An Ontario hay co-operative hopes to have a double-compaction facility running by 2018, giving it access to global markets for hay.
Ontario hay has traditionally been at a shipping cost disadvantage compared to most competitors, as hay headed for Asia or the Middle East has had to be shipped by rail to the West Coast.
According to Fritz Trauttmansdorff, chair of the board of directors of the Ontario Hay and Forage Co-operative Inc., the expansion of the Panama and Suez canals has lowered the cost of shipping from the East Coast to Asia — and that’s changed the game for Ontario producers, who have been at a $100 per tonne disadvantage.
“The situation before Christmas was that it was cheaper to ship to China than to truck to Florida. This is a very real possibility now,” Trauttmansdorff said.
Ontario has some of the most reliable growing conditions for hay in the world, with the climate rarely too wet or too dry, compared to drought-prone Spain or California. The challenge in Ontario is the lack of hay drying and packing capacity to efficiently fill containers to get them to foreign markets.
There are some lower-capacity hay dryers in Ontario, Trauttmansdorff said, but the European models on the market are generally too expensive to import, with less capacity than Ontario growers need.
As a result, there are Ontario and Quebec farmers and companies working to build dryers that could be commercialized and efficient in Ontario. Trauttmansdorff said the projects look promising, including an Ontario project with the Martin family and Reist Industries that’s expected to have working prototypes running this year.
The dryers are critical to reduce the hay’s moisture level to 12 per cent, the level required to ship hay in containers around the world without spoilage.
Being able to harvest hay in two days, then artificially dry it to the right moisture, could revolutionize hay production in the province, said Ray Robertson, manager of the Ontario Forage Council.
It currently takes up to five days to dry hay — and it’s much easier to predict the weather two days out instead of five, Robertson said.
Once the hay dryers are available, the next step is to create a co-op-owned facility to compact the hay.
Double-compacted hay means you can put 25 tonnes in a shipping container instead of 15, for a significant advantage in shipping, Robertson said.
A double-compactor would need to process 100,000 tonnes a year, according to a feasibility report created for the co-op, which has previously estimated such a compacting facility would cost between $10 million and $15 million.
“In very few words, go big or go home,” said Trauttmansdorff. That means a co-operative is necessary to fund the large double-compactor — and to get the financing for the project, there will need to be enough members of the co-op who have committed supply to make the project feasible.
A co-op would buy the hay from farmers, then market it — but creating that logistics and marketing infrastructure would also create more expenses for a new co-op.
Farmers will have to figure out whether shipping to a double-compaction facility, likely to be located in the Kitchener area, makes sense for them.
Trauttmansdorff said the co-operative has seen interest from farmers as far away as Timmins, where they grow one cut of timothy hay efficiently.
Producing more hay in Ontario also offers growers the potential to add a perennial crop to their current rotations. The loss of soil organic matter is significant each year in Ontario and is driving the current expansion of cover crops — but growing more hay also has to make financial sense for farmers.
“The risk profile for hay needs to be similar to corn and soybeans,” Trauttmansdorff said. That can be achieved with hay dryers, double-compactors and proven logistics to reach global markets.
Hay prices are decent, with recent auctions around 13 cents per pound, Robertson said.
“It makes it really competitive, hay versus cereal crops,” he saiud. “Extra markets make hay more attractive as a cash crop.”
More information can be found on the co-operative’s website.
— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.