Thinking of haying/farming for profit- many questions

[Cliff_Johns]

So I may be messed up on this, but it seems to me you should
be able to get at least 200 square bales per acre in 3 cuttings.
If you have 60 acres in hay at any one time, you get something
like is 18000 bales to sell each year, probably more.

Around here small square bales of the good stuff might be $4
depending on the year. Even at $2, that's 36K. It depends a
lot on the location and the proximity of horses and how good
for horses the current fields are.

Your costs are lower than it is for many since you own the
equipment already, but there are a lot of costs that go into
the operation (fuel, planting, repairs etc.)

Cliff

 

[smstonypoint]

Your costs are lower than it is for many since you own the
equipment already, but there are a lot of costs that go into
the operation (fuel, planting, repairs etc.)

Full-time farming (without outside income) requires the farmer to cover his total costs (variable + fixed) and provide for family living expenses. Fixed costs include depreciation. Even though the equipment is in place, it will eventually either wear out or repair costs will become prohibitive. The farm has to generate sufficient income for equipment replacement in order to be sustainable in the long run.

I remain skeptical about the prospects of sustaining a full-time farming operation producing "commodities" on 80 acres. In my opinion, success is more likely (but far from guaranteed) producing specialty "products," but these are labor- and management-intensive, and require access to appropriate markets and savvy marketing.

Steve

 

[Reyer Farms]

Full-time farming (without outside income) requires the farmer to cover his total costs (variable + fixed) and provide for family living expenses. Fixed costs include depreciation. Even though the equipment is in place, it will eventually either wear out or repair costs will become prohibitive. The farm has to generate sufficient income for equipment replacement in order to be sustainable in the long run.

I remain skeptical about the prospects of sustaining a full-time farming operation producing "commodities" on 80 acres. In my opinion, success is more likely (but far from guaranteed) producing specialty "products," but these are labor- and management-intensive, and require access to appropriate markets and savvy marketing.

Steve

Very well said.

 

[swines]

"The Furrow" is a magazine published by John Deere. It often feature small farms and how people make a sustainable living on small acreage. If you go to the magazine's website, look at the January and February 2012 issues as an example. The January issue features a family that makes a living on 13 acres.

What is common to all of the successful, small acreage farming stories in The Furrow is a concentration on niche or specialty products that command higher prices than standard large acreage farm crops. You can't compete with large acreage farms trying to raise low dollar, equipment-intensive crops.

Where I live in the Southwest, depending upon where you are located, you could grow lavender, chocolate flower, and other unique crops. There is one small farm that grows 20 acres of lavender and all of it is presold. Another small farmer grows six kinds of garlic and that is all presold.

Another farm grows Timothy hay and sells it on a pickup on site basis. The last time I talked with the owner, they sold the entire 18,000 bale cutting in less than 6 weeks to horse owners - many who have a standing order with him. He has gone to the trouble of getting his production methods to keep the hay weed-freed, and as required to get the hay certified as "organically grown" - and it commands a premium price.

If you want to keep your 80 acres, I think you can do it - but not by trying to compete raising crops that are best in large acreage farms. Find out what niche crops you could raise, look at the markets for them, and then put a plan together on how you can raise crops that can be sold into those niche markets.

 

[MarkV]

Hope we haven't lost our Original Poster. This is a great subject and one that many here on the forum will be interested in. It would help to have an answer to some of the questions asked so the best answers could be given.

MarkV

 

[farmfun]

Just a couple of other thoughts to add to the list here.

We're not sure of the timeline of the inheritance, but shortly after the passing of loved one is a rough time to make long term decisions.
Perhaps a mixed approach may be of help here, check into leasing out as is for a mid term of 1-5 years. That may give a better evaluation period for use or for sale of land if that's what you decide you need to do. (rushed sales don't bring high prices either)

The income level you expect needs to be defined a little better, there may be a transition period to get what you finally want.

Bottom line don't just dump the land, its the wrong market for that approach and counting on interest, remember that's running lower than inflation right now - return around 2 percent BEFORE taxes.

 

[sdkubota]

Actually land sales around here are bringing top dollar. I think many people believe in gold, silver and land as a shelter for money. If the hard economy continues and people are forced to sell property, that is when values will decrease as the market is saturated with forced sales. Hopefully the original poster will come back or at least they started thinking sensibly about their future goals and expectations.

 

[lstinthot]

I currently belong to a dirt bike club that has its main trails on 80 acres. We help maintain the trails and main open area and pay dues each year. These types of places are showing up more and more or I am just becoming more aware of them because I am getting into riding more. Could be the outside the box way of making some money on the land if its good riding or outdoor adventure type land. Camp ground and outdoor adventure park.

