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David's Weekly Agriculture Column
Hello, Ashtabula County! What a year it has been. Rain, rain, and more rain. Last year at the 4th of July, our farmers were beaming. Corn was shoulder high and 90% of our hay crop was already in the barn. What a difference a year makes. This July 4th, the corn was barely knee high and in many fields it was only knee high to a Jack Russell. Our hay producers are having a difficult year. To make dry hay, we need stretches of dry sunny weather. Thus far, these stretches have been few and far between. Each week that passes will reduce the quality of our hay crop which is already two weeks behind schedule. Let’s all think happy thoughts of nice hay weather for the month of July
Speaking of hay. While the quality of hay is decreasing, do not expect the price of it to follow. The fuel crunch is being felt all the way to the farm gate. There is a lot of discussion on what the price of hay per bale will be this year. $2.50, $3.00, $3.50, $4.00 or more per bale?
My counterpart in Athens County, Rory Lewandowski wrote an nice article on pricing hay in this month’s Ohio Ag Manager newsletter (http://ohioagmanager.osu.edu). Rory outlined how producers can be determined the price floor for their based on the value of nutrients removed from the hayfield plus equipment costs.
According to the Ohio Agronomy Guide, each ton of grass hay removes 40 lbs of nitrogen, 13 lbs of phosphate (P2O5) and 50 lbs of potash (K2O). Using these crop removal rates and our current fertilizer prices, the cost of replacing the nitrogen, phosphate and potash removed in a ton of hay will result in a cost between $70 to $82 per ton. Besides the fertilizer cost, there should be something figured in for spreading the fertilizer. Using the 2008 Ohio Farm Custom Rates, the average cost for spreading dry bulk fertilizer is about $4.50/acre.
It is true that hay can be produced without fertilizing. We see it happen all the time. So, should fertilizer cost be part of determining the cost of hay? Yes, because each ton of hay removes those nutrients whether they are replaced or not. It is a matter of pay now or pay later. The soil can get mined to the point where it is no longer practical to produce hay.
The next part of calculating the cost of hay production is machinery/equipment expense. Rory used the average cost figures from the 2008 Ohio Farm Custom Rates. These rates are based on survey responses of Ohio farmers. Your own equipment costs may vary, and if you know what they are, plug those in. For those who don’t know, this is a good place to start. Mowing is valued at $11.13/acre, tedding at $6.13/acre, raking at $6.59/acre, and large round bale baling and hauling at $8.81 per bale.
Since we talk about hay in terms of price/ton, these per acre costs need to be converted into costs /ton. Here is where fertility will pay some dividends. As yields increase, the machinery costs of mowing, tedding and raking decrease on a per ton basis.
Let’s consider an example where hay production is at 2 tons per acre and large round bales weigh 1000 lbs. Plus it makes for easier math! The machinery costs are $5.56/ton for mowing, $3.07/ton for tedding, $3.29/ton for raking and $17.62/ton for baling and hauling the bales. If we need to do one tedding and one raking before baling, our total machinery cost is $29.54/ton. Adding the machinery cost to the lower of our fertilizer quotes ($70) results in a total hay production cost just under $100/ton. At the higher fertilizer quote ($82), the cost is $112/ton. Remember, this does not include the cost of spreading fertilizer.
Now, it may be possible to reduce these hay production costs somewhat. You might find a better deal on fertilizer. Maybe you have an even distribution of 30% or more legumes in your hay mix, so the legumes provide nitrogen. Not having to buy nitrogen fertilizer could reduce hay cost by around $30/ton. Possibly you can spread some livestock manure. Maybe your machinery costs are a little lower.
The point is, even with some of these conditions, hay is still going to be an expensive commodity this year. The base cost of just your fertilizer and equipment in 2008 is $100-$112 per ton or $2.50 to $2.80 for a 50 pound bale of hay. This does not include your twine, hired labor and a return on your management skills (unless you work for free).
Just like gas, diesel fuel, and the food at our local supermarket, our costs are all rising. Here is hoping our rain will stop so our farmers can get their hay crop off this year. Have a good and safe July.
Marrison is Extension Educator, Agriculture & Natural Resources, Ohio State University Extension. Mr. Marrison can be reached at 440-576-9008 or marrison.2@osu.edu Ohio State University Extension embraces human diversity and is committed to ensuring that all research and related educational programs are available to clientele on a nondiscriminatory basis without regard to race, color, religion, sex, age, national origin, sexual orientation, gender identity or expression, disability, or veteran status. This statement is in accordance with United States Civil Rights Laws and the USDA.
Keith L. Smith, Ph.D., Associate Vice President for Agricultural Administration and Director, Ohio State University Extension TDD No. 800-589-8292 (Ohio only) or 614-292-1868
