Posted by Bill VA on April 02, 2017 at 17:44:42 from (216.24.79.193):
In Reply to: Making hay posted by Nick167 on April 02, 2017 at 14:19:50:
Properly limed and fertilized and you can make at least 100 - 50 lb bales per acre, so 1000 bales per year is possible. Multiply that times your selling price, less your expenses and you have your projected profit.
First thing to flesh out the above is a business plan. Are you going to file a schedule F farming tax form? Collect sales taxes? Reason I ask is that from the get go, we have conducted our hay business - as a business, which it is and a for profit business, not a hobby deal. We live to the letter of the tax law and use it to our advantage too, i.e. depreciating equipment, exempt from sales tax for some things we use, We have an accountant and most important, when one of our crackpot neighbors turns us in for running an under the table business (which most everyone around us is doing), we can show the IRS we are legit. Is is kind of a pain, but we ain't looking over our shoulder.
Horse customers have the deepest pockets, but also the shallowest too. Most have high standards for their horse's diet, but once they see the hay price, they are content to feed their "thoroughbred" trash hay - go figure. When we started, we had (and still have) a New Holland 68 baler, MF sickle mower and JD rake. Hauled the hay in with a utility trailer. Our hay was weedy, had some autum olive and multiflora rose bits in it. We sold it cheap for goat hay and the stuff sold FAST!!! I marketed it as "goat" hay and was spared the horse crowd. Old, inexpensive hay equipment and tractor equaled very low overhead. It also guaranteed breakdowns and to reliably get into the higher dollar horse market, we've been upgrading and adding to our equipment, i.e. tractor, newer baler, more storage area, sprayer, wagons, etc. We also have expanded our acreage to achieve more economies of scale. Probably the biggest challenge is developing your market. Every horse customer has a supplier when you get a tarted as well as access via craigslist to $2-$3 "horse" hay.
Inspite of the challenges, it's been a great odyssey for us. I was looking over one of my Timothy fields today and it's looking like a weed free carpet. Took some time to get there, but if the weather and equipment cooperates, we'll have some top dollar hay this June.
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