Best of luck

 

[Pharm]

We have about 230 acres that has been in our family for almost 200 years. The only reason we've been able to keep it in the family that long is because we have a good relationship with some of the farmers in the area who make a living farming. We have about 160 acres that we partner with the professionals, we pay for 1/3 of the expenses and get 1/3 of the profits ... the rest goes to them - but they do all the work and bring in all the equipment. We grow soybeans and corn with a yearly crop rotation.

Oh, and I do still have my day job (Pharmacy). I might be able to quit my day job if I lived by myself with minimal expenses - but I'm pretty sure my wife wouldn't put up with it. Kids would have to forget college too.

Basically I'm only taking care of approx. 20 acres. I've thought of haying but I just didn't see that it was worth the money for the equipment and hassle. I basically bushhog, cut trees down, and try to keep the place looking good.

We do have a lot of land in timber. The last cut of timber netted enough for a new tractor (kubota). Trouble is we only cut the trees every 25 years or so ... but that's about what I need for my next tractor purchase :thumbsup:

My advice - talk to area growers and owners and see what they do. If it wasn't for the help of others in the community we would have a hard row to hoe so to speak. Farmers coop is a great help as well.

 

[xtruckerbob]

I also have the family farm of 105 acres. Since I don't know how to farm I rent our land out at $170 an acre which they grow corn or cotton. I saved me 25 acres for the house, barn, shop, garden ect. which I plan to raised hay on what is left. I checked several local farm stores about selling them "Horse Hay" . I don't own any Hay equipment, so I found out I would need to bale for the pubic for either a dollar value or on half’s to help cover the cost of equipment. I also found out I could bale 2 or 3 days a week and stay 8-10 miles from the house. It seems farmers with big equipment don’t want to bale less 20 acres so this gives you extra income. We water our grass when needed and fertilize one a year(or as needed) and we do this our self on week ends. We get 3 cutting most of the time. I don’t know if you can live on what you make on the farm....on the other hand hay is not a full time job. The enjoyment and the extra income you get will be a nice addition. Good luck check all your option and take our advice will a grain of salt.:thumbsup:

 

[Verticaltrx]

Our situation is we are about to inherit an 80 acre farm that has been growing hay for many years, and 20 years ago also had cattle on part of it. My husband and I have absolutely no experience or knowledge on farming of any kind. We have always wanted to get into it and have dreamed of moving to the farm. (My husband lived there for many years when he was younger).

Basically my questions are- is it insane for us to think of taking over the farm and doing the haying ourselves with (at the moment) no experience or knowledge on farming? We are hoping to have enough time to learn what we can, but we aren't sure what time we have before we have to do something one way or the other with the farm. We have also considered raising cattle.

Our other option would be to lease the land to someone who knows that they are doing, but all the research I have done doesn't come up with that make enough money for us to be able to have that as an actual income. Am I right in reading that you either crop share or cash rental (which comes out to very little income)? Or do you do a cash rental plus a percentage of the crop? We don't intend to make a ton of money at any of this, but in order for us to keep the farm it would have to produce enough income for us to live off of that solely. Otherwise we will be forced to sell and that is the last thing we want to do.

Any advice or info is greatly appreciated.

Before you go any farther, there is a book you need to read: "You Can Farm" by Joel Salatin. If you follow that model you most certainly can make a very lucrative living on 80ac if you are willing to work hard. I have zero connections to Joel, not trying to sell his book or anything, but I have several of his books and what he talks about really makes sense.

My wife and I currently own a tiny 12ac farm, milking two cows, raising a few for beef, chickens for eggs, garden crops, and a little bit of hay sales (we have another 20ac or hay/pasture we use). This is our first year at our new place, but in the years to come I have no doubt we could make a decent living even off such a small amount of land. I will say, however, there is a bit of a learning curve. My wife and I both grew up on farms and agriculture is our life so we knew exactly what we were getting into. Again, pick up a copy of that book, it'll give you some really good info on all this.

 

[countryguy1225]

Ok, I will pop in my 3cents From what I am reading you seem to have made up your minds about this. Life is far too short! I think everyone should try new things. Start a new chapter... i did. I did my first 50 bales this year. All you need is to be handy, smart, and have a strong work ethic. You will make mistakes, and learn from them. My favorite quote goes like this. "Life is a tough teacher! You get the tests first and the lessons later"

My other favorite farm'ism goes like this - " remember: when working with farm equipment, every machine on your land wants to kills you. It's a dire expression about double checking everything over and over. Establish a farm protocol for safety.

