# Customers and price.



## haybaler (Jun 4, 2008)

How are everyone’s customers adjusting to higher hay prices this year? I have met some resistance with a few. The most resent the fellow was complaining just before he pulled out in his $250k+ motor home passing his Hummer and his “pimped out” dully going to a horse show. Was thinking on the way home if there aren’t enough buyers there is going to be a bunch of my hay ground in corn next year. It is too much work and risk not to make at least what you can with corn and beans. I had a couple ask why aren’t hay prices back to what they were. Explained about input costs, equipment expenses, and such. What I spend in fuel (now) would make their mortgage payments for the year. I enjoy making hay but it is still a business and the bottom line makes the call.


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## anokes (Jul 30, 2008)

You have to remember that people don't notice your customers hay at the stoplight. Today in America, if it is new and shiny, people will swim in an ocean of debt to impress someone they will never meet. If you started taking credit cards or arranged monthly payment schedules you'll probably be able to name your price. To me $1000 Nitrogen and $4-5 break-evens on corn doesn't seem like a risk-less situation. If you kept the same equipment you had last year or wisely purchased better equipment fuel is the only large increase that occurred in the hay industry. On the other hand almost every input in corn and beans has increased dramatically. Hay producers are in the drivers seat this year, but don't be stupid about pricing hay to people. Our buyers have to stay in business for us to stay in the business.

Thanks for your time!


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## Production Acres (Jul 29, 2008)

I would rather have hay any day than corn or cattle or beans. - The local elevator or auction house tells you what they will pay today for your work - with hay, you tell the customer what you are willing to sell for. 
Energy has been our major expense increase this year, but that has affected a lot in the hay buisness - trucking, proponic acid, fertilizer, labor, baler twine, grease and oil, etc.
I have been very reluctant to use credit cards as they generally take the merchant for ~3%. Do you have tangible evidence of credit cards increasing your sales? We have not had a major problem with bounced checks, and that has been a lot easier than the loss of 3%.


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## swmnhay (Jun 13, 2008)

Here everyone looks at salebarn prices.When there is plenty it's cheap 2.00 a sm sq bale.Last april it hit 7.00.I LR Bale so I don't deal with many horse people some are good and have even given me a $50 tip,but some are a major Pain.I need hay today,to high,can I pay latter? can you bring 1 bale?The cattle-dairy hay market is actually less than last yr at salebarn.I'm selling at same price as last yr for my regular customers to not loose them.I had alot of expences prepaid at lower prices but the current prices will add 25-30 ton to my costs.I need the salebarn price to go up to raise mine that is already higher than salebarn.


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## chetlenox (Jun 5, 2008)

I'm admittedly a small fry (I sell ~1500 small squares a year) but the increase in fertilizer prices had made a much bigger impact on my costs than fuel (which, admittedly, hasn't helped). But I also just sell out of the barn, and don't have to haul hay around.

For the record, last year I sold 1st cutting at $3, 2nd and on at $6/bale.
This year 1st cutting was $4, 2nd and on $7-8/bale.

So I'm trying to make up some of my increased fertilizer costs (~$1200 last year when we had lots of rain and generated 1900 bales, $1900 this year with less rain and will only end up with about a thousand bales).

Chet.


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## Lazy J (Jul 18, 2008)

Production Acres said:


> I would rather have hay any day than corn or cattle or beans. - The local elevator or auction house tells you what they will pay today for your work - with hay, you tell the customer what you are willing to sell for.


There is much wisdom in this statement and is the main reason I chose to concentrate our farm operation on Hay production. Unlike futures traded commodities a farmer can take advantage of local conditions to price their hay and can determine pricing for various qualities of their hay. In the grain market there is not incentive to produce products with superior nutrient content, plus if your area has a supply issue you can be rewarded by the market for the decreased supply.

Jim


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## OhioHay (Jun 4, 2008)

we are like SWMNhay, we have local hay auctions everyday of the week. Those set a price range. We sell all our hay privately, but still have to keep in mind what the local market is doing. We don't move our price weekly, but watch the top third of the market and then as it trends up or down, then we adjust accordingly.


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## TooFast4U (Aug 5, 2008)

We're "pricing boldly" this year, because we think quality hay will be higher this fall/winter (I'm in north MO). The good stuff will be scarce here when the snow flies, and transportation will make the far-away good stuff more expensive than it has been.

But because of the high prices we're asking, we're also trying something a bit different this year (trying to offer customers some peace of mind to encourage them to buy early at our higher prices): offering customers a price guarantee, which says that if we sell the same kind & quality of hay later at a lower average equivalent price than what they paid, we'll rebate them the difference. "Equivalent price" takes into account things like quantity discounts, delivery fees, etc.--i.e., the fact that a semi load may sell for quite a bit less per bale than I charged the guy who bought 25 small square bales.


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## ont hay producer (Aug 30, 2008)

This year I 'm going to put about 3500 small squares bales in, we sell to the Florida horse market, we finished cutting 2nd cut today, whatever 3rd cut there is we'll wrap and feed to the sheep. Last year I got 3.60 for small squares , this year my broker promises 4$, which I'm happy with. We had an auction last week Saturday where we sold a bunch of large squares, the good stuff, grassy 1rst cut no rain, reasonably soft , green, sold for 6.5 cents a pound , 730 lb bale. The poorer hay ranged from 3.5 - 4.5 cents.


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