# Storage charge.



## WaterShedRanch (Jan 29, 2012)

I have several customers who speak for hay early in the fall but generally don't want to take full delivery until later in the season. I generally don't take payment until delivery of the commodity. My father thinks I should charge them for storing the Hay. I tend to disagree with him. It's not like it's in the way and is always out before the new crop comes in. Does anyone follow such a practice and if so what price do you fix to it. F


----------



## Josh in WNY (Sep 7, 2010)

I generally don't store hay for people, but since I did some round bales this year, I did agree to store them for one of the buyers. I did this since they bought the majority of the round bales I made and seemed like a good customer that I would like to keep if I continue to do round bales. I may have to change things up next year since the barn addition I put up was intended for small squares not round bales.

My general policy when customers ask to have hay held for them is to ask for a deposit (usually around 25%) up front that is non-refundable and make sure that we have an agreed upon date for the hay to be removed. I have limited storage and can't afford to not have the barns empty come next hay season. This usually ends up with the customer either walking away since they weren't really that interested or gladly paying the deposit and picking up the hay on time.


----------



## rajela (Feb 15, 2014)

I would just include a little extra for storage in the initial price and make sure they paid up front. I would also have a written contract stating that they had purchased the hay and I was in no way responsible for it. You never know what could happen.


----------



## Troy Farmer (Jul 31, 2011)

After little trial and much error, I have moved away from storing hay. I built a shed for round bale storage. I have one customer (horse person) who buys one round at the time. He has no tractor or way of handling but he has been a faithful customer. So 2 years ago I offered to store enough hay to see him through until spring. He paid up front. I did not charge any extra. That winter turned out to be pretty rough and hay was short. People saw the hay in the shed and would stop wanting to buy. They would leave mad because I couldn't sale the hay. I probably hurt my business. This year I filled one side of the shed early. A new customer came along and bought all the hay in the shed. "I'll have it moved in 30 days" 30 days came and went. I called him "just set it outside if you need the space". He eventually came and picked up his hay and I negotiated some outside hay for the inside hay since he had taken so long to pick up.

Sorry for the long winded post. I said all that to say this: DO NOT STORE HAY FOR ANYONE BUT YOURSELF. Any other arrangement will end up biting you. As you can see by my location, I live in the southeast and dry stored round bales in February or March will bring a premium. Especially after about 14 inches of rain in December.


----------



## Tim/South (Dec 12, 2011)

When we stored and sold a lot of hay we did not charge extra if we held hay for a regular customer. Our price out of the barn was the same all winter.

We did save hay for very special customers and the price was the same.


----------



## hay wilson in TX (Jan 28, 2009)

Storage and what to charge. That is A CONUNDRUM.

One way is to store THEIR hay seperatly. Then you can figure how much that storage really cost you and benifits them.

My problem is my storage is a large pole barn storage that must move hay in front of THEIR hay to access THEIR hay rather than some later hay, that is infront of the stored spoken for and maybe paid for hay.

HERE I gladly load out their PU or tandom trailor. With the understandiong that this hay is theirs unless pulled out by another customer. I like to give them 3 days to a week to take possition. After that I assume they have done so and will be free to sell THEIR hay to the next buyer.

This is not a feed store with limited access and full time help on hand. If I am not here they are free to heip there selves and pay by mail or the next time they are here. Had one buyer pay almost a year later for hay that was in the barn and really not missed.

Sitting on saved hay for a customer is easier if you are a large operation with numerouss people milling around, but this farm only has Me, Myself, & I to baby sit the hay barn. They may come by while I am occupied cutting, or raking, or baling.

Everone will have to work out their own management style.


----------



## 8350HiTech (Jul 26, 2013)

In my opinion, the only reason to charge for the storage is if you would otherwise not be storing it at all. Storage, here, is simply another cost of doing business, the same as owning a tractor or fertilizing. Your price for the hay, whether someone is getting it two weeks after it went in the barn or six months after, should reflect your costs to own and maintain your storage. Aside from asking for a deposit up front as already mentioned, you shouldn't need anything else. If, on the other hand, you have something else that you desperately want to store in the space occupied by the spoken for hay, I'd just tell the customer you need the space and it will go to a buyer who will remove it according to the needs of your schedule.


