# U.S. Farmers Watch $100 Billion-a-Year Profit Fade Away



## Grateful11

(Bloomberg) -- The squeeze on U.S. farmers is getting worse as low crop prices and rising costs erode incomes that not long ago were the highest ever.

Illinois grower Jason Lay said he will buy 30 percent less fertilizer for his 2,500 acres of corn and soybeans, and 7 percent fewer seeds for spring planting...........

http://www.bloomberg.com/news/articles/2015-02-10/u-s-farmers-watch-100-billion-a-year-profit-fade-away


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## Vol

Just was getting ready to post the Agnews version of this story.....pretty good assessment.

Regards, Mike


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## mlappin

The American farmer doing what he does best, overproducing ourselves right out of profitability.


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## mlappin

Hay prices here are about $50-80 a ton less than last year, strikes me as funny all the new faces I see at the auction selling hay moaning about where the $300 a ton prices from the drought of 2012 went.


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## dubltrubl

mlappin said:


> Hay prices here are about $50-80 a ton less than last year, strikes me as funny all the new faces I see at the auction selling hay moaning about where the $300 a ton prices from the drought of 2012 went.


Kinda the same here. Lots of guys jumped in the last couple of years and this past season there was a lot of not so good hay made in our area. With the new season right around the corner we've lately seen 4 X 5's selling as low as $12. $15-$20 is pretty normal this past few weeks. Our little operation has been sold out for over a month now. If I had to bet, I'd bet that after this season there's going to be some pretty good deals on some hay equipment floating around in this area, especially round baling equipment. Might be a good time for me to save some coins for a good used net wrap machine?


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## slowzuki

12$ for a 4x5? Thats crazy! I'd find some cattle to feed from somewhere before I sold for that.


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## rjmoses

What I don't sell at a minimum of breakeven, I will hold over until next year and store it under tarps. I'm already pulling another 12 acres of alfalfa out this year and going to corn on it. But this field was worn out and time to rotate it anyway--I just ain't planting any new hay ground until next year.

BTW: Isn't it funny how the new farm bill prices were locked in at $3.70 and $8.84!!!!! You will have a VERY tough time telling me that this is coincidental.

Ralph

I may be paranoid, but I think they really are out to get me!


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## Grateful11

You know the sad part is we know many places that just bale to to get it off their unused pastures only to let sit on a fence or tree line to rot down to nothing. So not sure which is worse, selling it at a price that doesn't even cover cost or leaving it to rot when I know people that could use that hay to stretch their supply.

My wife has noticed just this week that on Craigslist has some really cheap hay that people probably carried over and now as haying season gets closer they're feeling desperate to unload it. Maybe wife and son should have waited instead of spending $30/bale on those 4x5's last week


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## cornshucker

Grateful11 said:


> You know the sad part is we know many places that just bale to to get it off their unused pastures only to let sit on a fence or tree line to rot down to nothing. So not sure which is worse, selling it at a price that doesn't even cover cost or leaving it to rot when I know people that could use that hay to stretch their supply.
> 
> My wife has noticed just this week that on Craigslist has some really cheap hay that people probably carried over and now as haying season gets closer they're feeling desperate to unload it. Maybe wife and son should have waited instead of spending $30/bale on those 4x5's last week


Before I would sell 4x5 for $12.00 I would do what I have done in the past which is bush hog it. The rotting organic matter is good for the land plus if you start selling it that cheap people will start waiting you out. My wife raises bedding plants in greenhouses and we never have a end of season clearance sale just dump what is left. My theory is it will piss off your regular customers who have paid full price and I can't say that I blame them.


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## dubltrubl

slowzuki said:


> 12$ for a 4x5? Thats crazy! I'd find some cattle to feed from somewhere before I sold for that.


