Hay - Grow or Buy?

[fenneran]

I guess that really sums it up. I am a computer guy by day and a farmer by night and weekend [img]/forums/images/icons/grin.gif[/img]
I do use rotational grazing, but at some point I do need to use some hay, and since I have some acreage still unfenced, thought it would be a good use of the ground and as a bonus, I get seat time on the tractor!
I have a friend up the road who has a turkey farm, so I should be able to get some good fertilizer, so the grass should grow better if I actually tend it. I'm still not set in my mind which way I'll go, but as usual, this group of like-minded folks always gives great information to chew on!
Frank

[Phred]

Frank,

I have to agree with doc on this one.

Here is my analysis that I developed for my own case. Most is applicable to other areas. Yields may vary but my values are fairly typical.

Round Bales:
Average yield in my county is 2.3 tons / acre.
Looks like you would probably be the same.
http://www.forage.com/hay/region/us/...ieldvatsa.html

Average hay market value is nominally $40-$50/ton for mixed grass in 1000 lb large round bales. Alfalfa would be higher. So this gives a gross of ~$100 / acre. So for ten acres you gross $1000 / acre / year.

Square Bales:
Same average yield. Average dollar value is $2-$3/bale for ~60 lbs small square bales. So this is better with a value per acre of ~$230. So that same 10 acres is worth around $2K. Of course this a lot more work. But if you assume your time is of no value then maybe this is the way to go.



Now look at the costs.

Square:
Lets assume that you have the tractor already and the maintenance is free. I think you might be able to get some very dated square bale equipment for 5-10K. But 10-20K is more likely unless as doc has outlined you don't mind repair work. So that means that you are looking at 5-10 years just to pay for the equipment. On top of all this you will need to fertilize the field each year to get the yields and maybe lime on occasion. Not to even consider all the time it will take to stack and store those ~800 bales. And again your time was not included in the math.

Round;
Even worse. The only good news is that this can be a one-man endeavor since you can stack and store the round bales with an FEL spear.


My own analysis for my property assuming around $20K for the hay equipment indicated that it was not worthwhile unless I could hay about 40-50 acres. That allows the equipment payoff to happen in a reasonable time frame since the gross is around 5K for round bales.
Also keep in mind that you probably need around 60 pto hp to run a round baler. So in some cases square bales may be the only option.

Disclaimer: I am hardly an expert. I will be putting up ~50 acres next year in round bales. This is why I did the analysis in an excel spreadsheet. Feel free to check my numbers and point out any errors that may exist.

As rich pointed out this is the economics. You may well decide to ^%$& with the money I want to do this anyway. Just be carefull that you don't end up with no hay to feed the animals because your 2K bailer died in the field and all your cut hay was rained on and destroyed.

Fred

[egon]

Just an aditional item;
Old balers require maintenance and even break down in the field. They have been known to Do serious damage to operators who get the least careless when they plug up.

Egon

[fenneran]

Fred,

Great post, thanks for the extensive analysis. Any chance of sharing your excel spreadsheet?

I think you all have convinced me that this would be a bad idea for me. I was hoping to get into the equipement for about $1,500, not $15,000! [img]/forums/images/icons/shocked.gif[/img] If my numbers were right, it would have been a fun investment, at the larger number, just a money pit. With the small operation I have, it seems to make sense for me to pursue hiring someone with equipement to make the hay for me from my grass.

Frank

[EJB]

Frank, thanks for the valuable calculations...I suspect from a pure dollars and sense point of view, the calcs are right, but as you say, you do need to factor in the enjoyment of the activityu and its hard to put $$$ on that as it varies by person.

The one thing however that keeps me interested in pursuing this as a viable pursuit, is the conversation I had with a local farmer the other day when I bought some hay from him, and that was, in this area anyway, he is selling and more importantly getting, $6 per sqaure bale for organically grown hay.

If you factor in $6 per bale for the organic stuff, and assumming your costs do not go up dramatically because of it, then the return on investment comes a lot quicker.

Just something to think about [img]/forums/images/icons/smile.gif[/img]

Also figure in alfalfa as compared to grass. Mostly what I do is alfalfa. I get 6-8 tons per acre from this and get 2 or 3 more cuttings than grass as well. Still takes alot to justify the equipment but if you are going to do it put it into alfalfa.

[RichZ]

Frank, you are in the ballpark for the price of used equipment. I spent $2500 on my used New Holand baler and 2 kicker wagons. The baler works, but as I said it did need one repair in the middle of haying. A plunger sheared off, and had to be replaced. My mechanic thinks it should do fine next year, since the part broke due to metal fatigue of a 20 year old baler. We'll see how it does next year. As has been pointed out already, though, I will not depend on my own hay for my animals as my only source until I have A LOT more experience under my belt! But if you're interested in starting up as a learning experience, as I'm doing, it can be done. Next year I hope to move up to TWO CUTTINGS!![img]/forums/images/icons/laugh.gif[/img]

Eventually, I do really expect to produce enough hay for my animals, and even sell some, but it may take me several years to get to that point. I've only had my farm for two years, and I know Rome wasn't built in a day. I've gotta crawl before I walk, and I may stumble and fall, but I will, eventually suceed! Enough cliches', you get my drift![img]/forums/images/icons/wink.gif[/img]

[Phred]

Doc,

I think you are lucky in that you are in an area that has deep rich soil that will grow anything. Some of us are not so lucky. Last time I was in Iowa I was impressed by the fact that the soil is better than average. This apperas to be true for large parts of the midwest.

In my area the soil is thin and rocky. I use to live in southwestern vigrinia and I bet frank also has his share of rock.

While I have not tried to grow alfalfa all my neighbors say that it does not work. Soil is pretty acidic and alfalfa has very deep roots.

But your right for those that can grow alfalfa its the way to go.
Do you find that stand longevity is a problem? How many years can you go before you need to replant the stand due to weeds and thinning? Lots of folks claim that alfalfa is a lot more trouble than grass.

Fred

[Phred]

Frank,

Its a very simple sheet but if you would like send me a private message with your email and I will shoot you a copy.

I did not mean to deter you. Like the others have said the money is only one aspect of it.

You can get an idea of what people are asking for used equipment at:
http://www.farm-equipment.net/menu.jsp
http://www.machinefinder.com/

Fred

Actually you can grow hay anywhere. The problem is most people don't know how to grow it. Hay is very sensitive to the soil ph. Not necessarily the type of soil but the pH and nutrients. You have to have it all just right and it will grow. We grow alfalfa on some pretty poor soil back home.

It also depends on your seed. You really have to use good seed for good alfalfa. Most people don't spend the money up front and then complain because they don't get a good crop.

With regard to longevity it again comes back to how well you prepared your soil and how good of a seed you used. Typically with the right conditions in the soil and a good seed you can usually get 8 years out of a stand. Then you can interseed grass and get a nice alfalfa/grass mix for 4-6 years after that until it dies out.

As far as taking care of it alfalfa is easier to take care of than grass in my opinion. Alfalfa will outgrow grass and keep the weeds down much better than grass does. Yes you have to spray for weeds and bugs but that's the same with grass.

When you get ready let me know and I will go through the whole process of how to plant alfalfa right.