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Implement Alley Discussion Forum

Pencil out what it costs to make hay...

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John e.c.MI

01-10-2006 11:08:54




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While doing some budgets this winter I did one for our hay crop. I grow hay mainly to utilize about 65 acres that is just not good row crop ground. With the price of fuel, fertilizer and machine costs, the guy that sells round bales for $20 should be shot. If you are making hay for recreation or for a few critters do as you please. But the guy that thinks he is making money selling cheap hay is kidding himself. Try to replace that machinery with just hay income!

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Rexalot

01-15-2006 09:23:23




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
I'm small potatoes compared to the sound of you guys. I sell what I don't need to friends for cheap as I can't store what I don't need. (I ask $1.50 - $2.00 bale/65lb square bales) I make enough profit to cover my fuel and string cost's, but no where will I ever recupe my initial cost's any time soon.

Before I started doing my own, the neighbor farmer sold me good orchard mix, 80lb bales for $3.50. He's got alot more wrapped up in his fancy equipment compared to my bargain stuff (Oliver 1800 - gave $1800, NH 68 /NH S67 balers $1000 in the pair, $250 wheel rake, $600 in a wagon, and $400 NH 469 MoCo)

I've been slowly rebuilding this equipment every season for the past few. I expect to drop about $300 this year into the haybine and baler and will likely have to fertilize the 4 acres I'm planning to cut. Factor in my cost's then paying somebody else for the hay would probably be cheaper.(I need about 230 bales a year)I'm more of a "Hobby Hay-maker" then the guys you describe doing 40 - hundred or so acres, they sound more like part time farmer wanna - be's that have more money then common sense. Throw some of that cash my way will ya!

I'll continue doing what I'm doing as I enjoy "playing" with my equipment, it's therapy. I'm not in it for profit. Sorry to hear that some of you have to "compete" with people with deeper pockets and no common sense to make a living.

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Hayman

01-14-2006 14:37:30




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 the hobby hay makers in reply to John e.c.MI, 01-10-2006 11:08:54  
I have them in my are too and yes they sell it for nothing some years. But what do they care for them its a "hobby" remember if they make a profit its bonus.

I wonder what people would say if someone was an accountant by trade and put ad in the paper and did accounting at far below the going rate of the other firms in town???

I help some hobby guys out with thier equipment sometimes as the fellows by me are not mechanically inclined. Heck a couple I know have more money invested in thier haying it equipment then I do.One guy has a big 4 year old JD self propelled disc mower and cuts 40 acres only.

Typically hobby hayers come and go as the years it rains all summer when your trying to hay isn't so much fun after all.

As a rule though the serious customers that take thousands of bales buy from larger suppliers that do it as their main business. So they know they can get a long term supplier. I charge more then what the hobby guys advertise it for in the paper and I tell people who complain to go drive around a "kick bales" to see what they find. Sometimes its a bargin sometimes is crap.

With the climbing input, cost, fuel costs, wages etc, what do people expect??? Hay is suppost to stay the same price for 30 years like grain?

Heck charge $2 for a small square bale of straw and the only people who complain sometimes are farmers. I tell them to go buy it elsewhere or make it themselves! All my other customers (acreage owners, construction and oil field compaines) think its a bargin.

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Bill in Colo

01-13-2006 19:10:39




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
This the first year 5 or 6 that this area is not short of hay , long term drought. Price looks to be about 70 per ton what ever the way it was baled little square, mids and large square or round. I bought 100 tons standing next door for 45. per ton. also cut raked and baled round for another neighbor at 36. per ton and I'm 4 to 6 under the market for custom work. We have a short season about 75 days start to finish and and it rains in Aug.

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tim[in]

01-12-2006 18:16:57




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
what i could never understand is why people want to feed "high octane" alfalfa hay to a horse that is not working hard. like giving sugar and caffiene to a kid. seems to me it would make more sense to feed them timothy. no wonder some are so nervous and jittery . we fed ours grass hay and they always kept condition.what i've never understood is why good clover hay that is close to alfalfa in food value , doesnt go for what it is worth.i think the reason some people think hay is cheap , is you are not planting it every year like row crops.

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jimont

01-13-2006 18:54:32




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 Re: Pencil out what it costs to make hay... in reply to tim[in], 01-12-2006 18:16:57  
tim - We actually shipped red clover hay to England for the Queen's horses back in the late '70's. It seems that there was quite a push for clover in England at the time. Clover can't be cured very well in that damp English climate. We always prided ourselves in putting up GOOD red clover hay but it seems that you can hardly give it away these days as the money seems to be in a good alfalfa/timothy mix.

