should you make or buy your hay? here's the math for small farms

hi i'm pete and welcome to just a few acres farm sometimes i get comments asking why we bother to make our own hay on a small farm so in this video i'm going to go through the financial math of why we make our own hay and give you the tools to figure out whether making hay makes sense for your small farm but aside from the math of it you have to do what you love and i love making hay i love the self-sufficiency of it i couldn't imagine raising cattle without making my own hay and it gives me a chance to work all my old farm all that i love although making hay can be stressful on the whole it actually eliminates stress for me because i don't have to depend on somebody else i don't have to worry every year about whether my hay supplier will come through with what i need i don't have to worry about the quality of my hay and i don't have to worry about getting cheated on the weight of the hay that i'm buying and a final aspect is i need a way to take care of my pastures when the grass growth gets ahead of me i want to keep our cattle on optimal growth grass so i need to make hay if it gets past me so let's get into calculating whether it makes financial sense for you to make your own hay the first step is to figure out how much hay you'll actually need and i have a video on this which i'll put up here called how much hey will my dexter eat and it really applies to any breed but let's go into my case i need about a hundred thousand pounds of hay per year or 50 tons this translates to about a hundred five by five round bales which is the kind of hay i make it also translates into about 200 4x4 round bales or about 2500 small square bales step two is to figure out how much buying that hay would cost so if i need 200 4x4 round bales the cost of a round bale around here is about 30 to 40 bucks so if i bought 200 of them it would be 7 dollars if i went the square bale route and bought 2500 square bales square bales around here cost three to five dollars each so i would spend 10 grand in small square bales there's quite a price difference and that has to do i think with the labor and the slowness of baling small square bales now that i know how much it would cost me to buy my hay i need to figure out how much it would cost me to make it and there's three categories to that cost number one is your equipment investment number two is your operational costs and number three is your labor the first thing you need to invest in to make hay is tractors and we've got two for making hey the 656 and the 504 656 is the cutting and baling tractor the 504 has got a loader on it for moving bales around this 656 cost me three thousand dollars i've got another five thousand into it the 504 cost me three thousand dollars and i've got another four thousand dollars into it so if you add that up that's fifteen thousand dollars in tractor costs next is the haybine this cost me a thousand bucks i've got another 300 into it and where parts so that's thirteen hundred dollars total i got this junky old two-star tedder for free but if i went to auction and bought one i'd probably pay fifteen hundred dollars for a four-star tedder so we'll figure that this rake cost me 1200 bucks i've got another 200 into it and replacement teeth for a total of 1400 bucks this old round baler cost 1200 bucks this dilapidated old bale wagon cost me 300 yes i could have a nicer one but this one works just fine this brings me to a total equipment cost of twenty thousand seven hundred dollars most of which is invested in the two tractors i could have gotten away much cheaper on the tractor side by having just one tractor instead of two you don't need two tractors i just find it more convenient this is a line of equipment we need for a herd our size 35 head if you have a smaller farm you can get by with investing much less money in fact when we started we didn't use this line at all we had an h tractor which i already owned we had a sickle bar mower which i already owned cut we had a rake that a neighbor loaned me for free and we had a small square baler that cost me twelve hundred bucks and we made three hundred to a thousand square bales a year for years with that feeding a small herd with only that 1200 investment which i made back in the first year i did a custom bailing job for a neighbor it was worth 1200 i got my money back so you can start much smaller than we did with much less investment 1 may seem like a huge number and it's a number that would form me if i went out and spent all that money at once but what happened is we had this small line to start with and then as we grew i gradually went out and bought our current hay line of equipment one piece at a time so that twenty thousand dollar investment was spaced out over about five years now let's look at operational costs and these are the expendables spent every year to take care of the equipment and make the hay i spend about seven hundred and fifty dollars in fuel every year to run the tractors i spend about five hundred dollars in wear parts which include things like maintenance on the tractors new knife sections and guards for the mower when they wear out new teeth for the rake when they wear out miscellaneous little things that need to be replaced and we can't forget the cost of baling twine when we were making small squares the last year when we did 3500 i spent about 200 on sisal twine for our square baler when we started round balling the cost went way down now i spent about 50 bucks a year on plastic twine for a round baler so if you add all those operational costs up i spend about thirteen hundred dollars a year on them yes some years or more i may have a major breakdown and have to spend more money but some years it's also less the third part of the equation is labor costs and this is a funky one for me because i don't figure any particular hourly wage for me or hillary on the farm instead what we do is we figure out how much money our family needs to make to make a living off the farm then we work backwards from there into how many animals we raise and profit per animal for me any work i do on the farm labor wise is just in there it's part of that total number and making hay falls into that category now if you want to figure it out i spend about 80 hours a year making hay give or take so you can assign whatever hourly wage you want to that so now let's do the math i have roughly twenty one thousand invested in hay making equipment and if i bought hay it would cost me roughly seven thousand dollars a year so it's simple to recoup my equipment investment i need to make hay for about three years seven times three is twenty one thousand dollars after year three i'm in a good place because i'm only spending about thirteen hundred dollars a year in operational cost to make my hay now all this begs the next question which is what if you don't wanna use junk like i do to bail your hay what if you want newer equipment and you're not mechanically inclined to fix up all this stuff that i run well then the equation changes quite a bit i'm not an expert on the cost of newer equipment but i'm guessing you'd spend 50 grand on a tractor that's this size and the 65 horsepower class you'd probably spend 10 grand on a rake and a tedder you'd probably spend 15 grand on a discbine and you'd probably spend another 15 grand on a modern round baler so you're looking at close to a hundred thousand dollars and that really tips the scales the other way so it all depends on what you're comfortable with now there is a third option that's kind of in between making your own hay versus buying in hay and that's hiring a custom haymaker to make hay off your own land and you can probably expect to pay about half of what you would pay for just buying your hay in for this and if you're going to plan on doing that it's important to establish a good relationship with a custom haymaker because you want to be towards the top of their list when you want your hay made and i find the best way to do that is number one establish a good rapport with them and number two pay them in cash on the day they finish that always gets their attention running through these scenarios can help you make an informed decision when you're trying to decide which way to go with your farm and i think what also applies is the size of your farm of course if you have less than five head of cattle it really is hard to justify making hay unless you have a strong desire to do so like i do and you may be better off buying in your hay for herds that are above five up to about 20 cattle you know a small line of hanging equipment like we started with may make the most sense and maybe you can split it so that you hire out your first big cutting of the year and then you make your own hay for the next there's a lot of flexibility there and for herds that are above 20 head going up to our size 35 and above it probably makes sense to have your own line of hand equipment especially if you can get by with older equipment like we do and finally two words of wisdom number one you have to do what you're comfortable with if you love to make hay that's great if you don't want to deal with big equipment that's okay too you can buy in your hay you have to do what you love and that's the biggest part about farming that i can't stress too much if you don't love it it's just a job if you love it it's a life i hope this video was informative thanks for joining me and i'll see you next time

Channel: Just a Few Acres Farm

Views: 332,920

Keywords: small livestock farm, small farm life, farming, farm, homestead, just a few acres farm, make vs buy hay, hay small farm, costs of making hay, costs of buying hay, making hay with old equipment, old haying equipment costs

Id: 5c74IHVZP00

Length: 9min 4sec (544 seconds)

Published: Tue Jul 21 2020