# Establishing Fair Custom Rates for Small Jobs



## Hayman1

Need some feedback from you folks. I have looked at past threads on this topic but I find myself trying to establish fair (to me and the customer) for small jobs that the average ac rates just don't seem to apply to. Here are two examples-

Seeded no till teff field. About 14 acres. I charged 50$/hour for a 50hp tractor and operator for the 6 hours worked, including setup, calibration, and travel time-about 2 miles away. Then added 15$/ac for the drill for a total bill of just under $500 for the job. Local extension agent said my assessment and charges seemed fair to him.

Just did a chisel plow job on about 1,300' of hayfield beat to death by a electric power company installing a new line. Used a 100hp tractor and 7 shank cp. Made about 5 runs on two passes wide. Took me about an hour and half on the job plus travel. Had to change the c plow adjustment multiple times to work the compaction out. Finished with most of the tilled area tilled to about 8-10 inches depth. Seems to me this job is worth about 150-200 total. When I look at the PA custom farm rates or Iowa rates I can't get close. Some of these rates talk about tillage at 15$/hour-seriously, the minimum wage is almost 2/3 of that. Don't see how anyone pays the depreciation and fuel bill on a 100 hp tractor at 15/hour. Am I missing something? Any suggestions on an approach since it looks like I am going to get more requests-then there is always snow plowing. The way I look at it, the fact that I have the equipment that they don't is worth something before we even get started.


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## slowzuki

Tillage for 15$ an hour? When? 1940? Sure it wasn't acres? With 100 hp under load, you are gonna burn about what 3-4 gallon per hour. Your operator as an employee is costing you about 20-35$ per hour as an employer (not what they get). Your wearing metal in an hour costs about 10-30$ here depending on rocks. Depreciation/maintenance/insurance on the tractor costs maybe 20-35$ per hour.

To me that job is 75$ per hour bare minimum if you work for no profit, more like 90$ per hour if the tractor isn't antique. Travel maybe cheaper, say half rate.

I have done bush hogging at low rates (50$/hr)because people complained about the price and I felt bad as they were in a bind. Last one I did the fellow begged and pleaded to get it done before each showing as he was putting the property up for sale, his account is now at something like 600 days with I'm guessing 30% chance of getting paid. He made sure to tell me he was paying soon up until the lien date passed then things went quiet.


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## Hayman1

Well, I thought it was a little nuts too. Some good points in your comments. I went back and looked at all the tables again. The 15$/hr was as quoted but may not have represented much of a sample. Maybe one of those rich guys that just wants to run his tractor that we have all talked about in this forum. I calculated that with all the passes etc, I did the equivalent of 3 acres in area but certainly not like being in previously tilled crop land- know what that feels like since I do food plots for a neighbor-those I can fly in.

So using the Iowa 2013 rates of 15-20$/ac for chisel plowing, I am at 45-60$ per acre plus travel so it just does not add up. BTW- tractor has less than 700 hrs and new tires so it is at the upper end of things. What I find interesting is snow removal with a loader and manure loading or liquid manure spreading have high hourly rates in these tables compared to tillage. Maybe farmers just like to do tillage at a loss. LOL


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## haybaler101

15


Hayman1 said:


> Well, I thought it was a little nuts too. Some good points in your comments. I went back and looked at all the tables again. The 15$/hr was as quoted but may not have represented much of a sample. Maybe one of those rich guys that just wants to run his tractor that we have all talked about in this forum. I calculated that with all the passes etc, I did the equivalent of 3 acres in area but certainly not like being in previously tilled crop land- know what that feels like since I do food plots for a neighbor-those I can fly in.
> 
> So using the Iowa 2013 rates of 15-20$/ac for chisel plowing, I am at 45-60$ per acre plus travel so it just does not add up. BTW- tractor has less than 700 hrs and new tires so it is at the upper end of things. What I find interesting is snow removal with a loader and manure loading or liquid manure spreading have high hourly rates in these tables compared to tillage. Maybe farmers just like to do tillage at a loss. LOL


15 to 20 an acre is for the machine running 10 to 20 acres an hour or more. That makes around $400/hour. Hobby jobs are tough to compare to row crop farming rates.


