# Is Hay A Good Business To Be In?



## Anonsky's Hay Service (Feb 1, 2017)

I am considering a purchase of 20-25 or so acres here in Texas to hopefully someday build a house on (live in town now with my tractors and toys but things are too crowded, plus i want this land as an investment)

My question is Ive done a lot of things before but never have run a hay operation. I have a ~40 hp tractor and a 30 hp tractor and a flexible working schedule with my day job.

How practical would it be to raise hay on this. How many cuttings could I expect in north/east Texas in a normal year? How hard is it to sell your hay? Should I consider making round bales or squares?

Do i have a chance of actually making money on this? Not looking to get rich, only to cover the cost of equipment, property maintenance/taxes, and a little something for my time. Thanks.


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## somedevildawg (Jun 20, 2011)

Welcome anonsky hay service to haytalk....sounds as if you've already made your decision! It could pay for equipment, maybe pay the taxes, not sure I would expect any jingle in the pocket however, a better bet might be to raise a few animals and cut a bit of hay to feed up during the winter months.


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## vhaby (Dec 30, 2009)

Anonsky's Hay Service said:


> I am considering a purchase of 20-25 or so acres here in Texas to hopefully someday build a house on (live in town now with my tractors and toys but things are too crowded, plus i want this land as an investment)
> 
> My question is Ive done a lot of things before but never have run a hay operation. I have a ~40 hp tractor and a 30 hp tractor and a flexible working schedule with my day job.
> 
> ...


Your statement reads that you want to purchase the land regardless. Rural living has its benefits, so go for purchasing the acreage.

Regarding a hay business, your tractors may be a bit under powered for running most hay balers except maybe a small square baler. Is the HP mentioned the engine HP or the PTO HP? The PTO HP rating is most used when considering power needed to run equipment.

You realize that a hay business requires the purchase of several items of equipment that aren't necessarily cheap. Then there is the learning curve. I've been through it, and would advise that you go slow by hiring the haying done while you learn the process and determine what equipment you think best suits your needs, and then look for good buys on used equipment unless you need huge tax write-offs. Twenty to 25 acres would not be too much to eventually handle to make small square bales. Round bales in your country likely will not sell well to make the money you want because there is always the guy who sells rounds at near give-away prices.

If you really want to do this hay business, I for one, suggest that you clean up the acreage of whatever grass/weeds are growing on it and either sprig Tifton 85 bermudagrass or, if the soil is well drained and not too acidic in the subsoil (pH above 5.5 to four feet deep) consider planting alfalfa. These forages when made into small square bales will sell at a better profit than round bales.

As you know, the number of cuttings you should get depends on the seasonal rainfall. Tifton 85 in a good year might produce four cuttings. Alfalfa could do five to six cuttings. If haying operations are delayed by frequent rainfall that does not allow a 4-5 day hay curing window, the number of cuttings could be less.

Most people in this area store round bales outside. This is not the best way to store rounds, but will do if all the round bales are sold by fall. If you plan on doing small square bales, a hay storage barn is a necessity. Good hay will sell well in the field and a higher price can be asked when selling out of the barn. It will take time to establish your reputation as a quality hay maker.


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## Anonsky's Hay Service (Feb 1, 2017)

vhaby said:


> Your statement reads that you want to purchase the land regardless. Rural living has its benefits, so go for purchasing the acreage.
> 
> Regarding a hay business, your tractors may be a bit under powered for running most hay balers except maybe a small square baler. Is the HP mentioned the engine HP or the PTO HP? The PTO HP rating is most used when considering power needed to run equipment.
> 
> ...


I actually do need any tax write offs I can get - my day job has been good to me.

How big of a tractor do I need? Im thinking like - maybe 60 pto hp? Would that do well?

Thanks for the support everyone. You are right - I want and plan to buy the land regardless, its just a question of what will I do with it (besides live there and store my stuff on it) once I have it. You guys are great, thanks again!


