If I have a bin full of corn and my neighbor needs corn but I don't want to sell it until prices get higher am I gouging? How about if my neighbor happens to be Cargil?

You can only gouge if you are the only one with a product that everyone else needs. Or if all owners of the product get together and agree not to sell for under a certain price. Otherwise you are just asking for more than market value and you should have a hard time selling.

Why do hay producers have an obligation to everyone else to make sure they sell their product for a reasonable price when everyone else is trying to get as much as possible for whatever they are selling whether it's corn, beef, cars, or furniture?

I agree. In a drought year, the hay seller probably has 1/2 to a 1/4 of the hay to sell that he has in a good year. WHY would he charge the same amount per roll? In a mild winter, nobody buys any hay after the first of March so the hay seller has to barn it for a year or sell it for mulch. In a lush year, the ranchers stockpile whole fields of forage or get somebody to bale it on halves and then order less hay than they do in the normal year. I can see it both ways; but if a guy has a whole barn full of hay in December after a drought and I NEED it, I think I can understand why it is priced higher than hay bought out of the field in a good year.

 

[Hitch]

Welcome to what amounts to a lesson in the "Futures Market". It's a crap shoot, sometimes, trying to figure out the future worth (cost/value) of a product - and spend (or invest)accordingly. It is a situation where you simply can not control many external factors that determine price. It is also a frustrating lesson in supply and demand - the free market driving the prices one way or another. Markets get panicky sometimes. You are wise to keep a bit of hay as a "buffer" against wild price swings due to shrinking supply - unless the costs of having that hay inventory sitting idle are too high or the quality of the stored hay will deteriorate badly due to exposure to the elements. You could plug in "cows" for every time the word hay is used and understand what keeps some ranchers and farmers from a good night's sleep as market time approaches. Good luck. Stay informed on issues that impact the prices/availability of the goods you will be buying and selling (oil/fuel prices, long range weather forcasts, and even farm related legislation). Research, think, and plan as far ahead as you can get reliable/credible data to make a better informed decisions.

 

[Alan]

Since I started this post I'll try it one more time. Most of you folks except MS are missing the point. This is not a market issue, or a hay shortage issue. The whole issue is about 4 or 5 of the local hay suppliers in my area getting together and holding their hay to manufactor a shortage. So if I wanted more hay I would have to go "out of my way" to find it. Because of a true hay shortage last year, some of the hay producers saw some big money, they are now greedy and have gotten together to hold their hay until people start to panic. Their are creating a false market and I hope they have to eat every bale! I know they have lost my business.

 

[AngusLimoX]

I try to refrain from wishing ill on others in agriculture.
I like to see us getting a good price for all of our commodities.

If there are enough folks around that are too lazy or don't care enough to seek hay elsewhere and buy from these fella's, then that is selling to the market.

If they sit on it too long, then it was a calculated risk, and hopefully they aren't whiners.

ALX

 

[Alan]

I try to refrain from wishing ill on others in agriculture.
I like to see us getting a good price for all of our commodities.

If there are enough folks around that are too lazy or don't care enough to seek hay elsewhere and buy from these fella's, then that is selling to the market.

If they sit on it too long, then it was a calculated risk, and hopefully they aren't whiners.

ALX

Okay I thought I would give it one more try. I see you and I have a different view on what is good business ethics and what is price fixing.

nuff said in this topic.
Alan

 

[AngusLimoX]

Tough position to be in, I'm trying to figure out what I would do in their shoes. What happens if the hay shortage isn't as bad this year, do they get stuck with 2 year old hay and not hay next year? As a guy who doesn't produce my own hay, I hope they get stuck with the hay, just irritates me a bit. Maybe some of you guys to that have been through this already or produce local hay can tell me your thoughts and what this cycle (hopfully a cycle) will do in the next couple of years.

Thanks,
Alan

Alan, it is not a cycle. Wheat , beans, barley - through the roof. Organic acreage increasing breakneck speed. Corn for ethanol, all the other ethanol/pharmaceutical crops. Unsettled weather, unusually dry weather.New hay technology - compressed large bales in containers for overseas.( Middle east and Europe )

In my area the only commodity that you will see half page adds for in the paper is to buy hay for export.

If you own ground you gotta look at what is the most profitable crop keeping in mind the health of your soil. In order for hay to be planted there's gotta be a financial incentive above the other options.

It's business, and it is changing. You have to know your break even's and decide.

ALX

 

[Hitch]

Dear Alan,

It is very much a lesson in free market forces, at least as the market is defined in your area (such as supply and demand), and business ethics. A viable business person, with any hope of long term survival, better factor in all the values of the stakeholders involved. Neighbors and local communities, among others, are external stakeholders to those hay sellers' businesses. Ethical business folks accept the reality their business behaviors are connected to social responsibility in the communities they live and do business in.

The loss of your business may be very well founded decision on your part. If that same decision is made by a lot of others, then some angry chickens are going to come home to roost and somebody is going to see a loss of near term profit plus loss of market for future sales. Ethics and "value added" arguements aside, if these guys do not guess it right, you are correct and will get a form of satisfaction with the ultimate outcome. They will almost certainly have a product nobody needs and little money to pay their costs - much less realize a profit. The possibility of true "price fixing" is a complaint for your state's Attorney General to respond to.

No American business (or community) is free of the causes and effects of our world econcomy. From the hay seller's perspective, a better market and profits for them may exist months down the road with someone far away. It may suck but it is a fact. It's their risk. In the meantime, you can choose to reward somebody who does business to your liking and pay accordingly.

Lastly, I agree stongly, this dead horse has probably been whipped enough. I wish you the best.

 

[Alan]

this dead horse has probably been whipped enough. I wish you the best.

The horse is dead because I refuse to pay the price for hay this bandits are waiting on.... LOL :lol:

Good post Hitch, welcome to the boards.

Alan