# Can hay compete in Corn/soy country with $3.00 corn?



## swmnnative (Dec 19, 2017)

Hi everyone,

First time poster. This may be long, so, sorry in advance.

Went home for Christmas, (we're a few weeks early in celebrating, saves everyone airfare). Last weekend, I went to a land auction with my dad, (prices finally coming down), and then helped him move some small squares of grass hay bought from a friend for the stock cows.

So, anyhow.

guy selling says he's getting $2.90 at the sale barn, and alfalfa is bringing $4.00.

We've never baled more than 1,000 bales a year of square bales, grass and alfalfa. We've never had a lot of cattle around. It was always thought of as a second rate crop, we'd find an odd-shaped corner of a field to plant to hay, and bale grass off of land that is too wet to row crop.

I'm thinking, if we can get 4 tons/acre/year, and $4/ #50 bale, that's $640/acre in revenue. This is slightly better than $3 corn at 200 bu. / acre. Inputs have to be less. Less fertilizer? alfalfa seed is expensive, but, not as bad as corn seed. What am I missing? Have Just discovered a niche market for a young-ish guy to start farming?

If its part of your complete rotation, you could monetize the gains from breaking up your corn/soy rotation. Does it make sense to add some alfalfa to a grain farmer's rotation?

What are some honest assessments of input costs? Anyone in Southwest Minnesota, Northwest Iowa have a handle on realistic yield estimates?

We have some old haying equipment, suppose I'd get nicer stuff if it actually works.

I suppose it's a temporary thing, while everyone is still planting corn ditch to ditch, and hoping for the market to improve.

Maybe slightly better than corn, resulting in not losing money as fast for a lot more work?


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## mlappin (Jun 25, 2009)

A lot more work for sure.

Harder to get consistent weather to make good hay than it is to get good enough weather to get the crops in the ground.

If you have a great hay year, most likely every body else in the area did as well.

Not all your bales will be $4 bales, first cutting goes for less most of the time and is usually the largest volume cutting, so more work for cheaper hay.

Selling good 1st cutting round bales here for $50/bale for horse quality, Later cuttings at $75/bale. Later made 1st cutting rounds suitable for beef cows are $45/bale, they come and get it.

Depending on the land, hay, especially alfalfa can chew up a LOT more potash than corn.


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## swmnnative (Dec 19, 2017)

Trying to do the conversion,

How big of bales are you baling?

Mainly, yeah, I'm thinking it's probably a fool's errand. I don't think we've ever got all of our cuttings up without getting one rained on. Seems like it's always 1/4 inched rain here and there.


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## swmnhay (Jun 13, 2008)

I'm in SW Mn near Worthington.

200 bu corn ground should produce more then 4 ton acre.5-6 is normal.

Fertilizer costs are similar to corn.With a good stand there is seldom a need to spray for weeds.Spray for leaf hoppers once in awhile.
Prorating seed costs over 4-5 yrs for alfalfa costs a lot less then seed corn especially if planting Smart Stax corn.
Not a large market for sm sq in local area.There is also a smaller supply of sm sq then yrs past.

The 1/4" rains are normal and no big deal as they do little damage its when it rains for a couple weeks every couple days and it won't dry that you could end up with some hay not worth putting in a sm sq bale.


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## stack em up (Mar 7, 2013)

I'm an hour east of swmnhay, I do dairy quality alfalfa in big squares. Yes it can compete, but there's a lot of variables. Fertilizer is comparable to corn, more often than not you'll have at least 3 applications of Warrior for leafhoppers. Generally at least 2 split applications of fertilizer per year. Depending on the traits you purchase in seed, you could be up to almost $50/acre over 5 years just in seed, although I don't recommend buying the best of the best just starting out.

Keep in mind, corn can be covered from crop insurance, alfalfa cannot. Revenue assurance helps a lot on the operating loan at the bank.


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## swmnhay (Jun 13, 2008)

stack em up said:


> I'm an hour east of swmnhay, I do dairy quality alfalfa in big squares. Yes it can compete, but there's a lot of variables. Fertilizer is comparable to corn, more often than not you'll have at least 3 applications of Warrior for leafhoppers. Generally at least 2 split applications of fertilizer per year. Depending on the traits you purchase in seed, you could be up to almost $50/acre over 5 years just in seed, although I don't recommend buying the best of the best just starting out.
> Keep in mind, corn can be covered from crop insurance, alfalfa cannot. Revenue assurance helps a lot on the operating loan at the bank.


you can get insurance on alfalfa now although it would be very hard to get a payment unless it freezes out.Usually the first cutting covers most of the yield gaurentee.There is insurance for seeding also.

I'd put my seed costs around $25 if prorated over 5 yrs with non RR seed.

Bankers hate hay,my bank anyway.They got burnt when a large hay producer went bankrupt and a lot of hay dissapeared.Well they were not to hip on me taking over some of those farms.

.Can't hedge the crop.Poor crop insurance policy compared to corn.And it's hard for them to put a lien on hay as most of its sold private and a UCC is pretty worthless.