Keep us posted. Let us know how it all goes. You should do a farm journal or blog. Lol. The first 100 days as a hay farmer.

 

[greasemonkeyok]

I think it helps to recognize that any agricultural endeavor for profit has a strong element of gambling: weather; price of fuel, equipment, seed, and fertilizer; market availability; market price of your product.

 

[donlo]

Sister,,,the words haying and Profit,,are seldom seen together,,,

If I were attached to the land, I would set aside an area for you and hubby to visit , maybe put up a "katrina-trailer" for weekend visits,, rent out the land,, to keep it in ag,,to keep property taxes low, as far as cash rental and percentage of crops,,that depends on your area,, in NE ohio I here $30 an acre to $60,,$50 in my area,,
I'm not being a downer,,but it would be tough to make enough income on that acerage,,

 

[ShearHeadMS]

i do at least 2000 acres a year in Bahaya grass, 80 acres is very hard to lay into a good profit margin if you want good equipment. i sell my square bales for 5 bucks a pop and my huge square bales for 300-350, the main thing is trying to find a market and make sure you have demand, my demand is high because of Mississppi beef farming and most of the time these guys would rather buy than make. but just keep in mind equipment breaks down, and if you dont have any mechanical know how your going to be paying alot for repairs and parts. but take it as you will, if you have alot of free time you can do it and make good money like me, or you can just lease it and make money off of the other guys.

 

[loghill]

I imagine that a lot of what people have said on both sides (do it - don't do it) is correct based on their experience, location and level of knowledge. To give advice is difficult since none of us know your financial details, stage in life, income needs, specifics on the land in question, etc. Someone may already have suggested this, but if your state has a good Agricultural Extension Service (associated with a land-grant college) you may find someone there who can help you work through the difficult topics such as agronomy in your area, financial planning for a farm that size and so forth. Unless this farm would put you in the poor house if it didn't work out, I'd agree with the person who said "life is short," so don't pass up pursuing a dream that you've had all your life. I live on 80 acres that is not agriculturally productive (as in producing real income), but I wouldn't trade it for all the city lots in town. If you can afford it, learning as you go and overcoming the challenges (and failing now and then) might be enough to make it all worthwhile.

 

[MarkV]

Last we heard from the Original Poster was better than a month ago, I'll guess they made their decision. Hope it all works out.

MarkV

 

[OldMcDonald]

You can do it. Many of us started with no capital and have had to buy our way in. Since you own the farm outright you cannot have a total failure if you do not borrow. I believe that is the most important point for you because it is extremly unlikely that you will be able to service the repayments. Do not give up before you at least give it a try.

You will not make a "liveable income" from the property according to the standards of most people, but if you can live on a very small amount of money you should survive. There are some costs which you will have as others have already pointed out. I have no knowledge of what these mandatory taxes etc. amount to, but presumably you do. You must be able to cover these every year. Is it possible for one of you to have paid employment at least in the early years? I have had to work off-farm myself from time to time so know it is not ideal, but I was able to keep farming.

Lack of experience is, of course, a drawback, but there must be someone who is a friend of the family that is willing to give you advice. The basics are, stick with what you already know the farm can produce. Grow as much of your own food as possible. Do not rush to buy a lot of stock. Make sure you have two years' feed in hand. Hay will keep a long time if kept dry and vermin free. It can often be more profitable to feed it to your own stock rather than sell it. Learn to live on minimal income. Begin your planning now.

Best of luck to you and whilst I lack US experience I have farmed in several countries, so contact me direct if you wish.

 

[fxrupr]

Every part of the country is different so farming is different everywhere. I know from personal experience with my brothers 300 cow Vermont dairy farm that he is barely breaking even most months and works 16 hour days almost all the time. There is a terrific article in the November issue of Texas Monthly mag. which is on their website called Git Along, Lonesome Ranchers. The author interviews owners of old multi generational huge ranches and owners of some much smaller hobby ranches. The bottom line is you have to love the lifestyle and be willing to work harder than you have ever worked before if you want to make due on the land. It may mean working a part time job in town for one or both of you to make ends meet. Another great read is Buffalo for the Broken Heart: Restoring Life to a Black Hills Ranch by Dan Obrien on Amazon.
It is a life changing decision and I hope it works out for you. A lot of wise folks have given their opines here. This is just my 2 cents worth. Best wishes.
John