Factors Affecting the Valuation of Hay: Producer and Consumer Preferences, Price Determinants, and Attribute Importance

Hay is an important input to livestock production and a large cost input for producers of livestock. Additionally, hay serves as a significant source of income for producers and is a large driver of the United States agricultural economy. It is estimated that approximately 60 million acres of US total cropland area is used for hay production (CITE) Despite the importance to livestock production, hay is relatively understudied as compared to other commodities. Existing literature shows certain characteristics or attributes, like quality, increase the value placed on hay products. However, previous studies have only been conducted in action settings where purchasing information is aggregated. Therefore, we created an experiment that elicits willingness-to-pay (WTP) for bales outside of an auction (spot market and private-treaty transactions). The experiment was conducted at four separate University of Tennessee field days, where four bales (eight total across two years) were analyzed by participants who were randomly placed in a control or treatment group. Both groups were given forage species and provided access to the bales (i.e. viewing, feeling, smelling) and asked to enter their WTP for each bale. The treatment group showed forage analysis information and bale weight; the control group had neither. The forage analysis included the following metrics: dry matter (DM), crude protein (CP), acid detergent fiber (ADF), neutral detergent fiber (NDF), relative feed quality (RFQ), and total digestible nutrients (TDN). We want to know if access to quality measures and forage analysis have any significant impact on WTP. Alongside the experiment, a total of two surveys are utilized. The first survey pairs with the experiment and is administered in-person at the respective field days. The second survey is administered online with an embedded choice experiment. The sample for this survey is participants in the hay market across the nation. The surveys help to reveal farm and producer demographics, which help determine which factors of operations increase WTP. By compiling the results from the experiment and both surveys, we hope to reveal relationships and develop a better understanding of the hay market outside of auction settings