Stop Haying to Improve Your Bottom Line

Haying season is a traditional summer activity for ranchers, but in today’s economy, doing the work yourself versus buying hay might be hurting your bottom line. 

“When you look at the numbers honestly, you may find you’re better off not making hay at all,” says Carson Roberts, extension specialist for forage and agronomy at the University of Missouri. 

Time, equipment, interest rates and inflation shift with each generation. With feed as a top cost for cow-calf producers, knowing the true cost of hay production is imperative to running the ranch like a business. 

“It’s all about getting above the business and looking down at it — and numbers are a really good way to do that,” says Roberts. “Know your numbers, not someone else’s numbers.” 

There’s a lot that goes into calculating hay production costs. The first place to start is by separating enterprises. 

“You need to separate your haying operation from your cattle operation — those are two different enterprises,” Roberts says. “Even if you’re feeding it yourself, put a real dollar value on that hay.” 

After that, take inventory. 

“Brainstorm everything — walk around your farm and take a picture of anything that has to do with producing hay,” he says. 

From fertilizing to spraying to harvesting, there are many pieces of equipment and tractors to account for. 

“Usually, if hay isn’t profitable, it comes down to equipment costs,” Roberts says. 

This is largely due to increased equipment and repair costs. 

“Today it takes about 28 calves to buy a new baler — 50 years ago it took 14,” he says. “We’re looking at equipment inflation running about 10 times faster than cattle prices.” 

Using loan-free, older equipment isn’t free, either. 

“If you’re running older equipment and doing your own repairs, you’re subsidizing your hay enterprise with your mechanic skills,” Roberts says. 

Those mechanic skills take time and labor, which are often overlooked costs for business owners. 

“Your time is most valuable doing the thing that makes you the most money,” he says. “If you’re a good cattle producer, you’ll make your most money producing cattle — not producing hay.” 

The profitability of hay production is also dependent on the scale of the operation. For larger operators, the numbers might pencil out. 

“At a large enough scale, owning equipment might make sense — but most producers aren’t there,” Roberts says. 

To accurately calculate the cost of hay production on your operation, lean on local extension services that already have budgets or spreadsheets built for producers. 

Once the numbers are calculated, what’s next? 

“If you’re going to get out of haying, sell the equipment — it frees up capital and keeps you from going back,” Roberts says. 

Purchasing hay also creates more freedom to feed what you want, instead of feeding what you put up regardless of quality. 

“You can inspect it, sample it and know exactly what you’re feeding,” he says. “If half the hay got rained on, you can go find the producer whose hay didn’t.” 

Sampling hay is well worth the cost to understand exactly what you are feeding. 

Outside of buying hay, increasing days spent grazing can have the biggest impact on the bottom line. 

“You can make almost twice as much money per acre grazing as you can haying,” Roberts says. 

Grazing isn’t limited to summer pastures. It can include stockpiled forages, corn stalks or cover crops. Cattle are more efficient at harvesting forage than haying equipment — let them do the work. 

Learn more about how to transition from producing hay to purchasing hay on the Casual Cattle Conversations podcast.