Wesley Tucker, Agriculture Business Specialist at the University of Missouri Extension located in Polk County presented his Hay Production Economics 101 for those present at the recent Hay School. Tucker began by discussing the changes in today’s environment, “We simply wake up in a different world than we did just five years ago.” The rapidly increasing costs of land, fuel and fertilizer need to be considered in how they impact the cost of producing hay. Wesley proposed it might be time to go back to basics and look at the cost of hay production.
Tucker proposed the following: What does it cost to produce a bale of fescue hay? He then suggested the following for consideration: Harvesting Costs – should it be per bale or acre? Most people can mow, rake and bale an acre of hay for $25 to $40 per acre. Expenses are: Fuel, 14.6 percent; Labor, 20.6 percent; Supplies, (net wrap, oil, grease, etc.) 11.1 percent and Ownership expense, 53.7 percent. It doesn’t cost that much more to harvest an acre of hay and get 5 bales/acre compared to only 2. (Sure you have more fuel and supplies, but labor and ownership costs don’t change that much.) It makes a big difference in cost per bale depending on the yield.
Tucker compared harvesting 160 acres with one cutting verses harvesting it twice. “One cutting cost $31.63/acre where as, harvesting it twice costs $55.27/acre. Why do the harvesting costs not increase the same every time an additional harvest is added? Because over half the cost of harvesting hay is tied up in the ownership of the equipment. Whether you add more cuttings, more acres or more bales/acre spreading these costs over more yield makes harvesting hay less and less expensive.”
Alfalfa is expensive to establish and can cost $385 per acre each year to maintain and harvest. Calculated on a per ton basis, the 4 to 5 tons an acre it yields is barely more expensive than the fescue hay that produced 2 tons an acre. Additionally the superior quality from the alfalfa hay is worth the amount of investment.
Another factor to examine is that experts have suggested that approximately 50 percent of hay that is produced in Missouri never makes it into a cow. That is a lot of waste and wasted money. Look at production, storage and feeding situation closely and see where you are losing hay. Each area has its’ own losses that can be controlled. With the current price of hay, it’s time to look at how are we able to cut those losses now. If you are spending $35/bale and wasting 30 percent of it; then the bale actually costs $50.
Tucker suggested that if we are going to invest resources to produce or purchase hay the focus needs to be on quality. A hay test is a good way to determine if your hay is meeting the needs of your livestock. All hay is not created equal. Cheaper hay becomes more expensive in the long run when you calculate the supplement needed to make up the difference in nutritional value.
It may be time to rethink your haying options. Tucker suggested rather than using labor and equipment to harvest 200 acres of low quality hay that only produces a few bales to the acre why not focus efforts on 60 acres that is managed well. Striving for higher quality and more intensively managing a smaller number of acres can actually produce more hay, that is higher quality and at a lower cost per ton. Remember it’s not about how many bales produced it’s about how many pounds of protein and energy are delivered to your livestock.
