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Lisbon, OH | Think I posted this in the right place, since I'm dealing with hay.
I am working on renting a hayfield about 35 acres that is part of a pasture that I already rent. Trying to come up with a plan that will be fair to both me and the landlord. Ohio doesn't really have a rental rate for the eastern part of the state. We do quite a few different things with the ground we have. Some is free, some the owner gets a part of the hay, and others we pay rent on, most is $20-30/acre. Hay in this area goes for $20-40/bale, depending on quality. We can sell $30 hay every day, $40 hay takes a little more work. Fertilizer removal rate on this field would be about $71.50/acre (64-46-120 applied). Our 4x5 bales weigh 800-1000 lbs. An average 1st cutting would give us about 5 bales/acre. This year we were a little below that on average. Ohio average yield is about 2.5-3 tons per acre, which we get pretty close to. It costs us about $12/bale to make a bale on the 5 bale average, which does not include rent or fertilizer. That does include equipment, fuel, labor. Landlord will also want lime. 2 ton/acre applied is about $91/acre here. I need to take soil samples before I make any decisions just to be sure where we are. This ground just been mowed 2-3 times/year. Other farmers in the area, but owner isn't going to let anyone take it for free.
I said all of that to say this. If I break this all down to a cost per bale on our 5 bale average: Fertilizer $15.23 + Production $12 = 27.23/bale. If we jump up to 7 bales/acre fertilizer costs go down, so bale cost is $22.88. Not including rent or lime. Hauling costs $5/bale.
I'm thinking instead of a rent per acre to offer a rent per bale, in the neighborhood of $4-5 per bale. At our 5 bale/acre average, this would be around $20/acre, which is pretty typical of our rent. It would also give me an incentive to a really good job, because as my production increases my cost to make a bale goes down. Also, the landlord would make more the more hay I make. Would this be a good way to approach the owner? My only concern is if he wants $10/bale, I don't think that I can make that work.
On lime, who is responsible? As I said, I haven't pulled any soil samples yet. Hay hasn't been removed from this field in 3-4 years, it's just been mowed. We probably wouldn't have to apply lime every year, maybe every 2-3 years depending on pH. At $91/acre for 2 ton applied, we're looking at $6-10/bale additional for lime.
So, using these figures on let's say 7 bales/ac/year (hoping more fertile fields=more hay) 3 tons/ac
$12 Production
$10.21 Fertilizer
$4.33 Lime (2 T/3 yrs)
$5 Hauling
$5 Rent
$36.54 grand total to make a bale
$85.26/ton estimate
So, long story short....will this work? Any other suggestions? Do my numbers line up with yours?
I have my scratch pad of figures if anyone would like to take a look. | |
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Rental rates and fertilizer/lime on hayfields
