callmefence
Keyboard cowboy
You need to make sure and sell those calves real cheap. You make to much and these folks will think you're gouging.
Price gouging vs profit opportunity
- Thread starter Muletrack
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SmallTimin
Member
I sell the calves for whatever they go through the ring for. The way I see it, I can't gouge if the buyer is setting the price.
SmokinM
Well-known member
If he is selling it at that price I sure don't fault the seller. A fool and his money are soon parted would sure apply there.
callmefence
Keyboard cowboy
I'd would wager the average hay producer has as much invested in equipment as his average customer has in land.
simme
Old Dumb Guy
I can understand the price gouging thing if one person corners the market, has plenty of supply and sticks it to the customer at extremely high prices. But a situation where the supply is very limited due to an external condition like drought is different. If you believe price controls are the solution, remember that price controls do not increase the supply. So, the seller has to sell below his price of production, it sells out and no more is available due to the drought, and people still don't have hay. Why should the buyer be protected on price if that forces the seller to lose money? Remember that the seller produced much less product with his fixed costs still the same and his variable costs higher. A free market will cause the price to increase to the point that the additional cost will cover the price of trucking product from farther away. The weather caused the high prices, not the seller. Look at it the other way. If the weather is great and a huge amount of hay is made, a free market will drive the cost down. Should the buyer be required to pay the same amount per bale as in a normal year or should he pay the lower price due to oversupply?
Feeder calves, grain, hay, trucks, labor - you got to believe in a free market or else let the government set prices for buying and selling. I would rather have the free market.
Feeder calves, grain, hay, trucks, labor - you got to believe in a free market or else let the government set prices for buying and selling. I would rather have the free market.
I can feel the pain of your situation. I never lived where you are where there's only one cutting...with possibility of no rain and then price gouging on top of that. Round Hay can be found for $35 to 60 dollars here...and the really good stuff, expensive is $80. for a 4x5.5ish. What you are describing, your location high desert...it makes me feel like the only solution is to run just what the land can support alone (as close to year round grazing, with what hay you can put up yourself). Might be 1 cow per 20 to 40 acres. I hope you don't abandon your cattle dream completely. Cattle are beautiful on every piece of available land, keeps you in Ag property w/ tax exemption too.
I used to think $60. round bail of hay was kind of expensive...but then i did some research on hay fields, needed fertilizer to "give back" to the soil, costs of equipment and maintenance required on those pieces of equipment...multiple times going into the fields, logistics of putting up hay, and fuel/oil costs....then after all that i looked at the operator's time (labor)....I found that even excluding all labor costs....I realized that $60. bail of hay was a great bargain....I was not being ripped off. Basically what i found is....the farmer-operator is working for free in those fields...and just one major breakdown cost will put him upside down for one to two years. Boy are hay producers risking....i won't complain or rerun the numbers until hay gets over $120. $60. is a bargain.
We don't have Ag exemption here. We are zoned so we can't have less than 160 acres, and I'm actually small with 960. I've done some cuts, and didn't keep any heifers. If I need to do another cut, I'm not sure, but maybe its time to say the hell with it and go south for the winter. My problem is that I really enjoy my cows. I have never expected to get rich with them, but they do need to at least pay their way. I guess if we don't get some rain I'll have to make some hard decisions by fall.
If I had a way to truck the hay long distance, I'd be down there getting your $35.00 hay, but trucking is $5.75 a mile so there wouldn't be any savings.
Buyer usually sets the price for cattle and hay.If you don't want to pay the asking price walk away or offer a different price.
If supply drops and demand stays the same prices go up.
One thing many don't think about is if it is a dry year and production of hay is down . Most times it costs the same number of hours and trips across the field with equipment produce hay even if ton per acre produced is down.
That doesn't even factor in increase in price of fuel ,equipment , ect
Stocker Steve
Well-known member
farmerjan
Well-known member
Between us and a neighbor that has a truck and custom spreads lime and fertilizer.... we figured up the cost to produce hay this year. Just figuring the same production per acre with the rise in fertilizer prices, fuel and all... it will cost us about $65-75 a 5x5 roll.... That is NO PAY for the farmer... not figuring in land value..... just costs. Less fertilizer, less hay... and not figuring in what if there is less rain or drought conditions...
