How should I work out this split with my neighbor?

[petebert]

How should I work out this deal with my neighbor to do hay on my field? He's a super old school dairy farmer, he'll pretty much agree to anything I come up with. Neither of us know what to "charge" each other so I'm trying to figure out what would be fair.

The field is mine, he worked it with his disc this fall and then I paid for all the seed, fertilizer and planted it myself. As of right now he will be the one doing all the baling since I don't own any hay equipment. I'd eventually like to bale it myself which he won't have a problem with.

I was thinking I'd pay him for discing it and then figure out the hay split when the time comes. Any idea what a fair price for that is? It was 3 passes on 8 acres.

If he does all the baling how should we work that out?

This is in Michigan so I figure Midwest/Northeast prices would be the most relevant.

 

[smstonypoint]

Michigan State publishes custom rates at https://msu.edu/~steind/cp-17%20MASTER%20Cust_MachineWrk%20NOV%2009%202016.pdf. You could use those rates to "cost out" your neighbor's contributions to the crop.

I couldn't find a recent enterprise budget for a hay crop in Michigan after a quick search, but you could use budgets from Clemson as a guide in estimating your costs: Enterprise Budgets | Clemson University, South Carolina. If I was in your shoes, I would include a land charge as part of my costs.

I don't know that there is a single "fair way" to split the hay crop, but how about this? Supposing your costs are X($/acre) and your neighbor's costs are Y($/acre), you could split the crop with X/(X+Y) going to you and Y/(X+Y) going to your neighbor.

Good luck.

Steve

 

[hosspuller]

Round or small squares or large squares ? Makes a big difference in baling cost. labor or equipment.

 

[tcreeley]

If he is rolling in money - anything will work that you both settle on. If he is scraping by, you may get a deal one year- but if he can't afford it - he'll back out next year.
Figure your costs. Get his costs Each take the amount of hay to cover their costs. Then split the rest down the middle.
Call around to find the selling price of hay - pick up in the field.

 

[David Wayne]

I grew up on a dairy farm and we baled a lot of hay and straw on neighbors. It was our equipment & labor for half the bales. And since they didn't want any of it we just paid them current market price for their half of it. At least that is how it was in the 70's- 90's.

David

 

[petebert]

Small square bales. Definitely not rolling in the money but he just does this type of stuff to help me out. The biggest issue is that he might get too busy with his own farm to get to my field.

I actually was just talking to him and he brought up the idea of me using his equipment and doing it all myself, and we work out some sort of rental fee. I'm running a diesel Ford 3600 which is supposed to be 40hp at the PTO. He doesn't think my tractor can run his haybine and I'm not comfortable with the idea of running his baler. Just because balers are complicated and finicky at times and I'd hate for his to break while I use it.

So no I'm thinking I buy my own baler, something used, 60's/70's era. He cuts it and I rake and bale it.

 

[hoho]

Use the kiss idea 50/50 on hay and what ever works on everything else.That is what i use on my farm.Old baiers and mower can be money pits unless you know how to fix your self.

 

[petebert]

I do like the idea of 50/50, keeps it simple.

 

[hosspuller]

I grow about 10 acres of hay. It is not profitable. The only reason I do it, is to keep the land in ag use and tax basis. Between chemicals, fertilizer, seed, fuel and equipment any cash I make is thrown back on the land. I do get hay for my horses. The equipment is 70's vintage I use a 40 PTO hp tractor on a NH 477 haybine and a NH 310 baler. It's enough tractor to pull a wagon behind the baler. A discbine may be too much for 40 hp.

Hay making is all about timing and weather. The hardest part for me is labor to pick up the small bales. Even paying a premium, the work is hard, hot and dusty.

How will you handle and store the bales ?

 

[RickB]

I grew up on a dairy farm and we baled a lot of hay and straw on neighbors. It was our equipment & labor for half the bales. And since they didn't want any of it we just paid them current market price for their half of it. At least that is how it was in the 70's- 90's.

David

Use the kiss idea 50/50 on hay and what ever works on everything else.That is what i use on my farm.Old baiers and mower can be money pits unless you know how to fix your self.

I do like the idea of 50/50, keeps it simple.

You provide the land, fertility and crop. He does the harvesting. You put half of it in your barn. Done.