Resources to learn about a small scale haying operation?

[powerscol]

5 acres is tough to pencil out - but it can be done.

If you assume you are going to hay 4 of the 5 acres and buy used equipment.

We bought a New Holland 68, JD350 hay rake, MF32 sickle mower and 50 gallon sprayer for $1,750. All of these pieces of equipment worked out of the gate and we made some 1,200 bales the same year. Junk hay, but what we made in that first year easily paid for the equipment. We later added added a cheap tedder and haybine. The baler got refurbished and a 2nd baler was added - but now are doing more acreage, horse hay and need conditioning and reliability on the baling side. Flip side is our hay price has gone up too. We also had an old wagon we refurb'd - which we pull behind the baler and added two more, but again we have more acres than you and more bales.

Sooooo - if you have 4 acres x 100 bales per acre x $4 per bale and you are at $1,600 in total cash collected. You've essentially paid for your first pieces of equipment - AND you can get better equipment cheaper than we did if you can wait and/or are lucky.

However, be prepared to turn a wrench and have unexpected breakdowns. Haying ain't for the faint of heart, but when the field is cleared and the squares are in the barn - it's a GREAT feeling.

In addition to this forum, and Haytalk, there is also yesterdays tractors. Between these 3 forums, I doubt you couldn't get an answer to any hay equipment or haying question.

Here is our 1958 year model New Holland 68 and 1962 Massey Ferguson model 50 diesel at work earlier this summer.

New Holland 68 and Massey Ferguson 5 Diesel Baling Hay - YouTube

Good luck,
Bill

Bill is very correct. If I may add one thing, get a good working baler - you may pay more, but it will be worth it. I love my Hesston 4550 inline. Also be sure all equipment is demoed before you buy - made a $3000 mistake that way. Watch for farm auctions, and word of mouth from your neighbors. That's how I got my Ford 503 rake. One other tool is get a hand held moisture/temp meter - can save a barn fire.

 

[ProjectKing]

+1 I talked to four of my neighbors about small time haying before I started to farm my 7 acre hayfield. Got my hands dirty helping them out with discing, planting, mowing and baling to get work experience first hand. Nothing like bucking a bunch of 3-twine, 100 lb bales to get the message that haying is real, honest, hard work. Never thought for minute that I could make any money from my hayfield. Just enjoyed working on the old machinery (offset disc and drag, grain drill, sicklebar mower, 5-bar side delivery rake, and a Massey Ferguson 124 baler) and experiencing the satisfaction of growing a crop. Good luck

How well does your equipment hold up? Curious how much hassle and downtime you have. Do you sell hay?

 

[Mac102004]

I think for a 5 acre piece of property you'd only be doing it for the "fun" or amusement in it. I guess someone who doesn't HAVE to do it might find it fun, and I guess only doing 400-500 bales at most wouldn't be that bad. So hay, if you can have a bit of fun and get a few bucks selling the hay, why not.

 

[powerscol]

I think for a 5 acre piece of property you'd only be doing it for the "fun" or amusement in it. I guess someone who doesn't HAVE to do it might find it fun, and I guess only doing 400-500 bales at most wouldn't be that bad. So hay, if you can have a bit of fun and get a few bucks selling the hay, why not.

I agree, however you can pay for your equipment with tax breaks. Talk to you tax person and see what happens to the bottom line when you form an LLC and buy equipment, parts, ect. Last year I saved myself several thousand dollars in taxes. Boss unit did the base tax without the SCH F and we owed 7K. As I had bought the tedder and PZ 170 last year, along with rebuild parts for others and deducting my operating and and long term deprecation, and then adding in a small profit on 400 bales, we came out $1800 ahead. I formed a small LLC years ago to do this. (My unofficial motto is " GOT HAY". So in a nut shell my equipment ended up free if you figure I would have had to pay anyway. Farming operations is a risky business and the IRS looks kindly on it as there are huge deduction limits. I have also been audited by my State with good results. You local SBA can also be a big help.

 

[Fallon]

Ya, have 5 acres & do some side tractor work. Looking at going legit. Also looking at some alpacas to fuel the wife's spinning & knitting hobbit & get ag status for the tax benefits. Hay might be an and/or thing for ag & tax stuff too. I'm researching options & implications as much as possible. Have a few accountants info & need to talk to at least one of them about everything & the tax ramifications. I like to know my options & some scope before I pay an accountant for their time for that conversation though.

Was leaning towards a LLC at one point, but the extra overhead might not be worth it assuming I maintain proper insurance.

If haying can pay for itself & feed alpaca, the tax breaks might make the effort worth it. Hopefully small enough to be manageable working a day job with cheaper equipment or something. We'll see, research continues.

 

[rankrank1]

Those touting you can pay for newer equipment with tax breaks are correct if you are wealthy and already paying a lot into taxes from your other income sources. However if you are on the lower end of the income spectrum and not paying much in taxes to start with well good luck with that philosophy. You can not get back in taxes what you have not paid in to start with. All you gonna do is get poorer from speeding your household income on equipment that will never pay for itself on 5 acres. (The old adage that it takes big money to make money applies here).

5 acres will be tough to pencil out but doable as others have pointed out. Been doing 5-6 acres for over 8 years now with low cost junk (I enjoy tinkering on it). Can not really say I have made a whole lot. On the other hand I have not lost anything either, as I make the hobby pay for itself. In other words absolutely zero of my household income goes to support the hobby. I do get some tax breaks but they are quite modest (maybe $600 to $800 per year). Without those tax breaks well my bottom line would be even worse than it is.

 

[ProjectKing]

I agree, however you can pay for your equipment with tax breaks. Talk to you tax person and see what happens to the bottom line when you form an LLC and buy equipment, parts, ect. Last year I saved myself several thousand dollars in taxes. Boss unit did the base tax without the SCH F and we owed 7K. As I had bought the tedder and PZ 170 last year, along with rebuild parts for others and deducting my operating and and long term deprecation, and then adding in a small profit on 400 bales, we came out $1800 ahead. I formed a small LLC years ago to do this. (My unofficial motto is " GOT HAY". So in a nut shell my equipment ended up free if you figure I would have had to pay anyway. Farming operations is a risky business and the IRS looks kindly on it as there are huge deduction limits. I have also been audited by my State with good results. You local SBA can also be a big help.

Why did you form a LLC? I know what an LLC is.

 

[powerscol]

As a shelter to separate liability - IE if something terrible goes wrong, they cant take the house. Also to separate out the taxes - farm stuff is farm stuff and household income is separate. I have a separate EIN for it and where I live I can qualify for no tax on farm equipment with it. I fill out a form and use the LLC EIN number, It also makes operating a business in my state legal and allows me access to business programs the state may offer.

Check into it where you live. In my state it was only $50 to register electronically on line and $10 a year with simple electronic filing. I can do DBA's (doing business as)under it too if I get so motivated.

Plus I can add President and CEO to my sig if I want :cool2:

and on Edit - When traveling you will be surprised at all of the hidden business perks folks offer other SBA folks....it all helps - just ask

 

[tessiers]

Another thing to throw out there is that I hay 75 acres and not 1 of it is mine. At least around here there are plenty of 5-10 acre plots people are happy to have cut. I turn down ground every year. I don't know how other areas are but that's the deal in my area.

 

[ProjectKing]

Another thing to throw out there is that I hay 75 acres and not 1 of it is mine. At least around here there are plenty of 5-10 acre plots people are happy to have cut. I turn down ground every year. I don't know how other areas are but that's the deal in my area.

Are you just baling or have you seeded with specific grasses?