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 A Prism Business Media Publication September 26, 2006 |  
Ehay WEEKLY CONTENTS
Cut Costs To Boost Profit
Top of the News RR Alfalfa Doesn't Affect Milk Production Haymarkets.com Retooling
State Reports Iowa Kentucky Texas
Events Purdue University Offers Marketing Workshops Calendar
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Cut Costs To Boost Profit
Reducing the cost of producing hay may result in as much or more payback than increasing the revenue side of the equation, according to R. L. "Dick" Wittman, Culdesac, ID. He'll examine ways hay growers can increase the profitability of their operations as part of the upcoming Western Hay Business Conference & Expo, Oct. 24-25 at the Red Lion Hotel at the Park, Spokane, WA. "We have spent so much time in the hay business trying to get the last dollar out of the revenue side, but we haven't taken the time to examine our cost structure," Wittman states. "Often, people can see a better impact on return on equity by improving cost efficiency than by trying to grow bigger farms with more acres. That leads to a double benefit -- getting twice the improvement in financial performance without adding the stress associated with managing larger businesses, more labor and stress on equipment, etc. Seeing how the numbers can change can put people on a treasure hunt to look at their businesses from every possible angle."

He plans to show growers how to break down the costs of their hay businesses at a level where they can draw conclusions tied to responsibility centers that are managed by individuals with unique roles in managing farms. He hopes producers can position themselves to look at strategic business choices that can have an impact on improving profitability, either through cost efficiencies, or in some cases, through revenue enhancement. "The hay industry has costs associated with each phase of growing and harvesting -- seeding, swathing, turning, baling, hauling, etc.," he explains. "For each of these activities, managers should be asking, 'Should I do it myself? Should I hire it done? Should I buy or lease?' Break it down to cost per ton and include all of the facets that go into the cost equation, such as labor, fuel and ownership costs. A lot of our farm management training has skimmed over this at a very high level, but it doesn't get down to a working level where a grower can actually say, 'Now here is a tool I can use. Here is the actual way I go about analyzing this decision.' "

Wittman will help growers look at the histories of their operations and learn how managerial accounting can be used to do a more confident job of marketing their products. "For example, if you know that you've got $70/ton in the hay and your profit-margin goal is $30-40/ton, you know you're hitting your profit goal when you sell hay for $110/ton," he says. "But if you only speculate, your costs are somewhere between zero and $90/ton. You're out there wondering if you need another $10-20 out of the market because you aren't sure what your costs are. It is simply not acceptable to wait until the end of the year to look backward and say, 'Gosh, I wish I had known that sooner.' "

Wittman farms 8,000 acres and has a herd of 300 beef cows, in addition to running an ag consulting business. Visit his Web site at www.wittmanconsulting.com/index.htm, or contact him at 208-843-5595.

Other speakers at the Western Hay Business Conference & Expo will discuss hay export opportunities, producing hay for the horse market and organic hay production. Learn more about maximizing yields and profits from timothy and orchardgrass. Visit a hay industry-specific trade show and ask industry experts all about their products and services.

Register for $150 per person and bring a second person from your operation for $125. Learn more about the conference at www.hayconference.com.

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Top of the News
RR Alfalfa Doesn't Affect Milk Production
Dairy cows fed Roundup Ready (RR) and non-genetically modified alfalfa performed identically in a University of Wisconsin study. Researchers Dave Combs and G. F. Hartnell report no differences in milk production, milk composition, feed intake or feed efficiency for cows fed the two types of alfalfa. The research was presented at the 2006 American Dairy Science Association-American Society of Animal Science meeting in Minneapolis.

Source: Imperial County Agricultural Briefs.

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Haymarkets.com Retooling
The online, interactive trading floor, www.haymarkets.com, will no longer be accepting hay listings or processing transactions while it goes through a retooling phase, according to David Heemsbergen, Hay Markets International business development manager. In association with Land O'Lakes agronomists, Hay Markets International has given sellers assistance with testing, grading and listing of hay. Buyers established accounts, which assured payment when hay was delivered and accepted. Heemsbergen says Hay Markets International has decided to adjust its trading model to better serve industry needs while still striving to serve as a resource center for buyers and sellers. More information about what lies ahead will be available later this year.

Contact Heemsbergen at dlheemsbergen@landolakes.com.

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State Reports
Iowa
Many Iowa growers were working on the last hay cutting while fighting rough weather during the last month, says Dale Leslein, Dyersville Hay Auction manager. A total of 303 tons of hay sold at last week's auction. The top on large square bales was $60/ton, while round bales topped at $70/ton. The hay lacked color due to the tough weather conditions producers have faced this summer. "I have been reading about reports from states where there is a shortage of hay, and that's not the case here in eastern Iowa," says Leslein. "The supply of hay out here is the biggest we have ever seen, with record production. Southwestern Wisconsin and northwestern Illinois are in the same boat. Fourteen-ton-per-acre yields are being recorded this year, or double what a normal good year produces. Piles of hay are standing everywhere you look. It could take two years to clean up the supply."

However, he adds that top-end dairy hay is scarce. "Hay over 160 RFV is hard to find," he says. "We have a boat load of hay from 100 to 130, but that's about it."

Dyersville hay auctions are held at 11 a.m. on Wednesdays. Contact Leslein at 563-875-2481 or dale@dyersvillesales.com.

