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Money in hay?

A

Angus Cattle Shower

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I have been playing around with the idea a bit of renting a quarter section for five years and seeding it to hay. What kind of money is there to be made in hay? I thought I would have minimal input costs, as you only seed it once so you won't have to be worried about planting costs over the five years. However, we have never done anything like this before so I am asking anyone with experience to share some insight. We have all the machinery so that is not an issue. I thought about seeding it in the spring to millet mixed with a good alfalfa seed. I have heard that the alfalfa wouldn't be ready to cut for a year but we have had good luck with millet hay on small scale. Is there even a market for millet hay?

Any help is appreciated!
 
This post is from two years ago, numbers may need to be adjusted a little to current market conditions.

Fertilizer Costs Drive Up Cost of Making Hay
Friday, 25 July 2008
While rising grain prices have gotten a lot of attention, far fewer ranchers are paying attention to the rising cost of making hay due to higher fertilizer costs. Penn State extension in their July newsletter estimated that the fertilizer value in one ton of grass hay is now $84. That's the cost of the 50 pounds of nitrogen, 15 pounds of phosphate and 50 pounds of potassium each ton of grass hay contains and this does not include micro-nutrients. Using Pennsylvania custom machinery rates, it takes $35.37 in machinery costs to make a ton of hay. At a per acre yield of two tons per acre, add pasture establishment costs of $25.63 per ton and land rent at $30 an acre ($15 a ton) and you have a total cost of $160 a ton and this does not include the cost of fertilizer spreading. If you figure a 1000 pounds of hay in a large round bale this would be an out-of-pocket expense of $80 a roundbale. Now, consider that you can often buy grass hay for less than its fertilizer value ($42 a roundbale) and that this exercise did not include weather losses which are typically high in humid climates. Put a pencil to it and you will probably find that is far better to buy hay from your neighbors than to grow your own.
Click to expand...
http://wincustomersusa.com/stockman/index.php?option=com_content&task=view&id=248&Itemid=9
 
One problem with selling hay year in and year out is during the good years everyone has plenty of hay. So marketing your hay becomes difficult or you have so sell it way cheaper than you intended. I know some people that sell hay every year and they are tied in with a feedlot that takes their hay at a preset price. Some years they are above the market $/ton and some years they are below but it usaully averages out.
 
The government of Manitoba has a huge amount of information on their website. Conditions here are not much different from Saskatchewan, so it's pretty relevant for you too. There's enough reading here to keep you busy for a while.

http://www.gov.mb.ca/agriculture/crops/forages/bja03s00.html
 
We have neighbours nearby who have figured out their breakeven and a price they can live with. When hay is 6 cents a pound, theirs is 4. When hay is 2 cents a pound, theirs is 4. They are presold several years ahead, since their customers can budget and don't have to worry about the weather and the price of hay.
 
the dairies are about gone here, the game and fish are the major buyer for thier elk herd here in western Wyoming. They only paying $85/ton, see alot listed for $75, saw some meadow hay listed at $35, can't put it up for that.
 
Down here good quality hay is selling for around $60-$70 per large round bale from what the state market reports are saying. We fertilizer early before the prices went up so after cutting and baling we have around $45 per bale in it. But I would be happy to let some good at 60-70 per bale.
 
I'm hearing prices of $100 to $135 per ton in the Williams Lake area. You could add another $30 freight to get it here.
Don't know what hay is worth up in Silver's area, they are drier than here.
 
Looks like $85 per ton so far, but I expect it will be on the rise. Freight is the real killer here too. We bought some fescue straw at $20 per 1200 lb bale, we'll ration that out with the good hay and haylage this winter.
 
with hay prices at 125/ton and calf prices at or under a buck im tempted to sell both cattle&hay and sit it out for a year or two. as we are short about 125 ton of hay the only thing making me hesitate is the hassle involved in keeping the range area we have developed
 
miocene said:
with hay prices at 125/ton and calf prices at or under a buck im tempted to sell both cattle&hay and sit it out for a year or two. as we are short about 125 ton of hay the only thing making me hesitate is the hassle involved in keeping the range area we have developed
Click to expand...

Up here we can just sign a non use agreement for our range and we can have it de-stocked for 2 years this way.
$125 / ton sure doesn't pencil out does it? I hate the thoughts of trying to buy back in in the next year of two because I'm just enough of an optimist to think that cow prices are going to be climbing steadily over the next few years.
 
silver - im also a optimist thats why im just thinking :) we can get a non use as well but it still cost's the range fees althogh they are minimal .my area is paying the cost for the easy winter of2010.crop insurance will come through with some money for feed purchase .i might even have to go find a off the ranch job :( which is a first in the last 15 years . :roll:
 
Miocene, sorry to hear about your situation. It was the same here from 2001-2009. Last year we paid $125/ton for good hay, bad hay, any hay we could find. This year we have so much forage I was actually tempted to bale some. However, every custom outfit in the country was too busy to come, and all the neighbours were too far behind on their own to help. By the time I had someone come to look at cutting it, prices have dropped to $60/ton in this area. THere's just so much feed around it's tanked.

So, Angus Cattle Shower - like others have said, it can be feast or famine. If you're serious about it, I would do like RSL's neighbour and try to work on contracts so you can budget on the same price every year. As far as seeding it, I wouldn't use a cover crop at all. You may not get much the first year, but it will be worth it as the 2nd year will be fully developed hay. Sometimes with cover crops you end up with thin patches still in year 2.
And don't monkey around trying to cut costs or corners in seeding. I've learnt this the hard way. I figured I could broadcast seed and save a bunch of money, all it did was let the weeds take off to the races and the forage was slow coming. THe best luck we've had was the neighbour came in with his air drill and seeded alfalfa/meadow brome into stubble, don't be shy with the fertilizer either, and that is what created the tangled jungle of pasture I posted pics of last week.

As with anything, plan. Make it work on paper. If you can do that, there's a chance it may work in practice.
 
I agree with you PureCountry. We never had any luck getting a
good stand with a cover crop, so we quit doing that. We have had the best luck here
(and I call it luck because we are not farmers) using the
rangeland drill that we can rent from the Conservation District
and seeding int o stubble.
 

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