Yeah, A&M always says that too. I'm like you, from WHERE?? I run a cutter for a guy once in a while who's a big custom hay maker and he sells his to a broker. Most of the big "commercial" guys nowdays don't want to mess with baling for you unless you have a BIG field of HEAVY hay and if you have that you should have your own machinery anyway. Lot of those guys increasingly don't want to mess with selling to you either unless you're buying 50-100 bales or so. I ran into the same thing trying to find milo haulers a few years back. Back in '75 every guy in the country had a beat up old bobtail and was looking to haul grain. The big 18 wheeler guys got PO'd since they had to have DOT inspections, commercial insurance, the works, and so they raised a stink to the gov't to get the rules changed so you had to GROW grain in order to haul it, and could only do so much custom hauling before you were considered 'commercial'. Well, having to have DOT inspections and commercial insurance buried all those guys, unless they happened to have a 20 acre field of milo somewhere, but most of em were GONE. SO, the 18 wheeler guys eliminated the competition. But guess what?? Small farmer go to hire them, first thing they ask is "how many combines you got?" Well, one I say. "How many auger carts you got?" WEll, one I say again. "Weeeelllll, we don't really have the time to mess with a little operator like you... Couldn't you team up with a neighbor and run 2-3 combines and a couple carts?? We want the business but we want to have 100,000 pounds on the truck and get rolling from the field in about 20 minutes." No, not really I says. "Weeeeelllll, since it's nearly 11 am and we haven't got a job yet today, we'll come do it, but man you better cut like the wind!" After all this I bought a wagon for $500 and hauled it myself. Same thing with hay.
Most of the guys I bale for either 1)just don't have enough cows/acres/bales to justify owning a mower, rake, and baler, or 2) are just too old, in ill health, retired, too rich to want to do it, or too poor to afford to do it themselves. I work with guys based on their situation.
Back to the 'never bale your own just buy it' theory... I can disprove that on the face of it. They threaten to replace us schoolbus drivers with contractors or a contract company. They did the same thing at the nuclear plant where I worked. In fact I worked subcontract. Contract labor always costs more and here's why. Say you're talking about baling hay. It costs so much in diesel, labor expense (time), machinery, repairs, consumable supplies like twine, wrap, cutter knives, etc. Now if you own the machinery the costs are the same, fudging for labor since if you're doing it yourself your saving money. A big custom guy is spreading those expenses over more acres/ bales/ cows, etc, but usually has higher overhead because he's running new expensive machinery. Do it yourself with older stuff= more repairs and expense, but you can do a lot of repairs on a $1,000 baler for the cost of a $25,000 baler, so you come out pretty close on costs that way. The commercial guy has to pay added costs in moving his machinery around a lot, where your cost might be little or nothing if your hay meadow is on the farm or close by. But the clincher is that contract labor, no matter in what business, must make a profit to justify staying in business. That additional profit is figured into what they charge you, either for the custom work or for the finished product, the hay. A small custom guy baling his own and cutting a little on the side is content with a lower profit margin than say a full time commercial only hay operator. But either way, that profit for the custom guy (labor, whatever you want to call it) is added expense coming out of YOUR profit when it's all said and done.
I KNOW that I can make hay cheaper than I can buy it. That should be a no brainer when you think about it. All my equipment is paid for, and it's all older stuff so it cost less to begin with. I figure in maintenance and eventual replacement costs too, because nothing lasts forever, and older stuff needs more repair than newer stuff most of the time. When I custom bale, I know what those costs are when doing my own and add the cost of my labor and moving machinery. When you buy the hay outright the expenses are even worse because you're paying for the product as well; it costs a certain amount of money to grow that grass since seed and fertilizer isn't free and chemicals and irrigation SURE isn't free. Besides that the product has intrinsic value no matter what the production costs are; I get $25/bale on average for prairie hay with virtually no seed/fertilizer costs because it's good hay and that's what it's worth. I've had guys want me to sell it to them for nearly nothing and I'm always like, "well if it's not worth anything why do you want it and if it's not worth anything why would I want to sell it when I can keep it and feed it myself?" Good luck! OL JR
