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Group Title: Economic information report
Title: The Economics of hay production in North Florida
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00026501/00001
 Material Information
Title: The Economics of hay production in North Florida
Series Title: Economic information report - University of Florida. Food and Resource Economics Dept. ; 187
Physical Description: iii, 17 p. : ill. ; 28 cm.
Language: English
Creator: Eason, Mark, 1957-
Prevatt, J. Walter ( James Walter ), 1953-
Chambliss, C. G. ( Carrol Gene )
Publisher: Food & Resource Economics Dept., Agricultural Experiment Stations and Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: June, 1983
Copyright Date: 1983
 Subjects
Subject: Hay -- Economic aspects -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: M. A. Eason, J. W. Prevatt, C. G. Chambliss.
General Note: Cover title.
General Note: "June 1983."
 Record Information
Bibliographic ID: UF00026501
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: notis - AHG1475
alephbibnum - 001547924
oclc - 22619310

Table of Contents
    Front Cover
        Front Cover
    Abstract
        Page i
    Table of Contents
        Page ii
        Page iii
    Main
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
Full Text

"M. A. Eason Economic Information
Report 187
J. W. Prevatt

C. G. Chambliss




The Economics of Hay Production
in North Florida





















Food and Resource Economics Department
Agricultural Experiment Stations and
Cooperative Extension Service
Institute of Food and Agricultural Sciences J une 1983
University of Florida, Gainesville 32611















ABSTRACT

This report contains costs for producing and harvesting hay in North
Florida. Estimated costs and returns of establishing, growing, and harvest-
ing alfalfa, Coastal bermuda, and bahia are shown in budget form. The
harvesting costs of four hay harvesting systems are also presented taking
into account various yields harvested annually and per acre.

Key words: Alfalfa, Coastal bermuda, bahia, budgets, cost and net
returns, and costs per ton.













ACKNOWLEDGEMENT


Appreciation is extended to Janice Walden for typing this manuscript.









TABLE OF CONTENTS Page

ABSTRACT ............................................ ... ......

INTRODUCTION ...................................................... 1

ALLOCATION OF COSTS ................................................ 1

BREAKEVEN PRICE AND NET RETURNS ............................... 2

RAINFALL DATA ...................................................10

COMPARING HAY HARVESTING SYSTEMS..............................10

VARIABLE AND FIXED COSTS ...................................... 13

COST ESTIMATES ...................................................13

SUMMARY .................... .................. ........................ 17


LIST OF TABLES

Table

1 Estimated establishment cost for one acre of alfalfa, North Florida,
1983 .............................................................. 3

2 Alfalfa hay: Estimated production and harvesting costs per acre,
North Florida 1983 .... ......................................... 4

3 Alfalfa hay: Net returns per acre with varying yields and prices. 5

4 Estimated establishment cost for one acre of Coastal Bermudagrass
in North Florida, 1982 .......................................... 5

5 Coastal bermudagrass hay: Estimated production and harvesting
costs per acre, North Florida, 1983.............................. 6

6 Coastal bermudagrass hay: Net returns per acre with varying
yields and prices............................................... 7

7 Estimated establishment cost for one acre of bahiagrass in North
Florida, 1983................................................. 7

8 Bahiagrass hay: Estimated production and harvesting costs per
acre, North Florida, 1983 ...................................... 8

9 Bahiagrass hay: Net returns per acre with varying yields and
prices ............................................................ 9

10 Break-even prices at various yields.............................. 9

ii









LIST OF TABLES (Continued)

Table Page

11 Cumulative number of three-day dry periods for seven day inter-
vals between April and September, 50 years data, Quincy, Florida,
1932-1981...................................................... 11

12 Harvest variable costs per ton of four hay harvesting systems..... 15

13 Fixed costs per ton of four hay harvesting systems ...............15

14 Total harvest costs per ton of four hay harvesting systems........ 16








































iii









THE ECONOMICS OF HAY PRODUCTION IN NORTH FLORIDA


M. A. Eason, J. W. Prevatt, and C. G. Chambliss


INTRODUCTION


Hay remains an important winter feed for Florida livestock. As with
other agricultural enterprises, producing and harvesting hay is expensive.
Estimated costs and returns for alfalfa, coastal bermuda, and bahia are
presented in this study. Establishment, production, and harvesting expen-
ses are explained in budget form. Net returns per acre with varying yields
and prices, and breakeven prices are shown.
Custom rates are used in the production budgets for simplicity, but many
hay producers own their equipment. With the development of different size
and shape packages of hay and harvesting methods, it has become more diffi-
cult to determine system costs. For this reason, this study also investigates
the operating and ownership costs for various hay harvesting systems.


