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Just like to see some more input on hay prices. Sorry

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dave2

01-09-2008 14:15:04

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David in MD said: (quoted from post at 06:56:05 01/07/08) One of the comments above was just because we can get $5 per bale should we. Yes we should, potash is $350+ per ton, when I started in 2001 it was $180 per ton. Nitrogen (30%) was $240 per ton last year and I"m sure it"s bumping $400 now. Diesel fuel and twine are also up. I figure good horse quality hay should be worth as much as corn which is just under $5 per bushel contracted for next fall. I sold hay anywhere from $3.50 to $6 this year. My good regular customers paid a maximum of $5 while anyone off the street paid $6 and seemed happy to get it for that. I"ve heard $7-8 per bale elsewhere. I"ve already warned everyone that hay prices will start at $5 next year. If the market is flooded with hay, which I doubt, and I can"t get my price I"ll grow corn.[/quote:7d252a452c]

[quote:7d252a452c="Dave from MN"](quoted from post at 05:08:44 01/07/08) All the hay that I have I bought for $2.00 or less per bale from a friend. We sold ALOT of it for cost to a few people around here that could not find reasonable hay, and cant afford $5-$6 hay. So now here I sit with a possible good deal on 6 nice bred cows and a bit short of hay to get them to summer, called a friend and he'll still give me $2.00 hay, even though he could say no because he can sell it all right now for $4.00 or a bit more. A friend in need , is a friend indeed!

Everything we do and say will surely come back to us in the end. It's just our choice if it pats us on the shoulder or bites us on the butt.
If expenses go up 30% over 3 years, jumping prices 300% over a couple of months doesn't quite match. Let your conscience be your guide. Got a guy over here (Germany)that did that a few years ago when we had a hard winter followed by a real dry spring, that cuts his fields and and leaves most of it lay, only baling what he can use. Good 1st cut hay here runs about $100 a ton (+/- depending on the bale size/labor involved).

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kyhayman

01-10-2008 21:31:02

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

I dont know about anyone else but Im in business to make money. I raised prices in 2005 .50 a square bale and 5.00 a round bale to cover increasing costs (handnt raised them since 1995). My costs went up about 3000.00 in 2006 mostly for fuel and fertilizer but I ate the increase since I was already priced slightly above the local average.

2007, I set my prices to keep my net income the same as 2006 even though yields were down by half. I challenge anyone to take a voluntary pay cut of 50 percent when they dont have to. The kids have to eat and the gas man wants to be paid. With the increase in fuel and fertilizer I've got to get almost what I got this year in 2008 with normal yields just to keep my net income the same (be nice to get a raise since all my family expenses are going up). Amazing thing about it, every single year I sell out of hay sooner than I did the last year even though every year but this one my production is up. Already have orders from 3 people for 450 round bales of 2008 grass hay and a 720 bale order for round baled silage at this years price with half down up front.

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tvb

01-10-2008 18:01:39

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

I'm paying 1.75 per bale to have my own hay baled and that's the "I like you discount" cut, tedded raked, baled on the ground, I pick it up. However it'd amazing how fast six cases of beer get's 600 bales picked up and stored! I keep suggesting to my wife that my own baling equipment would be nice she doesn't think so, she's usually right-I guess I better log off and go do the dishes

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dhermesc

01-10-2008 08:57:01

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Re: Just like to see some more input on hay prices. Sorry in reply to IaGary, 01-09-2008 14:15:04

That's pretty good except you missed the labor you need to apply all those chemicals and fertilizer - and there is fuel and equipment involved in that too. Not mention the fact you have time and fuel tied up in getting to and from the field with equipment and the hay. Not everyone has their hay fields just outside the door of their machine sheds - some of ours were over 30 miles away.
The college did figure in labor (didn't say what it was for) at $8.50 an hour. I wonder who they think they hire for 8.50 an hour (they forgot the required taxes and book work time to report this to the government) because even a highschool student that you can trust with equipment will pass your fields on by for the guy that pays $12.00/$15.00 an hour.

