Hay Machinery Economics

Farm Business Management Update, April 2001

By Jack Dunford

Costs associated with hay making continue to increase as machinery, fuel, repairs, and other input prices rise. The following tables summarize the operating costs and fixed costs associated with typical hay making equipment for large round bales and conventional square bales. Many Virginia livestock producers who own haying equipment used on relatively few acres experience extremely high machinery fixed costs on a per acre or per bale basis as shown in the tables.

Table 1. Estimated Round Baling Machinery Costs per Acre¹

Acres Produced per Year	100 acres		300 acres		500 acres
Cost Classification	OCa	FCb	OC	FC	OC	FC
Equipment Complement	----------------------------------------$--------------------------------------
70 HP + 9 Ft. Mower/Cond.	3.31	28.82	4.87	11.16	6.57	7.01
50 HP + 9 Ft. Rake	1.62	11.49	2.10	4.72	2.52	3.02
70 HP + Round Baler	3.25	45.86	5.05	16.75	6.61	10.35
70 HP + Bale Mover	3.50	14.10	3.42	5.79	3.76	3.86
Total Costs	11.68	100.27	15.44	38.42	19.46	24.24

^a Operating Costs (OC) include fuel, oil, lube, and repairs per cutting.
^b Fixed Costs (FC) include capital recovery, insurance and housing per acre.

Table 2. Estimated Conventional Square Baling Machinery Costs per Acre¹

Acres Produced per Year	100 acres		300 acres		500 acres
Cost Classification	OC	FC	OC	FC	OC	FC
Equipment Complement	----------------------------------------$-------------------------------------
70 HP + 9 Ft. Mower/Cond.	3.31	28.82	4.87	11.16	6.57	7.01
50 HP + 9 Ft. Rake	1.62	11.49	2.10	4.72	2.52	3.02
50 HP + Tedder	1.11	7.03	1.34	3.02	1.53	1.94
70 HP + Baler w/ Kicker	6.11	42.60	9.26	16.55	11.96	10.40
50 HP + 2 Hay Wagons	3.47	18.96	5.02	7.99	6.33	5.13
Total Costs	15.62	108.90	22.59	43.44	28.91	27.50

¹ Tables 1 and 2 were calculated using the MCOST computer program. Labor is not included in these machinery costs.

Obviously, total machinery costs (OC + FC) for both large, round and conventional, square bale haymaking can easily exceed $100 per acre when the machinery is used on 100 acres or less annually. The total machinery costs for the same line of equipment is reduced to $45 to 55 per acre when 500 acres or more hay is produced.

Some hay producers may be wise to have their hay crops custom harvested rather than owning a complete line of hay equipment. The following custom rates were collected in the Shenandoah Valley and reported in the Year 2000 Farm Custom-Work Rate Guide, which is available at Extension Offices throughout the Valley.

Table 3. Selected 2000 Shenandoah Valley Average Custom Rates for Hay Production¹

Operation	Unit	Average Rate ($)
Mow Hay	Acre	13.08
Mow/Condition Hay	Acre	12.69
Ted Hay	Acre	6.70
Rake Hay	Acre	6.74
Bale Conventional Square Bales	Bale	0.47
Bale 800 Lb. Round Bales	Bale	5.84
Bale 1,000 Lb+ Round Bales	Bale	7.15
Cut, Rake, Bale Conventional. Square Bales	Bale	1.11
Cut, Rake, Bale Large Round Bales	Bale	12.00

¹ Note: These custom rates include the tractor, implement, and operator.

For a small or part-time farmer, purchasing haying equipment may not always be the best long-term financial decision. The farmer should determine, prior to making the investment, whether with borrowed or personal funds, if his total costs are at least within reason of what it would cost to custom hire the haying. In some localities custom operators may not be available, but where they are, low volume hay producers should closely evaluate hay machinery purchases compared to custom harvesting.

Hay is a vital crop on most Virginia livestock farms. Producing the highest quality hay possible will help to minimize feeding supplemental nutrients to livestock. By keeping machinery costs which represent a major portion of total hay production costs, producers can reduce total haying costs. Achieving these two goals will improve the profitability of any livestock operation.

Contact the author at dunford@vt.edu

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