ALLOCATION OF COSTS


Total costs are subdivided into variable (operating) and fixed (owner-
ship) costs. Variable costs describe those costs that vary with output (yield)
during the production period. These costs are related to the price and
quantity of inputs such as fuel, oil, lubricants, repairs, and labor. Fixed
costs, however, are unrelated to output and do not vary during the pro-
duction period. The fixed costs considered include depreciation, insurance,
taxes, and interest.
The land costs (either rent or opportunity cost) for Coastal bermuda
and bahiagrasses are assumed to be cheaper than for row crops because
these grasses do not require as fertile soil as row crops. Not only do net
returns differ as prices and yields change, but also as input costs vary.
The main cost which varies in the study is the cost of harvesting. For


M. A. EASON and J. W. PREVATT, assistant professorsof food and
resource economics, are stationed at the AREC-Quincy and the AREC-Braden-
ton, respectively. C. G. CHAMBLISS, associate professor of agronomy, is
stationed at the AREC-Bradenton.
1







2
example, the same amount of production Inputs can produce four to eight tons
of alfalfa per acre. The major difference in net returns will depend on how
many tons are actually produced and harvested.
This study does not include a lpnd clearing cost in the regular budget.
It is assumed that it would not be feasible to clear land in order to plant
grass in today's economy. However, a custom land clearing charge is foot-
noted in the Coastal bermuda and bahiagrass budgets.
Total costs for establishment resulted with alfalfa being the most expen-
sive ($296) (Table 1), then Coastal bermudagrass ($183) (Table 4), and
bahiagrass the least expensive ($167) (Table 7). Alfalfa's greater cost is
attributed mainly to higher price seed, greater amounts of fertilizer and
other inputs. The major expense for Coastal bermuda is the cost of sprig-
ging ($55), which includes the sprigs.
Alfalfa's production costs (Table 2) add up to $181 which is $30 more
than Coastal bermudagrass and bahiagrass production costs (Tables 5 and
8). Harvest expenses will vary with yield and the type of harvest system
used. Most livestock producers prefer alfalfa in rectangular bales as opposed
to the large round bales. For this reason, the budget assumes that alfalfa
is harvested in rectangular bales.


BREAK-EVEN PRICE AND NET RETURNS


Break-even prices for each enterprise reveals the price a producer has
to have in order to break-even at various yields. To determine break-even
price, simply divide total cost per acre by yield per acre.
The break-even price for alfalfa hay with a four ton per acre annual yield
would be $107.26. A six ton yield of coastal bermuda and a five ton yield of
bahia hay per acre would require a break-even price of $55.00 and 60.69,
respectively (Table 10). A producer needs to know his costs and projected
yields in order to establish a break-even price. Once the break-even price is
known, the producer can better market his hay for a profit.
The net return tables for the three forages (Tables 3, 6, and 9) show
basically the same data that the break-even table presents, but the net return
tables are more precise with varying yield and prices needed for a profit.
Alfalfa hay, for example, with a four ton yield per acre nets $10.94 per ton at
a price of $110 per ton. A net return of $93.19 is realized with a five ton yield






3


Table 1.--Estimated establishment cost for one acre of alfalfa, North Florida,
1983

Item Unit Quant. Price Value Your cost

Variable costs: ----Dollars----

Seed Ib. 18 2.90 52.20
Inoculant pkg. 1 .75 .75
Fertilizer (0-10-20
or equivalent) cwt. 6 7.50 45.00
Lime ton 1 18.00 18.00
Boron lb. 2.5 1.25 3.13
Herbicide acre 1 16.75 16.75
Insecticide acre 1 12.20 12.20
Tractor (80 hp) hr. 3.5 4.26 14.91
Truck, pickup mi. 20 .10 2.00
Equipment hr. 3.5 3.02 10.57
Labor hr. 5.0 3.75 18.75
Land rent acre 1.0 30.00 30.00
Interest on cash exp. $ 224.26 .15 33.64
Total variable costs 257.90

Fixed costs:

Tractor (80 hp) hr. 3.5 5.32 18.62
Truck, pickup mi. 20 .13 2.60
Equipment hr. 3.5 4.86 17.01
Total fixed costs 38.23

TOTAL COSTS 296.13


Source: Timothy D. Hewitt, Area Economist, University of Florida ARC,
Marianna, Florida.