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dave2

01-10-2008 10:03:09

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Re: Just like to see some more input on hay prices. Sorry in reply to dhermesc, 01-10-2008 08:57:01

we used to get 10 cents a bale. Got $2 an hour for helping another guy out and thought we were on top of the world.

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The Bachelor

01-10-2008 07:40:23

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

This talk has me thinking... about expenses.

I use thisLink to estimate my hay expenses. Its a very good model and I can adjust for fuel etc.....

It shows operating costs of around $50/ton (or 40 bales) + machinery depreciation...etc at $26/ton.

So basically the costs to harvest hay is $76/ton or $1.50 a bale.

Now we have to tend to the plant itself with seeding and fertilizing. I'm just pulling these numbers out of my head so correct me if you need to (I' m basing this on 2000 bales/year).

I lime around every 5 years thats $26/ton x 2 tons/acre x 50 acresthat ends up costing $.26 /bale

Fertilize once a year and this figure could be wrong but I think I used about $2500 in fertilizer around $1.25 /bale.

Overseeding weedkillers along the fenceline etc..... is variable, but lets say $600 or $.30/bale.

That makes the grand total for one bale of hay to be about $3.31/bale

Now what's a good labor cost. lets see it takes about 16 hours to mow rake bale and load 20 acres of hay (with my ol raggely equipment). This year that was around 300 bales (bad drought year) so lets figure $10/hr labor which is $160/300 bales
All this leaves the total bale price at $3.85

Just for fun, I wanted to figure my labor costs at $5 /bale... Seems I'd be making about $30/hr.

Now before you shoot me, I'm sure I missed something. Its a slow day here at work, so I thought I'd do things off the top of my head.

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Texasmark

01-10-2008 06:45:17

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

"05 and "06 were drought years here. You couldn"t find a bale of hay and I am a producer/consumer.

So I wound up feeding all I could grow and then buying poor quality (too mature) Sudan for $65 delivered, in 5x6 rolls, and $40 for corn STALKS and glad to get them. Course getting the cows to eat the stalks was another matter.

Enter 2007. Weather is perfect. Glut hay season. Production costs are still up as you guys describe, but now the market is flooded. I have hay to sell but it"s selling for $30 a roll in some places and as soon as a potential customer sees that, it"s hard for you to get $45 a roll which is somewhat of an honest return on your investment....says nothing of pay for your effort.

Glad I"m retired and living off other income so that I can "afford to farm".

Can"t wait for IRS to challenge me on my income vs expenses. Once you commit to farming, you can"t just up and quit you know. You have all the equipment and all at risk, plus if you don"t "ag" your property the local taxies come after you and you have to ag it to be in ag.

Oh well!

Mark

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Kirk Grau

01-10-2008 06:28:36

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

I am also on the buying end of this equation (several horses for personal use). Had a pretty good deal with the neighbor when he was making small squares that he would park a few full wagons each day near my place and I would buck it into the loft, then he would let me pay as we used it. (like I said, good deal). He went to a large square baler two seasons ago and my loft is not conducive to getting those ~700 lb. bales up there. Now I have to go over to his place and pick them up 2 at a time with my truck. He is getting $60 for a bale, but gives me a break at $55. I am pretty sure he could get a more, but he is leary of running customers off as well. We are in south central Pennsylvania (near Gettysburg.)

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Dave2

01-10-2008 07:21:07

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Re: Just like to see some more input on hay prices. Sorry in reply to Kirk Grau, 01-10-2008 06:28:36

You might ask him if his baler will subdivide the big square ones. There is a guy here that bales some that are one big bale that you cut the ropes and have 5 smaller ones about 150 pounds. still heavy, but better. I guess I'm spoiled, I pay 25 Euro (about $36)picked up.

