Forage crop demand could point to an export rebound
Workers load compressed hay Wednesday at El Toro Export in El Centro. Bales of compressed hay were loaded in containers for shipment to Japan, Korea and China. (Joselito Villero)
China understands the value of better-quality dairy cattle, said Adam Lyerly, El Toro Exports, sales manager. And U.S. hay has increased Chinese milk production, he said. El Toro is an El Centro grain and seed exporter.
“Last year was definitely better than 2008-2009,” Lyerly said. “At the end of ’08 commodity prices fell drastically and what sold took a huge loss.”
The market of a couple of years back was the worst in 25 years, Lyerly said. Now he is optimistic, in part, because of a weak dollar compared to other currencies, he added.
The Chinese prefer to buy American alfalfa since it has higher nutritional value than their sheep grass, Lyerly said. Sales also increased to the United Arab Emirates. The UAE has a shortage of fresh water and must desalinate irrigation water, so it is cheaper to import, he said.
Increased alfalfa sales can also open the door to other crops such as Bermuda, Sudan and Klein grass. Those commodity sales increased by 30 percent in Korea and Japan, since the final quarter of 2010, Lyerly said. Part of the reason is because Australia, a prime exporter, cut back because of flooding. But Pacific Rim consumers recognize the reliability of American produce, he added.
Alfalfa prices have surged from $100 to $180/ton since 2008, said Steven Benson, manager of John Benson Farms, an alfalfa/vegetable grower in Brawley. Commodities tend to follow corn, whose prices have increased since its use in ethanol. He expects sales to be up this year, but also the cost of production including water and labor rates too.
Yet, not all exporters are seeing growth. For Growers Express, a Salinas-based shipper/grower, with fields in Imperial County, sales remain level, said Tim Donlon, export manager.
Growers Express sells celery and lettuce to Singapore and broccoli to Japan year-round.
However, since this winter, sales to Japan have jumped 20 percent to 30 percent because of cold and snow there, Donlon said. But barring further severe weather disruptions, he does not foresee long-term increases in exports. They are hoping sales remain steady for the remainder of the year, he said.
But for forage crops the outlook is good, Lyerly said. Since last year, El Toro has added 10 percent to 15 percent to its staff and they expect steady growth for 2011.
By the numbers
El Toro Exports
$20 million to $50 million in sales
23 years in business
Staff Writer William Roller can be reached at 760-337-3435 or firstname.lastname@example.org