The situation your describing doesn't sound very promising in any way I can imagine it. If you invest in all the equipment and take on the job you assume the risks involved. If you give people bad hay are you willing to go to their barn and remove it? If their barn catches fire will your insurance cover it? Hay is a good crop for marginal land (the type of land thats not ideal for corn or vineyards here). You don't work it till its dry so wet ground is great for haying. It allows us to use ground that would otherwise go to waste. Our market is pretty cut throat here, there are always guys undercutting everyone. My neighbor was selling his hay for $1 a bale just because he felt he was making enough money at that rate. It makes it hard for everyone else with newer equipment to compete as you have to have a better product and you have to be able to sell your product unless you have good customers already. In which case things become a little easier but then your regular customers don't want to see rate increases every year so you have to treat them right and keep them happy. Every area is different so it doesn't matter what I make per acre here.
Also, bale size and type is dependent on your market, customer and area. It doesn't do any good trying to sell 3 string bales if everyone is use to and happy with 2 string bales or rounds. If your market is better suited for small squares then your stuck with labor issues no matter how hard you try.
My biggest fear with your situation is what do you do if you buy the equipment and still lose the customer (either someone cheaper comes in or you cut your own throat by giving them bad hay). Besides all the other issues, transport, storage, handling, weather.... hay isn't a very fun industry to get into for just a few acres if you have no need for the hay personally. I will honestly say that if your customers will leave you for someone else just because some other guy might do the hay then let them go. If they have no loyalty to you for the work you have been doing then how is haying going to help when that market is very touchy and easy to mess up and create hard feelings. I would just concentrate on what you do well and try expanding that.
I will say this, I broke my back in October of 2007 pretty bad. I was back baling hay early June 2008. I love it but dislike the labor problems this industry has. Its so hard to find good, reliable workers. Even the migrants caused me lots of headaches. They work great when they show up but they don't understand hay needs to be made when the weather allows. They want to unload wagons when it suits them (usually after working in the veggie fields) which caused me to have to change how I bale depending on where the hay is going. If its going in my barn or one particular customers barn I get paid to unload and stack in then I have to limit how much hay I cut and bale each time. I have 4 kicker wagons that allows me to bale around 550 bales before I have to unload so if I line up one or two other customers that unload their own I can give one or two loads to them then fill the wagons again till all 4 are filled. I then have to store the full wagons inside (I am fortunate to have access to a friends warehouse that I can use for this purpose any time I need) till they guys are ready to unload. Its just a huge headache as I have to shuttle full wagons back and forth till I finish my land purchases and am able to build a good storage barn where I want it.
Every time I look at haying I see so much stress and headaches that its amazing I do it but there is just something inside us hay farmers that loves the challenge and work. But when the sun is shining and the hay is ready to be cut you have to quit everything else your working on or doing to make hay. You have a small window and you need to take advantage when it arrives (if it arrives).
If you do decide to do this make sure you buy a good baler. Spend more money on your baler then any other hay tool as if your mower breaks down your ok, just rake and bale what hay is cut already while you repair the mower. If your rake breaks (its very rare for a rake to break down, I had a flat tire once and thats been it) down you can find another one easily. But if your baler breaks down or acts up your in trouble unless you know what your doing and can get it fixed quickly. So buy something reliable and fairly new (I prefer New Holland but Deere is good too and their both easy to get parts for). I have quite a bit of money invested in spare parts for my small square baler. extra belts, shear bolts, springs.... all the common wear items and a few other items that have shut me down for a day when it broke. This way if I break down I can be back and running in a short time unless something bad happens. I have plenty of spare roller chain and replacement links for all my equipment as well. And the best way to learn how your baler works is to have it break down. Same with a combine actually. Once it breaks down you have no choice but to just stand there and stare at it and figure out how everything works. Once you know how everything works then its easier to understand whats causing a problem or to catch a problem before it breaks.
And if you go small square bales you will need to decide how your handling the hay. I have found a thrower and basket wagons are the best for my operation. There are accumulator setups as well but what scares me with them is if your a one man operation you need to finish baling then use the loader to start picking all the bales up after you put the baler away. If rain is coming I can see losing an entire field of baled hay still. With my kicker wagons if the rain is coming I just park the wagons inside or tarp them immediately. The time it takes to bale is the same (well, except for the few minutes changing wagons). But the kicker wagons cost money, good ones will cost you at least $2k for used, new will be between $4-$5k Its hard to make money haying on the small scale if you have no need for the hay yourself.
If you insist on trying this venture do you have any of your own land you can plant to good hay? If you establish a customer base and then lose one of the bigger fields what will you do? If you create a customer base and want them to stay loyal to you then you will have to have enough hay for them every year. Which means you need more hay then you have orders so if you have a field ruined then you don't leave your customers hung out to dry. The easiest way to create a bad reputation is to not deliver hay to a customer with hungry animals.