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## Vol

Haybaler has made a excellent point.....you need to price the hobby job at a price where it is worth your while and where you don't dread them calling back for more work. Kind of like a small dresser dozer operator I know....he won't unload for less than $500....and you cannot blame him.

I suggest for hobby jobs to charge for the tillage, a tractor rental rate(.30-.35/per hp) per acre, and estimated fuel, and for operators hours.

Regards, Mike


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## Tim/South

Locals will nickle and dime you into the poor house.

My take the last few years is that it does not cost me a dime to stay at home. It costs me every time I crank and use a machine. That tractor now has fewer heart beats, is closer to new oil and filters and fuel.

I just tell people I do not have time.

And now for the rest of the story.

A friend of mine was bushoging his side of the pasture fence. The new neighbor walked over and asked how much he would charge to bushhog his side of the fence? Friend said "just give me something for fuel".

He worked about 30 minutes cleaning up what would eventually be the yard of the $200,000 house.

When my friend finished the guy asked how much he owed.

Friend said, $10

Neighbor replied, "It burned THAT much fuel?"


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## DSLinc1017

All good points. I try to keep it at an hourly rate. Like Tim/south said, doing nothing at home cost nothing. We charge 86 an hour to run a 24' box truck, that price takes into account labor, fuel, oil, insurance and upkeep, as well as a bit of profit. In the end you need to make money! If you don't why do it?

If some one asked mo to do work with a tractor, its an instant 75 an hour charge. I use the hour meter on the tractor as my calculator.


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## slowzuki

Just have to watch the hourly rates, I priced my early snowblowing on hourly rates as I had done a lot of bushhogging and thought I had a good handle on expenses. Snowblowing uses way more fuel than bushhogging per hour. Travel time becomes very significant in small jobs and people don't like to see it on snow removal bills. A snowblower has fewer wear items as in consumables but is pretty likely to have major damage less frequently. A single cinder block will wipe out an entire season of profits. Cumulatively I didn't allow for rust related depreciation either, running on salt roads has made my nice tractor very rusty and hurt resale.

Moral of this, small jobs expose you to a lot more risk in terms of unknowns from hitting things to getting paid and you need to price higher. Every other industry gives discounts for bulk too.


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## Hayman1

Tim/South said:


> Locals will nickle and dime you into the poor house.
> 
> My take the last few years is that it does not cost me a dime to stay at home. It costs me every time I crank and use a machine. That tractor now has fewer heart beats, is closer to new oil and filters and fuel.
> 
> I just tell people I do not have time.
> 
> And now for the rest of the story.
> 
> A friend of mine was bushoging his side of the pasture fence. The new neighbor walked over and asked how much he would charge to bushhog his side of the fence? Friend said "just give me something for fuel".
> 
> He worked about 30 minutes cleaning up what would eventually be the yard of the $200,000 house.
> 
> When my friend finished the guy asked how much he owed.
> 
> Friend said, $10
> 
> Neighbor replied, "It burned THAT much fuel?"


I don't usually get that response, in fact most would give me far more for fuel than I used. Problem is they have no clue as to what everything cost- one looked at one of my 8x18 kicker wagons and asked if it cost 1,000$ and I said no, 3700 and they about passed out. Their eyes get big when you tell them what a 18-38 rear cost-they just can't believe farming cost that much. I am not looking for custom work, have more than enough to keep me busy on my place. Howver, friends and neighbors ask for stuff to be done as do hay customers so that is where this comes from. Just feel like I need to help them out but not get burned in the process. Of course, the occasional big repair just is part of life.


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## deadmoose

Looking at the custom rates as said above most are talking about custom operators. I think the $15/hour you are referring to is ONLY talking about labor. Not including the tractor, implement, fuel, or depreciation.

