Cost to produce square bale hay

[TN B&B]

First off i would like to say hello.

I am new to the board. I live in TN. My dad has farmed his whole life. He passed away a little over a month ago. I have worked off and on with him my whole life. You know how it is on a farm. I have taken over the responsibility of managing our family farm now.

My question is this. What does it currently cost to produce a small(50lbs or so) square bale of hay?
We have about 35 acres of Tifton 44. My dad has been reluctant to go up in price through the years. I am trying to figure out what it actually cost us to produce a square bale of hay. Diesel has gone up, labor, fertilizer, twine, parts, equipment, etc. You name it, it has gone up. The cost to produce it keeps going up. We cut with a disc mower, go over it a couple times with a tedder, then rake it and bale it.

I'm just trying to see what our costs are to produce hay. I plan on eventually figuring out what we have in a square bale of hay. I just wanted to know if anyone out there can help me out.

Thanks,
B&B Farms.

 

[hayray]

Right around $2.50 per bale on the high end and in some years can be made for around $2.00 a bale depending on the investments into crop improvements and equipment in a given year. Fixed costs are easy to calculate but the variable costs such as fuel, fertilizer, twine, labor and repairs can swing that costs. Many years alot of producers are spending close to $2.75-$3.00 a bale if it is costing you $120 per ton to produce hay.

 

[Running Arrow Bill]

Welcome to the Board!

There are 2 types of costs: (a) Direct Costs [fuel, fertilizer, water, twine, etc.] and (b) Indirect Costs [depreciation, advertising, etc.].

For Direct Costs, compute the actual costs of the fuel & fertilizer, water use, twine, etc. for any given hay crop. These are variable costs dependent on fuel, fertilizer, etc. prices. Another direct cost would be the "value" of the equipment you are using: e.g., your proration for the "rent" you are paying yourself for its use. If you hire any labor to help produce the hay, the labor costs would be added as direct costs.

After all of these "costs" are added up, divide the number of bales you produce into that cost. That is your "break even" cost. Then, add a "profit" item to arrive at a "selling price" for your hay.

Hope this helps a little!

Bill

 

[Lucky_P]

Lots of Extension info out there, and I'm thinking OK St.U. has some free software.
Google 'hay production cost' - should give you plenty of stuff to consider - like this:
http://ohioforages.blogspot.com/2008/06 ... f-hay.html

 

[TN B&B]

Thx for the replies so far. I appreciate it.

 

[LauraleesFarm]

For our variable costs, my husband keeps a logbook where he records different expenses for each job we do. Start with each tractor freshly full of diesel. Record:
Hours on the tractor prior to starting cutting, prior to raking, and prior to baling (separate tractors if necessary, we have 3)
How many bales made
Approximately how many acres being farmed
Hours on the tractor after done cutting, after raking, and after baling (again, separate if necessary for multiple tractors)
Now fill the tractors after you are done and you know how much fuel you used for each tractor--record that
Now you can do many calculations with these figures such as:
cost per tractor hour
cost per bale
bales per acre
gallons of fuel used
And if you charged for the job you can figure how much you made per hour for what you got paid
We generally figure $0.50 per 4 x 5 round bale for twine, or $1.00 for net (could be more exact but its close enough for me).
Of course, you will have to address your fixed costs separately (tractor payment/depreciation) and also your maintenance costs. If you keep good records for tax purposes you could go back and estimate annual maintenance/repairs based on past figures.
In general, we make more on square bales than we do on 4 x 5 round.....and the square baler uses less fuel/pto demand. Squares are fairly profitable if it is horse quality hay.