4


Table 2.--Alfalfa hay: Estimated production and harvesting costs per acre,
North Florida, 1983 (Based on 4 cuttings)


Item Unit Quant. Price Value Your Cost

Variable costs: --- Dollars-----

Fertilizer (0-10-20 or
equivalent cwt. 12 7.50 90.00
Lime ton .5 20.00 10.00
Boron Ib. 2.5 1.25 3.13
Herbicides acre 1.0 11.25 11.25
Insecticides acre 1.0 8.60 8.60
Tractor (50 hp) and
machinery hr. 2.0 3.14 6.28
Truck; pickup mi. 20.0 .10 2.00
Labor hr. 2.0 3.75 7.50
Land rent acre 1.0 30.00 30.00
Interest on cash
expenses $ 168.76 15% (6 mos.) 12.65
Total variable costs 181.41

Harvest costs:

Custom mow, rake, baleb ton 4 24.00 96.00
Labor hr. 8 3.75 30.00
Tractor (50 hp) and
equipment hr. 4 3.08 12.32
Total harvest costs 138.32

Fixed costs:

Tractor and machinery hr. 6 5.45 32.70
Truck, pickup mi. 20 .13 2.60
Establishment (prorated
over 4 years) acre 1.0 74.03 74.03
Total fixed costs 109.33

TOTAL COSTS 429.06

aHarvest costs change with yield per acre. A custom rate of $24 per ton
is assumed.

Assumes hay is harvested in rectangular bales (55 Ibs.).






5



Table 3.--Alfalfa hay: Net returns per acre with varying yields and prices

Yield per acre (tons)a
Price 3 4 5 6 7 8
-----------------------------Dollars-------------------------
$ 90 -131.31 -69.06 -6.81 55.44 117.69 179.94
100 -101.31 -29.06 43.19 115.44 187.69 259.94
110 -71.31 10.94 93.19 175.44 257.69 339.94
120 -41.31 50.94 143.19 235.44 327.69 419.94
130 -11.31 90.94 193.19 295.44 397.69 499.94
140 18.69 130.94 243.19 355.44 467.69 579.94


aNet returns are based on the amount of salable hay, not necessarily the
amount produced.


Table 4.--Estimated establishment cost for one acre of coastal bermudagrass in
North Florida, 1983a

Item Unit Quant. Price Value Your rnst

Variable costs: -----Dollars------

Lime ton 1.0 20.00 20.00
Fertilizer (5-10-15 or
equivalent) cwt 3.0 7.50 22.50
Custom sprigging
(sprigs included) acre 1.0 55.00 55.00
Nitrogen Ib 60 .26 15,60
Herbicide Ib 2.0 3.75 7.50
Tractor (50 hp) hr 1.75 2.58 4.52
Truck, pickup mi 20 .10 2.00
Equipment hr 1.75 1.04 1.82
Labor hr 2.0 3.75 7.50
Land rent acre 1 20.00 20.00
Interest on cash
expenses $ 156.44 15% (6 mos.) 11.73
Total variable costs 168.17

Fixed costs:

Tractor (50 hp) hr 1.75 3.12 5.46
Truck, pickup mi 20 .13 2.60
Equipment hr 1.75 3.60 6.30
Total fixed costs 14.36

TOTAL COSTS 182.53


aAdd $300 per acre for custom land clearing; includes bulldozing, root
raking, and heavy disking.







6


Table 5.--Coastal bermudagrass hay: Estimated production and harvesting
expenses per acre, North Florida, 1983 (Based on 5 cuttings)

Item Unit Quant. Price Value Your cost

Variable costs:
----Dollars ----
Fertilizer (5-10-15 or
equivalent) cwt 6 7.50 45.00
Lime ton .33 20.00 6.60
Nitrogen Ib 200 .26 52.00
Herbicide gal .25 11.50 2.88
Tractor (50 hp) hr 1.75 2.58 4.52
Equipment hr 1.75 .56 .98
Truck, pickup mi 10 .10 1.00
Labor hr 2.02 3.75 7.56
Land rent acre 1.0 20.00 20.00
Interest in cash expenses $ 140.54 15% (6 mos.) 10.54
Total variable costs 151.08

Harvest costs:

