Hay pricing

[CDennyRun]

I was wondering if any of you guys adjust your prices down, after the price of diesel drops significantly. In my area, small bales were $2.50-3.00 six or seven years ago. Diesel skyrocketed, and now people pay $10-16 for orchard grass, timothy and so on. This year diesel is close to what it was in 2003, and prices are still going up.

This kind of blows my mind. I understand that the prices of everything else haven't dropped, and it needs to be a profitable business. I just think that fuel prices should reflect hay prices in both directions. The cheapest I've found in my area lately is $8. I talked to a farmer the other day who is charging $10 about it, and he just said "It's supply and demand. I'm going to cash in as much as I can" I get that making optimal profit is EVERYONES goal in all industries, but I feel pretty off put by the farmers here locally for these crazy prises. It just seems dishonest.

This is another reason I can't wait to start baling my own! Thoughts?

Regards,

Chris

 

[zzvyb6]

Nope. My hay has been priced at $2.00 a bale U-Pik-it-up at the barn, or $2.50 delivered within 10 miles. Once it's in the barn and has to come back out it's a little bit more. All my customers have been with me more than 20 years. I call it baled weeds and their horses love it.

I sell out every year and still save some for the local horse rescue agency. The equipment was cheap, stays reasonably maintained (could use some paint: mower and rake are 50% rust-oleo). Profit is on the tax side due to creative accounting. My time is not worth very much and the tractor would be a lawn ornament if it weren't working the hay 'business'. My IRA is my 'job' so why ruin a good thing ? Horse people are a special breed, most are broke, liars, and women. Finding the good ones takes some patience, trust, a good eye and some faith. I would never price them out of my friendship.

 

[CDennyRun]

Nope. My hay has been priced at $2.00 a bale U-Pik-it-up at the barn, or $2.50 delivered within 10 miles. Once it's in the barn and has to come back out it's a little bit more. All my customers have been with me more than 20 years. I call it baled weeds and their horses love it.

I sell out every year and still save some for the local horse rescue agency. The equipment was cheap, stays reasonably maintained (could use some paint: mower and rake are 50% rust-oleo). Profit is on the tax side due to creative accounting. My time is not worth very much and the tractor would be a lawn ornament if it weren't working the hay 'business'. My IRA is my 'job' so why ruin a good thing ? Horse people are a special breed, most are broke, liars, and women. Finding the good ones takes some patience, trust, a good eye and some faith. I would never price them out of my friendship.

People in the horse community can definitely be nut jobs! My wife and I don't mingle too much with most of them, as they seem to be from Mars.

I sure wish we had a good hay guy like you around here. Oh my goodness.. 2.50 a bale and solid reliable hay sales is a dream for us!

 

[aczlan]

We are closer to $4 or $4.50 for first cut hay (loaded out of the barn).
$5.50/bale for 2nd cut out of the barn.
Usually, we knock a dollar a bale off if someone gets it out of the wagon so we don't have to stack it in the barn.
Its good hay (grass, timothy, clover and alfalfa mix) and its always good and dry (tested with a moisture meter).

Aaron Z

 

[CDennyRun]

aczlan: Seems like you have a really good deal going on there. That pricing is pretty reasonable. We have one hay guy that charges us $4 a bale, but the supply is so limited, that you really have to jump to get it. The bales are banana shaped, and loose, but the hay is good. The guy is really flakey too. Hence the original reason I plan on haying myself. It's this, or $8+ a bale!

 

[smstonypoint]

A couple of points.

First, fuel costs are only a relatively small component of the costs of hay production. I couldn't find any recent enterprise budgets for grass hay from WSU or Oregon State, but a 2014 grass hay budget from Ohio State (Farm Management Enterprise Budgets | Department of Agricultural, Environmental, and Development Economics) shows that fuel,oil, and grease represent only 2.4% of total costs and 4.8% of variable costs per acre. YMMV.

Second, do you think it dishonest of buyers when there is a bumper crop and they are able to purchase hay at less than farmers' total cost of production?

Steve

 

[aczlan]

Second, do you think it dishonest of buyers when there is a bumper crop and they are able to purchase hay at less than farmers' total cost of production.

We sold some hay for $1.50/bale delivered to a customer's property this year.
Why?
1. It was late getting cut (first cutting for that section didn't happen until Aug)
2. The guy took in a goat that decided it didn't like our daughter and it a friend
3. I was done with dealing with hay for the year
4. I didn't want to deal with CL flakes to get it sold

Would I do it again? I might given the right circumstances, but it was a "get it gone" deal rather than something I would plan on doing on a regular basis.

Aaron Z

 

[CDennyRun]

A couple of points.

First, fuel costs are only a relatively small component of the costs of hay production. I couldn't find any recent enterprise budgets for grass hay from WSU or Oregon State, but a 2014 grass hay budget from Ohio State (Farm Management Enterprise Budgets | Department of Agricultural, Environmental, and Development Economics) shows that fuel,oil, and grease represent only 2.4% of total costs and 4.8% of variable costs per acre. YMMV.

Second, do you think it dishonest of buyers when there is a bumper crop and they are able to purchase hay at less than farmers' total cost of production.

Steve

If fuel has such a subtle impact on end customer cost, than why do all the local hay farmers say the increase in cost per bale is due to fuel? Like I stated before, I absolutely expect hay farmers to make a good profit. Anyone who is anyone does business to make money. I know it takes money to make money, and new equipment is VERY expensive. But bringing the price per bale up to $16 is absolutely as$ of nine. Even $10 is crazy. In my region we are not lacking pasture for haying. I just don't get it.

 

[CDennyRun]

No, I don't think it's dishonest to buy hay at a discounted price, because a farmer wasn't able to sell his product. That was a miscalculation on the farmers part, that could be based off of many different decisions. That's not the end buyers problem. Do I feel bad for that farmer? Yes. It sucks to loose, no matter what you do.

 

[hosspuller]

Diesel fuel has dropped a bit... Machine parts, property taxes, fertilizer, lime and herbicide has NOT dropped in price. In fact, baler twine has increased by double. Labor is still hard to get for small square bales. As said before, fuel is a small portion of costs.