Flack! Flack! Pieces of hay flail against the windshield.
If you’ve ever traveled east to west in Washington, hay trucks are a consistent sight, tracing the mountain pass over Interstate 90, funneling into Puget Sound ports where the hay is loaded on ships and sent across the world’s oceans. But you might not know just how huge the hay business is in the Northwest.
On Nov. 26, Anderson Hay Enterprise, Inc., one of the largest companies trading in alfalfa and timothy hay on international markets, filed for Chapter 11 bankruptcy relief. Anderson Hay was founded in 1960 and is based in Ellensburg, Washington. The company is currently run by CEO Mark T. Anderson.
Additionally, six subsidiary and affiliate companies associated with Anderson Hay have also filed for Chapter 11 protection, according to the ‘’declaration of Steve Gordon in support of debtors’ first day motions,” a document filed on Dec. 1 in the U.S. Bankruptcy Court for the Eastern District of Washington. It states that Gordon is the chief financial officer for all the companies listed.
“This is not a story about Mark Anderson making a mistake — this is a story of our whole industry,” said Don Schilling, the president and owner of Wesco International, another hay export company based in Ellensburg. “Every hay exporter’s first response should be, ‘There by the grace of God go I.’”
Forage, plants specifically grown to feed livestock, are one of the top crops in Washington and Oregon. According to a U.S. Department of Agriculture Crop Values 2024 Summary, last year in Washington, forage was valued at about $542 million farmgate value – or the price that farmers get for their crops. In Oregon, forage brought in over $602 million farmgate value.
Of loss and loess
The Columbia Basin, which spans both Washington and Oregon, is made up of prime windblown silt loam soil, called loess. Silt loam is fine grained and retains a lot of moisture. It’s excellent for growing potatoes, grapevines and hay.
“The hay that’s exported comes primarily from Washington, Oregon and California,” Schilling said. “Some comes from Idaho, Utah and Arizona. Just as we all benefited from the growth of the hay and straw industry from where it started in 1971, then everyone in ag is going to be affected by the contraction of this industry.”
The Columbia Basin is also close to deep seaports, with massive ships that can reach Asia and other ports of call. Shipping bales of premium hay to feed dairy cattle in places like Japan, South Korea, China, Saudi Arabia and the United Arab Emirates requires exporters to secure and ship large volumes of product in order to be profitable, according to Schilling.
The details
In a public letter linked to the top of its company website, Anderson’s CEO writes: “Over the past several months, we have been working closely with our lender, AgWest Farm Credit, to restructure and extend our loan terms. We approached those conversations in good faith and with every intention of finding a path forward together. Unfortunately, earlier this week, AgWest decided to end any constructive discussions and impose unwarranted, unacceptable restrictions on us that would effectively limit our ability to continue operating and serving our customers.”
Anderson Hay owes AgWest Farm Credit nearly $20 million, according to the bankruptcy petition. Beyond that, there are other creditors and unsecured creditors – meaning there’s no collateral.
The bankruptcy case is expected to go before the U.S. Eastern District of Washington’s Chief Bankruptcy Judge Whitman L. Holt for a second hearing on Dec. 17. That’s the same judge who heard the well-known Cody Easterday case several years back. Also, the same legal firm that represented Easterday – Bush Kornfeld of Seattle – is representing Anderson Hay and its subsidiaries and affiliates.
The other subsidiaries and affiliates in the bankruptcy petition are listed as:
- Anderson Agri LLC
- Anderson Hay & Grain Co., Inc.
- Anderson Pet Holdings LLC
- M T A Farms LLC
- M T A Holdings, L.L.C.
- MTA Ranch, LLC
Anderson Hay supplied hay products and straw domestically and to more than 30 countries, according to Gordon’s declaration document.
Anderson Hay and its subsidiaries and affiliates employ nearly 170 people. These companies work in forage and cattle sales, rock and soil sales, pet supply sales and trucking services.