----------



## glasswrongsize (Sep 15, 2015)

For my operation, I do not sell a great amount of hay and my storage is not free- barns cost money to build. I sell hay during haying season for less than I hope to get later in the fall/winter. The customers who have an investment in a barn can realize some of their own investment by buying and storing their own hay. Those that do not can help me pay for my barn by paying the price that the fall/winter market will bear. If I were to store it, I would see it as selling winter market hay at summer market prices. There'sa reason the hay costs more in the fall/winter. Just my 2 cents
73, Mark


----------



## luke strawwalker (Jul 31, 2014)

WaterShedRanch said:


> I have several customers who speak for hay early in the fall but generally don't want to take full delivery until later in the season. I generally don't take payment until delivery of the commodity. My father thinks I should charge them for storing the Hay. I tend to disagree with him. It's not like it's in the way and is always out before the new crop comes in. Does anyone follow such a practice and if so what price do you fix to it. F


Hoo-boy been there done that... I don't play that way anymore...

I make round bales mostly for our own use but was selling some. Had a guy wanting to "buy it off the field" in summer but "didn't want to take delivery" right away because "he didn't have a place to store it". I agreed to hold it for him and put his bales in a separate row, and told him that I generally load up Friday evening or Saturday morning and make the 100 mile run to the other farm in Shiner (where we had all our cattle at the time), and so he needed to call me so he can get his trailer over and I can load his trailer with his bales and my trailer with my bales at the same time.

Course, when it comes time to actually get the hay, the guy either never shows up when I'm loading or shows up when I'm about to hit the road or have just got home, or I'm sitting down for supper, or generally any other most inconvenient time possible, making double work for me...

Then he had a few bales left at the end of the winter and left them there, and wanted NEW hay for that coming fall... and of course he wanted to do the same thing again. I had enough and said, "nope, from now on it's "cash-n-carry" out of the field, or if you don't want to haul it off and store it at that time, you can buy it when you need it at the going rate, IF I have any to sell. (He REALLY wanted to buy it in the summer when the prices were cheap, since EVERYBODY has a lot of hay coming out of the field at that time and there's plenty to go around-- come January or February, if it was a dry late summer and low hay yields and a hard winter where hay went fast, the price skyrockets if there's any available to buy at all...)

He didn't like that so he took what he had left (eventually, still whining wanting NEW CROP hay instead of his year old stuff that he had paid for and I "stored" on site for free) and that was that... He was just looking for a sweetheart deal that was all to his benefit, and I was stupid enough to provide it...

When I really thought about it, I was pretty stupid for doing that. First of all, he's paid for the hay, so it's "his", but I'm storing it... so technically I'm storing *his property* on my place free of charge... now granted this wasn't in a barn or anything-- it was round bales stacked up on a levee in a row, but I have care, custody, and control of it and therefore I'm responsible for it if anything happens... If someone tosses a lit cigarette or something and it catches on fire and burns, I'd have to replace HIS hay with MY hay... so I was basically taking on liability that I didn't need and which was making me NOTHING in return... Secondly, the hay I sold to him in the summer at the "out of the field bargain price", I was having to handle, stack, and load AGAIN after storing it about half a year... so I was doing the same work as I would with hay I'd sell in the winter FOR A HIGHER PRICE, but had already sold at a LOWER PRICE in the summer... so basically I was cheating myself out of the extra money the hay would usually bring in January and February by taking his cash in the summer and STILL having the same amount of work handling it AND liability storing it as well... pretty dumb.

Sure, sometimes there'd be a bumper hay crop and a light winter and therefore lower prices in winter than in the summer, but that's not the usual situation... usually hay sells for more in the winter than in the summer, which is why a lot of folks want to buy it "right out of the field" in the summer-- to get a cheaper price and secure their supply for the winter to ensure they have hay when they need it. BUT, the flipside of that is that they have to store it... If they don't store it, if you store it for them, you NEED to be compensated for that... additional time and effort that goes into putting it in the barn and pulling it out again, and the ADDITIONAL LIABILITY you take on having the hay in your barn... because if anything happens you are ultimately responsible and will have to either replace the hay or refund the money... Now the flipside of that is, if a guy doesn't have storage and doesn't want to mess with taking delivery, hauling (if necessary), stacking, and storing the hay (and finding or making a place to put it), then they need to just "take their chances" and BUY the hay in the winter or dry weather when they need it... and take the chance that 1) the price will be higher and 2) there may be little/no hay available when they need it.

