Hay pricing

[CDennyRun]

I was wondering if any of you guys adjust your prices down, after the price of diesel drops significantly. In my area, small bales were $2.50-3.00 six or seven years ago. Diesel skyrocketed, and now people pay $10-16 for orchard grass, timothy and so on. This year diesel is close to what it was in 2003, and prices are still going up.

This kind of blows my mind. I understand that the prices of everything else haven't dropped, and it needs to be a profitable business. I just think that fuel prices should reflect hay prices in both directions. The cheapest I've found in my area lately is $8. I talked to a farmer the other day who is charging $10 about it, and he just said "It's supply and demand. I'm going to cash in as much as I can" I get that making optimal profit is EVERYONES goal in all industries, but I feel pretty off put by the farmers here locally for these crazy prises. It just seems dishonest.

This is another reason I can't wait to start baling my own! Thoughts?

Regards,

Chris

 

[zzvyb6]

Nope. My hay has been priced at $2.00 a bale U-Pik-it-up at the barn, or $2.50 delivered within 10 miles. Once it's in the barn and has to come back out it's a little bit more. All my customers have been with me more than 20 years. I call it baled weeds and their horses love it.

I sell out every year and still save some for the local horse rescue agency. The equipment was cheap, stays reasonably maintained (could use some paint: mower and rake are 50% rust-oleo). Profit is on the tax side due to creative accounting. My time is not worth very much and the tractor would be a lawn ornament if it weren't working the hay 'business'. My IRA is my 'job' so why ruin a good thing ? Horse people are a special breed, most are broke, liars, and women. Finding the good ones takes some patience, trust, a good eye and some faith. I would never price them out of my friendship.

 

[CDennyRun]

Nope. My hay has been priced at $2.00 a bale U-Pik-it-up at the barn, or $2.50 delivered within 10 miles. Once it's in the barn and has to come back out it's a little bit more. All my customers have been with me more than 20 years. I call it baled weeds and their horses love it.

I sell out every year and still save some for the local horse rescue agency. The equipment was cheap, stays reasonably maintained (could use some paint: mower and rake are 50% rust-oleo). Profit is on the tax side due to creative accounting. My time is not worth very much and the tractor would be a lawn ornament if it weren't working the hay 'business'. My IRA is my 'job' so why ruin a good thing ? Horse people are a special breed, most are broke, liars, and women. Finding the good ones takes some patience, trust, a good eye and some faith. I would never price them out of my friendship.

People in the horse community can definitely be nut jobs! My wife and I don't mingle too much with most of them, as they seem to be from Mars.

I sure wish we had a good hay guy like you around here. Oh my goodness.. 2.50 a bale and solid reliable hay sales is a dream for us!

 

[aczlan]

We are closer to $4 or $4.50 for first cut hay (loaded out of the barn).
$5.50/bale for 2nd cut out of the barn.
Usually, we knock a dollar a bale off if someone gets it out of the wagon so we don't have to stack it in the barn.
Its good hay (grass, timothy, clover and alfalfa mix) and its always good and dry (tested with a moisture meter).

Aaron Z

 

[CDennyRun]

aczlan: Seems like you have a really good deal going on there. That pricing is pretty reasonable. We have one hay guy that charges us $4 a bale, but the supply is so limited, that you really have to jump to get it. The bales are banana shaped, and loose, but the hay is good. The guy is really flakey too. Hence the original reason I plan on haying myself. It's this, or $8+ a bale!

 

[smstonypoint]

A couple of points.

First, fuel costs are only a relatively small component of the costs of hay production. I couldn't find any recent enterprise budgets for grass hay from WSU or Oregon State, but a 2014 grass hay budget from Ohio State (Farm Management Enterprise Budgets | Department of Agricultural, Environmental, and Development Economics) shows that fuel,oil, and grease represent only 2.4% of total costs and 4.8% of variable costs per acre. YMMV.

Second, do you think it dishonest of buyers when there is a bumper crop and they are able to purchase hay at less than farmers' total cost of production?

Steve

 

[aczlan]

Second, do you think it dishonest of buyers when there is a bumper crop and they are able to purchase hay at less than farmers' total cost of production.

We sold some hay for $1.50/bale delivered to a customer's property this year.
Why?
1. It was late getting cut (first cutting for that section didn't happen until Aug)
2. The guy took in a goat that decided it didn't like our daughter and it a friend
3. I was done with dealing with hay for the year
4. I didn't want to deal with CL flakes to get it sold

Would I do it again? I might given the right circumstances, but it was a "get it gone" deal rather than something I would plan on doing on a regular basis.

Aaron Z

 

[CDennyRun]

A couple of points.