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## mlappin (Jun 25, 2009)

swmnnative said:


> Trying to do the conversion,
> 
> How big of bales are you baling?
> 
> Mainly, yeah, I'm thinking it's probably a fool's errand. I don't think we've ever got all of our cuttings up without getting one rained on. Seems like it's always 1/4 inched rain here and there.


First cutting bales run around 800lb/bale, later cuttings I can make an 1100lb bale but those are harder to move as people tend to think they were baled wet. I try to make around a 900-950 bale on later cuttings, still dense enough to hold its shape but not packed so tight they won't breath at all.

Swmnhay made a valid point with hay and banks, my banker at the moment doesn't mind so much though, he's seen my books for enough years to know I usually sell my hay on the high end of going prices.


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## Bob M (Feb 11, 2012)

My banker doesn't like hay either. He told me a couple years ago to plant corn on all of our acres and that the price of corn would not drop.


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## stack em up (Mar 7, 2013)

My banker doesn’t like hay either, or cows for that matter. I keep telling him ifnindont take a loan out for anything hay related, what the hell does it matter to him? Only time I take a loan on the hay enterprise is if I haven’t sold enough to cover whatever it is I need/want. DA (what I call him, short for dumbass) still likes to have the hay on inventory on the balance sheet, looks better to his bosses I assume.


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## somedevildawg (Jun 20, 2011)

Bob, that banker would starve (or others around him) ifn he was a investment banker.....

But they's a damn good reason why they (bankers) don't like it......if I took my balance sheet to them asking to borrow money they would probably throw me out on my head, and I wouldn't blame them 

Welcome to haytalk swmnnative..


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## swmnhay (Jun 13, 2008)

Bob M said:


> My banker doesn't like hay either. He told me a couple years ago to plant corn on all of our acres and that the price of corn would not drop.


do the opposite of what a banker advises and a guy is better off!They typically are to late to the party.


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## mlappin (Jun 25, 2009)

swmnhay said:


> do the opposite of what a banker advises and a guy is better off!They typically are to late to the party.


Amen.

Right after I got married my banker lady told me I really should have better health insurance, told her I couldn't afford it, besides I had catastrophic thru the farm policy. This went on for a few years, then she says she could just add it to the operating note&#8230;

I asked her why if I couldn't afford 12 small payments why one big one at the end of the year would be better? I think she finally got it as I never heard about it again. The banker guy I have now actually farms too, he understands and rarely brings up silly stuff.

Years and years ago, had to be the early to mid 80's, the banker Dad dealt with then wanted Father to borrow five million to expand the dairy and buy more ground. Dad asked him how he was ever supposed to make the payments on that, bankers response was not to worry about it, your kids can pay it off. Dad was doing business elsewhere the next year.


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## swmnhay (Jun 13, 2008)

mlappin said:


> Amen.
> Right after I got married my banker lady told me I really should have better health insurance, told her I couldn't afford it, besides I had catastrophic thru the farm policy. This went on for a few years, then she says she could just add it to the operating note&#8230;
> I asked her why if I couldn't afford 12 small payments why one big one at the end of the year would be better? I think she finally got it as I never heard about it again. The banker guy I have now actually farms too, he understands and rarely brings up silly stuff.
> Years and years ago, had to be the early to mid 80's, the banker Dad dealt with then wanted Father to borrow five million to expand the dairy and buy more ground. Dad asked him how he was ever supposed to make the payments on that, bankers response was not to worry about it, your kids can pay it off. Dad was doing business elsewhere the next year.


I've proven my banker wrong many times.
When I got into cattle he said everyone is loosing money on cattle now,why do you want to feed cattle?Ummm because you can buy feeders cheap now!OK but we will go 1/2 of what you want.I made $350 a head on them!When cattle got higher sky was the limit,buy what you want.

Wanted to buy some more land at $2400 per acre and he thought was to high and okayed me to go to $2000 at auction,I told him I might as well stay home from the auction then.Well it sold for 2400.When land hit 10,000 he asked if I was going to buy any

And he thought I was nuts to expand hay acres,required a 2 nd mortage on land because they thought the hay was poor collateral compared to grain.Well I proved him wrong there also.


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## OhioHay (Jun 4, 2008)

I think it depends on your local market. If you have a good local demand, hay competes very nicely and in our area out competes $3 corn. Without a good local market, transportation can eat away the competitiveness.


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## hillside hay (Feb 4, 2013)

Pay for the labor up front by mechanizing everything you can afford to


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## cyclonic (Jan 16, 2015)

I farm both corn/soybeans and hay. I can make small squares more profitable per acre than corn, until corn is $4.00 or more. That's on owned or rented ground up to $200/A.


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## endrow (Dec 15, 2011)

OhioHay said:


> I think it depends on your local market. If you have a good local demand, hay competes very nicely and in our area out competes $3 corn. Without a good local market, transportation can eat away the competitiveness.


Yes I think it is all about local market . And unless you are going for mulch hay, an important thing is proper storage


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## kurt1981 (Apr 18, 2017)

alfalfa squares grown on good land will blow any crop out of the water. To do it in mass production think you would need multiple balers, stackwagons, lots of barns, and alot of man power to do it in a small window or it could be a disaster.


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