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Michael Soldan

01-12-2006 16:03:34




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
I guess John I would ask a question to reply to you..What's it cost to not make hay? I have a small cow/calf operation, some small acerage in hay and pasture, and I get a field of hay from a neighbour every year, I rent out the rest of my farm. I need about 2000 small squares a year and if I had to buy them @3 a bale I might as well sell all the cattle now. I don't think it costs much to make hay. I spend about $700 for spring fertilizer for the hay fields, around $200 for twine, add in $200 or so for fuel and my older but in repair equipment will go a lot more years so they have long run out of depreciation for tax purposes. I put up hay for way less than a third of what it would cost to buy hay. If you factor in what you would have got for land rent if you rented your hay field then it changes the equation, I don't factor it in...that's what I have a farm for , to raise cattle and grow hay. I beleive that if I was selling hay at $3 a bale that I could have a profit of $1-1.25 a bale, factoring in what I would have made with the land rented. I'm not in the business to sell hay but have sold a neighbour some one year when I had more than I knew what to do with..at any rate I can't afford to not make hay....Mike in Exeter Ontario

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Matt Page

01-12-2006 10:32:22




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
Why do we all have to make money all the time? What's wrong with helping people that are within your power to help. For those who have to justify everything, ussually people who help are helped in return. My mother laughs and calls it "The Bubba System" to my wife, I call it freindship and neighborliness. My dad and I are always helping people out. People are always doing things for us. Money seldom changes hands unless its to "make the pot right". We all benefit but we might not make more money because of it. Does it reduce my family's security? No, actually I believe it's increased. Security is the reason we're trying to make money and have things isn't it?

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Cliff Neubauer

01-12-2006 10:30:59




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
We sell quite a few small square bales but they are pretty much pure alfalfa so we get a premium for it. We've been baling about 5,000 small square bales every year but we just bought a better baler and if I could find the market I wouldn't mind doubling that number. As for round bales we usually buy a few each year, I think you can buy them as cheap as you can make them but that cheap hay is usually pretty low in quality. We are running about 85 cows right now and feed the calves out to about 1,100 lbs before selling them. What I would really like to do is get a vertical auger TMR mixer wagon so we can blend corn silage with low quality round bales to feed to cattle. I've ran the numbers and it looks like we would have to cut our feed costs by 30% to pay for the TMR mixer and feed bunks (would be looking at at least a $20,000 initial investment) but I think it would pay for itself in 5 years.

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buckva

01-11-2006 17:31:58




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  

Back in high school I did a project for Ag. class on the cost of raising beef steers. Part of that cost was the feed and of course the feed included hay. Final conclusion of the project was that there was no way to make a profit raising beef steers. Thought I would run this by my Dad as beef steers were our family's living. When it came to the cost of making hay Dad just said. Son you know it don't cost anything to put up hay. Well we could sell the hay and come out ahead,I said. Ain't nobody to sell it to because it don't cost them anything to make hay either.

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DJM75

01-11-2006 15:48:40




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
It"s a free country sell hay at whatever you want or give it away you people don"t like it go live with the communist and be a dictator and tell people what to do if you don"t like it.



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Warren in Wisc.

01-11-2006 14:31:30




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
Should be Shot huh? Well I am one of those guys. Heck, last year I gave away 10 round bales to my neighbor! I guess I should be hung, drawn and quartered! Better yet, I should have burned the bales because I didn't need them anymore and why drive the price of hay down? If we all burn our hay next year, the price will skyrocket then we can all make a killing.
We don't all have the same ecomomics, challenges, problems and whatever that you do. My hay is put up (at a loss I'm sure) for my cattle. The hay I don't feed, I could store for another year and feed as junk next year, or I can try to help out the neighbor who just may appreciate a little help. The next time you help someone out with a small construction job, home iprovement, equipment repair, etc., just remember that you are taking money right out of someone's pocket! Get real!

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Dave H (MI)

01-11-2006 07:27:34




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
Frankly, I get a little irritated when I hear of some guy dumping his marginal quality hay on the market for less than what it costs me to make it.
Not a lot you can do about it, though. Especially with horse bales you have people who will pay anything for a great bale and then the majority who realistically cannot afford their hobby so are looking for deals right and left. I make money selling hay but I do not make a LIVING selling hay.