First, fuel costs are only a relatively small component of the costs of hay production. I couldn't find any recent enterprise budgets for grass hay from WSU or Oregon State, but a 2014 grass hay budget from Ohio State (Farm Management Enterprise Budgets | Department of Agricultural, Environmental, and Development Economics) shows that fuel,oil, and grease represent only 2.4% of total costs and 4.8% of variable costs per acre. YMMV.

Second, do you think it dishonest of buyers when there is a bumper crop and they are able to purchase hay at less than farmers' total cost of production.

Steve

If fuel has such a subtle impact on end customer cost, than why do all the local hay farmers say the increase in cost per bale is due to fuel? Like I stated before, I absolutely expect hay farmers to make a good profit. Anyone who is anyone does business to make money. I know it takes money to make money, and new equipment is VERY expensive. But bringing the price per bale up to $16 is absolutely as$ of nine. Even $10 is crazy. In my region we are not lacking pasture for haying. I just don't get it.

 

[CDennyRun]

No, I don't think it's dishonest to buy hay at a discounted price, because a farmer wasn't able to sell his product. That was a miscalculation on the farmers part, that could be based off of many different decisions. That's not the end buyers problem. Do I feel bad for that farmer? Yes. It sucks to loose, no matter what you do.

 

[hosspuller]

Diesel fuel has dropped a bit... Machine parts, property taxes, fertilizer, lime and herbicide has NOT dropped in price. In fact, baler twine has increased by double. Labor is still hard to get for small square bales. As said before, fuel is a small portion of costs.

 

[CDennyRun]

Diesel fuel has dropped a bit... Machine parts, property taxes, fertilizer, lime and herbicide has NOT dropped in price. In fact, baler twine has increased by double. Labor is still hard to get for small square bales. As said before, fuel is a small portion of costs.

I totally understand. Like I stated in my original post; I know the fuel costs have dropped, and the price of everything else hasn't. If you have the same equipment that you did ten years ago, you don't fertilize like most of the hey guys around here, I don't see the 3-400% increase being justified when fuel is your answer.

I know that hired hands are harder and harder to come by. That just sucks! I have no answer for that. Kids are not what they were twenty years ago.

 

[Grateful11]

If fuel has such a subtle impact on end customer cost, than why do all the local hay farmers say the increase in cost per bale is due to fuel? Like I stated before, I absolutely expect hay farmers to make a good profit. Anyone who is anyone does business to make money. I know it takes money to make money, and new equipment is VERY expensive. But bringing the price per bale up to $16 is absolutely as$ of nine. Even $10 is crazy. In my region we are not lacking pasture for haying. I just don't get it.

It's sorta like almost everything else that goes up due to fuel and crude prices, like fuel surcharges, motor oil, groceries, etc. Once they go up they rarely ever come down.

When the Dairy was still here they went up on the milk hauling charge due to fuel increases, do think it ever came back down when fuel dropped, nope.

Here in NC due to the drought some are asking $95 for a 4x5' round bale. Small squares are going for $7-12. My wife contracted to buy 100 4x5's about 3 months ago for $44/bale delivered, she cut the guy off after 60 bales delivered because of the amount of trash, saplings, even deer bones in the bales. They need about 650 4x4 rounds per year. They've made about 500 so far but still have hay to mow if the weather would cooperate, more rain than we need now.

 

[zzvyb6]

Let me start this strawman economic model. Please excuse my dementia and delusions :

My baler spits out a 14 flake bale every 14 seconds (1 plunge per second from double raked windrows). At $2.00 per bale, that's about $8.00 per minute or $480. per hour or $240 income for the 1/2 hour it takes.

This all starts from mowing a portion of my field(s) at twice baling speed. So, to cut 100 bales It takes me 15 minutes (see the mowing video). Thats 4 rounds of my hayfield(s).

I rake at baling speed, so its another 1/2 hour but with 15 minute attachment changeovers (with the drying time delay removed).

I bale at 1/2 mowing speed (but I'm double windrowed for optimum baler feed rate).

Changeover and pickup with a NH Stack wagon takes 1/2 hour at baling speed.

Delivery of 56 bales to the neighbor (dump, flirt with the neighbor and her daughter and return for a 2nd load is another 1/2 hour.

or stow in the mow with free help another 1/2 hour.

So, mow = 15 minutes.
rake = 1/2 hour
bale = 1/2 hour
pickup = 1/2 hour
deliver 1/2 hour or stow 1/2 hour
for 100 bale production and get $200 for this. Burn maybe 3 gal of diesel (That seems realy high but wtf.) for all this at $2.17 per gal (off road). and plastic twine is $26 a box with the TSC 10% coupon.

Even if you DOUBLED the price of Diesel, I'd still be making the same amount of money as a white collar desk jockey ( I was one, actually), and it's a CASH transaction.