There are a lot of other factors involved then just the "per acre rate." Field condition, rocks, stumps, etc. can impact the amount of time and money required to complete the job. Ultimately you have to decide what you are comfortable with. If your costs are not covered and you aren't paying yourself you are losing money. Probably ok for a few select people that you may do that for, but for the rest charge enough to make it worth your time. If they don't like it you can break it down and explain the costs to them and they can always go somewhere else.

There are some who can't figure out costs and either charge entirely too much or too little. True cost accounts for depreciation-and how much. If you have your tractor 5 years @ 200 hours a year and in the end it is worth (for example) $10k less than you paid the cost of the iron is $10/hour. This of course doesn't count maintenance, fuel, or repairs which should be figured in.

Good luck!


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## cmd

I think your no-till drilling his high but you must have really small grain drill if it takes you 6 hours for 14 acres and can use a 50HP tractor. Here, you can rent a 10 or 15 foot JD no till drill for $10 an acre normally. I think guys are charging about $18 an acre average for custom drilling.

I think the problem is you just are not at an efficient equipment size so your going to be higher.


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## Bgriffin856

No less than $100 as a base rate. Doesn't matter if your mowing, raking, bailing, plowing etc. If you can't cover your costs might as well stay home. If the customer doesn't like it Im sure some fool will do it cheaper with lower quality of work


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## MT hayer

You guys sure bring up some solid points. Every area is going to be different. I charge by the hour for the swather, doing draws, and odd shaped fields with no acre maps. Pretty tough to argue with the hour meter. Remember to have an electric hour meter. A tach drive one doesn't register true hours unless your at pot speed I believe. I have been entertaining the minimum idea myself. If the person has issues with a warm up and a quick visit while in progress, just be too busy next year!

Moving is getting to be a big cost any more. My dirt equipment, I charge by the hour, road time to the next job and till done. The hay equipment I don't do, but I should. I would throw a lot of paint on the fact that you have to make something! It may be fun, but machinery has to be replaced at some point.

I have found a couple of reasons why people hire hay done. #1 is it is rough and they don't want to use their equipment on it. Your machines and you take that abuse so be sure to charge for it and they know ahead of time your rate. That relic of a mower is going to give up before the warranty! #2 is they just don't have time! When they drive by on their way to the fair, and your unplugging the baler, reinventing the dictionary, and then you ask your self, "is this really a good idea"! hehe, just some thoughts for you! You might have to get your head in the door first to get a name that for sure. As long as you do good work, they will have you come back. I have learned a few things in this business, and a lot more to go. I even offer mound leveling because you can get more done with a swather working as a swather, not as a land plane. Great topic, let see what else comes up!


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## dlskidmore

My place is too small to justify getting the heavy equipment I'd like to use on my place, but not being an operator myself I don't have a firm grip on the challenges my parcel contains. I do expect contractors to collect fair compensation for fuel, time, equipment wear, and either a daily minimum or travel fee. Per hour is probably safest for the contractor going into an unknown situation, but I'd hope after we had done the same thing for a few years we could settle on an annual fee.

Right now I have a hay man that works on shares, but given our differences in opinion on the future of the land I'll be looking for someone to make improvements for hire soon.


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## Stanno

Hello!

I am new to this site and would like to present a scenario and get the professional opinion and thoughts of you fellows who are in the business. I will present it as though I am the buyer in this circumstance, paying an individual to cut, rake and roll my hay. Assume that I am relating all information as factual even though I realize that sometimes there is argument as to what the facts are. Let's assume I have all the facts correct and both the buyer and seller agree on the facts. I will present it as a first person account. I will abbreviate all I can.

I had a gentleman who had rolled my 25 acres of bahia grass for a number of years and on the average I would obtain between 55 and 65 rolls of hay. The

price he charged me was $17 per roll, which seemed reasonable for the area (southeast Georgia). This spring I learned that he was no longer going to work

in the hay business so I sought the help of someone else. I finally located someone in late July who stated he would be willing to do it for $22 per roll and would

try to do it the next week.