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## r82230 (Mar 1, 2016)

Anonsky's Hay Service said:


> I actually do need any tax write offs I can get - my day job has been good to me.
> 
> How big of a tractor do I need? Im thinking like - maybe 60 pto hp? Would that do well?
> 
> Thanks for the support everyone. You are right - I want and plan to buy the land regardless, its just a question of what will I do with it (besides live there and store my stuff on it) once I have it. You guys are great, thanks again!


I would go with something 80+ HP & w/FEL (you already have smaller stuff for raking, pulling empty wagons, etc.)

Larry


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## Vol (Jul 5, 2009)

If your suggested land is suitable, I would recommend getting into the pecan business.....good future here, good export future, a nice long term investment, and would allow for slow equipment growth in the beginning. The hay industry is highly competitive and is in a slump presently unless your utilizing the hay yourself. The pecan industry is not affected by the elements quite as much as the hay industry....it can be, but usually not as much.....especially if you can irrigate.

Regards, Mike


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## NewBerlinBaler (May 30, 2011)

Welcome Anonsky. Somethings to consider...

Tax write-offs can be tricky - especially for a relatively small farm like the one you plan to buy. You can show a loss but only for a few years. After that, the IRS expects you to make a profit. Hence, huge capital expenses (like an 80+ hp tractor to make hay on 25 acres) will require a much longer time period for you to reach profitability and that could get you in trouble. If you have a well-paying off-farm job, you have to be even more careful about this. If the IRS classifies your operation as a "hobby farm", all of your write-offs will be disallowed and you'll owe back taxes and penalties.

Best to talk to an accountant about this. Often times, accountants provide free initial consultations so it may not cost you a cent to get educated.

Gary

PS The two tractors you now have are plenty big for that size operation.


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## paoutdoorsman (Apr 23, 2016)

Not to derail too much here, but I have not heard of the IRS hobby farm classification before. Is that something based on # of acres, or % of total income?



NewBerlinBaler said:


> Tax write-offs can be tricky - especially for a relatively small farm like the one you plan to buy. You can show a loss but only for a few years. After that, the IRS expects you to make a profit. Hence, huge capital expenses (like an 80+ hp tractor to make hay on 25 acres) will require a much longer time period for you to reach profitability and that could get you in trouble. If you have a well-paying off-farm job, you have to be even more careful about this. If the IRS classifies your operation as a "hobby farm", all of your write-offs will be disallowed and you'll owe back taxes and penalties.


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## Tx Jim (Jun 30, 2014)

IIRC hobby farm is one that doesn't show a profit in 2 out of 7 yrs when someone has other major off farm income. A full time farmer that doesn't have other off farm income doesn't fall under this category


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## RockyAcres (Jul 8, 2013)

Let me preface this with the statement that I'm not an accountant, I'm just conveying what's been conveyed to me in the past. I agree with the suggestion above to speak with a local tax accountant as a safeguard.

The IRS can determine that a business (farm or other) is considered a hobby if it produces no income for the first three of it's existence. So if you started a business in 2013 and showed no income through the end of 2016, they could come after you for any/all of the write-offs you've taken for that business. That's not be confused with taking a loss. If you're showing income, but showing more expense than income, that is not considered a hobby. A colleague of mine had a consulting business for 20+ years and was audited twice and he said all they could accuse him of was being a bad businessman because his business lost money every year. But because he always showing some level of income, it was considered a legitimate business.

Keep in mind, as with anything, if you try to abuse it, it will likely catch up with you. If you try to write off a $70k tractor to make $100, you'll probably raise some eyebrows.


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## Josh in WNY (Sep 7, 2010)

Anonsky's Hay Service said:


> How big of a tractor do I need? Im thinking like - maybe 60 pto hp? Would that do well?
> 
> Thanks for the support everyone. You are right - I want and plan to buy the land regardless, its just a question of what will I do with it (besides live there and store my stuff on it) once I have it. You guys are great, thanks again!


I would think a 60 HP would be on the low end of what I would want with the upper end being 80 HP. The other thing to consider is how you are going to handle the hay. If you do rounds, you definitely need a loader. If you do small squares and want to mechanize things with an accumulator and grap, you'll need a loader... long story short, plan on getting a loader tractor and make sure it has a strong enough front end to handle the loader.

