Gross profit/acre hay

[Builder]

This oughta be fun.....
Was wondering if any of you ever crunched your numbers on hay gross profit/acre.
IOW, in a average year, how much do you make in gross sales for cattle/horse hay. This would be before expenses (equipment loans, fuel, insurance, etc.)
I know yields & growing seasons vary. I'm in the mid-atlantic area. Just thought it would be fun to see what y'all are bringing in before expenses/acre.

 

[JasG]

There are so many things to take into account it is hard to say. Hay is a commodity so the price tends to go up and down to some degree

Now your saying before expences so in a field that gets 120 bales per acre at $2.50 per bale would be $300.00 for that cutting. $2.50 is at the lower end of what a friend of mine has been selling hay for.

Price also depends on crop mix, color, quality, cutting (1st, 2nd, 3rd)

Some people want to buy it by the ton and not by the bale.

Around here I don't know anyone that does just hay for profit. Most are dairy famers that sell the crop they don't need for extra cash.

 

[Builder]

There are so many things to take into account it is hard to say. Hay is a commodity so the price tends to go up and down to some degree

Now your saying before expences so in a field that gets 120 bales per acre at $2.50 per bale would be $300.00 for that cutting. $2.50 is at the lower end of what a friend of mine has been selling hay for.

Price also depends on crop mix, color, quality, cutting (1st, 2nd, 3rd)

Some people want to buy it by the ton and not by the bale.

Around here I don't know anyone that does just hay for profit. Most are dairy famers that sell the crop they don't need for extra cash.

I'm almost being "forced" into it. They are offering me the property to hay in turn I get the other work they offer (mowing, maintenance, etc.). If I don't do it, someone else would be happy to do it.
Small rectangular bales retail for $5-$8 here.
4' round bales are $45-$50.

I would have to invest in hay equipment. That to me would be the biggest hurdle. Oh and store it, too. LOL

 

[MtnViewRanch]

I'm almost being "forced" into it. They are offering me the property to hay in turn I get the other work they offer (mowing, maintenance, etc.). If I don't do it, someone else would be happy to do it.
Small rectangular bales retail for $5-$8 here.
4' round bales are $45-$50.

I would have to invest in hay equipment. That to me would be the biggest hurdle. Oh and store it, too. LOL

You say that you "get" their other work. Does this mean that you get paid to do the other work or you do the other work for free for the "right" to be able to do hay on their property? Do you have to produce hay, or do they just want it to be kept clean and neat?

How much land are we talking about here?

 

[two_bit_score]

I'm almost being "forced" into it. They are offering me the property to hay in turn I get the other work they offer (mowing, maintenance, etc.). If I don't do it, someone else would be happy to do it.
Small rectangular bales retail for $5-$8 here.
4' round bales are $45-$50.

I would have to invest in hay equipment. That to me would be the biggest hurdle. Oh and store it, too. LOL

You should make the investment in a hay barn also. A barn will pay for it's self. There is too much waste to hay left outside, it loses protein value too quickly but covered it will retain protein value for about 10 years.

Right now large round bales are about $100 in Texas. For that price you should be getting the hay tested and making sure it's good quality.

If you don't already have the equipment it's going to be a big investment but could be worth it if you do it right.

 

[cowski]

too many variables on cost. i would only do square bales.if you find a market,there is profit in it.a lot of horse people will pick it up in the field behind the baler.store the excess ,it normally will not last the winter.the most profit is selling it to horse people.

 

[Builder]

Great insights. I am labor poor. Very tough to get help. My guys all are construction workers. Most have fled for steadier work since new con is shot.
I like the idea of big bales since I can get them picked up with bale spear on tractor.
I put hay in my neighbors feeder, but he's only buying 40 rounds/yr for his small herd.

 

[Builder]

You say that you "get" their other work. Does this mean that you get paid to do the other work or you do the other work for free for the "right" to be able to do hay on their property?

Other way around. I have these customers that I cut non-hayed areas for. Their properties were also in disrepair and I fixed them up. I asked about who was cutting their hay and they would shake their heads because they didn't like who was doing it. I asked them if they'd be interested in me doing it, and they appeared to be very interested. One guy was receiving nothing from the guy who was cutting his 24 acres. The guy would take the hay and leave a mess. I was under the impression you gave the property owner a small cut of the profit, or some hay for their horses/cattle if they owned any.

Do you have to produce hay, or do they just want it to be kept clean and neat?

How much land are we talking about here?

It varies from customer to customer. One is disatisfied with current hay guy. One is paying me to cut 20+ of which about 12 could be hay with a little weed spraying. The 3rd wants some of the hay for their horses for the privelage of letting me keep the rest.
Total between the 3 is about 39 acres. (1 is 20, 1 is 12 and one is 7).
I could get more without too much trouble.

I guess my quandry is: Do I spend $12,000 on equipment to cut hay without anything more than a small barn to store it and not a ton of experience? (All I have done is handle/transport bales). have lots of common sense & mechanical ability. I would have no problem tarping it out in fields until I sell it, but not sure if that's adviseable.
One of my "rich guy" customers may be interested in building a simple hay pole barn. I am pretty sure he'd let me bring hay to his property to store anything beyond what I harvest off his property if he built the barn.

I own no livestock. I would simply like to be involved in cutting/selling hay, but have nothing bother than a rough idea of what I would make per acre, bale in gross profit.
I think it's a great way to keep myself in front of wealthy land owners that need lots of services.

 

[greasemonkeyok]

Due to the cost to transport, most of your market forces (both supply and demand) are primarily local. Then you also have the fact that there are commercial competitors, and hobby farmers, that contribute to the supply side of the market.

All in all, it is pure gambling where all rules are local.

Good luck.

 

[piller]

Here's a link to some hay budgets from the University of TN
The University of Tennessee | Department of Agricultural and Resource Economics | Budgets
http://economics.ag.utk.edu/budgets/2007/CoolSeasonGrassHay.pdf

At the end of the hay budgets are some break even cost analysis. There might be other hay budgets available from ag schools in your area. Hope this helps.