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hayray

01-11-2006 05:51:15




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
John, could not agree with you more, anybody selling hay that cheap needs to be shot or ran out of town. Good planning, custumer relations, storing hay for winter, and delivery and forage testing are all extra things that are going to help you make money doing hay, but if you are going to treat hay like you do your row crops than you are going to end up giving it away. If you are serious you can make good money at it. I just bought a new baler this fall, and sell 4x4 rounds for $130/ton. Michigan State says production cost average $80/ton. Anybody going to the Michigan Farm Show in Lansing today?

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kyhayman

01-10-2006 21:25:25




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
I dont see how anybody can buy new hay equipment at most any price, especially balers. I sell some $16 hay, and I sell $60 hay, depends on the hay. The $16 hay, roadsides, ditches, fence rows, broom sage, or wet and black, maybe even muddy. As long as it covers the fuel bill and the input costs better to bale it and feed it or make it go away somehow than deal with it in the next cutting. My competition keeps a lid on things for me, one reason I cut my bale size on dry hay back from 4x5 to 4x4. Same price as before, but I've got one guy who sells 500 rolls a year at $8 a piece. That wont pay my operating costs.

I was going to get out of round bales to sell. At $15 a roll, just wasnt hardly making wages and go all small squares. Barn storage and wrapped wet hay kept me in it. Storing the same hay in the dry effectively doubled the price ($35 and up) and doubled the market (all the horse people now are interested). Wet hay was even better, selling 50% water, for double the money ($30), and more than doubling the yield.

So, yes, I do still sell hay for $16 a roll, sure. But there is always a reason. This year it is probably b/c it has so many weeds in it and I want the seeds off the farm. At least this way the weed seed is gone and I didnt have to run the Bush Hog over the field. That and some of that from last year, that has mud on it went for that. (OMG, that was ugly, got 4" on it in the windrow, got the hay dried out but the ground was still wet and was about to rain again).

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Luke S

01-10-2006 12:51:42




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
I am the "recreation" guy you are talking about. I bale about 50 acres of hay that I use to feed our own horses and sell the rest. You are right about trying to even break even, it is impossible, at least with big rounds. Next season we are going to make a thousand or two square's to sell to try and make the bottom line a little less red, I have it sold for $3 and that will yield $6000 if I do 2000 bales. That will help some, but it will still cost me money in the end. I have threatend to quit but my wife really enjoys making hay and so do I. So I'll keep going. I had a tractor before I started that I gave $16g's for, that I used for other work on the place, so i really can't add it to the equation. I bought a 110hp Oliver 1955 for $6000, a Hesston 5500 baler for $2000, a NH 256 dolly wheel rake for $1250, a JD 4-basket tedder for $1000, A new Vicon 7'10" disc mower for $5000, and just added a JD 24t baler that I got for free in a truck trade I made. So before the other tractor I all ready had, I got $15,250 in this stuff. But we like doing it. I know I am crazy.

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jimont

01-10-2006 12:16:07




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
John - Learned a long time ago to demand top dollar for "GOOD" hay. You'll always be told by a customer that they can buy it somewhere else cheaper ---- they're free to do so BUT there's also a great difference in the quality and weight of those bales. Good hay,harvested in the best of conditions and stored properly will always sell well. Actually,we are unloading my late uncle's barn this year of hay I helped him put up 10 yrs before he died in 1993.Bales are still well shaped,not dusty with only slight loss in colour and are going to a 125 head buffalo cow herd!!

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hayray

01-11-2006 05:54:22




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 Re: Pencil out what it costs to make hay... in reply to jimont, 01-10-2006 12:16:07  
Could not have said it better myself



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Dwayne TX

01-10-2006 11:47:04




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 Re: Pencil out what it costs to make hay... in reply to John e.c.MI, 01-10-2006 11:08:54  
I understand what you're saying. The reason I want to do my own hay is that I want to know what I'm getting. I know how much fertilizer was applied. The guy that sells hay doesn't care how tight/heavy the bales are - he wants to get the most bales per acre. I've had bales fall apart trying to pick them up with a spear because they were baled so loose.



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Ken Macfarlane

01-10-2006 13:18:03




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 Re: Pencil out what it costs to make hay... in reply to Dwayne TX, 01-10-2006 11:47:04  
I suspect when I sit down to do our taxes this year, if I counted my equipment costs only as the depreciation and repairs, I will find I made about 1$/hour on my haying. It does help offset some of the costs of having a tractor but I'm doing better so far snowblowing at maybe 5$ an hour after costs (I charge 45$)

Once the equipment has been around a few years it starts looking much better but it is a lot of work any way you cut it.

Ken

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