It's definitely a trade-off and every hay buyer has to evaluate for themselves which factors are more important to them-- 1) getting it cheaper in summer and locking in their supply, but having to stack and store it themselves, or 2) buying it and taking delivery WHEN THEY NEED IT, and running the risk of higher prices and tighter/nonexistent supplies. As a seller, you need to be compensated for the work and liability you take on... and you need to be in a position to take advantage of local market trends when they present themselves... Selling out of the field with them taking immediate delivery reduces the amount of handling and storage requirements, as well as liability and handling the hay to load or deliver it to the customer. Therefore you can usually sell it a little cheaper and actually come out ahead. On the other hand, picking it up off the field, putting it in the barn, and storing it DOES have value, and you need to be compensated for that... (plus the admittedly low but not nonexistent risks of losing the hay if something happened like lightning striking the barn and burning it down or something between when the hay is harvested and when it's used...) You also need to be compensated for the additional labor of pulling the hay back out of the barn and loading it out for the customer, or if they load their own, just being there to supervise or observe... That's another reason why hay generally sells for more in the winter or dry spells when folks buy it when they need it...

Of course, it's your business and you can do what you want-- if you have a good working relationship with these people and they're reliable and steady, and if the situation is working for both of you, then there may be little reason for change... BUT, you BOTH need to have an understanding about what would be expected if something bad happened (like the barn burning down with their prepaid hay in it) or what happens if they DON'T get all "their hay" out of YOUR BARN by the time the new crop is coming in... stuff happens and you have to be prepared for the unexpected... Generally speaking, I agree with your Dad... you SHOULD be compensated for storing it for them...

Later and good luck! OL J R


----------



## slowzuki (Mar 8, 2011)

All hay has to be stored inside here, at most you can leave it out 2-3 days in a dry spell but that's asking for trouble. I give a discount for accepting loads on the day of baling so I don't have to load it in my barn. About 50% never sees my barn. We are contemplating building a large shed to park loaded wagons in, I have enough running gears that I could build wagons to store about 3000 bales on wheels. I haven't figured out how it would change my costs yet but it sure would be nice to have some covered parking.


----------



## luke strawwalker (Jul 31, 2014)

WaterShedRanch said:


> I have several customers who speak for hay early in the fall but generally don't want to take full delivery until later in the season. I generally don't take payment until delivery of the commodity. My father thinks I should charge them for storing the Hay. I tend to disagree with him. It's not like it's in the way and is always out before the new crop comes in. Does anyone follow such a practice and if so what price do you fix to it. F


Okay somehow I missed the fact that they're "speaking for" the hay in early fall, but not actually PAYING for it until the point of delivery... so the hay is still YOURS up to the point they take delivery and you take the money... that changes the equation a little bit...

Since the hay is YOURS until the point they come get it or you deliver it to them and accept payment, then yeah that's your problem to store it until the point they pay for it. Thing is, you DO need to figure in the COSTS of storing it (costs for the barn, maintenance, taxes, etc) and add that into the price of your hay as part of the overhead costs... but then you probably already know that... You'll have the costs of the barns and stuff regardless of whether they hay is "spoken for" or not because it hasn't been sold and delivered yet.

The thing I see with this arrangement is, you need to maintain flexibility... you said they're "speaking for" the hay in early fall-- presumably by that time the hay season is winding down and there's a good 'feel' for what the local market will be doing-- how much hay is in the barn, how much demand, etc, that all factors in to setting a fair but profitable price. Doubtlessly when hay is in short supply due to poor yields or weather problems and hay is in short supply it goes for more than in bountiful supply years. That's half of the equation, though, as the severity of the winter and subsequent demand plays a role in the pricing as well... If it's a severe winter and hay supplies diminish quickly due to additional demand, hay can really jump in price in late January and February... I hope by allowing these folks to "speak for" the hay, you are not "locking in" a given price and then find yourself "giving away" hay in late winter that you could have gotten more money for selling it to someone else at that time for a higher price in the local market conditions... Of course there's SOME benefit to pre-pricing, if you can lock in a profitable price everybody agrees with beforehand and will stick to... (even if it's an "easy winter" and hay supplies remain plentiful and they can get it "cheaper" somewhere else).

