Hay is only worth what the buyer will pay for it – and in the current environment, that’s a lot less than it’s been in the recent past.
“The common way of evaluating the value of your hay is to see what current hay prices are, and go from there,” Tim Schnakenberg, University of Missouri forage agronomist, told Ozarks Farm & Neighbor. “Hay doesn’t always sell for what it’s worth, and getting a hay test is one of the best things you can do whether you’re keeping what you’ve got and determining how to supplement it, or if you’re selling the hay. You can’t manage what you don’t measure, so measuring your hay quality is the starting point.”
The cost of producing a bale of hay can be surprising. In addition to the expense involved in mowing, raking, baling, transporting and storing it, the hay has removed a lot of nutrient from the soil that will have to eventually be replenished. “I figure about $45 a ton just in nitrogen, phosphorus and potassium,” Schnakenberg said. “Then you can add mowing and raking, and most people have $85 a ton tied up in it. An 800-pound bale is worth about $35. You can buy $25 bales, and people aren’t getting what’s valued out of it.”
And don’t forget wear on equipment, said Steve Swigert, agricultural economist and consultant with the Samuel R. Noble Foundation in Ardmore, Okla. “If you count the tractor as part of the hay equipment, it soon exceeds what you can even hope to get out of the hay,” Swigert told OFN.
“If you have a tractor that’s being used for some other things the rest of the year you can defray that cost to the feeding side or some other enterprise you’re doing, but you can easily get $100,000 in hay equipment.”
Swigert said if you’ve already got the cattle and it’s a way to get a beef cow from one season to the next and raise a calf, then it would be better to feed the hay yourself.
“But if you take the flip side of that and say what’s the best way for cow producers to obtain hay that they might need,” he said. “It’s better for them to buy it from somebody else than putting it up because of the cost that they would incur on their own place.”
It’s not always that way, of course; if there’s a drought in 2016, prices could shoot up again. However, Swigert says keeping marketable hay until next year is problematic due to the wastage involved.
Right now, hay prices are low; there’s an abundance of supply, and much of what’s available locally is of poor quality. The Missouri Weekly Hay Summary published by USDA’s Agricultural Marketing Service for the week ending Sept. 18 also noted, “Hay prices are being pressured by lower grain prices and a heavy supply. Demand for hay is light and prices are mostly steady. The supply is moderate to heavy and market activity is light.”
MU’s Schnakenberg said it’s a challenge to interpret the reports.
“They’re talking about fair, good, premium and supreme quality alfalfa; they call it good, fair to good, and fair quality mixed grass hay. To me, it’s just so ambiguous, but it’s the best we can do.
“When you’re pricing hay, you have to look at as many sources as possible to see what hay is selling for. There are lists at farm stores of people who are selling hay. There are people who buy and sell on Craigslist. They need to back it up by looking at the hay market summaries. Check the newspapers and magazines, see what they’re seeing hay sell for and use that as a guide. I wish it was more cut and dried, but it’s not.”