Custom mow, rake, baleb ton 6 24.00 144.00
Labor (machine loading) hr .5 3.75 1.88
Tractor (50 hp) & equipment hr .5 3.23 1.62
Truck, pickup mi 10 .10 1.00
Total harvest costs 148.50

Fixed costs:

Tractor and equipment hr 2.25 4.24 9.54
Truck, pickup mi 20 .13 2.60
Establishment (prorated
over 10 years) acre 1.0 18.25 18.25
Total fixed costs 30.39

TOTAL COSTS 329.97

aAssumes hay is harvested in round bales (1000 Ib.)

bHarvest costs change with yield per acre. Assumes custom rate of $24
per ton.






7


Table 6.--Coastal bermudagrass hay: Net returns per acre with varying yields
and prices

Yield per acre (Tons)a
Price 4 5 6 7 8
------------------------------Dollars------------------------
$ 50 -80.77 -55.40 -29.97 4.53 20.85
60 -40.77 5.40 30.03 65.47 100.85
70 .77 44.60 90.03 135.47 180.85
80 39.23 94.60 150.03 205.47 260.85
90 79.23 144.60 210.03 275.47 340.85
100 119.23 194.60 270.03 345.47 420.85


Net returns should be based on the amount of salable hay, not neces-
sarily the amount produced.


Table 7.--Estimated establishment cost for one acre of bahia grass in North
Florida, 1983a

Item Unit Quant. Price Value Your cost

Variable costs: ----Dollars ----

Lime ton .33 20.00 6.60
Fertilizer (5-10-15 or
equivalent) cwt 4.0 7.50 30.00
Seed Ib 20 1.50 30.00
Nitrogen Ib 40 .26 10.40
Herbicide gal .25 11.50 2.88
Tractor (50 hp) hr 1.75 2.58 4.33
Truck, pickup mi 20 .10 2.00
Equipment hr 1.75 5.16 9.03
Labor hr 2.00 3.75 7.50
Land rent acre 1.0 20.00 20.00
Interest on cash exp.
(1 year) $ 122.74 15% 18.41
Total variable costs 141.15

Fixed costs:

Tractor hr 1.75 3.12 5.46
Truck, pickup mi 20 .13 2.60
Equipment hr 1.75 10.04 17.57
Total fixed costs 25.63

TOTAL COSTS 166.78

aAdd $300 per acre for custom land clearing; includes bulldozing, root
raking, and heavy disking.





8



Table 8.--Bahiagrass hay: Estimated production and harvesting costs per acre,
North Florida, 1983 (Based on 3 cuttings)

Item Unit Quant. Price Value Your cost

Variable costs: -------Dollars -----

Fertilizer (5-10-15 or
equivalent) cwt 6.0 7.50 45.00
Lime ton .33 20.00 6.60
Nitrogen Ib 200 .26 52.00
Herbicide gal .25 11.50 2.88
Tractor (50 hp) hr 1.75 2.58 4.52
Equipment hr 1.75 .56 .98
Truck, pickup mi 10 .10 1.00
Labor hr 2.00 3.75 7.50
Land rent acre 1.0 10.00 20.00
Interest on cash expenses $ 140.48 15% (6 mos.) 10.54
Total variable costs 151.02

Harvest costs:

Custom mow, rake, baleb tons 5 24.00 120.00
Labor (machine loading) hr .42 3.75 1.58
Tractor (50 hp) &
Equipment hr .42 3.23 1.36
Truck, pickup mi 10 .10 1.00
Total harvest costs 123.94

Fixed costs:

Tractor and equipment hr 2.17 4.24 9.20
Truck, pickup mi 20 .13 2.60
Establishment (prorated over
10 years) acre 1.0 16.68 16.68
Total fixed costs 28.48

TOTAL COSTS 303.44

aAssumes hay is harvested in round bales (1000 lb.).

b
Harvest costs charge with yield per acre. Assumes custom rate of $24
per ton.






9



Table 9.--Bahiagrass hay: Net returns per acre with varying yields and
prices.

Yield per acre (Tons)a
Price 3 4 5 6 7
---------------------------Dollars-----------------------------
$ 50 -104.25 -78.83 -53.44 -28.00 2.57
60 74.25 -38.83 3.44 32.00 67.43
70 44.25 1.17 46.56 92.00 137.43
80 14.25 41.17 96.56 152.00 207.43
90 15.75 81.17 146.56 212.00 277.43
100 45.75 121.17 196.56 272.00 347.43


aNet returns are based on the amount of salable hay, not necessairly the
amount produced.