The main thing is to do what works for you and your customer and is mutually beneficial... and of course, expect the unexpected... you wouldn't be the first guy to end up stuck with a bunch of hay someone 'spoke for' and didn't buy later on because 1) they didn't need it because of mild conditions or 2) they found it 'cheaper' somewhere else... not much you can do about that... just don't lock yourself out of higher prices by agreeing to a lower price early in the season before a rough winter or supply shortages drive prices up and you could have fetched a higher price had it not been "spoken for"...

Later and good luck! OL J R


----------



## slowzuki (Mar 8, 2011)

Luke, traditionally here (eastern canada and northeastern US hay buyers speak for or "reserve" a number of bales at an agreed price. They traditionally don't prepay and pay as delivered or picked up.

It is a terrible system for the seller as the buyer is angry if you run out, angry if you sell their hay, angry if you can't replace poor hay part way through the winter, and they will refuse to pay for hay they leave you with the next year when the next cut starts.

They want to treat you like a walmart basically but its always the way it has been done for horse owners.

I think this is left over from when most of the hay was used on farm and a few bales would be stashed away for the neighbour who owned a horse.

Now that small squares are barely used on most farms its clashing with this old model of sales.

Only large stables built in the last 10-20 years or converted from dairy operations seem have on site storage for a years hay supply. Most of these are operated as businesses and want the storage for stability of their business.


----------



## Josh in WNY (Sep 7, 2010)

slowzuki said:


> Only large stables built in the last 10-20 years or converted from dairy operations seem have on site storage for a years hay supply. Most of these are operated as businesses and want the storage for stability of their business.


The one problem I've noticed even with stables that have storage... they don't have enough!!! I can't even remember how many stables I talked to in Florida that were interested in buying hay from me, but had to split a load since they could only handle part of the trailer full. I think this may be due to the fact that even though these stables were built with storage in mind, it was for buying hay from the farmer down the street, not shipping it in long distance.

Another way to prove that storing hay should be an additional charge would be to ask a stable owner who buys hay in bulk and then sells it to their customers what their markup is and how they justify it. I'm pretty sure "storing the hay" will be part of that along with arranging for the delivery, stacking, etc. This is all the stuff we have to handle when hay goes in our barns, same as the stable owner.


----------



## slowzuki (Mar 8, 2011)

Exactly. In terms of capital investment hay storage building is about the largest one line item at least up here where snowloads make large buildings expensive. There aren't a lot of good co-uses of a hay barn either to reduce costs. When they store hay the hay isn't gone soon enough to store machinery before winter. Same as renting space for boats or RV's, the hay is gone during the winter not before.

Even tarp buildings cost a lot of money by the time you prep a pad, get the piers set and slap a building on them.


----------



## luke strawwalker (Jul 31, 2014)

Okay, so it's a "horsey thing"...

Gotta say, you guys have a h3ll of a lot more patience than I EVER would... I'd put up with that about two minutes and that'd be that.

Now I remember why I hate horses (and horse people ain't far behind). LOL

Later! OL J R


----------



## rjmoses (Apr 4, 2010)

Here's my perspective:

1) Since they are "buying" the hay but asking you to store it, I would a) get a written or financial commitment upfront, then b) add to that a storage fee. Here's your risk: they don't take the hay and you're stuck with it. What do you do? You might have been able to sell if back in November, but now it is March and you upmteen dozens of bales to unload and the market has dropped. You are scruuweedd!

2) You built a storage facility. It cost you a gazillion dollars. Now you are giving it away for free. You would never make it as a hooker.

3) The best thing in the world is to work off of Opium. I mean OPM--Other people's money. And that is what they are doing. It costs nothing. And if things don't work out, walk away--you haven't lost anything.

Just my thoughts.

Ralph


----------



## IH 1586 (Oct 16, 2014)

I normally sell hay out of the field and anything in the barn is for sale during the winter, however I have a few people that don't have storage, asking if I will store for them. I am charging them more than field price AND it will be paid for in full.


