Farming Magazine - July, 2012

COLUMNS

Beef: What Does Hay Really Cost?

By Dr. John Comerford

"My neighbor is not a farmer, so he lets me make hay on his place just to keep the grass cut, so that hay is free" is a statement we hear often in the Northeast. Is it really free? The answer is certainly "No!"

The costs

Hay has a cost to a beef enterprise, whether you harvest it at home or anywhere else. On a financial accounting basis, every bale of hay you feed has a cost equal to what you can sell it for. If we want to determine what a bale of hay costs other than sale value, we have to consider the following:

  1. Land cost - Land, like hay, has a cost. If the land is not paid for, it is the cost of making the payments. If it is paid for, the cost is what alternative use it may have, such as rental or selling it and collecting interest on the returns. If the hay ground is also used as pasture, a part of the land cost can be allocated to this use.
  2. Fertility costs - Good-quality hay comes from good-quality forage, and fertility is an important step in quality and quantity.
  3. Harvesting costs - Ownership of tractors and haying equipment is one of the largest costs for beef enterprises in this region, primarily because farms are relatively small and the cost must be spread over fewer acres and fewer cattle.
  4. Hauling - Hay is seldom fed where it is harvested, and there are labor, fuel and machinery costs for moving from harvest to feeding or storage locations.
  5. Storage - These costs are of two types: the loss of hay feed value during storage, and the cost of structures that may be used to store it.
  6. Feeding - If hay is not stored where the cattle eat it, there are machinery, fuel and labor costs associated with getting the hay to the cattle.

Table 1 illustrates these costs based on a single cow consuming 2.25 tons of hay each year from a 4-ton-per-acre yield (.5625 acres of hay per cow.)


The alternatives

The above data shows there are significant costs associated with owning equipment for harvesting, hauling and feeding hay. Some of the possible alternatives:

  1. Custom harvest - The data in Table 1 shows the breakeven value of hay consumed by a single cow if just purchasing hay is $65.56 pre ton for hay stored inside and $90.23 per ton for hay stored outside, recognizing many of the costs used here are conservative. Many beef farmers in Pennsylvania have the advantage of having dairy farms close by. Most hay and forage harvest in the spring and summer for dairy farms is alfalfa. Beef farmers can enlist grass harvest prior to first and second cuttings of alfalfa and improve the feed value of their hay crop in doing so.
  2. Purchasing all hay - This allows land formerly used for hay harvest to be converted to pasture, and herd size can increase. Overhead costs can be spread over the sale of more cattle. Secondly, hay quality can be maintained, because desirable hay quality can be attained with no risk. It is important to use an enterprise budget like Table 1 to determine what the individual farm costs will be for hay production and harvest to decide if hay purchase is less costly, recalling the quality risk, most machinery and labor costs will be eliminated.
  3. Extend grazing - It has been shown that the grazing period can be significantly extended in Pennsylvania with well-planned pasture management. Extending the grazing season by just 30 days reduces the hay needs on a 25-cow beef farm by nearly 10 tons of hay. Land formerly used for hay production can be used as part of a forage stockpiling program. Consult pasture and grazing specialists to determine the best program for any given farm.
  4. Make the cows come to the hay - There are innovative ways to prevent the daily winter chore - and cost - of filling the hay feeder. One such method is to allow the cows access to the hay storage facility with a moveable feeding gate at one end. There will usually be more feeding losses in this method. A second method is to space the hay bales along a fence with an electric fence separating them from the cows. Spacing the bales allows a portable electric fence to be used between the bales, and the fence and ring feeder are moved as each bale is consumed. Keeping the fence high enough for calves to get under it while preventing cows from doing so provides an excellent shelter for young calves. At least the hay should be placed near where feeding will take place to reduce labor, fuel and machinery costs.

Hay and other purchased feed are the highest cost items in most cow-calf enterprises. Ideas and actions to reduce this cost are always helpful.

Dr. John Comerford is associate professor of dairy and animal science at the Pennsylvania State University.