# Big Decision Help



## triabordofarm (Apr 8, 2013)

Ok I've been at it a couple years (hay anyway) and I would like some simple advise/opinion from you seasoned hay farmers.

I am bailing an alfalfa/grass mix on 66 acres, new plant last year. Since I lost the crop to drought/cold last year I would like to install irrigation and plant straight dairy quality alfalfa. With well, irrigation, large square baler, larger used tractor, hay shed etc, I am looking at $230,000. I have 2 large dairys commited to buying the alfalfa, price dependant on test. Big question:....It pencils out but we all know how things on paper vs. reality turn out, so is the investment viable? Seems like a lot up front, but as I said, it pencils out. I might add that next year I will pick up another 40 acres next door from my retiring neighbor. . Thanks, you're opinion is valued.


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## Waterway64 (Dec 2, 2011)

How far away are these dairies and are there others in the area to? I have little doubt the irrigation would pay. To cut upfront debt could you sell out of the windrow as green chop a years or two? Would these dairies give you a two or three year contract. Any of this would protect you somewhat. Mel


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## Teslan (Aug 20, 2011)

triabordofarm said:


> Ok I've been at it a couple years (hay anyway) and I would like some simple advise/opinion from you seasoned hay farmers.
> 
> I am bailing an alfalfa/grass mix on 66 acres, new plant last year. Since I lost the crop to drought/cold last year I would like to install irrigation and plant straight dairy quality alfalfa. With well, irrigation, large square baler, larger used tractor, hay shed etc, I am looking at $230,000. I have 2 large dairys commited to buying the alfalfa, price dependant on test. Big question:....It pencils out but we all know how things on paper vs. reality turn out, so is the investment viable? Seems like a lot up front, but as I said, it pencils out. I might add that next year I will pick up another 40 acres next door from my retiring neighbor. . Thanks, you're opinion is valued.


Just 66 acres? No access to more? I'm not sure what kind of well or irrigation system you are putting in or the hay barn size, but I think your $230,000 is a little low if those things are the type I would put in.


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## ontario hay man (Jul 18, 2013)

Are you normally dry or is it rare. Price of equipment etc sounds way low. Shed tractor and baler will eat alot of that up alone.


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## ontario hay man (Jul 18, 2013)

What does irrigation pipe cost? I know the guy I worked for just about cried when I ran one over in the long grass. Those pivots are rich to arent they?


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## rjmoses (Apr 4, 2010)

triabordofarm said:


> Ok I've been at it a couple years (hay anyway) and I would like some simple advise/opinion from you seasoned hay farmers.
> 
> ...
> 
> ...


I would like to see how it pencils out. I'm thinking you might've missed some things like chemicals and application, fertilizer, liming, taxes, insurance, etc.

Here's my rule of thumb for a new venture: Figure out everything that you can think of that it's going to take, then add 50% for contingencies.

Then figure out your expected income and then cut it in half,

Finally, double your expenses from above and cut your income by another 50%.

It may sound like I'm joking around, but I have been in 9 start ups and only two of those paid off, one marginally, one really, really well (but it took 17 years).

If you're really serious, hire an accountant to go over your numbers and an agronomist to go over your plan.

Ralph


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## Vol (Jul 5, 2009)

Ralph, that's funny and depressing at the same time...Best way to go into a new venture is pay as you go...do not borrow....then you will watch your money a whole lot more closely and hard times won't be nearly as hard....BUT...that is not possible in all instances.

Regards, Mike


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## rjmoses (Apr 4, 2010)

Vol said:


> Ralph, that's funny and depressing at the same time...Best way to go into a new venture is pay as you go...do not borrow....then you will watch your money a whole lot more closely and hard times won't be nearly as hard....BUT...that is not possible in all instances.
> 
> Regards, Mike


Yeah. I agree-pay as you go!

I got a 26" bicycle for Christmas when I was about 8/9 years old. I wanted to learn to ride it so bad!! But, it was the one winter where we had snow on Christmas that lasted until July. (At least it felt that way!) And it had a crust of ice on it about an inch thick. My legs where too short to reach the ground so I had to use a concrete block to mount.

But that didn't stop me. I fell so many times that I bent the pedal cranks to the point that I couldn't hardly pedal anymore.

Same thing with start ups--you go into them with the beliefs and attitudes that you are going to succeed *this* time! And if you fail, you just have to get back on that bicycle and try again.

I believe it takes four things to succeed: Talent, Skill, Try and Luck (spelled w-o-r-k). And the most important parts are Try and Luck.

Ralph


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