Price gouging vs profit opportunity

[Muletrack]

Where's the line between profit opportunity and price gouging on hay bales. In the midst of the drought I got some fairly nice grass bales for $50 each. Now everyone thinks they should get $75-$150+. Told the $50 guy at the time that I would buy everything he bales next summer. Would rather graze than make hay. Read on an older thread that this isn't really a problem other than supply and demand. I can see that point of view. I had some hay to sell a few years ago, priced it reasonably and said in my ad, "Will not price gouge during a drought. Phone rang off the hook (mostly from big ranchers trying still to dicker me down). Somewhere, their has to be an ethic involved.

 

[KAstocker]

Market price is ethical.

 

[Nesikep]

I don't sell a whole lot of hay, I sell at a price I make some money on, and for the most part my profit margin doesn't change year to year (well, high fuel costs this year might be something)... I also don't drop my price when there's a ton of hay around.. Either I have hay for you or I don't

 

[SBMF 2015]

I think for a good, solid repeat customer the price should stay the same as long as they are still covering their costs. If they knew this was a one time thing, the price would definitely be higher.

 

[Allenw]

I would price with the prevailing market in the area, you price it to cheap someone will buy and resale it.

Opinion on price gouging will depend on what side of the deal your on.

 

[collegeboundgal]

Some say that if you treat a buyer right when bales are hard to find and sale at a minimum price they will come back next year and the year after to buy your hay when everyone has hay.
I found this to be complete bull ****.
Customers go for the cheapest hay (barley glancing at quality) close to home.
That's what I saw when we sold during a drought. Buyers saying it was really good hay and thank you so much. Never heard a word out of them the year after. Called/texted saying we had plenty of hay the next summer only to hear the ol' "oh, we found someone closer/cheaper".

 

[Dsth]

Some say that if you treat a buyer right when bales are hard to find and sale at a minimum price they will come back next year and the year after to buy your hay when everyone has hay.
I found this to be complete bull ****.
Customers go for the cheapest hay (barley glancing at quality) close to home.
That's what I saw when we sold during a drought. Buyers saying it was really good hay and thank you so much. Never heard a word out of them the year after. Called/texted saying we had plenty of hay the next summer only to hear the ol' "oh, we found someone closer/cheaper".

been there done that

 

[Rafter S]

My father and a friend were in the custom hay business for decades, and I pretty much grew up in the hay field. They had a long-standing practice for setting the price for hay. At the start of the season they'd look at the prices for fuel, fertilizer, labor, etc, and set what they thought was a fair price for the hay. People could take it or leave it, but it didn't change depending on how much rain we got.

Occasionally, in a year when we'd had a lot of rain so hay was plentiful, someone who had bought hay from them in the past would buy it somewhere else because they saved a few dollars. The next year they went to the bottom of the list. People who bought from them every year stayed at the top.

 

[Stocker Steve]

I prefer price per ton.

I realize we are in a drought today, but before that were hay makers covering their total costs?

 

[MurraysMutts]

I prefer price per ton.

I realize we are in a drought today, but before that were hay makers covering their total costs?

Yes. It has to be profitable or we keep it.

Can make better use of it by purchasing older breds (one n dones) and calving them out on a sacrifice area, than giving hay away at cost.

May not work that way for everyone.

 

[Brute 23]

Market price is ethical.

I agree. The $100 a bale years go a long ways towards covering the years you can't hardly give hay away.

I have never faulted an individual for trying to get the most they can as long as they are not manipulating the market or doing some thing illegal or some thing of that nature.

 

[SmallTimin]

I sold the rest of my hay off as hay prices seemed to be climbing. I did not raise my prices, because I priced it where it needed to be, for me to make money, from the start. This year, my prices will be higher but I won't know how much higher until I get fertilizer here. May go back to chicken litter, or combine it with commercial fertilizer. At this point I'm not sure, it's going to be interesting to say the least.

 

[Hunter]

I say sell it for whatever they are willing to pay.
Costs have gone up to grow good grass.

 

[TexasBred]

Good hay is sort of like good whiskey........Don't know that either has ever sold for what it's worth.

 

[Nesikep]

Good hay is sort of like good whiskey........Don't know that either has ever sold for what it's worth.

at $140/bottle I think I'm paying enough for my single malt!

 

[mtchick]

There's a lot of what I feel is gouging going on around here. $290 for a 750# bale, and I've seen $400-$450 for a 1300# round. No one can tell me it costs that much to make a profit on a bale of hay.
I had to buy all my hay last year, but I bought early and from the same guy I have worked with for I guess going on 14 years. I normally get at least half my hay off my own land, so buy different amounts every year, but I can tell him by June how much I think I'll need and I get it for a fair price.
I'm on high desert, and we get 1 chance to get a cutting of hay, last year was the 1st time in 20years that I got nothing off my fields. It's not looking good for hay this year either, so this my be my last year with cows.

 

[Hunter]

There's a lot of what I feel is gouging going on around here. $290 for a 750# bale, and I've seen $400-$450 for a 1300# round. No one can tell me it costs that much to make a profit on a bale of hay.
I had to buy all my hay last year, but I bought early and from the same guy I have worked with for I guess going on 14 years. I normally get at least half my hay off my own land, so buy different amounts every year, but I can tell him by June how much I think I'll need and I get it for a fair price.
I'm on high desert, and we get 1 chance to get a cutting of hay, last year was the 1st time in 20years that I got nothing off my fields. It's not looking good for hay this year either, so this my be my last year with cows.

Not sure I would have any cattle if I could get $400 for a 1300# round bale.

 

[shaz]

Not sure I would have any cattle if I could get $400 for a 1300# round bale.

People that do stuff like that usually don't last. We've got a local jerk here who has a horrible reputation. when his cows come through the sale barn it gets announced and the price goes down.

 

[SmallTimin]

People that do stuff like that usually don't last. We've got a local jerk here who has a horrible reputation. when his cows come through the sale barn it gets announced and the price goes down.

I bought some cattle at the sale last week from a guy like that. Auctioneer says all his cattle look starved, I bought a couple anyway. Hard for me to pass up 3wt cattle for less than 50 cents a pound.

 

[faster horses]

Hay was in short supply last summer. We were short on hay too and we have repeat customers. We did raise the price, but not anything like other people were asking. One of our customers always pays more than we ask, and he did the same thing last summer. Of course, he is the one who gets all the hay he wants and then we go from there figuring out who gets what.