What is cutting on shares mean exactly?

[danisiri]

I am a newbie. I am having someone cut our 70 acres for hay this year and he is offering to either a) cut for free if he keeps all the hay, or b) cut on 60/40 shares, or c) charge $25/bale.

I assumed that shares means he cuts for free but keeps 60% and I keep 40%. Am I right or wrong? Or is there a cost associated with doing shares?

Thanks!

 

[Skyfish25]

I'm in IA but here's what we usually do. 50/50 share. Your field, no cash changes hands, custom operator keeps 1/2 of final product. Charge per bale, this can vary by bale size, 25 is what I would charge for a 4x5, I would be higher on a 5x6. edit-forgot about net wrap, is a more for it less for twine, usually.

Also, consider field shape and operator friendliness. If small and irregular, may charge more, keep more share. If hay is thin, must keep more or charge more.

Also, We have a few small fields that we do all and keep all as no one would mess with 1-3 acre fields. The owner is happy that they stay mowed and weed free. I sit grass, clover, alfalfa. Has it been fertilized, most people don't fertilize hay ground enough.

 

[vtsnowedin]

I assume you mean big bales. All those are fair to some people. Some just want the land kept open and don't have any stock to feed or use for the hay. Others have use for it but no equipment so have to pay for the service with part of the crop. exactly how much would vary with the quality of the hay and ease of access etc. And last is somebody with a lot of stock and no equipment that needs all the hay their land produces and has to pay in cash for the service. Where do you fit in the option sheet?

 

[danisiri]

No stock this year, but using baling to preserve the Ag exemption. So don't need the hay this year. The land is flat and cleared so great for grazing. I have not sprayed fertilizer, so the grass growth varies across the land. Thank you everyone!

 

[Soggy Bottom Outdoors]

At the very least I would advise you to pull a soil sample to keep everyone honest. I understand if he cuts it all he keeps it all but he shouldn't wear out your ground doing it. A soil sample will tell if he's putting back as much "fertility" as he's taking off. I'm unfamiliar with Texas "ag exempt" status but why not cash rent it?

 

[danisiri]

At the very least I would advise you to pull a soil sample to keep everyone honest. I understand if he cuts it all he keeps it all but he shouldn't wear out your ground doing it. A soil sample will tell if he's putting back as much "fertility" as he's taking off. I'm unfamiliar with Texas "ag exempt" status but why not cash rent it?

We live on the land so I don't want to rent it out.

Texas gives an agricultural exemption to save on taxes if you generate income from the land.

 

[Yamezz]

The crop share ratio is something I've been thinking about lately. My contractor does all the spraying, seeding, fertiliser, mowing, raking and baling. The previous couple of years he's taken 75% of the crop, but this past year, right as he was baling he mentioned he now splits it 80/20 with other property owners. I pointed out we hadn't discussed a variation to the 75/25 split, so it was maintained for this year, but I'm wondering what a fair split is. It's a quite productive 75 acre block that's fairly easy to navigate and I've gone to the expense of liming the soil, of which he's receiving 75% of the benefit. Maybe some opinions on my situation will benefit the original poster.

 

[vtsnowedin]

The crop share ratio is something I've been thinking about lately. My contractor does all the spraying, seeding, fertiliser, mowing, raking and baling. The previous couple of years he's taken 75% of the crop, but this past year, right as he was baling he mentioned he now splits it 80/20 with other property owners. I pointed out we hadn't discussed a variation to the 75/25 split, so it was maintained for this year, but I'm wondering what a fair split is. It's a quite productive 75 acre block that's fairly easy to navigate and I've gone to the expense of liming the soil, of which he's receiving 75% of the benefit. Maybe some opinions on my situation will benefit the original poster.

You could advertise it and take bids. A little competition is a good thing.

 

[Tx Jim]

I think 40% for landowner & 60% for custom baler is generous offer by baler operator as I would not cut/rake & bale your unfertilized native grass hay for 60% of the yield. If it averaged 2 rd bales to the acre then @ $25/bale fee the baler operator will have $41.66 invested per bale sitting in the field. No me Vern. I would want at least 75% of the yield which at 2 BPA yield I would have $33.33 per bale which would still be more than I'd want in the unfertilized hay.

 

[Gary Fowler]

Other than tax purposes, paying $25 per bale for hay or 60/40 or less split is too hard on the land and to remove all that natural growth without replenishing it with fertilizer and lime will lower the soil fertility each time until it will no longer produce.

Last year we could buy 5x4 bales for $25 per bale (had to pick it up from the field though). Cost to produce with fertilizer and lime is more than that so it is best just to buy hay for feeding when it is that cheap.