What is cutting on shares mean exactly?

   / What is cutting on shares mean exactly? #11  
On fields that are 50/50 around here, very good alfalfa, owner pays seeding and fert. If land owner had me do that, I would have to sit down and figure out how to charge. When hay is cheap, I don't do very much at all.
 
   / What is cutting on shares mean exactly? #12  
If you paid 25$ per bale, do you have the need for 250 round bales per year? That's a lot of hay for someone starting out.
 
   / What is cutting on shares mean exactly? #13  
Hello,

We own about 30 acres of tillable land. When we moved here almost 10 years ago, "cost share" and "cash rent" were new terms for me. Here, "Cost share" means the farmer puts up 2/3 of cost to input the crop (seed, fertilizer, chemicals) while the land owners put in the remaining 1/3 cost. Then at harvest, the farmer gets to keep 2/3 of the money when we sell the crop and I get 1/3. "Cash rent" is simply the rent you charge farmers per acre for using your land. Here you know what your income will be each year and you don't worry about input costs.

After losing my butt the first couple years due to ignorance, I called the country cooperative extension office for help determining the value of this farmland for "cash rent". What I discovered in doing so was the low, average, and high cash rents paid to landowners by farmers in my county. I then considered how productive my land was and determined a new rent to charge my farmer. I just went with "average" for the county and he paid it willingly. Under this cash rent system, I doubled my income. Obviously, something fishy was happening at the grain elevator when they weighted "my" portion of the crop and cut me a check.

I then shopped for and found the right farmer for my land. He is an established guy who's sole livelihood is farming, so he devotes all his time and energy to farming. He is now doing yearly soil samples (and gives me copies of the info), spreads truckloads of cow manure on my fields and properly applies chemicals to build up the soil. In addition, I raised my rent 25 percent, but I remain just under "average" for the county in farm rent costs. All of this was done on a handshake and he's more than held up his end of the deal. He is a guy I trust, but it took time to find him.

I'd start by talking to your local county extension office for guidance on what rents are going for in your area. Trust your farmer, but VERIFY if you are doing the cost share method. I learned that one the hard way.

Good luck!
 
   / What is cutting on shares mean exactly? #14  
Years back I cut hay for a guy 50-50, but he was legendarily ornery so I only did it one year for him. There's a whole bunch of us who have worked for this clown once; it got to where nobody would cut his pretty good hay because of his reputation. Since I ditched the cattle I have no need for any of my own hay so I allow a guy to take my hay for free to keep the fields clean. He's happy, I'm happy. He has a heavy duty 6 foot BushHog, mine is smaller so when I go after light brush I borrow his HD model; I don't abuse it, everybody wins.
 
   / What is cutting on shares mean exactly? #15  
I am a newbie. I am having someone cut our 70 acres for hay this year and he is offering to either a) cut for free if he keeps all the hay, or b) cut on 60/40 shares, or c) charge $25/bale.

I assumed that shares means he cuts for free but keeps 60% and I keep 40%. Am I right or wrong? Or is there a cost associated with doing shares?


Thanks!

Why would he offer to cut on a 60/40 share, if his other offer is a 100/0 share? Isn't that like: "I'll cut that for you if you give me all the hay, OR I'd be willing to cut that for you if you give me 60% of the hay"?
Or is he supplying fertilizer in the 100% offer but not the 60/40? What am I missing?
 
   / What is cutting on shares mean exactly?
  • Thread Starter
#16  
Why would he offer to cut on a 60/40 share, if his other offer is a 100/0 share? Isn't that like: "I'll cut that for you if you give me all the hay, OR I'd be willing to cut that for you if you give me 60% of the hay"?
Or is he supplying fertilizer in the 100% offer but not the 60/40? What am I missing?

That is what confused me. He is coming by this weekend to talk about it
 
   / What is cutting on shares mean exactly? #17  
Maybe it's his low and high (best/worst) offer.

"Willing" to take 100% if you have no use for it and/or don't want to deal with moving/storing bales but just to keep the fields open.
60% is his low bid if you want the hay.
$25/bale is his custom baling (labor and equipment) contracting fee if you want it all

What is not offered: How much per bale would he pay if he takes it all? It may be worth nothing (to him) if cash is involved, or something. Though he knows its worth something to you to have the fields kept open.

What's something worth? No SINGLE good answer. (There's 2 answers: Yours and his. Then the question is: "Do they match?") Depends on a lot of factors. Supply and demand baby!
 
   / What is cutting on shares mean exactly? #18  
60% baler 40% landowner is as good as it gets.the baler guy will come out pretty good unless the place doesnt have good grass on it.you being the landowner can sell your share of the hay.or you could sell it all to the baler man for $5 a round bale standing.
 
   / What is cutting on shares mean exactly? #19  
I have one 20 acre spread that I cut. I pay the man 2$ a standard square bale and take all and resell at $8 or more. He maintains the weeds and does the irrigation. So you agreeing on a cost per bale may work, if he does everything. What size bales is he putting on the ground?
 
   / What is cutting on shares mean exactly? #20  
Why would he offer to cut on a 60/40 share, if his other offer is a 100/0 share? Isn't that like: "I'll cut that for you if you give me all the hay, OR I'd be willing to cut that for you if you give me 60% of the hay"?
Or is he supplying fertilizer in the 100% offer but not the 60/40? What am I missing?

Part of the answer is how difficult the field is to move around in as well as the quality of the land. It cost nearly as much to mow and rake a field with 5 round bales per acre as a field with 2 round bales per acre.

I have a few small, or irregular shaped, or hilly fields and I would only do those where I get ALL the hay for free. Otherwise it is not worth messing with it. I put fertilizer on and reseed when needed. I also mow some areas not for hay to keep them clear of weeds trees, etc. for good will to the landowner.

I had a larger field the owner wanted to do shares at 50 - 50. To make that work the landowner needs to pay for the fertilizer. He wouldn't do that and I had to give up that field as it simply was not worth the expenses for 50% of the crop. If the owner would have allowed a 60-40 split I could have handled the fertilizer cost.

Unfortunately, grass hay prices seem to follow the bare costs due to many people just looking to cover their costs unless you can set your product apart.

I'm working to get in a position to put up high quality alfalfa mix hay. That is difficult to do if you are only making hay part-time or do not have better equipment.
 
 
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