leasing land for hay

juddspaintballs · Dec 10, 2014

I have 10 acres, mostly clear, but slightly hilly. It's been grass for years and the old guy that owned the property mowed it all like a lawn. I don't want to mow 10 acres. I have the tractor, but no implements for making hay and no desire to do so either. The predicament I'm in is that I'd like to get the farm exemption for my property so my taxes are a lot less. All I need to do to get the status here in WV is to have $1000 worth of agricultural products sold. I'm thinking of leasing out 8 acres or so for someone to do hay on. What should I expect in pricing, terms, etc? A friend told me that with someone doing all of the work, they typically pay $1/bale around here. Does that sound right?

JSanders10 · Dec 10, 2014

You may find someone locally who will cut/bale on halves with you, that's pretty typical.
He takes half for all the work, you get half to sell or do whatever.
That's the deal I have... had been cutting close to 40 acres and one day a man stopped me on my tractor and said he was cutting it 15 yrs ago, same deal for my uncle and would like to again. It was the easiest deal I ever made.

ch1ch2 · Dec 22, 2014

When I bought my 25 ac, the seller leased back the hay rights. He baled 35 to 70 bales a year. He paid $250 a year. Several people told me he was ripping me off. After 12 years I up-ed the price to $500. He quit me and I looked for someone to replace him. No one want it...Bahia grass and weeds. I finally found someone to bail it. They take 2/3s. I got 45 bales this year leaving me 15. Sold them for $40 a bale for $600.

bigbull338 · Dec 22, 2014

the best way to sell hay from a meadow is to sell it standing by the bale.around here thats $5 a bale.

sixdogs · Dec 22, 2014

You have to figure the loss of soil nutrients on a lease deal. Add back what it would cost to replace the fertilizer, lime and trace minerals and most cases it would be a better deal to simply bush hog the field. For example, my 20 acre hayfield with 3 to 4 cuttings a year cost around $4,500 just to maintain fertility and that's without lime. So to be honest about it I would have to charge the land rent and then have a written agreement to maintain soil fertility---and I did. Had I not replaced the fertilizer I would have, in effect been subsidizing the guy cutting my hay and depleting my soil. Just my two cents on this.

bigbull338 · Dec 23, 2014

sixdogs that would not fly around here.most wont lease a meadow if they have to put $225 an ac in it every year.because no land will make enough hay to cover that cost.with money you could buy 150 round bales.

ch1ch2 · Dec 23, 2014

bigbull338 said:
the best way to sell hay from a meadow is to sell it standing by the bale.around here thats $5 a bale.

The new guy cutting it for me did offer to pay $5 a bail cow hay $10 a bail horse hay. Mine was cow quality. Worth $225, even at horse quality it would only be $450. And that is how I would have sold it if I did not already have a buyer. My brother has a place 200 miles to the West where hay is going for $60 to $80 a bail. Transportation was not an issue because we regularly have business reasons to be at the halfway point each week. It is truly nice to have blessing from above.

bsrfarms97 · Dec 23, 2014

sixdogs said:
You have to figure the loss of soil nutrients on a lease deal. Add back what it would cost to replace the fertilizer, lime and trace minerals and most cases it would be a better deal to simply bush hog the field. For example, my 20 acre hayfield with 3 to 4 cuttings a year cost around $4,500 just to maintain fertility and that's without lime. So to be honest about it I would have to charge the land rent and then have a written agreement to maintain soil fertility---and I did. Had I not replaced the fertilizer I would have, in effect been subsidizing the guy cutting my hay and depleting my soil. Just my two cents on this.

Well one might argue to the land owner that he can also charge the land owner for keeping his property mowed and cleaned up. Thats wear and tear on ones equipemnt also. Ive been on both sides of that fence owning the land and leasing land from others. Around here in East Tn, if a guy can agree to fertlize and at most help pay ones land taxes that seems a fair deal if the land grows a decent hay crop. If you dont own the equipment to keep your land cleared it can get quiet expensive buying it or paying someone else to mow it. Dont get too greedy or the farmers in your area may band together and that would leave you hiring someone to come in and bushhog it. That has been done more than once here.

sixdogs · Dec 23, 2014

An asset needs to have a return to the owner to make it work and the asset finds a price level that supports the investment return expected. It's one thing to be a homeowner with some idle acreage but in the farm belt the cost to rent is a given dollar amount and an agreement to maintain soil fertility and take care of the property. Depending on your ground, rents of $225 to $450 an acre are typical PLUS the cost to maintain fertility. That can cost another $225 or so an acre. There are lines of people looking to rent acreage on the flat ground since the economics of scale in large farming can yield a decent return at those levels.

You are right, this is different from the rolling hayfields of the central part of the country and yes, you pretty much get what you can in that situation. But you don't want to deplete your soil fertility just because the renter doesn't want to pay for it. Why should the landowner foot the bill and subsidize the renter?

Farmland sells for $5000--$7000 or more an ace in the black dirt of the Midwest so a rent of $250 an acre is really a pretty good deal for the tenant. You can get 225 bushels of corn or 75 bu of soybeans per acre and if you're farming 2000 acres or so the math works for everyone involved .