By Joel Benson
Idaho Farm Bureau Federation
POCATELLO – Members of the Idaho Farm Bureau Hay and Forage Committee visited with Driscoll TopHay officials July 26 during a facility tour to discuss topics such as hay markets, tariffs, and testing standards.
Facility managers at Driscoll TopHay reported that if they ran their press non-stop, they could still not produce enough hay to meet the needs of their overseas customers. Driscoll cuts and presses bales heading for countries across the world including China, which has been the recent focus of tariffs and trade wars, but top management feels they simply need to wait and monitor that situation.
On the topic of tariffs, Driscoll officials shared with the committee that there has been an existing 8 percent tariff on exported hay to China. The current U.S.-China trade war would push that to 25 percent. China can source hay from other areas, but it is not the quality that they prefer. If increased tariffs extend into late summer, Chinese customers will have to decide if they are willing to pay an extra 17 percent to get the product they want.
Supply and demand will also be a factor. Hay produced outside of the United States provides only a small portion of the world's hay supply. South America, Australia, Spain and other Europian nations do not come close to what the United States produces. The bottom line is that China would struggle with hay supply without the United States.
Driscoll officials also discussed markets for traditional and GMO hay. Countries like Japan do not have a national policy banning GMO hay. However, specific purchasers inside of Japan may stipulate non-GMO for their customers. China, on the other hand, will not purchase GMO hay, making the prevention of cross-contamination at the Dricoll facility a priority. Current testing can discover a .01 percent trace of GMO residue from a previously processed batch of hay, so cleaning of machinery at the facility is carefully watched. Because of the strong Chinese demand, Driscoll TopHay primarily presses conventional hay.
The sales team at Driscoll TopHay said that international customers often come with different needs than domestic customers. Purchasers often value the color of the bales as a top priority. Dricoll officials shared that they buy from local farmers for export based on lab test results, but international customers place a great amount of weight on the "eye test" to determine the value of the exported hay.
The Idaho Farm Bureau Hay and Forage Committee met earlier in the day to discuss forage testing standards. The committee has a desire to work toward a better testing system for both hay producers and buyers.