Oh, I hear ya, and if I could be home like a normal person, I'd find a piece of land and some cattle to raise too. I have no earthly clue as to how they can come out, but they sell it that cheap sometimes around here. That's one of the reasons we're cutting way back on rounds. I still plan on doing some, but if I do more than 250 this year i'll be very surprised, and all of those are going into the barn and selling at premium prices. Any other way and the round baler stays parked. Basically what we have to compete against is the guy down the road that puts almost nothing into his grass, then bales it mostly for his cattle. What he sells is his surplus and he really could care less what he gets for it. He's simply offsetting his costs of feeding his own hay a bit. Before one of our round bales go through the baler, we have an average of $27 worth of inputs. That ain't counting wear and tear, fuel, twine, misc. expenses. I'm done with trying to get a paltry $30 and sometime having to hagle with someone that that's too much. Let 'em go buy the trash down the road. Honestly, if I was a cow guy, I don't think I'd bale my own rounds. Just too dang cheap to go out and buy 'em from someone if you ask me!

Regards,

Steve


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## dubltrubl

Here's just one example of what we have to compete against, especially when it comes to dealing with uneducated buyers:

http://cenla.craigslist.org/grd/4884649851.html


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## NewBerlinBaler

Isn't is a little early for the USDA to be calling 2015 a bad year for farmers? What if there's another drought (or other type of weather calamity) that pushes prices up? The unforeseen event doesn't have to happen in the US either. Could be a problem in China or South America that causes a grain (or other commodity) shortage.

Gary


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## slowzuki

Absolutely crazy, not even two or three year old hay.



dubltrubl said:


> Here's just one example of what we have to compete against, especially when it comes to dealing with uneducated buyers:
> 
> http://cenla.craigslist.org/grd/4884649851.html


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## 8350HiTech

Hey, whether it's hay or cars, sometimes it's just time to clear inventory. You can hang onto it like death and hope the price goes up or you can take a loss but at least have some cash to put back into something else. $15 for a bale is better than letting it rot in a fence row and getting nothing.

The forces of supply and demand don't care about what input costs were/are.


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## deadmoose

Letting a 15 dollar bale rot to claim 30 dollars worth of fertilizer sounds worth it to me. I once bought $5 5*5 bales. 4 years ago? Could have bought more. Only bought what I needed to make it til grass was green. Oops. Same bale would have sold for a lot more the next year (after 12 drought). Next time I see $5 round bales of grass i am buying them all.


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## Vol

mlappin said:


> The American farmer doing what he does best, overproducing ourselves right out of profitability.


That is precisely why I do not make all rounds here.....way over supply. Most anyone can and will roll up hay into rounds....easy enough to do. But, very few HERE have the grit or the investment to be into small squares....and I am glad about it.

Quite a few folks on this site refer to little squares as idiot bricks and probably humorously for most.

But HERE, only the folks that produce nothing but rounds are the idiots....and the $20 a roll sellers.

Regards, Mike


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## cornshucker

Vol said:


> That is precisely why I do not make all rounds here.....way over supply. Most anyone can and will roll up hay into rounds....easy enough to do. But, very few HERE have the grit or the investment to be into small squares....and I am glad about it.
> 
> Quite a few folks on this site refer to little squares as idiot bricks and probably humorously for most.
> 
> But HERE, only the folks that produce nothing but rounds are the idiots....and the $20 a roll sellers.
> 
> Regards, Mike


Same here Mike I do rounds but I trying to get into more and more squares. Guy near here had sheltered 4x5 on Craigslist back in the early fall for 20 bucks. Impossible to make any money at that at least for me it is. As for feeding it I've tried it all unrolling in pasture once they get full they lay in it, shit in it and generally waste some of it. Tried feeders unless under a shelter every time it rains you got a big mud hole. Somebody big enough for a TMR can do well with rolls or some one with a good setup can do OK with round bales. Rolls, small squares, large squares all have their place. Just sometimes some people let their laziness or taking the easy way out get in the way of common sense. I know because I have been there and done that too many times.