Table 10.--Break-even prices at various yields a

Yield (tons/acre) Pricelton
Alfalfa Coastal Bahia

3 $ 133.77 $ 85.52 $ 84.75
4 107.26 70.19 69.71
5 91.36 61.08 60.69
6 80.76 55.00 54.67
7 73.19 50.65 50.37
8 67.51 47.39 46.96


aBreakeven prices vary with yield and harvesting cost. Break-even

Total cost
price = Yield







10


at the same price Note that the cost figures in the break-even and net return
tables are adjusted to reflect changes in yield per acre which affect harvest
cost.
Net returns are affected by the amount of good quality salable hay. For
example, if four tons of alfalfa are produced an acre (Table 3), and only 75
percent (3 tons) of that is salable hay, then net returns decrease from a
positive $50.94 per ton to a negative $41.31 per ton, assuming a selling price
of $120.00 per ton.


RAINFALL DATA


Hay harvesting is largely affected by rainfall. Quantity and quality of
salable hay depends on whether or not it was rained on during harvest. Fifty
years of rainfall data (1932-1981) for the Quincy AREC were reviewed in order
to determine a historical basis for harvesting hay. Using a cut off of .03 inch,
the number of three-day dry periods in seven day intervals were tabulated from
April 1 to September 29. There is a total of five separate three day dry periods
in a seven day interval. Observing the rainfall data (Table 11) for example,
one can see that for the first week (1-7) in April that 36 years out of 50 years
had one three day dry period, 27 out of 50 years had two three day dry periods,
20 out of 50 years had three, 10 out of 50 years had four and nine out of 50
years had five three day dry periods. This information is a tool and may be
used with other decision making factors such as the immediate weather forecast.


COMPARING HAY HARVESTING SYSTEMS


This study presents the harvesting costs of four hay harvesting systems:
small round bale, large round bale, rectangular bale with pull type wagon,
and rectangular bale with a self-propelled bale wagon. The operations of each
system were based on harvesting, transporting and stacking hay in a storage
facility. Costs were further examined to determine the effect of annual use of
equipment and hay yields.
A hypothetical production setting composed of five levels of annual pro-
duction setting composed of five levels of annual production (tons harvested
annually) and three levels of yield (tons per acre) was used. The components
of each system were organized to achieve the desired levelof harvest operation.







Table 11.--Cumulative number of three-day dry periods for seven day intervals between April and September,
50 years data, Quincy, Florida 1932-1981


No. of
3-day
dry
periods Number of years out of 50

ONE 36 43 45 47 45 42 39 38 37 37 36 32 32 25 26 22 25 23 32 35 25 29 33 42 38 41

TWO 27 34 40 35 40 32 32 26 28 32 26 20 20 14 15 11 13 12 21 22 12 18 24 35 31 33

THREE 20 20 29 27 29 22 31 20 19 23 19 11 11 5 10 3 7 6 13 10 6 12. 15 29 21 19

FOUR 10 14 20 18 20 14 21 13 12 11 11 5 5 4 6 1 3 3 5 6 2 7 10 17 15 11

FIVE 9 12 15 13 17 9 17 7 6 8 10 1 2 1 4 1 1 1 4 5 0 3 7 12 9 8


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12


The following machinery and equipment were included in the evaluation of the
harvesting systems:
System 1 --Mower-conditioner (9-foot)
Tedder (16-foot)
Side delivery rake (9-foot)
Small round baler (4.5' x 4.25')
Bale fork
Rear hydraulic bale fork
Hay wagon
Tractor (70 hp)
Tractor (55 hp)
Pickup (0.5 ton)

System 2 --Mower-conditioner (9-foot)
Tedder (16-foot)
Side delivery rake (9-foot)
Large round baler (5.5' x 5.5')
Bale fork
Rear hydraulic bale fork
Hay wagon
Tractor (70 hp)
Tractor (55 hp)
Pickup (0.5 ton)

System 3 --Mower-conditioner (9-foot)
Tedder (16-foot)
Side delivery rake (9 foot)
Rectangular baler (14" x 18" x 36")
Pull type bale wagon (104 bales)
Tractor (70 hp)
Tractor (55 hp)
Pickup (0.5 ton)

System 4 --Mower-conditioner (9-foot)
Tedder (16-foot)
Side delivery rake (9-foot)
Rectangular baler (14" x 18" x 36")
Self-propelled bale wagon (160 bales)
Tractor (70 hp)
Tractor (55 hp)
Pickup (0.5 ton)

The mow, ted, and window operations are exactly the same for each system.
Therefore, any differences among systems will be reflected in the baling,
transporting, and stacking operations.






