Fair profit per hay bale

[bigbull338]

if i had to give $90 a bale for hay or more id go another way to feed the cattle w/o hay or very little hay.so you guys see you can price yourselves out of selling hay.

 

[agmantoo]

whitewing
By the way both the haying operation and the beef operation are done in this country IMO the difference would be "not much". The beef enterprise may be a little ahead but mostly because the hay operation will lose money.

 

[Suzie Q]

Having your own equipment means you are independent. Waiting for contractors does not help if you have a season where you only have one week of dry. You will find all the farms around here will virtually cut on the same day as it is the day that the weather allows. They dry their hay, make their hay, put it away and then it rains again. Which is perfect as no need for the irrigator.

Not so those without their own equipment, the contractors can only do so much in a day, which means they can only do so much in a week, so by the time they get to the next door neighbour's place it has rained and they have missed their opportunity.

Also when you start off in the hay business it is better to have your own cattle while you go through the learning process of your machinery and how it is done. The cattle get the bales too light, too heavy, too dry, too damp, too big, too small. They don't seem to mind.

 

[backhoeboogie]

Interesting question....

* My Dad and I bought a new 60 acre bermuda grass hay farm about this time last year. We bought a slightly used JD 467 baler, a new JD 830 MoCo, and a new Rhino SWR-10 wheel rake. All together, we spent $50,000 on hay specific equiment. If you spread that over a 5000 bale life, you get $10 per bale in direct equipment costs (assuming you don't include the two tractors which we already had).

* Now keep in mind that last season was the hottest and dryest in Oklahoma in the last 50 years. So, the production that we got off the field was about a third of what I think it would do in a "normal" year. But the "variable cost" for us (which included fertilizer, diesel, and net wrap) was right at $30 per bale.

* So (not counting our time) I would say we had $40 per bale in the hay that we made last year. Given the dry year, we ended up keeping all of it ourselves and not selling any. But, I would say a 25% profit on top of the $40 cost would be the minimum that I would have considered selling the hay for.

Granted, last year was not a "typical" year (at least I hope not), but $50 per bale would have been my minimum had I had any of it for sale.

If you irrigate that hay, your cost can double. No one will appreciate the fact that you have hay for them. Lots of work and nothing but aggravation. I did not irrigate during this drought and I do not regret it. Let 'em pay feed store prices.

 

[fatcattle]

Some scratching of mine on two cuttings of bermuda.
Swathing-fuel-7gal hr x3.38/14 ac hr=$1.69
Labor-10hr/14ac hr= + $0.71
$2.4/2 bale ac=$1.20 bale

raking-5gal hr x3.38/20ac hr= $0.84
labor-$10hr/20 ac hr= + $0.50
$1.34/2 bale ac=$0.67

rent-$20 ac/4= $5.00
fertilize-$30 ac/4= $7.50
baling-7gal hr x3.38/30bale hr= $0.79
labor$10 hr/30 bale hr= $0.33
wrap $3.00
hauling- $5.00 ? That's $23.49 bale without any upkeep on equipment, no time spent traveling between fields, no payments, no insurance, or any breakdowns. This is an approximation so some of the numbers are just guesses but they should be close enough to get an idea. The equipment is a 4990 JD self-propelled windrower, 7710 JD tractor, 567 JD baler, and a set of wheel rakes. My guess on a breakeven per bale would be close to $40. Of course, the more you do the lower it becomes because of spreading equipment costs across more bales.

 

[James T]

With the cost of fertilizer, seeds, seed bed preparation and custom baling cost or even with an established grass with fertilizer. If a person kept accurate cost to produce each bale. What would you consider a fair profit per bale over cost when it is sold to another person. Hope this question makes sense .

Your questions used the word "fair" and given where your located (hit by drought) I believe a fair profit would be 50% over the costs you mentioned. This does not include transportation. If your buying hay, this number does you no good because most sellers are going to gouge you. If your selling, sell direct instead of to the middlemen. This way, you gain a decent reputation in the hay business. This will be important when hay is plentifull one day and you'll be known as fair and reasonable.