OK so now please correct my estimates for time. Yes, somethimes a machine will STB, but it all evens out in the end. The price has no relation to cost plus profit margin. The machines are all paid off, no other real costs.

https://www.youtube.com/watch?v=hST7oAoFJkA

https://www.youtube.com/watch?v=PsnjrhQJfsY

 

[Wagtail]

People in the horse community can definitely be nut jobs! My wife and I don't mingle too much with most of them, as they seem to be from Mars.

I sure wish we had a good hay guy like you around here. Oh my goodness.. 2.50 a bale and solid reliable hay sales is a dream for us!

Some people in the horse community can be nut-jobs... it depends on what kind of equestrian activity they're involved in.

That being said, they are a 'community' and, as a community, they will talk amongst themselves. Which means that they will quickly figure out if they are being gouged on price, find a better alternative and spread the word to the community about that better alternative. So, if they're willing to pay US$10.00+ a square then that is a reasonable local price.

I don't know how badly your Summer's bushfires damaged or destroyed the overall hay crop in Washington State, but supply/demand may be playing a part in your pricing. Heck, it wasn't that long ago when hay-duffing (rustling) was being reported in the US due to southern drought.

 

[KevT]

Well, around here, 5x5 bales are $40 out of the field and square are $5, out of the barn they are $55 & $7. The investment in equipment is so high that I am just planting pasture grass instead of trying to hay it. Having only 20 acres here no one is interested in haying it for me, so a lot of cross fencing and pastures makes the most sense for us. This past year I have purchased 7 round bales to supplement the pastures and only had 1 in. Next year I will have 3 pastures in grass, and hoping the following year to have 5 with one always having winter rye. This should support 2 haflingers, 3 Zebu's, and 5 goats. With that in place I should never have to buy more than 5 bales a year.

 

[Tx Jim]

I charge $2.00 to cut,rake & sq bale be the hay mine or a customers so needless to state I'm not selling mine for $2 or my equipment will sit idle in the barn. I just sold some Coastal mix for $5 out of the field.

 

[oosik]

I just checked the hay prices out of Moses Lake. Low quality hay - $130/ton. Premium alfalfa hay - $250-$260/ton. Everything else falls somewhere between those two prices.

 

[CDennyRun]

It's sorta like almost everything else that goes up due to fuel and crude prices, like fuel surcharges, motor oil, groceries, etc. Once they go up they rarely ever come down.

When the Dairy was still here they went up on the milk hauling charge due to fuel increases, do think it ever came back down when fuel dropped, nope.

Here in NC due to the drought some are asking $95 for a 4x5' round bale. Small squares are going for $7-12. My wife contracted to buy 100 4x5's about 3 months ago for $44/bale delivered, she cut the guy off after 60 bales delivered because of the amount of trash, saplings, even deer bones in the bales. They need about 650 4x4 rounds per year. They've made about 500 so far but still have hay to mow if the weather would cooperate, more rain than we need now.

$95 for a round bale is insane. They're going for $45-60 for good grass, or haylage around here. You're right though, the drought has been really hard on the west coast as well. Hopefully we can get back on track this coming winter.

 

[CDennyRun]

Well, around here, 5x5 bales are $40 out of the field and square are $5, out of the barn they are $55 & $7. The investment in equipment is so high that I am just planting pasture grass instead of trying to hay it. Having only 20 acres here no one is interested in haying it for me, so a lot of cross fencing and pastures makes the most sense for us. This past year I have purchased 7 round bales to supplement the pastures and only had 1 in. Next year I will have 3 pastures in grass, and hoping the following year to have 5 with one always having winter rye. This should support 2 haflingers, 3 Zebu's, and 5 goats. With that in place I should never have to buy more than 5 bales a year.

Boy do I wish I had 20 acers to pasture! Around here people hay fields as small as an acer or two. Sometimes it's almost comical, but I can't blame them.

I just checked the hay prices out of Moses Lake. Low quality hay - $130/ton. Premium alfalfa hay - $250-$260/ton. Everything else falls somewhere between those two prices.

That sounds about right.

 

[CCWKen]

We've had a couple of serious droughts down here in the last 10 years or so. It was so bad one year that ranchers were trucking in hay from way up North (300+ miles). You couldn't buy hay at any price. Many had to feed their cattle cactus to make ends meet or sell stock at a huge price cut. I had a guy down the road offer to clear a large parcel of land up front of all cactus. We both made out. He and his workers spent almost a week burning the spines off and hauled out six dump truck loads of cactus and I ended up with a nice cut pasture. I was even feeding the neighbors horses off the lot for about a month. I didn't make a dime but I also didn't have to burn diesel to cut the pasture.