Buying Hay

[Angus Cowman]

WOW - am I glad my custom bale guy/neighbor/friend doesn't have a computer. :shock: You guys got me thinking, so I pulled all the figures.
We don't own any hay equipment except the spears on my tractor.
I figured the rent on the hay ground, hay crew & equipment charges & fertilizer = $19.53/bale + fuel
(hard to figure the fuel, because they just arrive full & we keep them full and don't keep tract of gallons.) This is baleage. So, that's cut, raked (some), hauled, & wrapped. (I'm free!!! - I load & wrap the bales).
We have always believed a beef operation can't afford to own & maintain hay equipment - especially when hubby works off farm. And, I'm fortunate, my guy comes when hay is ready. He just does a few neighbors.

With fuel running over $3 pr gal I would estimate your fuels cost $4 pr bale Jeanne depending on how many bales or acre your are getting

 

[Jeanne - Simme Valley]

We have 85 acres & put up 732 bales - so that's 8.6 bales/acre - first cutting. Would that be in the ballpark for $4/bale?
I should keep track of the fuel, but it's always way too hectic. And a lot of times, our delivery guy will just show up & fill all the tractors. We used to have a hand pump, but now we have electric :banana: so lots easier, if delivery guy doesn't show up.

 

[bigbull338]

CB i truely hope that you can do ok buying your hay insted of baling it.reading your post made my stomach flipp.id loose my shirt buying hay insted of having it baled.we baled 140 bales the 1st cutting.then had a guy come in an he payed a baling crew $20 a bale to bale 100 bales.we took 20 bales or less an gave him the rest.his cost was $2000.so he had 80 bales to sale,an he was selling them for $30 a bale.so he only made $400 on the deal.an if we had to buy what we baled,we wouldve been $1500 to $2000 in the hole.add that to the baling cost an theres your equipment payment.

 

[upfrombottom]

we wouldve been $1500 to $2000 in the hole.add that to the baling cost an theres your equipment payment.

If I'm reading your post corectly, you use about 160 bales a year. If you paid $30 a bale for it, that would come to $4800 a year. I pay more than that on one peice of equipment each year, so how in the world some think they can justify that is beyond my comprehention. Even if your labor is free, I couldn't make that one pencil out.

 

[Jeanne - Simme Valley]

I know what you mean. Something will break on my neighbor/friends equipment - and it's $1000 here $1000 there - yikes! Like they say, big toys, big bucks.
I could never justify new equipment because they are so costly, and I could not afford repairs on an old one.

 

[hayray]

Costs per bale are hard to relate between operations. Generally thinking in tons is better when making comparisions. Usually costs me around $80-$100 per ton to make hay, that includes everything including hired labor. Rounds for me sell for around $120-$140 per ton and small squares sell $180-$220 per ton. So there is a good profit that can be made, the big challenge being able to bale enough tonnage per season to make a living on. I am most likely different then most of the previous post except for AC, I have a hay business and have the cattle as back-up hay consumers. Even when fuel goes sky high your cost increase per bale is not that significant as you might think.

 

[upfrombottom]

Production cost may not be that significant on just the fuel for baling, but the price of everything increases with the cost of fuel. Price increases for lubricants, twine, net, parts, tires, etc. not including delivery, where nearly all the cost is fuel, can significantly effect the bottom line.

 

[bigbull338]

yes your going to have some breakdowns.an some will kill your hipp pocket.but when you buy all your hay your at the mercy of the hay sellers.now add in a bad drought.an hay goes from $50 to $120 a bale.you can buy good equipment.cutters usually last 10 or 12yrs.rakes go till they fall apart.balers go till they need major repairs usually 15yrs or more.last year i ran it to a used 3yr old claase baler 4 by 5 that had 1500 bales through it for $12,000.so if i was in the mood i could got the equipment for $25,000 or less.an all wouldve been nearly new.

 

[TexasBred]

As long as I deal with someone known for the quality of the hay he bales I can never justify putting up my own hay.

 

[novaman]

For those of you buying hay or thinking of buying hay, keep in mind that with grain prices getting higher there will be less hay for sale in coming years. I've heard a lot of guys in this part of the world ripping up alfalfa fields and hay ground with the plans of putting it into corn or wheat this spring. I have a feeling if the grain prices remain strong there will be very few who can pencil out putting up hay and selling it versus grain. The numbers I've seen aren't even close when comparing hay vs. grain.

 

[TexasBred]

For those of you buying hay or thinking of buying hay, keep in mind that with grain prices getting higher there will be less hay for sale in coming years. I've heard a lot of guys in this part of the world ripping up alfalfa fields and hay ground with the plans of putting it into corn or wheat this spring. I have a feeling if the grain prices remain strong there will be very few who can pencil out putting up hay and selling it versus grain. The numbers I've seen aren't even close when comparing hay vs. grain.

Sounds just like dairymen when milk pices go up. Buy more cows, produce more milk, drive the price of your product right back down. Can't say the same will work exactly the same way with corn but it typically doesn't take a huge swing in acreage, bushels per acre, or carryover to influence the market negatively.

 

[1982vett]

we wouldve been $1500 to $2000 in the hole.add that to the baling cost an theres your equipment payment.

If I'm reading your post corectly, you use about 160 bales a year. If you paid $30 a bale for it, that would come to $4800 a year. I pay more than that on one peice of equipment each year, so how in the world some think they can justify that is beyond my comprehention. Even if your labor is free, I couldn't make that one pencil out.