I thought this was a pretty good jump in price but I accepted his offer and awaited his arrival. We had some light showers on 2 days of the following week and he did not show up so I attributed it to that. The following week was clear all the way thru with still no show, so contact was made again after 2 weeks to the day and he promised to do it the following week, again. He was informed that the hay was beginning to dry and fall over some and he stated that that was true and that he had checked it and it was kind of "thin" and that he may have to charge a bit more than $22 per roll but that he would be fair in his dealings with me on the price. A side note is that I did not fertilize the pasture this year, so I was expecting a lower yield.

He arrived and did the hay, cutting it one day and subsequently raking, turning and rolling it over the next couple days. The pasture is for the most part level with mostly straight sides and clear of any obstructions. 20 rolls of hay were produced. A drastic drop in production to say the least, but this was not the hay man's fault and I understood this perfectly.

He had quoted me $22 dollars per roll, which was more than I had ever paid and I really didnt know how much "a little bit more" than 22 dollars per roll was but by my definition I was willing to tolerate $25-26 per roll, much more than I had ever paid before, but I was going to do my best to do my part in being fair. When I was presented with a statement for $1440.00 for the job, an average of $65.45 per roll, you can imagine my shock.

OR MAYBE YOU CAN'T!? Am I off base, or is the hay man off base, or are we both crazy? That is why I would like your assessment of the situation.

For additional information, in anticipation of the lower yield for this year I called a neighbor in the adjacent county that I had purchased some hay from in the past to inquire as to whether he may have some extra hay this year that I might could purchase from him to close the gap in my needs. He said yes, and quoted me his prices on his hay of the type he thought I would like. He said he had alesia hay rolled and stacked under a shelter, this years, and that he would load onto my flatbed for $40 dollars per roll and that he had other UNsheltered alesia hay, this years, for considerably less, but didn't give me the exact price at the time for it.

Now, the statement was given to my wife at my business location since I was off that day. She took immediate notice of the price and called me and I told her to not

write the check right then that I would get it to him in a day or two. I wanted time to research this issue. She also questioned him about the price and he stood by his price stating that he had switched to charging by the acre instead of the roll.

I could not help but think of my previous hay man who rolled 55-65 rolls on that same acreage every year and could not imagine, even "charging by the acre", where my new man was experiencing more wear and tear on his equipment than then my previous man. I also considered the distance they hauled equipment with my old hay man traveling around 18 miles and my new man traveling around 7. My new mans main argument was the fact that he had to cover 25 acres same as the old man, but it was my understanding that this was all taken into consideration when I was quoted a price of $22 dollars per roll.

To my knowledge, I have never had a disagreement on pricing, for whatever the product, in all of my 54 years. When I saw or heard a stated price for anything I either took out the money and paid for it, or I moved on with the thought that the price was higher than I could afford, the seller probably never even knowing I had looked over his goods.

But with this issue, I don't know what to do. What do you professional hay men think of this situation? I may share your responses with my hay man at some point, or direct him to this website to view your professional responses. Thanks in advance for your opinion!!!!


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## deadmoose

22 to 65 is a big swing. Assuming everyone was up front about costs that is ridiculous. A man shouldn't agree to a price then rriple it.

That being said 15 cut 6 rake 6 ted an acre plus 15 a roll is more than fair IMO for cutter. 27×25=$675 +20x15=$300 $975

Was his price that much per roll plus cutting and tedding and raking?


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## Teslan

I don't do custom jobs of really any sort, but every year it seems I need to reclaim around a gas well that an oil/gas company has reworked on our farms. This last year I charged one company $750 for ripping, disking, cultipacking about an acre. I charge about $150 an hour and that time includes hooking up equipment and unhooking equipment. I charge this because if they hadn't come into the field at all or at the best time (when the ground is frozen) I wouldn't have had to hook up that stuff at all. My travel time to the site is included as well, but that's not very far either. They also get charged more for replanting and crop loss, but that's not in the hourly charge. However I do inflate the final bill a bit for them never meeting their timeframe promises. So while this isn't custom work so much it's sort of how I would bill for a small acreage work. Though without the charges for annoyances. Depending on the person.