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Kentucky
It was a good year for making hay in Kentucky, reports Ray Smith, University of Kentucky extension forage specialist. "We had good moisture throughout the state with good haymaking windows, too," Smith says. "Hay production and quality were both good. We should get some nice fall cuts and make some good baleage, too." Stockpiles of hay were largely used up because 2005 was a low-production year. "We don't seem to be in an excess situation," says Smith. The University of Kentucky continues with an initiative of helping producers make quality hay. A team of agronomists, county extension personnel and marketing specialists are working with producers to spread the word about the importance of cutting hay at the right time and the benefits of proper storage.

Learn more about Kentucky hay production by visiting www.uky.edu/Ag/Forage/. Contact Smith at 859-257-3358.

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Texas
A late-summer cool front brought some Texas producers relief from blistering temperatures and drought. Some parts of the state got 5-6" of rain, while dry conditions persisted in other areas.

Pastures and hayfields responded well to September rains in the rolling plains area. Some growers are now planning on a second hay cutting. There is still a shortage of hay and stock water in northern Texas, but pastures have greened up and will give cattle producers a respite from feeding. Hay demand and cattle sales have tapered off. Some farmers with enough soil moisture are planting winter annual pastures. More winter forage will be planted if rains continue. Range conditions are improving in the panhandle region, while pastures and ranges are in fair condition and starting to green up in the southern plains part of the state.

The drought continues to linger in eastern Texas. Hay is selling for $60-100/roll and quality is poor to fair at best where available. Some cattle are beginning to lose body condition and producers are continuing to sell livestock, with some completely selling out.

Alfalfa growers in far western Texas lost 2-2.5 cuttings due to rains this year. Some areas report up to 16" of rainfall in recent weeks, which is double the average rainfall for this time of year. Range and pasture grasses and forbs are showing improvement in west-central Texas. However, supplemental livestock feeding continues. Large numbers of livestock have been sold.

Hay growers in central Texas may get another cutting in early October if the weather cooperates. Range conditions remain poor. Destocking continues due to dwindling water supplies in beef cattle operations. Most producers are now feeding hay in addition to protein and energy supplements. Large amounts of hay are being purchased in southeastern Texas, and last week brought very little rain to the area. Cattle continue to be sold. Pastures have burned up with little grazing to offer.

Most of southern Texas has had adequate soil moisture. Area landowners received 4-9" of rain last week. Pastures are beginning to green up. As hayfields dry out, harvesting is expected to proceed.

Source: Texas A&M University.

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Events
Purdue University Offers Marketing Workshops
Entrepreneurs and small business owners who attend a Purdue University workshop will learn more about effective marketing and sales techniques. Every person attending a "Bigger Profits Through Targeted Sales" workshop will take home a personalized marketing action plan. The one-day workshops are designed to offer valuable business advice and ideas.

Scheduled in four Indiana cities in October and November, they're sponsored by Purdue's New Ventures Team -- a group of extension educators and specialists who aid people interested in starting new businesses or improving the profitability of existing businesses.

The workshops include interactive exercises, short lectures by instructors, an interview with a business owner and one-on-one discussions with New Ventures members. Throughout the day, attendees will craft their marketing action plans, which will serve as an overall strategy for marketing a product or service. The plan is composed of specific action steps. Workshop participants will think through how customers perceive their products or services, identify who their customers are and where to find and attract them, and get a chance to test the ideas that they've developed with both instructors and their workshop peers.

The workshops run from 7 a.m. to 6 p.m. and include breakfast, lunch and an evening reception. Their dates and locations include:

Oct. 25: West Lafayette -- Purdue University Stewart Center, State Street and Oval Drive.
Nov. 10: Shipshewana -- Blue Gate Restaurant, 105 E. Middlebury St.
Nov. 14: Indianapolis -- Adams Mark Hotel at the Airport, 2544 Executive Dr.
Nov. 17: Evansville -- Bauerhaus Event Facility, 13605 Darmstadt Rd.

Registration is $85 per person if completed at least two weeks before a workshop, and $100 thereafter. To register online or download a workshop brochure, visit
www.agecon.purdue.edu/newventures/programs/.

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Calendar
**Oct. 3-7 -- World Dairy Expo, Alliant Energy Center, Madison, WI. Learn more at www.worlddairyexpo.com.

**Oct. 17-19 -- Sunbelt Ag Exposition, Moultrie, GA. Visit www.sunbeltexpo.com or call 229-985-1968.

**Oct. 20-21 -- 5th Annual Pennsylvania Statewide Project Grass Conference, Williamsport. Featured speakers include Jim Gerrish and Allen Williams, plus many more. Contact Kris Ribble at kris.ribble@pa.usda.gov or 570-784-4401, ext. 111.

**Oct. 24-25 -- Western Hay Business Conference & Expo, Red Lion Hotel at the Park, Spokane, WA. Sponsored by Hay & Forage Grower. Register at $150 per person and bring a second person from your operation for $125. Learn more at www.hayconference.com.

**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 Office, 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.

**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 Garry Lacefield at 270-365-7541, ext. 202, or glacefie@uky.edu.

**Feb. 6-7 -- Mid-America Alfalfa Expo, Buffalo County Fairgrounds, Kearney, NE. Visit www.alfalfaexpo.com or call Barb Kinnan at 800-743-1649.

**Feb. 27 -- Kentucky Alfalfa Conference, Cave City Convention Center. Learn more at www.uky.edu/Ag/Forage.

**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.

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Comments from Readers
Send Questions & Comments To...

Lora Berg, Editor, eHay Weekly,

hfg@hayandforage.com

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