If you wanted to, you could also check around locally and see if there are any farms in the area that might be willing to work the land for you. This doesn't let you play on the tractors quite as much, but saves you a lot of time and aggravation.


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## VA Haymaker (Jul 1, 2014)

You can make money on hay - but IMHO for the acreage you have, I'd recommend top quality square bales. IMHO the amount of acreage you have will keep you very busy if you have a full time day job. To make great hay, you need very good equipment and/or older - but with back-ups, i.e. two square balers. One thing to consider in your operation if you have a full time day job is the amount of wrenching and what can practically be done with limited evening hours after work. A good example of this is - mower conditioner. Rolls or impellers speed up drying and can take a day out of the hay time-line. Sickle haybines are great and reduce the overall hp (IMHO a disc mower conditioner is your max hp driver for small squares) requirements, however a discbine can extend the hours you can cut without plugging the sickle long after the dew has fallen.

IMHO - two tractors is a must. Sometimes you need someone raking while you are baling and if you are baling on wagons, a second tractor is handy to shuttle wagons to and from the barn.

Taxes - they cut both ways. You need an accountant and you need a business plan. The plan lays your path forward and the accountant can intelligently inform you (and shield you) as to the IRS rules, deductions, profit/loss, etc.

But once you get the hay up and off the field - all done, pretty good feeling IMHO....

YMMV

Good luck,

Bill


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## Vol (Jul 5, 2009)

To avoid being classified as a "hobby farm" you must show a "profit" at least once in a 5 year period along with a few other considerations that have been previously mentioned above....there are several components involved.

Regards, Mike


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## Anonsky's Hay Service (Feb 1, 2017)

I think I can do this fairly inexpensively (famous last words, I know) with used equipment. $6-10k buys me any number of 60-80hp decent looking used tractors off craigslist.

I think I can likely turn a profit on this before 5 years, if I do it. I dont plan on buying new equipment.

1) Can anyone point me to some resources on raising hay? Like, if your grass looks like this, it needs that - type of thing? I've never intentionally gotten grass to grow before although I have had the opposite problem in the past 

2) What kind of mower could I run with a 60 pto hp tractor? I saw a 9 foot disc mower before, would that run it?

3) How does a guy find a not destroyed hay wagon? I used to work for a shop that had a steady stream of them come in for welding, and these things were DESTROYED and had usually already been cobbled together before we got them in. Some were downright scary and many werent worth the firewood value of their rotten decks. Any reason why I couldnt just use a car trailer/utility trailer?

My CPA doest object to this idea - his only advice is things will look better on paper if i do more than 10 acres, which almost goes without saying. Technically I'm not "employed" anywhere, I'm a "contractor" so that might make this whole adventure look better on paper. Thanks guys!


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## notmydaytoday (Sep 16, 2016)

My tractor is about 50 hp and it pulls a 9 ft disk mower fine.

I will be using my 18ft car trailer to do small squares but i have two sons to help get hay as it will take one of us

in the truck, one on trailer stacking, and one in the field throwing on the trailer.

That is our plan till we can get a stack wagon or grapple and accumulator setup or even a couple of regular hay

wagons to pull behind the baler.

Sorry i can help on the grass growing part as i am just learning to do hay myself.


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## Josh in WNY (Sep 7, 2010)

For question 1, I will defer to the members on here that are closer to your location. Markets vary from region to region depending on what animals are prevalent, what types of forage grow well in the area, etc.

For question 2, there are few disc mower/conditioners that a 60 HP tractor would run effectively. The CaseIH 3309 (aka, New Idea 5209 and a few other names/models) would be ok, but you wouldn't play with it. Disc mowers (without a conditioner) would work, but might extend the drying time. A decent sickle mower/conditioner would easily be run on a 60 HP tractor, but is slower than a disc style mower and has more of a tendency to plug... I wouldn't let that stop you from getting one though, I covered a lot of acres with a NH 488 when I was younger.