----------



## slowzuki (Mar 8, 2011)

#1 I've considered, along with another members suggestion of you have until X date to pick it up.

#2 _________ with a heart of gold.

#3 Agreed - hay folks have that all figured out. Its like an interest free loan with free storage for them, and avoids having to build their own structure. Win-win-win for client. If its really the product/service they want and need it should cost them fairly.


----------



## FarmerCline (Oct 12, 2011)

I don't charge to store hay......well I guess you could say I do because I have that already figured into my price of hay but the price is the same regardless if it is the day after it's put into the barn or 6 months later. It really doesn't cost me any more to store the hay for a lenght of time because I had to build the barn anyway for short term storage so the cost to store the bale is really the same if it's a day or a year. If I had to rent storage on a monthly basis that would be a little different.

For new customers or small quantity buyers I will not store hay.....it's first come first serve for them. For regular repeat customers that have done business with me for a couple years I will store the hay that they say they need. So far I have not been stuck with any hay that I saved and was never picked up. I do not do this though until I get a feel for the customer and develope a good business relation.


----------



## Vol (Jul 5, 2009)

FarmerCline said:


> I don't charge to store hay......well I guess you could say I do because I have that already figured into my price of hay but the price is the same regardless if it is the day after it's put into the barn or 6 months later. It really doesn't cost me any more to store the hay for a lenght of time because I had to build the barn anyway for short term storage so the cost to store the bale is really the same if it's a day or a year. If I had to rent storage on a monthly basis that would be a little different.
> 
> For new customers or small quantity buyers I will not store hay.....it's first come first serve for them. For regular repeat customers that have done business with me for a couple years I will store the hay that they say they need. So far I have not been stuck with any hay that I saved and was never picked up. I do not do this though until I get a feel for the customer and develope a good business relation.


Ditto...

Regards, Mike


----------



## Josh in WNY (Sep 7, 2010)

FarmerCline said:


> I don't charge to store hay......well I guess you could say I do because I have that already figured into my price of hay but the price is the same regardless if it is the day after it's put into the barn or 6 months later. It really doesn't cost me any more to store the hay for a lenght of time because I had to build the barn anyway for short term storage so the cost to store the bale is really the same if it's a day or a year. If I had to rent storage on a monthly basis that would be a little different.
> 
> For new customers or small quantity buyers I will not store hay.....it's first come first serve for them. For regular repeat customers that have done business with me for a couple years I will store the hay that they say they need. So far I have not been stuck with any hay that I saved and was never picked up. I do not do this though until I get a feel for the customer and develope a good business relation.


I don't really charge extra for the storage either, I give a discount for taking directly off the field before it's stored. I'm also in the same boat as you concerning my small squares... they are all going to a loyal customer of several years and I know he's good for it.


----------



## WaterShedRanch (Jan 29, 2012)

Thanks for all the comments. I apologize for my delayed response getting back to this thread.


----------



## OhioHay (Jun 4, 2008)

FarmerCline said:


> I don't charge to store hay......well I guess you could say I do because I have that already figured into my price of hay but the price is the same regardless if it is the day after it's put into the barn or 6 months later. It really doesn't cost me any more to store the hay for a lenght of time because I had to build the barn anyway for short term storage so the cost to store the bale is really the same if it's a day or a year. If I had to rent storage on a monthly basis that would be a little different.
> 
> For new customers or small quantity buyers I will not store hay.....it's first come first serve for them. For regular repeat customers that have done business with me for a couple years I will store the hay that they say they need. So far I have not been stuck with any hay that I saved and was never picked up. I do not do this though until I get a feel for the customer and develope a good business relation.


We have done it that same way for the last 25 years. It has treated us well and created many long term customers. Some have bought hay off us for more than twenty years.


----------



## Shetland Sheepdog (Mar 31, 2011)

I store for regular customers, and charge the delivered price for stored hay, which is $1.00 more per bale than off the wagon at the farm.

It is the customer's responsibility to remove the hay from storage and transport it to their location.

I will deliver from storage, but the price per bale goes up another $1.00

Some of my customers pay as the hay is picked up. They are aware that it's "first come, first served"

Some are on a monthly payment plan based on projected need until the new crop comes in.

Some are prepaid, and the hay is theirs to pick up as needed. They have a specific lot of hay as per prior agreement.

