# Getting into the Hay Business/ Partnering



## horsearound66 (Jul 21, 2015)

Seeking general guidance and opinions of seasoned hay farmers about interest in partnership. I have come into some money which I would like to invest in land to grow hay. I do not have the experience growing/baleing it though and am wondering if it's reasonable to pursue a partner who would either rent the land from me and then do all of the hay business, or perhaps (if it's more advantageous) share profits. I'm not sure how this would best be negotiated and am very flexible. Right now I'm just seeking opinions of whether this is viable. I hope this is an appropriate site to ask this on and I appreciate anyone's feedback. Thanks very much - Josie


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## slowzuki (Mar 8, 2011)

Its hard enough to make money haying when you know exactly what you are doing. I can't recommend planning on renting land for hay as the best investment you could make.

Parking money in land and speculating on the increase in value worked pretty good for corn ground the last 10 years in some areas but there is some talk of that collapsing soon or at least a major correction.

Why hay specifically?


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## Teslan (Aug 20, 2011)

slowzuki said:


> Its hard enough to make money haying when you know exactly what you are doing. I can't recommend planning on renting land for hay as the best investment you could make.
> 
> Parking money in land and speculating on the increase in value worked pretty good for corn ground the last 10 years in some areas but there is some talk of that collapsing soon or at least a major correction.
> 
> Why hay specifically?


My own pessimistic thoughts are that right now nearly anything could be a bad investment. Stocks, residential real estate, commercial. So I don't think farmland would be half bad. Bin my area irrigated farmland brings the same rent if hay, corn, etc.


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## Tim/South (Dec 12, 2011)

In my region I would not recommend a person buying land to hay.

From what I read on this forum we have some members from Pa. who do well. I gather some areas of the state may do better than others, different market options.

As already mentioned, it would be a challenge in a partnership to make much of a profit for both parties. Some considerations would be whether a person was buying existing hay property vs having to establish hay. Initial costs to establish a good hay field could be expensive. Finding someone dependable with the equipment to harvest the hay could also be a challenge. Most would be more interested in tending to their own where they would not have to split any profit, would not have to consult someone about management details.

The cost of equipment has increased since the "good old days" when locals would be happy to hay on shares. It is just hard to pencil out a formula where both sides would be happy with the return.

In any form of Ag there are no givens. We are all at the mercy of Mother Nature and Lady Luck.


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## Bob M (Feb 11, 2012)

Depending on where in Pa. you are looking to buy ground I would think you could find someone to rent the ground and produce hay. Assuming it is good quality crop ground. I don't think the rent paid would be a good return on your investment though. If you are buying land in southeastern Pa. I would be interested in renting but in our area 1 to 3 % return on investment in cash rent.


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## Bishop (Apr 6, 2015)

Not to make light of your particular situation but there is a joke that goes like this:

Did you hear about the farmer that won the lottery?

He farmed until the money was all gone with a huge smile on his face.

Farming may not be the best place to invest, unless you are buying land on spec and renting it out.


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## Mike120 (May 4, 2009)

Agree with Bishop...Buy land with a location potential to go commercial/industrial/development as an investment. Use a hay lease to keep it in Ag for reduced taxes (I assume PA has AG exemption). At most, have the lease pay the taxes, sit back and watch your investment grow. It does work in the right location......


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## horsearound66 (Jul 21, 2015)

Thank you all so much for your insight and especially for taking the time to reply! It's much appreciate and I will consider all you said. Bob M I will definitely look into the SouthEastern PA area. I live in the North East part of the state but it's not important that I buy land here. If anything promising comes up I will get in touch with you.

Again thank you all...

Oh and to the person who asked Why Hay? I am a horse person, have worked the last 11 years in horse care and barn management and have an appreciation for the value of good quality hay and reliable service. Several of my horse farm friends suggested hay as an option for a business investment so I though I'd look into it.


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## Tim/South (Dec 12, 2011)

horsearound66 said:


> Several of my horse farm friends suggested hay as an option for a business investment so I though I'd look into it.


If you have a market for the hay then that sweetens the deal. The horse outlet is on the upper end of the hay business and (most) buyers expect to pay a reasonable price for quality hay.

As expensive as horse hay is, there is not a world of profit. Money can be made, just not as much as outsiders envision. Producing quality hay is expensive. Finding the right outfit to partner with would be a priority.


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## Vol (Jul 5, 2009)

horsearound66 said:


> Several of my horse farm friends suggested hay as an option for a business investment so I though I'd look into it.


You could be treading on thin ice.....I doubt that they had your best interest wholly in that suggestion. 

Regards, Mike


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## Hawk40 (Jun 28, 2015)

Stay away from Ag altogether unless you can handle losses, they come with the territory and IMO partners just complicate matters


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## Redbaler (Jun 10, 2011)

I would suggest starting a IRA. Maybe a few of em. Hay is difficult to get a 5 star crop without years of experience. Only thing worse than the livestock business imo would be a restaurant. And yes I'm dumb enough to be in the livestock business.


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## Waterway64 (Dec 2, 2011)

I have only known three partner ships that lasted to retirement. It takes open communication and willingness for give and take by all parties including spouses. Before a partnership is agreed to it must be decided how it will be dissolved to!
I farm because I enjoy it, a must. I am in hay and livestock because there is less government. It allows more natural fluctuation in the market and I feel if I study the market and play my cards right I am better for it. I would say be flexible and DONT follow the crowd! My .02


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