For question 3, I don't know what to tell you about the wagons... I did rebuild a flat rack for only a couple hundred in pressure treated wood, but I didn't have to do any repair work on the running gear. A utility trailer would work for smaller amounts of hay or if you pick up an accumulator and/or bale grab. If you can find a bale grab but not an accumulator, you may still want to pick it up. Even if you have to form the blocks of hay by hand, the grab will save you a lot of work once that's done.


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## Anonsky's Hay Service (Feb 1, 2017)

Okay this is great, guys thanks!

Can anyone recommend a favorite variety of coastal grass? How to find a dealer online or near me?


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## FarmerCline (Oct 12, 2011)

Anonsky said:


> Okay this is great, guys thanks!
> 
> Can anyone recommend a favorite variety of coastal grass? How to find a dealer online or near me?


 Coastal is a variety of Bermuda grass. For horse hay in small squares I prefer either Tift 44 or Alicia as they are very fine stemmed and make a very nice looking square bale. For max yield you won't beat Tift 85 and it's a little higher in protein as well but it is larger stemmed and some horse hay buyers don't like it as much. If your planning on baling hay primarily for cows Tift 85 would be the way I would go.


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## somedevildawg (Jun 20, 2011)

Anonsky said:


> Okay this is great, guys thanks!
> 
> Can anyone recommend a favorite variety of coastal grass? How to find a dealer online or near me?


I believe you would be best suited for Alicia or coastal.....it's forgiving (something tells me you're gonna need that  ) and probably super (c what I did there, my youngun rubbing off) available in your neck of the woods....probably the cheapest to get sprigged. Not sure, depends on where in Texas, it's a big state....on the other hand, lots of folk on here from the great state...


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## Anonsky's Hay Service (Feb 1, 2017)

Okay, okay, this is great!

Can someone explain (and this is the ultimate in dumb questions) the difference between seeding and sprigging?

Does this coastal bermudagrass really require more than a seedbed and broadcast spreading?!?


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## Tx Jim (Jun 30, 2014)

Seeding is sowing seeds put in soil very shallow with a machine such as a "Brillion seeder" that distributes seed the a roller pushes seed in the soil.. Sprigging requires a machine that digs trenches,distributes sprigs(bermuda roots) in these trenches then covers sprigs & packs soil. Both applications require a good seedbed. The better the seedbed the better the chance for plant emergence & survival.

I've seen people spread sprigs with a manure spreader the go over field with a tandem disk set for shallow penetration.


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## rajela (Feb 15, 2014)

Anonsky's Hay Service said:


> Okay this is great, guys thanks!
> 
> Can anyone recommend a favorite variety of coastal grass? How to find a dealer online or near me?


Update your profile or post what specific part of Texas you reside in and we can help you a little better with your questions.


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## Tim/South (Dec 12, 2011)

Seeding is planting seeds.

Sprigging is planting pieces of the plant.

Both require preparing the ground.

Sprigging is the normal practice to establish the better hybrid varieties of Bermuda grass.

Be careful of the seeded blends. They tend to revert back to the original Bermuda, Common Bermuda, which can be established by seed.

I planted some Cheyenne 2 and I am pleased. It is a seeded variety and is not supposed to revert back to Common. Time will tell.

I have an established field of Alicia Bermuda we planted from clippings many years ago. Absolutely love the Alicia Bermuda.


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## hcriddle (Jul 5, 2014)

Before you run out and spend a lot on bigger tractors take a look at Small Farm Innovations in Caldwell, TX. They specialize in small hay operations and have lots of equipment that runs on smaller horsepower tractors. Good folks to deal with also.


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## JD3430 (Jan 1, 2012)

Anonsky said:


> I think I can do this fairly inexpensively (famous last words, I know) with used equipment. $6-10k buys me any number of 60-80hp decent looking used tractors off craigslist.
> 
> I think I can likely turn a profit on this before 5 years, if I do it. *I dont plan on buying new equipment.*
> 
> ...


