PB1699-Marketing for the Value-added Agricultural Enterprise

Hay has been an important crop in Tennessee for many years. Acreage devoted to hay has been trending upward over the last two decades, as shown in Figure 1. Acreage of all types of hay harvested in 1998 was 1,785,000, 51 percent larger than acreage harvested in 1980. Hay is the leading crop in Tennessee in terms of acreage harvested mechanically. In 1997, the value of hay produced on Tennessee farms reached $207 million, ranking the crop third in value among all crops. Cash receipts have averaged about 15-20 percent of the total value of hay produced over the last few years. The remainder is reflected in the substantial cash receipts to Tennessee’s livestock and milk producers. Increasing interest in cash hay production has been noted, as more farmers search for alternatives to traditional grain crops and tobacco. The conservation provisions of recent farm bills are calling farmers’ attention to the need to adopt approved conservation practices, including crop rotation and strip cropping on more highly erodible fields. This legislative emphasis has resulted in increased acreage of soilconserving crops such as hay. There are indications that farmers are devoting larger acreages to hay on traditional crop farms with either a small or no livestock base. This addition to the crop enterprise mix may be designed to achieve greater diversification or to provide better use of existing farm resources. Regardless, producers adding a cash hay enterprise are likely to be willing to devote the necessary time to develop a sound hay productionmanagement- marketing program. Hay cost-return budgets, developed by The University of Tennessee Agricultural Extension Service and available at county Extension offices, indicate that cash hay production is only marginally profitable for farmers achieving average yields, quality and prices. Therefore, it is imperative that hay producers do their “marketing homework” if the hay enterprise is to make a net addition to farm income