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Making Hay: NMSU marketing team aims to increase sales for alfalfa product producer

Thanks to a team of students from New Mexico State University, a livestock feed company in Dell City, Texas, has a new marketing plan to help expand its business.

The 2012 NMSU National Agri-Marketing Association team placed in the top 12 in a recent national competition. (Courtesy Photo)

The 15 students from the College of Agricultural, Consumer and Environmental Sciences took on the premium-bagged alfalfa Chaffhaye and created a marketing plan for the product. The plan was presented at the National Agri-Marketing Association's national competition in Kansas City, Mo., this spring. The team placed in the top 12 in the competition, making it into the semifinals.

While the plan didn't take home the big prize, it has certainly proved to be a winner with Chaffhaye's executives.

"I think the team's research and presentation were excellent," said Kimber Davies, head of marketing for Chaffhaye. "The team produced a lot of statistics that will be helpful when approaching the target market that was identified in their report. The report also included specific plans for marketing to our target customers."

After researching Chaffhaye and the alfalfa feed industry, the team of marketing students identified the dairy goat market in the Southwest as being ideally suited to the company and its product.

"The horse market is so broad and so diverse it was hard to find a specific target to focus in on because the company doesn't have enough production to serve the whole horse market," said Jett Sharp, president of NMSU's National Agri-Marketing Association. "The dairy goat market was a better fit and dairy goat producers are a lot easier to get to try new products."

The marketing team recommended that Chaffhaye market its product to dairy goat producers in Arizona, California, Colorado, New Mexico, Nevada, Oklahoma and Texas. According to a 2007 U.S. Department of Agriculture Census report, an estimated 83,152 dairy goats and 5,744 producers were found in the targeted region. The team projected that the dairy goat population increased in 2011 to 89,804, with 6,204 producers. This is good news for Chaffhaye.

"The yearly consumption of (Chaffhaye) per dairy goat is estimated at 1,600 pounds," the marketing team's executive report states. "Using the 2011 estimate of dairy goats in the Southwest region at about 90,000, total consumption would approximate 144 million pounds of (Chaffhaye) per year. This would make the total potential market of (Chaffhaye) 2.88 million 50-pound bags in the region."

Chaffhaye reports that its product is made with premium alfalfa that is carefully selected and harvested to maximize nutrients, palatability and digestibility. Within hours of harvest, the alfalfa is chopped, lightly misted with molasses and compressed into an airtight bag.

"A large majority of dairy goat producers have 10 or fewer dairy goats. It's really easy if they can purchase a 50-pound bag," said William Gorman, a professor emeritus of agricultural economics and agricultural business at ACES and a faculty adviser to the student marketing team. "The goats eat virtually every bit of it."

As part of its plan for Chaffhaye, team members conducted a market analysis, studied the competition, analyzed prices, created a business plan and mapped out an advertising and marketing strategy, which included a suggestion that the name of the product be changed from Chaffhaye to AlphaHaye.

"We think that's a better name because it implies it is made from alfalfa," Gorman said.

The team also recommended utilizing a user-dealer network to sell the feed and promote awareness of the product to the dairy goat market.

"They really liked that we were using the user-dealer distribution network, and that way the people who were selling the product could really know it and be passionate about it," said Sharp, a range science major who is set to graduate this fall. "I think they liked that we targeted leaders in the dairy goat industry to be those dealers."

Chaffhaye's Davies agreed and added that the company plans to use all the suggested marketing efforts in order to build a user-dealer network.

"We also intend to try the suggestion of full-year fixed price contracts for stated quantities," she said. "This will help users better know their feed costs and assure them of a steady supply."

In a bit of serendipity, the students also suggested that Chaffhaye expand its growing and processing operations into the San Joaquin Valley in California, a move the company already was considering.

Chaffhaye is part of a long line of companies that have benefited from the work conducted by NMSU's National Agri-Marketing Association team. The team competes annually at the national level, working throughout the year to create a marketing plan before presenting it to judges.

"The competition requires you to prepare a marketing plan for an agricultural-based product, something you sell to farmers or farmers could sell," Gorman said. "You have to do the research on it, select a product and then go through a screening process to make sure the product qualifies with the competition's criteria. We do the research on the product during the fall semester and draft an executive summary. The spring is very, very busy because we get preliminary comments back from the judges on the executive summary, we revise it and the final five-page document goes back in early March. Then you have to get ready for the 20-minute oral presentation and five minutes worth of questioning, which occur in the middle of April each year."

This year, NMSU fielded a fairly young team, with only three of the nine members on the presentation lineup having had experience in previous competitions. Sharp was one of those experienced team members and was part of the NMSU squad that won the national competition in 2010 by marketing a specialized horse saddle.

"I think that win really gave me confidence and a feel for what the judges were looking for in the competition," Sharp said. "I just tried to convey that to the younger members of the team. I told them how much pressure was going to be on them, how they really needed to know their script forward and backward and know the product really well."

Cady Mathews, a sophomore majoring in agricultural biology, just wrapped up her first year on NMSU's National Agri-Marketing Association team. Rather than intimidating her, the 2010 win inspired Mathews and her other young team members.

"It let us all know that it could be done, so we all strived for that as our end goal," she said. "I will definitely continue with the National Agri-Marketing Association. Even if you're not involved in agri-business or agricultural economics, marketing is something that you'll use in the future. You're going to have to present with other people, you have to know how to present yourself. It's definitely an asset to have."

And at least one company is eager to keep working with this year's now-seasoned NMSU agricultural marketing team.

"All of us at Chaffhaye enjoyed working with the team," Davies said. "As we continue to grow, we hope maybe some of the team members will want to work with us down the road. Their report shows we have a lot of marketing to do."