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## somedevildawg

I would rather claim a loss on the bales than sell for that cheap.....put it back on the field or save em....few years ago 3-4 yr old hay was selling for $80 a roll, this year you're lucky to get $25-30, I can't sell it for input costs, I could but I ain't......I'll gamble a bit more...


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## mlappin

Vol said:


> That is precisely why I do not make all rounds here.....way over supply. Most anyone can and will roll up hay into rounds....easy enough to do. But, very few HERE have the grit or the investment to be into small squares....and I am glad about it.
> 
> Quite a few folks on this site refer to little squares as idiot bricks and probably humorously for most.
> 
> But HERE, only the folks that produce nothing but rounds are the idiots....and the $20 a roll sellers.
> 
> Regards, Mike


Location, location, location. Here I'm selling my poorest hay for $45 a bale, you come and get it. Better hay is $80 a bale out of the barn.

I gotta admit it was a lot easier to make money when the poor hay would have been $65-70 and the decent first cutting horse hay was $80/bale.

I partly blame the current glut of hay on our Farmers Exchange, they list the high and low of the auction, may have one load of small squares sell for $275/ton but no mention of the other dozen that didn't break $150/ton.


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## swmnhay

I've bought or have been given a quite a bit of hay from 0-$20 a bale.I feed the better bales and dump the rest in pen for bedding.Haul the manure in the field and grow good corn.

I'd say most all the time the guy stored it poorly.Rd bales stacked up or stored on the ends letting water soak in.


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## Vol

Cheapest that I sold squares this year was $260/ton and the highest was $320/ton....the majority average was $280/ton. The way I am set up I don't touch very many bales with my hands....either hauling from the field to the barns or loading from the barns to the trailers going out.

Regards, Mike


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## mlappin

Primarily horsey people I take it Mike? The horse hay market here took a serious hit years ago when the RV market tumbled. Wakarusa area was the RV manufacturing capitol of the USA, when RV sales plummeted peoples overtime or their jobs dried up, with no excess cash rolling in they had to cut back on their hobbies.

At one time 60% of the round bales I sold went to horses, now maybe 25% tops. Even had one guy that paid me a $25/ton premium over the market high when I brought him some nice soft alfalfa/orchard grass mix, dust free of course. He had about 40 miniature horses around and half of them seemed to be pregnant, he had people coming from all over to buy miniature hay burners, last time I was past his place I seen maybe a dozen around. Horse hay market here is still weak at best.

I've sold some at $230/ton right after New Years this year, market for premium hay is still there, market for just average hay is horrible atm.

2013 weather wasn't great for making hay but after dealing with 2014's weather I'm seriously thinking of cutting back on the hay some more and finding a different sideline to add to the cash flow. I see HeatmasterSS is looking for dealers in my area.


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## Vol

Yes, I do sell a lot to horse folk....but also lots of sheep people around these days it seems. Sell to several of the co ops in East Tennessee. I do not mind delivering to them as I know that I will have easy access and I can get turned around.....and they unload.

My drive ups I tell them that I have a 100 bale minimum...and I generally load them up with a grapple and they really like that.

Regards, Mike


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## rjmoses

mlappin said:


> The horse hay market here took a serious hit years ago when the RV market tumbled.
> 
> ......
> 
> 2013 weather wasn't great for making hay but after dealing with 2014's weather I'm seriously thinking of cutting back on the hay some more and finding a different sideline to add to the cash flow.


Same here---After Boeing bought McDonnell Douglas, Ford and Chrysler closed their plants and GM cut back to one shift, and the stock market tanked in 2008, my horse hay market took a serious hit. Then, when corn prices went into the atmosphere, a lot of my cattle hay customers got rid of their herds.

I had 120 acres of hay; now I'm down to 42 acres---and shrinking.

Ralph


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## mlappin

We have some sheep people in the area, not a fraction of the small market for horse hay though. Have a few with milking goat herds as well, but not many. A lot of the larger dairies are grinding straw in the rations as well.


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