The Green Prairie International Inc. hay plant located near Lethbridge is a distinctive corporation with a distinctive marketing approach.
“We’re only Canadian (hay export) company that has operations both in Canada and the U.S., and Green Prairie is now the largest Canadian exporter of forages,” explains Green Prairie’s director of market development Edward Shaw. “It provides our producers with another option for export markets other than grains or cattle. It is another avenue they can go into to get into the export market and diversify their farming operations.”
Green Prairie International has been in operation for the past 29 years, and is owned by the John Van Hierden, who also serves as the president and CEO of the company. It’s a family business which has grown from humble roots into an international player in the forages’ market.
Green International now exports throughout Asia, North America, Europe and the Middle East. Its main products include Timothy, alfalfa and dehydrated corn silage for the international, high-end feed market.
In recent years they have also greatly expanded their Lethbridge hay plant to produce new lines of designer feed for the smaller pets food market, and diversified into grains, barley, wheat and oats.
“When we started out 29 years ago probably 90 per cent of our exports were Timothy, explains Shaw. “Now it’s probably 40 per cent Timothy and 60 per cent alfalfa.”
“We still do Timothy in the small compressed bales, which are 30, 40, 60 and 120 kg,” continues Shaw. “We do the jumbo bale with a quarter cut at 400-450 kg bales. We also do that in alfalfa and other mixed grasses as well.”
Shaw says diversification is important because the international hay market, like other forms of agricultural export products, can be extremely variable at times.
“Volumes are high, but profit margins are thin,” states Shaw. “Demand is always changing, and markets will change too. When Argentina, for example, devalues its currency by 50 per cent overnight, their freight stays the same, but their costs go down. The Euro in relation to dollar is also critical. And our Canadian dollar in relation to the U.S. dollar is critical. It is always a puzzle as to where it is going to go next.”
Shaw says the company has to keep a close eye on exchange rates and price moves due to weather and other factors. But there are just some things you can’t calculate on, says Shaw.
“When we buy from farmers we go out and commit to paying X number of dollars per tonne, we are locked in. So we are taking a huge risk on exchange and political events which we have no control of. When we come to buy the product, like for example our alfalfa products, we have to be competitive with the local dairies. We have to be competitive with them, but our profit margin has to be high enough so we can export.”
Shaw says there are also domestic challenges which have the potential to undermine their operations in Lethbridge as well.
“One of the biggest challenges we are faced with right now is the Alberta carbon tax,” explains Shaw. “Our competitors are not the companies in Saskatchewan, Manitoba or Ontario, they are in the United States, Spain, Argentina and South Africa that have no carbon tax. This $30/ tonne for energy has a huge impact on us. It makes us very uncompetitive.
“Our second challenge is freight. We are a long way from the Vancouver port, and we have to truck our equipment into Calgary and then send it by rail to the port, and then ship it off from there.
“But, by far, our biggest challenge we face is in securing consistent quality and quantity of hay year in and year out.”
Green Prairie International grades all the hay it takes in on a fixed scale which determines the end price paid to farmers who ship hay into them. Green Prairie does have the ability to dry out hay, which it needs to do to get it down to the 12 per cent moisture mark required for high-end feed exports, but Shaw says the company is working with local producers to try to get more field level solutions in place.
Right now, for example, Green Prairie is having farmers come in to try out a new field level drying machine produced by a company called Agri Green Enterprises which essentially spears bales and pumps heat through the hollow tines to greatly decrease curing time. Any way they can encourage more efficiency in their hay producers, says Shaw, helps Green Prairie lower its own bottom line.
“We are trying to encourage people to get technology to put up their hay in a faster manner,” confirms Shaw.
For all the various challenges Green Prairie International faces in a competitive export marketplace, it is still an exciting and interesting business which can be quite lucrative when all the factors line up, says Shaw.
“This is a challenging business, and it’s very rewarding to see the diversification of product for the farmers to grow,” he states. “It’s another niche for farmers, and I think it is something where Canadians can fill a void in the world market around forages.
“The developing markets are requiring a higher quality of protein, and the demand for forages is increasing almost logarithmically in the world. Canada is in a really good position to meet those needs.”