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Keith in NW MO

01-09-2008 17:52:55

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

You should feel guilty cheating some poor old farmer out of his hay in the past for $2 or $3 per bale. This is the most ridiculous whining about someone who is not even making that much of a profit. Your math on 300% is based on cheating someone out of there product and sweat for years.
Just exatly how many bales or acres either one would it take me to get rich selling hay. What level of profit do I deserve, either by the bale, acre or even yearly? What return on investment should I get?
$3000 per acre land
$4 per gallon fuel
60 cent nitrogen
45 cent potash
Red Brand baling wire $85 per roll (25 cents per bale)
Let's not even start on equipment
Duh!!!! It should be $12 per bale for small square's

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BC in TN

01-09-2008 17:39:10

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

I reguarly sow my hay ground; fertilize and lime it according to soil samples and keep an old baler and rake in pretty good shape. I just put on four new tires on the tractor and two on the baler. I have never sold a bale of hay. I'd say that I have $5.00 or more in each bale I produce for my own use. Fortunately, I have an income that supports my "farming" habit. My baler and rake will likely get a new coat of paint this year as well. However, I do have some good quality hay. I don't know where I could buy fertilized, weed free hay for less than $5.00 a bale.

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Dave from MN

01-09-2008 17:18:36

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

Father in law just told me small squares have been bringing $7 at the sales barn this week.

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dhermesc

01-09-2008 15:45:41

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

"If expenses go up 30% over 3 years, jumping prices 300% over a couple of months"

Several expenses went up a lot more than 30% in the past three years (like fuel and fertilizer), how much have they gone up in the past 30 years and what have market prices done during the same time period?

Sometimes you have to use two good years to pay for 20 years of p*ss poor ones. My 72 year old FIL has had three great years in a row, but he used it to pay off debts that were run up in the 1980s that rolled over year year after year in operating loans. Right now he's where he thought he'd be in 1988.

Complaining about the cost of hay to feed horses is like complaining about the cost of fuel to run your speed boat. Doing without either won't effect the food on your table.

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Traditional Farmer

01-09-2008 15:27:44

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Re: Just like to see some more input on hay prices. Sorry in reply to dave2, 01-09-2008 14:15:04

If I can't get $5 for a rectangle bale its not worth my time and labor to bale it and put it in a shelter.I'll just bale it up in round bales and feed it to my stock.If anyone thinks its cheap and easy to put up small bales they need to have a go at it.

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Spook

01-09-2008 17:10:37

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Re: Just like to see some more input on hay prices. Sorry in reply to Traditional Farmer, 01-09-2008 15:27:44

I buy hay, and I am now paying $5 per bale. Considering all the work and expense that go into it, it's a bargin. If there's somebody getting rich off the hay biz, I haven't heard of it. A lot of hay fields around here are getting plowed up for corn, beans and wheat. These crops make money, and are a LOT less labor intensive. I don't think we will see hay under 5 here unless fuel comes down signifigantly, and alternative crops come down in price. Ain't gonna happen. Get over it.

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Dave2

01-10-2008 05:44:52

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Re: Just like to see some more input on hay prices. Sorry in reply to Spook, 01-09-2008 17:10:37

I'm on the buying end. I pay about $1.30 for a small (25 lb?)bale. Only reason I can get any small bales is that my neighbor has a small baler. I get from 4-600 bales a year and the rest in round bales. The only thing the farmer does is bale the hay. It's all his, but I mow, rake, and pick it up afterwards. After doing the work, I don't imaging I'd sell it too cheap either. A bottle of JD at Christmas, a couple of Ribeye BBQ's in summer, and and an endless supply of manure keeps the prices down and also gives me straw free for the taking. To be honest, I remember my neighbor paying $2.00 a bale in the late '70's.

I'm really starting to enjoy the freedom of the round bales though. Hope I didn't upset anyone too bad.

Dave

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Fergienewbee

01-14-2008 14:13:26

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Re: Just like to see some more input on hay prices. Sorry in reply to Dave2, 01-10-2008 05:44:52

Back in the '60s, we were paid $1.00 per hour to haul hay from the field to the barn--no extra for topping out the mow. Best benefits were dinner--those farm wives could sure cook--and the farmer's daughters driving the tractors in shorts.

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