The tractor you mention will run a 4' wide x 5' tall round baler. It is also adequate to run most brands of disc hay mowers in the 8' to 9' bar length. 120 acres can be done with one tractor using it to mow, rake and bale with, cutting about 20 acres at a time. It can get into work that way.

Haying is somewhat more complicated than many people realize as mentioned and the advice of partnering with someone on shares is a good idea. Especially if you help on part of it. Getting a tractor or volunteering to rake or mow with his so you can be there will teach you more than anything else could. I have used several methods for doing hay over the years including hiring it done, selling it standing, partnerships and now baling it myself to sell and doing custom baling. I have been around hay and equipment all my life and it is a constant learning experience with customers, new products, weather ect.ect. It is not rocket science, but experience is a great teacher.
As shipping rules get tighter 4' wide bales have become far more popular. Many haulers will not/can not takes loads over 8' wide. I went to a 4x6 round baler this last year with net wrap for this reason. Some states will still allow farm tagged trucks to carry hay at 10' (2 5' bales)but that is changing regularly.
Defintely get ready to spend some serious money of you decide to get new/nearly new equipment. Also be prepared to learn how to work on said equipment

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For my operation, I use 3 tractors( the biggest a 5455 MF 105 engine hp, 85 pto hp) a 4x6 MF round baler, 2 disc mowers, rake, and a tedder. We covered quite a few acres with this setup with just my wife and I for labor.
The type of hay demand in your area needs to be the detemining factor in the type of baler you use. Round balers and small square bales are a doable setup, large squares balers require such a large hp tractor and cost so much that doing it yourself would be very hard to justify.
BTW: I have seen a study out of Oklahoma State University that basically puts the break point having it custom done/doing it yourself in the 700 round bales per year range.(Custom rate of approx $20 a bale with hay selling in the $30 range if I remember correctly, which I will not guarantee.

) You will have to put a pencil to the costs/expected returns to see how it would work out in your situation