Neither did I 5 years ago. I'm just beginning to pay off some loans I took out on new equipment once I realized you need to be nothing short of a full blown mechanic to take care of inexpensive equipment purchased on Craig's List. Been there, done that.
Once you start selling hay, it becomes addictive. I'm not saying I have any regrets, I'm just saying don't be surprised to find yourself sitting across the desk from a farm equipment salesman getting ready to sign the paperwork for new equipment.
Your success or lack thereof in the first couple years will determine whether or not you expand operations and need more reliable equipment.


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## Hayman1 (Jul 6, 2013)

Anonsky's Hay Service said:


> I think I can do this fairly inexpensively (famous last words, I know) with used equipment. $6-10k buys me any number of 60-80hp decent looking used tractors off craigslist.
> 
> I think I can likely turn a profit on this before 5 years, if I do it. I dont plan on buying new equipment.
> 
> ...


I started about 97-98 with junk, and i mean junk. been worn out 2-3 times before I got it. Pulled a baler (NH273) with ground drop with a JD950 (which is why I always recommend against using small tractors for baling). I picked up with a 16' trailer with one-way mobile home axles-I did not know about the disposable axle when I bought, but I got the trailer new with deck for 1K which was cheaper than any wagon I could haul hay on and I could take it down the road for deliveries. Probably ran about 20 ac total in the old neighborhood, spread my own fertilizer etc. Cut with a NH 451 sickle, tedded with a paintless kuhn 3pt, raked with a 55 nh. But, I made a little money each year.

I did not buy my first new thing until 2006-7 when I bought my NH1409 discbine. Over time I bought a JD2240 which cured the under powered 950 on the baler. I did a lot of upgrading with used equipment before my new stuff. I traded the 2240 up to a 2640 before I bought the 1409. It pulled the 1409 fine at 70 pto hp. After the first new piece of equipment I got cured of my latent need for junk and quickly bought new baler and rake. I had replaced 4 bars on the old rake and just about every bearing. It is a lot of juice to drop on metal that you don't know if it will move each spring. That said, the old stuff is surprisingly resilient and you can eke out a lot of use. Lord knows, I got a lifetime of experience growing up with my dad borrowing bolts from the rusted hulk of something in the woods-basically making a pair of pants out of a pair of pants. One of my goals as an adult was to be able to do better, starting with not having 6 kids to feed, cloth and educate.

I started the hay business because I wanted to make high quality hay and I wanted mine cut on time. When you are waiting for Clyde down the road, you never get yours cut on time. The point I got to eventually was you can not consistently make high quality hay with beat up old junk. virtually all my hay was for sale to horse people. you can not survive around here making 20-60 ac worth of hay to cow guys, there is too much junk hay already being made and virtually given away. So, my path forward was clear as soon as I thought I could survive that path economically.--you think you can before you actually can but all my equipment is paid for and I have a decent business as long as my body cooperates.


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## BWfarms (Aug 3, 2015)

Seeding is planting actual seed into soil you are sowing. Sprigging is transplanting grass cut from roots into fields much like tobacco.


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## Trillium Farm (Dec 18, 2014)

ricarhimel said:


> So, after more than 4 years, what can you say about this business, is it a good idea, or not?!


If you have masochistic tendencies it's a great business to be in !!! 😇


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## JOR Farm (Aug 27, 2019)

I have to admit that I have never heard that $5 word so I had to Google it. Now I am laughing my butt off at how true of a description of a farmer it is. Someone should add that to the wikipedia definition of "farmer"


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## blb078 (Feb 4, 2019)

Funny this popped up. We've been looking at purchasing a farm/ranch in WY to run a hay/cattle operation. Doing the hay ourselves and leasing out the cattle portion of it. One place with looked at was about 600 acres with about 300 irrigated. I'd have to buy some bigger equipment and a swather because what I currently have will not cut it for 300 acres. But I'm self employed and have a pretty flexible schedule. I know on a year like this year you'd make a killing in WY but other years it seems to be so so with a lot of race to the bottom pricing.


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## Tx Jim (Jun 30, 2014)

Welcome to HayTalk
I've personally purchased equipment from dealers, neighbors & from Craigslist.


