Posted by Destroked 450 on July 17, 2018 at 09:21:25 from (173.242.142.14):
In Reply to: cost to make hay posted by cjunrau on July 15, 2018 at 07:09:58:
I went back and read over this thread, unless I missed it I didn't see where anyone said it didn't matter what it cost.
I did see a lot of variables in the cost which is normal for farming depending on ones location and weather conditions for that year.
Record keeping is important in any form of business, and farming is a business, sounds like your dad keep excellent records
Manufacturing has pretty much fixed cost, for each item they make they know how must their raw materials will cost, how much energy they'll use, what the labor cost will be, what the equipment cost and how long it will last.
If cost go up they raise the price of their product all while looking for ways to make it cheaper, robotics, lower quality materials, ect.
Once demand for a product drops below a set volume or a newer style replacement is introduced they quit making it.
Yes farmers must do their best to control cost but unlike mfg that cost is not fixed and it's hard for us to just stop raising a product when the profit margin drops.
I can figure my fuel cost per acre, I know how many bales I can wrap with a bundle of twine, I know what fertilizer will cost per acre, what I don't know and can't control is how many bales per acre that field will produce each time I cut it.
Example: I have a 12 acre field in front of my house, 2 years ago it made right at 80 4x5 rolls, "give or take a couple rolls" on first cutting.
This year we had a cold wet spring, that same field made 36 rolls 1st cutting, 44 rolls 2nd cutting. I used the same amount of fertilizer, same amount of twine, but I went over the ground twice for the same number of bales, this doubled my fuel, labor and maintain cost to get the same dollars worth of hay.
Even though hays prices are up I can't sell it for enough money in order to make the same profit I did 2 years ago even though that hay sold at a lower cost pre bale.
Farming is one of the only industries where we pay the price others demand for the materials and equipment we need to raise a product, but yet have little to no control over the price we'll get paid for that product.
A farmer needs to make a profit to stay in business, but unlike mfg we don't have as much control on what that profit will be.
And personally I'm not ready to move my farming operation to another country just to make more profit.
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