Poultry litter here went from 28/ton delivered last year to 42/ton this year. Nitrogen has tripled. My dairy farmers are saying it will COST $800-1,000 an ACRE to put corn in the ground this year... last year it was in the 500 range. That is not counting harvest costs....and what if we have a drought or get drowned and the corn crop is dismal ?????
Poultry litter here went from 28/ton delivered last year to 42/ton this year. Nitrogen has tripled. My dairy farmers are saying it will COST $800-1,000 an ACRE to put corn in the ground this year... last year it was in the 500 range. That is not counting harvest costs....and what if we have a drought or get drowned and the corn crop is dismal ?????
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Stocker Steve
Well-known member
Crop insurance should more than cover corn growing input costs, but livestock producers may still need to buy feed.
I assume the BTOs lock in both feed cost and selling prices just in case corn pricing goes crazy. Smaller cow calf operations are probably the most exposed. Reducing stocking rates (to extend grazing season), and culling some cows (to reduce winter feeding), would reduce risk for cow calf.
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Muletrack
Well-known member
I see what you are saying. Willing seller/willing buyer. But there is no "market price" on hay like there is on commodity grains. I'm looking for just one load of bales and am getting calls from guys who are asking $160 per bale. We aren't too far from grass, so in a short while those guys are going to be dealing with old hay. They can choke on it as far as I'm concerned. On the other hand, North Dakota has the cheapest hay prices in the country -- as a result there aren't a lot of guys raising it to sell.
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Muletrack
Well-known member
The last time I sold any hay, I got $65 for good grass/alfalfa, and $35 for plain grass and ditch hay. I made $70 an acre on some of the $35 grass. That's more than a lot of guys get for cash rent on crop land in North Dakota. Not a lot of cost in running a 50-year-old 4430 and a 20-year-old 535. I was very pleased.
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Muletrack
Well-known member
I don't know if it's true, but Walt Davis says in his book "How to Not Go Broke Ranching" that there isn't much the Amish won't sell, but they won't sell you hay. Yup, better to feed it than sell it. I know what it's like to get caught on the short side, and trying to rustle up hay is a hassle.
smartin0022
Well-known member
How can someone justify buying hay at anything over $50 per bale. I buy some hay when equipment breakdowns and or my fields are s#!t. I can buy 1400 lbs netwrapped hay for $30 a bale all day and it's pretty okay hay. I need 10 bales per head in my area on a rough winter. I don't make a huge profit on cattle by any means and I get free DDG, WDG and syrup from work if I need it to supplement. I'd sell everything I own and just kill deer at anything over $50 a bale. How are you all paying $290 for a 4x5 bale that weighs 750 lbs and staying in business? If my cost per head exceeds $450 a year I'm in the red.
Stocker Steve
Well-known member
There are several Minnesota locations that hold hay and bedding auctions twice per month. Results are posted on the internet. Auction selling cost is high due to trucking and fees and commission. About $18 to $21 per bale (or $30 per ton) selling cost for local grass hay, and much higher for hay with a couple hundred miles on it. About half the auction hay here currently comes out of the Dakotas or NW MN.
Good grass hay price has dropped to $150/ton at auction, so local on farm price should be about U$S 150-30=120 per ton.
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Stocker Steve
Well-known member
Hard to sell loose hay when you have too many thin horses.
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You use a sharp pencil. When you feed hay for 6 months a year average .
Quality hay some of the cheapest hay their is.
Feed efficiency matters.
Many confuse gross sales with profit.
Profit isn't who has the biggest calf check . Or who has the biggest calf sale average price.
Profit is what is left after ALL expenses are subtracted from gross sales.
Why should local farm prices be cheaper then auction?
Is it lower quality?
Do you expect to pay the same price for on farm replacement heifer prices as auction barn prices? Why would hay be any different?