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## BisonMan (Apr 27, 2020)

This is my 2nd year in the hay business, I don't own all my own equipment yet. I do Large Rounds and Small squares. The business is extremely tough. For me I am working to learn the business to make it more profitable, but the way my custom guy is charging there isn't much left for me. My first year I sold all the rounds direct for a low price, and sold the squares over the winter. This year (2021) I took on a field that was planted by another guy in 2021 who left. I have about 90 acres of hay, and produced 700 round bales and 1000 small squares.

I now have a rake and will try to cut down custom prices with this, and by honestly working to squeeze my custom guy who I like but is obviously running a business which I get. When I sell to farmers, they are tight on price and after covering my costs there really isn't any profit. Smaller sales are cash and there is a little money in it. Next year I'd like to do 3000 small squares as I find those are the most profitable and I have nephews who like to sling bales.

Based on what I made last year, I don't really have the money to fertilize at this point, so I'll wait to see if it needs it.

It's a tough business. Once I am running all my own gear it might make sense. I started growing hay because I have a long term play to get some animals. Corn, Beans and Wheat are looking mighty fine. When I look at my work in accounting with Zero Capital expense, getting paid every hour I work the hay business makes no sense. But I like the hay game, I like that it's tough, builds character!


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## Trillium Farm (Dec 18, 2014)

BisonMan said:


> *But I like the hay game , I like that it's tough, builds character! *


You've become a junkie like all of us here!!!


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## Tx Jim (Jun 30, 2014)

BisonMan said:


> I now have a rake and will try to cut down custom prices with this, and by honestly working to squeeze my custom guy who I like but is obviously running a business which I get.


I've been custom baling many yrs & I refuse to round bale hay that ""my rake"" has not made the windrows. I have in the past baled hay owners windrows created by their rake BUT NEVER AGAIN. Windrows that are not made correctly are more difficult to round bale & bales are more difficult to make level


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## Hayjosh (Mar 24, 2016)

Tx Jim said:


> I've been custom baling many yrs & I refuse to round bale hay that ""my rake"" has not made the windrows. I have in the past baled hay owners windrows created by their rake BUT NEVER AGAIN. Windrows that are not made correctly are more difficult to round bale & bales are more difficult to make level


...not to mention raking is the lowest cost part of custom haying so the savings are minimal but the aggravation factor is high.

That being said, I do 20 acres of custom baling for a guy who I resisted for several years and finally caved. The conditions were he bought a rake and raked it himself so I just have to show up and bale (small squares) Fields are just big rectangles and he does a really nice job raking them so it works out nice for me.


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## ACDII (Oct 1, 2021)

I made this decision last year based on thoughts and opinions from members of this site. In my case it is more to lower my property taxes, which can be as much as 50%. For that I just need to show proof of the fields being turned into hay. In my case, I may form an LLC to cover the "business" side of things. I went around and found a good used baler on Craigslist and turns out it is in very good working condition for it's age, about the same age as my wife, though she is not as rusty. I found a side rake for cheap, but by the time I got it fully working it was more than twice the cost, but now other than paint, it is like new. I also found a 1209 MoCo for $1600, needs some work, a new sickle bar and teeth, and some welding on the frame as there are a couple cracks from what appears to have been a ditch drag. Mechanically though, everything is in very good working order and that is what matters most.

To power it all I got a new Kubota L4060HSTC-LE. For the small amount of acreage I am doing, it is going to work just fine. I ran the baler with my B2410 and baled hay with it, so if that little 24HP with 18 PTO HP can bale, the Grand L will bale just fine. It has plenty to run the JD 1209 MoCo too. 

Now I don't have hills, it is all flat, so what works for me, won't work for everyone. It's not really the HP, but the tractor weight that you need for making hay, especially for hilly ground. A 60 HP will run all the equipment, up to a certain type and size, just fine, but might not be heavy enough for the terrain, where the 80 HP will have everything needed to balance out the equipment. Big difference is between a disc mower and a sickle type mower, you need a lot more HP for the disc mower. 

For my operation I can get away with a 7' mower and small square baler, but 20-25 acres, at least a 12' if not wider mower.


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