My storage holds roughly 2500 bales, and is all on the 2nd floor of the old hen house, as pictured.

It consists of 14 "bays" 10'x20'x6.5' that each hold 180 bales (+/-).

Building is, long since, paid for & depreciated, so, little or no expense there.


----------



## BWfarms (Aug 3, 2015)

A good business relationship always will come around full circle. I do have preferences but I'll work with a customer if I'm able. Ideally everything's cash and out of here. Some of you will remember I had a customer trade steers for hay (I was planning to buy steers and he approached me with the proposition). I had the steers on my farm before I had the first field mowed for myself. That kind of interest needs to be extended some consideration. I had filled his order but he decided he wanted to get at least 12 more round bales but didn't have storage. I knew he would because he came for 2 more loads last year after contract was filled. I told him not to worry, I'll have 12 more for him but he couldn't come get them unless the ground was dry, just meant I had to give him less cash to settle the steers (I purchased on top of trade).


----------



## Rodney R (Jun 11, 2008)

Cline hit the nail on the head the storage cost has to be figured into the cost of the hay - if it's there for 1 day or 350. And make sure that the customer knows about this, cause some just take it for granted. I can't image selling hay out of the field. I don't have time to deal with somebody getting 10 bales when I have 3000 to get in..... Nor do I have the time to haul it all within a few weeks.

I don't know anybody who sells it all while it's warm outside, and I know of very few folks that can store a full years worth.

Rodney


----------



## Josh in WNY (Sep 7, 2010)

Rodney R said:


> Cline hit the nail on the head the storage cost has to be figured into the cost of the hay - if it's there for 1 day or 350. And make sure that the customer knows about this, cause some just take it for granted. I can't image selling hay out of the field. I don't have time to deal with somebody getting 10 bales when I have 3000 to get in..... Nor do I have the time to haul it all within a few weeks.
> 
> I don't know anybody who sells it all while it's warm outside, and I know of very few folks that can store a full years worth.
> 
> Rodney


I don't sell much "off the field", only a few hundred bales or so. The way I usually set it up is to have them at the barn when I'm ready to put it in the mow. I bring it in from the field with the stacker wagon and have it setting there ready for them. Adds a little work for me, but is much less of a hassle if they have a breakdown or something and can't make it and I have to put it in the barn. It also makes me worry less about them getting hurt running around on my land or damaging my fields. This year it was even easier to load them up since I had the bale grab and their trailer was just the right size to load with it.


----------



## IH 1586 (Oct 16, 2014)

Rodney R said:


> Cline hit the nail on the head the storage cost has to be figured into the cost of the hay - if it's there for 1 day or 350. And make sure that the customer knows about this, cause some just take it for granted. I can't image selling hay out of the field. I don't have time to deal with somebody getting 10 bales when I have 3000 to get in..... Nor do I have the time to haul it all within a few weeks.
> 
> I don't know anybody who sells it all while it's warm outside, and I know of very few folks that can store a full years worth.
> 
> Rodney





Josh in WNY said:


> I don't sell much "off the field", only a few hundred bales or so. The way I usually set it up is to have them at the barn when I'm ready to put it in the mow. I bring it in from the field with the stacker wagon and have it setting there ready for them. Adds a little work for me, but is much less of a hassle if they have a breakdown or something and can't make it and I have to put it in the barn. It also makes me worry less about them getting hurt running around on my land or damaging my fields. This year it was even easier to load them up since I had the bale grab and their trailer was just the right size to load with it.


Guess I am in a good area as most of mine is sold out of field. My best day was about 2000 bales sold in 2 days. 500 1st day with the rest being sold the next day. I ended up taking 7 bales home. Had 2 duallys with goosenecks and 2 other trucks and trailers loading up the same time. Pretty awesome watching all that hay move at once. The bulk of my buyers are amish and they have an issue with not being able to find enough haulers in the area and its not just hay they are trying to move. If weather and help cooperate going to go for 4000 in one day. Have 40 acres in one spot and may try to do in one sweep.


----------



## mlappin (Jun 25, 2009)

No extra charge here either, I do make it understood that it will be all picked up before April or I'll haul it all to the auction as my buildings always are emptied before I start making hay again.


----------