:shock: YOU MEAN IT'S NOT SUPPOSED TO BE? :shock: :lol: :lol:

 

[Caustic Burno]

For those of you buying hay or thinking of buying hay, keep in mind that with grain prices getting higher there will be less hay for sale in coming years. I've heard a lot of guys in this part of the world ripping up alfalfa fields and hay ground with the plans of putting it into corn or wheat this spring. I have a feeling if the grain prices remain strong there will be very few who can pencil out putting up hay and selling it versus grain. The numbers I've seen aren't even close when comparing hay vs. grain.

Sounds just like dairymen when milk pices go up. Buy more cows, produce more milk, drive the price of your product right back down. Can't say the same will work exactly the same way with corn but it typically doesn't take a huge swing in acreage, bushels per acre, or carryover to influence the market negatively.

If it goes to high I will sell out, keep just enough to keep my ag excemption. Won't be the first time I dumped them all. I wasn't running that many staring last spring and half of them are gone to Jack in the Box now.
Dump them all buy a few heavy SS,s and sell them off at the end of the summer. I only needed 120 rolls for our climate for three months before I cut down to where I only need 60 this winter. I will be going into next year purchasing hay with a years worth here already.

 

[cypressfarms]

I feel guilty now; I've been paying my local guy $18/bale to come and cut hay on my land (I fertilize). He'll deliver to me for $22-$25 a bale if I buy a decent amount, like over 30 or 40 bales. These are small 4 by 5 bales, though. I need to call him and tell him how much I appreciate him, and also make sure he doesn't read CT!

 

[SRBeef]

For those of you buying hay or thinking of buying hay, keep in mind that with grain prices getting higher there will be less hay for sale in coming years. I've heard a lot of guys in this part of the world ripping up alfalfa fields and hay ground with the plans of putting it into corn or wheat this spring. I have a feeling if the grain prices remain strong there will be very few who can pencil out putting up hay and selling it versus grain. The numbers I've seen aren't even close when comparing hay vs. grain.

What we will probably see is more grain grown on ground that is best suited to grain and hay moving to ground that is more suited to hay. It makes little sense to grow hay on ground that has the soil, climate and topography to grow grains. Maybe more appropriate land use.

And I think like everything else, in the end the price of hay will adjust itself. And as long as the price of beef and cattle prices adjust, things will stay somewhat in balance.

The end result is higher food prices at the grocery store. Food becoming a larger percentage of a US family's net income, as it is in much of the rest of the world. jmho.

Jim

 

[Angus Cowman]

We have 85 acres & put up 732 bales - so that's 8.6 bales/acre - first cutting. Would that be in the ballpark for $4/bale?
I should keep track of the fuel, but it's always way too hectic. And a lot of times, our delivery guy will just show up & fill all the tractors. We used to have a hand pump, but now we have electric :banana: so lots easier, if delivery guy doesn't show up.

that would be in the ballpark Jeanne your cost would probably be a little less than the $4
I figure it on a 7 bale average which is roughly 3.5 tons pr acre on grass hay around here

 

[Angus Cowman]

yes your going to have some breakdowns.an some will kill your hipp pocket.but when you buy all your hay your at the mercy of the hay sellers.now add in a bad drought.an hay goes from $50 to $120 a bale.you can buy good equipment.cutters usually last 10 or 12yrs.rakes go till they fall apart.balers go till they need major repairs usually 15yrs or more.last year i ran it to a used 3yr old claase baler 4 by 5 that had 1500 bales through it for $12,000.so if i was in the mood i could got the equipment for $25,000 or less.an all wouldve been nearly new.

ok even if you could have gotten the equipment for $25000 on a ten yr average that is $2500pr yr in payments at 0% interest
then you still have the fertilizer cost and the fuel and labor cost associated with it

7 out of those 10 yrs you could have bought your hay cheaper it all goes back to having a good relationship with your hay supplier
yes there are yrs when hay is higher but my reg customers don't get gouged they may have to pay 5-10dollars more for their hay than they did the yr before but If they are paying that much more then a non regular customer will be paying $10 more than the reg customer it is that way now the regular guys get a break

plus if you didn't bale hay off of your place how many more cows could you run or how much further thru the yr could you graze without feeding hay

it doesn't take but 6-8 more calves a yr to pay for all of your hay for a yr and even less at todays prices
believe me I have ran the numbers and unless you are putting up lots of hay you can not justify having yours baled or owning the equipment to do it yourself

as for equipment lasting 10-15 yrs I want to buy some of that equipment my balers are wore out in 4-5yrs and a cutter may last 5-7 but most don't I usually buy new equipment every 4-5 yrs plus I have to replace tractors about every 10yrs at the most
I can't afford breakdowns because I am not making any money when it is broke plus I am spending money to fix it
if you are doing it for a living you sure can't run old or junk equipment

 

[Jeanne - Simme Valley]

Thanks AC - I was curious after all this discussion.
I guess I better be extra, extra nice to my neighbor/friend, after hearing some of the prices you guys are paying. Seems to me, $24/bale is livable.
Hmmm, I'm averaging 4 bales a day right now & that will go up with my cows going into production (started calving this past week). So, I'm feeding $100/day - ouch! Sure sounds awful when you look at it like that!
And, sometimes you hear guys say they put out extra hay so the cows have something to lay on :shock: Not me! I purposely let the mature dry cows run out of hay for 1 day/week to make them clean up anything they might be thinking about laying on. And, I pretty much make all the groups clean up - just not quite as hard on the younger heifer/cows.

 

[novaman]

So, I'm feeding $100/day - ouch! Sure sounds awful when you look at it like that!

If you think $100 is bad you don't even want to know that $ figure on the amount of feed put out in a day on my place.

 

[Angus Cowman]

So, I'm feeding $100/day - ouch! Sure sounds awful when you look at it like that!

If you think $100 is bad you don't even want to know that $ figure on the amount of feed put out in a day on my place.

yep
but I bet your cash flow is alot higher also