# Starting a small custom Hay business - Thoughts?



## YODA (Oct 24, 2013)

I am in the process of getting used equipment to start a very limited hay business in my subdivision. It made up of 40 -3 acre lots and a large 26 acre lots. All are under irrigation and original hay pasture. many just want their lawns cut to keep the places up. I just cut and take hay. My guess is I can cut and sell between 500 and 1000 small bales overall.

Per my local states emerging small business outreach program they suggest forming an LLC and developing contracts with liability clauses. I'm in Colorado

Can folks recommend any base contracts? I want to limit liability and just set simple rules I cut, bale for X price and not responsible for damage. Owner is responsible for pets and having a clear pasture for cutting.

What insurance do folks recommend. Should I ensure through the LLC or otherwise?

Lastly are there any current government grant programs to offset costs. I bought my first piece of equipment. Do I need to do the LLC before filing the farm tax forms?

Thanks and Happy Holidays


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## carcajou (Jan 28, 2011)

Government grants to offset costs??? Seriously??? I'm in this business to make money, not collect govt cheques. You may want to edit your business plan. Merry Christmas


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## Vol (Jul 5, 2009)

Merry Christmas YODA...you better talk to a CO accountant about "farming" qualifications before worrying about farm tax forms.

Regards, Mike


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## GawasFarm (Jul 10, 2013)

There are lots of new business start up grants around.....knowing how to apply for them and making your business fit what they are looking for can be harder though. There aren't any agri specific but with a good business plan you can get grants.


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## YODA (Oct 24, 2013)

Thanks folks - this is just the information I was looking for. The SBA indicated there may be small grants to get off the ground (they did not know about specific agg ones though). carcajou I am not looking for hand outs, just possibly an informed leg up to get off the ground. I know under our current US administration, (and NO I am not a fan) there were stimulus programs set up. I am just not up to date on what was done for small farmers, etc..)

I have always done my own taxes, but this year maybe I need to step up to the plate. I am a retired Engineer looking to use the equipment I have and opportunity I have to earn a bit of spending money. Not out to rake in a big profit.

The custom baler in this area is getting too busy to do these small lots and is willing to help me get started. I know it will take an investment, but I am trying to plan and spend wisely

Please any useful thoughts or comments, especially pitfalls would help. Thanks - Keith


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## Teslan (Aug 20, 2011)

Many just want their lawns cut? Are their lawns made of orchard and brome or other forage grasses? If it's more traditional type of lawn grass making hay out of that is worthless. Plus most people will want their lawns cut once a week which means no hay. Do these 3 acre lots all irrigate? The 3-5 acre subdivisions in North Colorado might have dryland grass planted but it isn't worth haying either. Very few irrigate and if so they don't fertilize enough to make hay. Mainly just bushhog it once a year if they don't pasture it. If they pasture 3-5 acres and aren't careful they will end up with dirt and weeds. Now your 26 acre piece if it's irrigated and decent grass it might make good hay. If the 26 acre piece is irrigated right and cared for it should make between 4000-5000 bales of hay a year. However most people in Colorado don't know how or want to irrigate grass right or spend the money on fertilizer to make it even worth haying.


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## YODA (Oct 24, 2013)

All the lots are irrigated and the lawns are the origional hay field grasses. Its made of of Bromes, Orchard, Thimothy, Crested Wheat, Clover and a smattering of alphalfa.

Generally we get enough water for two cuttings. On my place I fertilize and get about 150 to 200 standard square bales a year off of the 2 acres I keep back from the horses. Typically on the other lots the custom baler gets 35 to 50 bales per cutting. He estimates between 750 and 1000 bales overall. He does not cut the 26 acre place.

You last statement is very true here as most just throw water on it, no fertilezer and hope it stays green. One thing I would be trying to do is help them manage thier water bettter so I get a better crop.


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## Mike120 (May 4, 2009)

YODA said:


> All the lots are irrigated and the lawns are the origional hay field grasses. Its made of of Bromes, Orchard, Thimothy, Crested Wheat, Clover and a smattering of alphalfa.


Not sure I would classify pop-up sprinklers as "irrigated". However, it you are running a tractor, sickle mower, rake, and baler over those irrigated lawns you better buy a bunch of replacement sprinklers 'cause I guarantee you're gonna break a bunch.


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## YODA (Oct 24, 2013)

No pop up sprinklers, and if there were I would not cut. most flood or use large irrigation impact ones on hoses they move around. Everyone is on well water, so the decorative lawns are very small, just around the house, so I should have said the rest of the yards and property is old pasture grasses.


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## FarmerCline (Oct 12, 2011)

If you fertilize like you should you are going to have way more than 500 to 1000 bales of hay off of that acreage. I figure I get a minimum of 100 -120 bales per acre off of first cutting orchard and timothy. Water would most likely be your limiting factor on second cut. If you don't fertilize the hay it won't yield much and the quality will be poor.


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## Tx Jim (Jun 30, 2014)

What type/brand tractors & hay equipment do you have????


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