Hay..Asset orExpense

[Hayguy]

Soapweed's thread got me thinking, how do you all treat hay or feed, as an asset or is it an expense? and how do you get paid for the hay?how do you determine the $value? do you charge it against the herd and at what value,cost of production orwhat it could be sold for?.

 

[burnt]

This is how I used to see it -

"I'm the guy that bales the hay

And I'm the guy that stacks it"

Then one night the aliens came and sucked my brains out. And now this is how . . . .

:lol:

 

[gcreekrch]

Hay is a liability when you don't have it. :wink:

 

[per]

Hay is a commodity and therefore an asset. You can choose to squander it, value add it, deplete it, hedge it, insure it, buy it, sell it or otherwise use it but whether you profit from it depends on your choices.

 

[Triangle Bar]

Hay purchased is a production expense of your herd.

Harvested hay is a product that has a market value. Hay is a liquid asset. Whether you market it to dairies, horse or cow people, or through your own cattle it has a market value.

If I sell it I get cash. If I invest it in my cows... I don't get paid till the calf crop is ready to go to town.

 

[Jinglebob]

We no longer put up hay. Other than a small amount in the ditches and such. Hay is an expense towards the cattle.

I think Triangle Bar said it well.

 

[RSL]

That is a double sided question that is both economic and financial.
If you can make hay cheaper than you can buy it, you have a competitive advantage financially. If you can sell it for more than you can value add to it, you are experiencing an economic opportunity cost.
If you are trying to decide if you should hay or not look at the economics of the haying enterprise. If you are haying, look at the market options for the hay.
If you are not in the hay business then you need to look at whether hay is the cheapest alternative (economics) and how it fits your cash flow (finances).
Around here, hay becomes pretty attractive when it comes from someone else's place (bringing in nutrients) and doesn't involve running a tractor to feed (bale grazing). The cost per unit of nutrition gets pretty competitive when you figure that out.

 

[Cedarcreek]

Hay is a liability when you don't have it. :wink:

When you do it's an asset. Around here the saying is "Hay in the stack is like money in the bank." If we get a tough winter your going to need one or the other. :wink:

 

[Hayguy]

This is how I used to see it -

"I'm the guy that bales the hay

And I'm the guy that stacks it"

Then one night the aliens came and sucked my brains out. And now this is how . . . .

:lol:

thanx Burnt, and every one else that replied, some day's i just do to much thinking :wink: :lol: :lol:

 

[gcreekrch]

Hay is a liability when you don't have it. :wink:

When you do it's an asset. Around here the saying is "Hay in the stack is like money in the bank." If we get a tough winter your going to need one or the other. :wink:

That's a Canadian quote also, imagine that! :lol:

 

[John SD]

Hay is a liability when you don't have it. :wink:

When you do it's an asset. Around here the saying is "Hay in the stack is like money in the bank." If we get a tough winter your going to need one or the other. :wink:

I sure ain't got much money in the bank, but I do have a lot of hay in stacks. :wink:

I did turn some of the hay into money in the bank. Local trucker who puts up some of my hay went south with it. I can sell next year's share if I choose to.

Maybe I should have turned some more hay into cash, but I like keeping a healthy reserve supply just in case.

I can count on both hands the number of bales I have fed this winter. :wink:

 

[Jinglebob]

Hay is a liability when you don't have it. :wink:

When you do it's an asset. Around here the saying is "Hay in the stack is like money in the bank." If we get a tough winter your going to need one or the other. :wink:

I sure ain't got much money in the bank, but I do have a lot of hay in stacks. :wink:

I did turn some of the hay into money in the bank. Local trucker who puts up some of my hay went south with it. I can sell next year's share if I choose to.

Maybe I should have turned some more hay into cash, but I like keeping a healthy reserve supply just in case.

I can count on both hands the number of bales I have fed this winter. :wink:

You decide to sell some, give me a call. I always like to deal with neighbors. Got my hay this year from the next door neighbor He hauled it in and set it off. All I had to do was shut the gate on the hay corral. Only downside, he thought it would be getting trucked south so the bales average about 1500 pounds. That and the plastic twine. Sure makes the front of my bale wagon go up in the air when I winch one up and them little Halflingers got to get down and pull to start one!

 

[George]

I just finished feeding the last of my 2 year old hay and am starting on last years now.

In past years I have "loaned" some of the neighbors hay. I let them feed some of mine and then the first hay they put up comes back to replace it. I feel fress first cutting hay is worth more to me than 2 year old third cutting and it helps them out as well.

 

[Hayguy]

Jinglebob, is there any way we could get some pic,s of yourHalfingers and bale wagon in action. my neighbor is in the process of building a bale unroller wagon for his team, and any input, pictures, and ideas would be welcome.

 

[Jinglebob]

Jinglebob, is there any way we could get some pic,s of yourHalfingers and bale wagon in action. my neighbor is in the process of building a bale unroller wagon for his team, and any input, pictures, and ideas would be welcome.

Go to www.dennisranch.wordpress.com and do a search for team, horses, bale unroller. I don't remember how to post pictures on here very well. I have in the past but I am rusty. I got tired of posting pictures on places like this and then defending my actions or some silly thing that had nothing to do with the pictures. If you can't find any let me know and I will update a page on the site for you. Heck, I could even take some new pictures, but bet they will look pretty much like the old ones.

 

[Hayguy]

Thanx Jinglebob, i will show these to my neigbor and let him digest.

with those heavy bales do you need a counter weight on the front or would that be adding to the problem of it lifting?

 

[VB RANCH]

Hay is an expense
sometimes cheaper then othertimes
whether ya make it er buy it
ya still got money in it
if your feedin it
if your sell it it becomes income

 

[Jinglebob]

Thanx Jinglebob, i will show these to my neigbor and let him digest.

with those heavy bales do you need a counter weight on the front or would that be adding to the problem of it lifting?

If I planned on feeding this heavy of one all the time I would reconstruct my wagon (something I am wanting to do anyway) so that the balance point was lower and over or past the radius? of the back axle. I can make this work, but the front gets pretty high until the team starts pulling. Yeah, I thought of a counter weight, but then the team just has to pull more.

Let me know if they can or can't find or see them. I can probably re remember how to load some pictures on here if I get some time. Building a saddle, feeding cows and choring and trying to get a start on a nice young gelding, all at the same time. Gettin' so I ain't hardly got time to get on here and mess around. :shock: :wink: :lol: :lol:

 

[North Ridge Ranching]

I find this an interesting discussion. If you don't look at hay as both an asset and a liability you are probably missing something. A feed yard full of hay can seem like a big asset and yet carry over feed can be a huge missed opportunity on many years. There has a few times in my career already where I have made the wrong decision in not selling carried over feed for a higher price than I could of bought it for the next year. This is a missed opportunity but at the same time it is risk aversion as you can not guaranty the price of feed in coming years. In terms of feed, I have always sided towards risk aversion.

 

[Larrry]

I find this an interesting discussion. If you don't look at hay as both an asset and a liability you are probably missing something. A feed yard full of hay can seem like a big asset and yet carry over feed can be a huge missed opportunity on many years. There has a few times in my career already where I have made the wrong decision in not selling carried over feed for a higher price than I could of bought it for the next year. This is a missed opportunity but at the same time it is risk aversion as you can not guaranty the price of feed in coming years. In terms of feed, I have always sided towards risk aversion.

Do you buy insurance, if you have carry over feed it is just an insurance. The only thing is you still have X amount of feed for X amout of cows.

One of the keys is though if you have spent years and money building up genetics do you want to risk it by being short of feed. Not to say that a guy can't have a plan A and a plan B and even plan C.