Market opens for hay
By Steve Herring
Published in News on July 12, 2013 1:46 PM
Nick Gombos of ACX Pacific Northwest discusses the packing operation of the new business that ships hay to countries in Asia and the Middle East. Officials say it could open a new market for Wayne County farmers.
Once underutilized or simply discarded hay could soon be generating additional revenue for local farmers while providing a feed source for livestock in Middle Eastern countries.
Hay bales began arriving earlier this month at the new ACX Pacific Northwest operation housed in the former Carolina Tobacco Warehouse on Jeffreys Lane. The first shipment from the new operation will be to the United Arab Emirates.
A U.S. Department of Agriculture team was at the 158,400-square-foot facility Wednesday conducting the initial inspection of the hay to be able to issue a final sanitary certificate for it to be shipped overseas.
"I was invited to participate in the (ACX) growers meetings, and I am really glad see the turnout and that they got some contracts for the hay," said Susan P. Kostelecky, USDA export certification specialist for North Carolina and South Carolina. "I am thankful that they have gotten enough hay to start production, and we are really excited about this first shipment to the United Arab Emirates.
"My father was a tobacco farmer in Kenly. I grew up going to the auction warehouses. I worked in tobacco fields all of my life. I am really excited to see this is a business opportunity in the community for farmers in eastern North Carolina. I hope it is going to grow and expand beyond Wayne County and surrounding counties. I am hoping that they can pull from the bulk of North Carolina."
Founded in 1978, ACX Pacific Northwest is headquartered in Bakersfield, Calif., and is a leading supplier of long-fiber forage and roughage products, including alfalfa hay, timothy hay, Sudangrass, oat hay and grass hay.
The third-generation family-owned business's products are sold to the dairy, beef, horse, camel, goat and animal feed industries in Asia and the Middle East.
The Asian markets include China, South Korea, Vietnam, Japan and Taiwan. In the Middle East, the company ships to the United Arab Emirates, Saudi Arabia and other Gulf Cooperation Council countries.
"Products from this division will mostly be focused on the Middle East," said Nick Gombos, vice president for supply chain and logistics. "It is a good quality, high-fiber, mid-feed value crop. It is perfect maintenance for the animals they feed in the Middle East, which are camels, goats, sheep, cows."
"I think this is a good opportunity for our local growers," said Kevin Johnson, Wayne County Extension Service director. "Several growers are looking at ACX as a viable market for their surplus hay that they are not feeding to local cattle."
Goldsboro is the company's first East Coast operation.
ACX officials plan to create 38 jobs with an initial investment of $4.7 million over the next three years as the company renovates and leases the former warehouse. The final total investment is expected to reach $9 million.
"We have contracted with a lot of third parties, trucking companies, service providers, things like that and hopefully will support a lot of other jobs as well," Gombos said.
The company will contract with farmers or they may just call and let the company know what they have, he said.
"Traditionally, hay exports were concentrated on the West Coast," Gombos said. "We operate three facilities there currently. We export from the western 11 states and western Canada and Mexico. The East Coast had not been something that we had considered for quite a while in our industry. We have been in business for over 35 years. We were driven to look at other products because commodity prices have been so high for the last few years, really since 2008.
"Our customers have been struggling to maintain their imports of our products, and we have been struggling to stay competitive. So we started our feasibility studies several years ago looking at different regions in the U.S."
Goldsboro, particularly eastern North Carolina, "came up on the radar" a few times because of the large amount of coastal Bermuda grown in the area, he said.
"We saw there was a large amount of this crop available and traditionally, it had been used for domestic consumption," he said. "A lot of it, to our knowledge, had gone to waste, laid aside on the field and had not had a market.
"There were two reasons we settled on Goldsboro. One had a lot to do with logistics. It has a very centralized location for us in terms of our procurement radius. So we kind of took a look at where most of the product was grown, and the feasibility on just the cost of moving it. Most of that settled within an 80-mile radius of Wayne County."
Also, Goldsboro is on the way to the port at Norfolk, Va., he said.
"We were a little disappointed that we couldn't ship out of Wilmington, but it didn't have the services that we need," Gombos said. "It didn't have the deep water that Norfolk has of course, mostly because of the Navy."
Gombos said the company is "pushing" for improvements to the Wilmington port including making it a deep-water facility.
"We are lobbying for that and supporting that as much as we can," he said. "But for the time being, we have to ship out of Virginia."
Another reason for the interest in Wayne County was that the county was very helpful and friendly toward business, particularly a startup, he said.
The hay comes in large round bales, but leaves in heavier, more compact square bales.