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## Nitram

If in your situation... The cost of buying same bale vs what you paid for your own grass...don't use him next yr

If you paid more to have it baled then its worth not including land/grass value that is not any way good


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## rajela

Pay him the agreed on price and say good bye.


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## cmd

Stanno said:


> Hello!
> 
> I am new to this site and would like to present a scenario and get the professional opinion and thoughts of you fellows who are in the business. I will present it as though I am the buyer in this circumstance, paying an individual to cut, rake and roll my hay. Assume that I am relating all information as factual even though I realize that sometimes there is argument as to what the facts are. Let's assume I have all the facts correct and both the buyer and seller agree on the facts. I will present it as a first person account. I will abbreviate all I can.
> 
> I had a gentleman who had rolled my 25 acres of bahia grass for a number of years and on the average I would obtain between 55 and 65 rolls of hay. The
> 
> price he charged me was $17 per roll, which seemed reasonable for the area (southeast Georgia). This spring I learned that he was no longer going to work
> 
> in the hay business so I sought the help of someone else. I finally located someone in late July who stated he would be willing to do it for $22 per roll and would
> 
> try to do it the next week.
> 
> I thought this was a pretty good jump in price but I accepted his offer and awaited his arrival. We had some light showers on 2 days of the following week and he did not show up so I attributed it to that. The following week was clear all the way thru with still no show, so contact was made again after 2 weeks to the day and he promised to do it the following week, again. He was informed that the hay was beginning to dry and fall over some and he stated that that was true and that he had checked it and it was kind of "thin" and that he may have to charge a bit more than $22 per roll but that he would be fair in his dealings with me on the price. A side note is that I did not fertilize the pasture this year, so I was expecting a lower yield.
> 
> He arrived and did the hay, cutting it one day and subsequently raking, turning and rolling it over the next couple days. The pasture is for the most part level with mostly straight sides and clear of any obstructions. 20 rolls of hay were produced. A drastic drop in production to say the least, but this was not the hay man's fault and I understood this perfectly.
> 
> He had quoted me $22 dollars per roll, which was more than I had ever paid and I really didnt know how much "a little bit more" than 22 dollars per roll was but by my definition I was willing to tolerate $25-26 per roll, much more than I had ever paid before, but I was going to do my best to do my part in being fair. When I was presented with a statement for $1440.00 for the job, an average of $65.45 per roll, you can imagine my shock.
> 
> OR MAYBE YOU CAN'T!? Am I off base, or is the hay man off base, or are we both crazy? That is why I would like your assessment of the situation.
> 
> For additional information, in anticipation of the lower yield for this year I called a neighbor in the adjacent county that I had purchased some hay from in the past to inquire as to whether he may have some extra hay this year that I might could purchase from him to close the gap in my needs. He said yes, and quoted me his prices on his hay of the type he thought I would like. He said he had alesia hay rolled and stacked under a shelter, this years, and that he would load onto my flatbed for $40 dollars per roll and that he had other UNsheltered alesia hay, this years, for considerably less, but didn't give me the exact price at the time for it.
> 
> Now, the statement was given to my wife at my business location since I was off that day. She took immediate notice of the price and called me and I told her to not
> 
> write the check right then that I would get it to him in a day or two. I wanted time to research this issue. She also questioned him about the price and he stood by his price stating that he had switched to charging by the acre instead of the roll.
> 
> I could not help but think of my previous hay man who rolled 55-65 rolls on that same acreage every year and could not imagine, even "charging by the acre", where my new man was experiencing more wear and tear on his equipment than then my previous man. I also considered the distance they hauled equipment with my old hay man traveling around 18 miles and my new man traveling around 7. My new mans main argument was the fact that he had to cover 25 acres same as the old man, but it was my understanding that this was all taken into consideration when I was quoted a price of $22 dollars per roll.
> 
> To my knowledge, I have never had a disagreement on pricing, for whatever the product, in all of my 54 years. When I saw or heard a stated price for anything I either took out the money and paid for it, or I moved on with the thought that the price was higher than I could afford, the seller probably never even knowing I had looked over his goods.
> 
> But with this issue, I don't know what to do. What do you professional hay men think of this situation? I may share your responses with my hay man at some point, or direct him to this website to view your professional responses. Thanks in advance for your opinion!!!!


