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Making hay on shares?? 50/50 60/40???

A

andy r

Member
I have a few odd shaped smaller fields and some good size waterways that I am going to let a neighbor bale. From the conservation aspect these areas just are better in hay. There is quite a bit of legume in this mix as well as a good representation of several grasses. This neighbor had been renting these areas before by the acre as they went along with the pasture he was renting from me. Well, he turned 65 and the 250 head of ewes went west. He still loves to make hay and market it. Since he is no longer renting these areas by the acre we have agreed to do this on a share basis with him doing all of the work and also paying for large squares to be baled. He will also do all of the storage/marketing/hauling. What portion should/could the landowner expect to receive???? Thanks guys. Andy
 
Years ago we did it for 1/2, but the price of fuel, twine, etc has doubled or tripled. I'd probably get 2/3rds today to make 1500lb twine rapped large rounds.
 
So, if you would sell $1000 of hay the landowner would get $250? or, is that 1/4 of the value of the hay as it passes out of the field gate? Are we talking heavy good hay? For the most part my hay is 3 foot tall that will produce fairly good size windrows.
 
I used to bale hay on a 50/50 share. Now I usually go 60/40 with me providing fertilizer. Too many of the land lords around here would not put anything on their hay ground so shortly you where baling weeds and junk grass. Even then the hay needs to be pretty good hay for it to work out for either party. So it you get 40-50% of the hay/value you will be doing fine.
 
Think landlord got around 150 per acre from this Alfalfa field.
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Around here the land owner gets 1/3 if the renter puts on fertilizer, 1/2 if land lord pays the fertilizer.
 

I've been doing it 50/50 and losing out every time. I'd say 60/40 at the minimum and probably 75/25 is fairer considering the cost of twine, tires and fuel now.
 
I am doing 50% of net profit and 50% of fertilizer/lime. Can't say it's a good or bad deal, but I'm new and appreciate having 40 acres to play with.
 


I dont think you can cut and bale hay anymore for 50/50. Expenses are too high and no one fertilizes any more... So the person doing the baling cant make it.

Small/irregular fields are extremely expensive due to move in costs vs hay production.

So even 60/40 may not be enough. Then who moves the hay and market's it. Will you take your hay out of the field and he take his hay out of field?
 
Around here there are a lot of small acreage-10-20 or so and I offer my mixed grass to anyone who wants to bale it and all I get and satisfied with it is not having to mow the fields. Used to do it on 50/50 but has been several years.
 
That does not work. You have to show a monetary income to get the tax break and getting nothing for the hay on the ground will throw the land out of any tax reduction policy.
 
75/25 here, with me buying the fertilizer. Small fields within a 1/2 mile of home. I buy the landowners share of the hay. I feed the hay - none for sale.


I have one small patch that the landowner refuses any payment. We are all friends, and I help him when he needs help.
 
Leroy, that's how it works here too. They're always looking for an excuse to slip you into "recreational" status, and payment for the crop is the proof that they want. The income tax paid by the landlord can amount to a savings on his real estate tax.
 
A nice big rectangular field of alfalfa the landowner maintains the fertility can work out nice at 50-50.

It sounds like this is odd sized, not fertilized bits. And the wetter ground, harder to get good dry hay.

I think you will be closer to getting 25% of the hay.

Paul
 
Not true I fill out the paperwork for the county just has to be a farmer that files form F with the IRS that cuts the hay they accept it as being a barter for keeping the land up.No money has to change hands I just have to state the dollar value of the crop.Doubt you are very familiar with land use regulations in counties in Virginia anyway.Must 'work' as I have been doing it for about 30 years BTW.
 
The savings for the landowners can be a lot the one place where I cut about 100 acres of hay saves over $6,000 a year on taxes.Some farmers in my area actually charge the landowners to cut the hay and they keep the hay too for smaller pieces.I need to cut off a couple as I don't really need the hay but at least I have plenty of hay and enjoy making it different places.
Very few farmers in my immediate area that are farming for a profit and file it with the IRS.
 
just on the pure aspect of putting up the hay and peddling it for you gets him more % of shares... What you two decide on to make both happy is between you both. Just FYI..

I did the same thing with a gentleman from church few years back.. He didnt want any part of it but wanted a % of shares..whatever I thought was fare.. I did the 60/40 on small bales.
 
We tried the share way several times and for us it worked out better to buy the whole field and get as many cuttings as we could for the season.
 
I lease 3 small fields of between 10 and 15 acres each, ok in the Salt Lake Valley of Utah they are considered big fields any more. Each patch has a different lease agreement. The main reasons that two of the fields are farmed are weed control and property tax reduction. One place is 10% of gross and the other is 25% of gross. The third field is owned by a water district so no tax savings but they do not have to maintain the property I run. $10 a year on that one or about $1 an acre.
Ken
 
Fairest arrangement I ever had was to pay the land owner $1 per square bale. But I Never did any round bales on a cash arrangement. Counting bales was a pain, but worth it. I have also just cash rented the land, same rate as pasture.
Little fields are much more time consuming, so worth less.
 
As you can see by the answers it depends on the area and the land/crop.

In Oklahoma it is not profitable to fertilize native grass meadows. The convention is 2/3 to the baler, landowner sells or keeps 1/3. If he wants it all then 1/3 of the established value but the landowner should not expect to get winter prices during hay season.

If you sweat the pennies you'll have to find a new baler every year and you'll always be unhappy.
 
I'm looking at native here in Kansas. The previous renter was on 1/3 to the owner and bought the hay (big round bales) from the owner - he paid him $25 a bale for every third big round bale. I am going to put it up in small squares and was planning on paying the owner .60 a bale for everything we put up (average $3 or $4 or so per bale for native hay). Naturally a friend of his chimed in that he should still get 1/3 of the hay or a $1 a bale rent. I told him for that I'll leave every third bale in the field for him to pick up.


With 50 pound square bales and 1700 pound round bales. For 34 square bales (1700 pounds) he's getting $20.40 - for 1/3 of a big round he was getting $8.34 for 1700 pounds of hay.
 
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