Hay bubble
“The hay business is what keeps our [Kittitas] Valley and Columbia Basin farmers going,” said Brad Haberman, co-owner of No 9 Hay Trading, which is based in Ellensburg.
For a while, demand only seemed to grow, and hay exporters were looking to expand capacity. But the business winds changed, blowing in an adverse direction, Haberman said.
According to Gordon’s declaration document, “A number of significant macro-economic factors have impacted Anderson Hay’s operations and financial performance over the last three to five years. These factors have had a negative effect on market demand, the price customers are willing to pay for forage products, and production and processing costs.”
Pressed
Gordon’s declaration states that 80% of Anderson’s revenue comes from foreign sales to mainly feed dairy cattle. To ship overseas, hay presses take a normal bale of hay and squish it down – sometimes compacted into half the size – so the bales can fit neatly and compactly into shipping containers, usually wrapped in plastic or nylon.
But the global dairy industry has struggled with oversupply and low milk prices. That puts downward pressure on what farmers can afford to feed their cattle.
“… After years of significant growth in dairy cattle herds, China has been dramatically culling the number of producing dairy cattle for the last two to three years, thereby reducing the amount of feed needed,” Gordon’s declaration stated.
Japan is one of the world’s largest importers of American hay, and the country has helped its dairy farmers by providing subsidized feed. Japanese dairies imported as much as 25% less feed from 2022 to 2024, according to the declaration.
Industry experts said that a stronger American dollar and a weaker Japanese yen made American forage less competitive in the global market.
By the end of 2022, prices for export hay had fallen substantially. According to Gordon’s declaration, minimum wage increases in Washington and Oregon, overtime pay for agricultural workers, higher equipment costs after the pandemic and the rising cost of diesel fuel were among the stressors the industry faced.
Deep pockets
With hay being fairly profitable several years ago, more and more companies got into the business.
Foreign companies like Agrex Inc., which has a plant in Ephrata, Washington, and is owned by the Mitsubishi Corporation in Japan, and Al Dahra ACX, Inc.— which has a plant in Ellensburg and has roots in the United Arab Emirates — could afford to lose vast amounts of money to secure the best hay for their food security.
“Sometimes there would be six different hay buyers’ trucks circling a field [of growing hay],” Schilling described. In October 2022, a line of credit from AgWest Farm Credit — a bank with branches across the West — was extended to Anderson Hay for $35 million. In 2023, it was reduced to $25 million. In May, the credit line was reduced further, according to the declaration.
Several hay industry experts confirm that foreign customers started looking elsewhere for their forage.
Those experts say regions in Europe, North Africa, South America and Australia seized the opportunity to produce lower-cost hay.
The squeeze
Prices cut in half weren't the only problem for Northwest farmers and exporters. Anderson Hay and other American companies were put in a bind. Pay the prices, or dramatically downsize and be outcompeted.
Industry experts say that Anderson Hay’s bankruptcy announcement could leave a mark on the entire industry and the Columbia Basin if it can’t restructure effectively.
“This could signal a cascading series of events,” Schilling said. “Confidence took a huge blow on Wednesday of last week. The market has changed, the whole biz has changed as a result of this bankruptcy filing.”
Some hay growers say they’ve worked with Anderson for decades.
“Praying that they can work through it, so commerce isn’t harmed,” said Jeff Calaway, another Ellensburg hay exporter.
And some growers say that they will continue to send in hay during Chapter 11 proceedings.
“It’s the end of the industry as we knew it 10 years ago, or 20 years ago,” Schilling said. “I think Anderson got caught in that transition.”
AgWest Farm Credit said in an email that it wasn’t able “to comment in detail at this time” on the Anderson bankruptcy case. Anderson Hay CEO Mark T. Anderson was contacted, but pointed to his online letter as his only comment.
There are also worries from other exporters on how discounted Anderson hay could impact the global market.
“It could be hard on the rest of us if they have to sell it at a discount,” Haberman said. “They could drop the price overseas. It could hurt us and our growers for next year too.”