Depending on the shape of your field, smoothness, how much tedding and raking needed done, travel, etc. and operating at $80-$100 and hr depending on equipment, I can see how he could get there. The only wrong I see was not sticking to quoted price. I just did some 2nd cut for a guy 10 minutes away by tractor and he had $40 per bale in it and I probably should have charged a little more. If it was first cutting or bigger better shaped smoother field it would have been cheaper but time is time and I want compensated for my life.


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## ARD Farm

slowzuki said:


> Just have to watch the hourly rates, I priced my early snowblowing on hourly rates as I had done a lot of bushhogging and thought I had a good handle on expenses. Snowblowing uses way more fuel than bushhogging per hour. Travel time becomes very significant in small jobs and people don't like to see it on snow removal bills. A snowblower has fewer wear items as in consumables but is pretty likely to have major damage less frequently. A single cinder block will wipe out an entire season of profits. Cumulatively I didn't allow for rust related depreciation either, running on salt roads has made my nice tractor very rusty and hurt resale.
> 
> Moral of this, small jobs expose you to a lot more risk in terms of unknowns from hitting things to getting paid and you need to price higher. Every other industry gives discounts for bulk too.


My big Lucknow will handily eat a cinder block, small log or child's bicycle with no issue other than a slight shudder and yes, snow blowers really suck the fuel down, my tractor is always up on the turbo when blowing snow and it matters little if it's the M9 or the 105. You have to admit though, it's fun. You get in the heavy stuff and the drifts and you run out of horses pretty quick but it's sure a sight to watch that snow arching out of the chute going way up and way out, even farther if blowing with the wind.

Most winters it stays in the barn as a 'just in case' and the tractors sleep but last winter one tractor had the blower on and was hotlined 24/7. I went through almost 300 gallons of diesel just keeping the road open so I could get out for beverages.

As a rule, I don't do custom work (small jobs) just because of hidden junk. You never know whats lying under the forage unless you've been on that parcel previously and even then, limbs fall. I keep my treelines cleaned back just because of that scenario, besides, I don't like limbs 'attacking' my cab or jostling my mirrors. Same applies to customers fields. You'll find me and my chainsaw and polesaw trimming dead branches away do they don't impar my cutting and bailing.

Here in Michigan we have a wonderful agriculturical college, MSU and they put out a yearly custom rate schedule, including fuel use and cost calculations for all types of tillage and field operations as well as custom hay. I apply those to my custom jobs, none of which are little.. I even base my retail hay sales on their estimations. Very handy yearly updated guide.

That don't apply to pulling people out of snowbanks or ditches or retrieving stuck vehicles. Those all get charged a hundred bucks for me to come down the road, through the drifts in FWA and rescue their sorry butts. I let them hook the snatch strap to their vehicle, (I stay in my warm cab with the radio on and a thermos of hot coffee, that way I'm not liable if I pull the bumper off, or worse. Cars today are all plastic it seems and drivers tofay have little sense either.


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## IH 1586

I send out a price list listing everything I do and prices per acre/hr to my customers. That way they have it in front of them in black and white. It also says that the price does not include fuel. Don't have to worry about setting price and have the fuel cost go up or down.


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## country boy

its a little late but i can see stanno had some sticker shock at his bill. i do some custom work here myself but i tell people upfront its 28.00 per bale net wrapped 2per acre min and 30 per acre min on small squares @ 2.50 ea . its bad enough that i run my equipment on my own fields for nothing but very seldom will my average fall less than 4 per acre but that is because of the ungodly amount of money i spend on fertilize. but to this day every year i have people like stanno want me to cut on the halves ( which i don't do ) and then they are offended when i won't . had a bad day today and just had to vent a little


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