Pricing Standing Hay

Table of Contents

1. Introduction
2. Factors Determining Price
3. Determing Price
4. Related Links

Introduction

What is standing hay worth and what is a fair price? In recent years, standing hay has been sold for from one cent to over four cents per pound of dry hay produced. Standing hay is sometimes sold by farmers that have surplus hay, don't have hay making equipment or storage, or don't want to assume the risk of rained on hay. There is a wide variation in prices.

Factors Determining Price

The price of standing hay is determined by many factors:

• Supply and demand is the most significant factor. During years of drought, when hay supplies are low, standing hay will be in demand and will be worth more. During years of higher corn and soybean prices, land shifts from hay to grain production. Poorer pasture production also results in greater demand for hay.
• The earlier the date of cutting, the better the quality, and the more standing hay will be worth per pound of dry hay. Hay cut later will be worth less per pound, but there will be more pounds.
• Hay stands that contain more legumes such as alfalfa will usually be worth more.
• Higher yielding fields will be worth more per pound because of reduced machinery costs.
• Generally, newer stands are worth more, while hay fields that have been seeded down for a number of years will be worth less.
• The location of the field relative to the buyer is important. A livestock producer may be willing to pay a little more if he doesn't have to haul long distances.

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Determining Price

Sellers should start by determining their own cost of production per pound of standing hay. In an example budget, assume a $40 per acre land rental value, a four year hay crop, using typical custom rates and input costs, and a 6000 pound annual hay yield in a 2 cut system. The cost of production in this example for the standing hay works out to be just under 2 cents per pound of dry hay, or $120 per acre per year.

Buyers should consider what their costs will be after the hay is baled. In this same example budget, swathing and raking costs about 0.7 cents, while large round baling costs 0.8 cents per pound. This means that the standing hay costing 2 cents per pound would result in a total cost of 3.5 cents, or $28 per bale for an 800 pound bale in the field. This may or may not reflect the local market. Also consider that in a standing hay transaction, the buyer assumes the weather risk of that hay getting rained on.

To accurately determine the pounds of hay sold it is helpful to weigh some bales or wagon loads. Pounds of haylage can be converted to a dry hay equivalent by adjusting for percent moisture.

It is important that you make your own assumptions and calculate your own costs in order to determine what you feel is an acceptable price. Then negotiate the best you can. Crop budgets and custom rates are available on the Ontario Ministry of Agriculture, Food and Rural Affairs website.

Related Links

• OMAFRA Business Development website

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