13


VARIABLE AND FIXED COSTS

The variable and fixed costs in this study were calculated with the aid
of a computerized budget generator.
The variable costs included the calculation of fuel, oil, lubricants, and
repairs from operation and maintenance specifications, while labor requirements
were estimated for each system from time and motion information furnished by
producers, Institute of Food and Agricultural Science personnel, and industry
representatives.
Among the fixed costs, depreciation costs per hour were computed by
dividing investment cost minus salvage value by the total hours the system
would be used during its useful life. The insurance cost per hour was based
on a percentage of the average investment cost per hour. The percentage
coefficient was obtained from an established insurance company. The interest
charge for each asset was based on the average amount of capital invested
over the ownership period. Tax cost per hour of operation depends on the
investment cost, tax rate, and hours used annually. Hourly tax costs were
computed, using the investment cost multiplied by the tax rate (millage on
personal property) and divided by the hours used annually.
The purchase of hay harvesting equipment allows the buyer to become
eligible for tax advantages that would not apply to a rentor. These advan-
tages consist of depreciation and investment tax credits that reduce the amount
of taxable income. Depreciation is a method of recovering the cost of a
business capital item (equipment) by deducting part of the cost each year.
An investment tax credit is an effective tax reduction tool. The credit is a
direct reduction against income tax liability -- it reduces tax on a dollar-
for-dollar basis. For more information contact your accountant, extension
service, or the IRS.
The variable and fixed costs were summed to determine the total cost of
each hay harvesting system. Each of these costs was further evaluated to
determine the effect of increasing tons harvested annually and tons per acre
yield on hay harvesting costs.


COST ESTIMATES

The initial investment costs of the hay harvesting systems varied greatly.
System 4, at $103,750, had the highest investment cost. This was primarily












































.. ...... ___~l___t_







15

Table 12.--Variable -harvest costs per ton pf four hay harvesting systems

Quantity harvested annually
Total Per acre System 1 System 2 System 3 System 4
------------Tons----------- --------------------Dollars-------------------

100 1 22.00 20.84 16.65 32.35
2 10.71 10.14 8.71 15.93
3 7.05 6.67 5.72 10.54
500 1 24.20 22.98 19.97 34.19
2 11.53 10.94 9.47 16.63
3 7.51 7.12 6.15 10.94
1000 1 25.74 24.46 21.36 35.45
2 12.10 11.49 9.99 17.10
3 7.83 7.43 6.44 11.20
1500 1 26.89 25.56 22.38 36.39
2 12.53 11.90 10.37 17.44
3 8.07 7.60 6.66 11.40

2000 1 27.85 26.47 23.23 37.16
2 12.87 12.23 10.68 17.73
3 8.26 7.85 6.83 11.55


aOperating costs per ton include the costs of inputs such as fuel, oil
lubricants, repairs, and labor.




Table 13.--Fixed costs per ton of four hay harvesting systems

Tons
harvested annually System 1 System 2 System 3 System 4
-----------------------Dollars----------------------
100 tons 188.17 188.23 176.80 278.65
500 tons 37.63 37.64 36.44 55.72
1000 tons 18.82 18.82 18.22 27.86
1500 tons 12.54 12.54 12.15 28.57
2000 tons 9.41 9.41 9.11 13.93


aOwnership costs per ton include depreciation, insurance, taxes, and
interest.






16


Table 14.--Total harvest costs per ton of four hay harvesting systems

Quantity harvested annually
Total Per acre System 1 System 2 System 3 System 4
----------Tons------------ -------------------Dollars --------------------

100 1 210.16 209.07 193.46 311.00
2 199.88 198.37 190.92 294.61
3 195.28 194.98 187.98 289.31

500 1 61.83 60.62 56.41 89.91
2 49.17 48.59 45.91 72.35
3 45.15 44.77 42.59 66.66

1000 1 44.55 43.28 39.57 63.31
2 30.92 30.31 28.21 44.96
3 26.65 26.26 24.66 39.06

1500 1 39.43 38.11 34.53 54.96
2 25.00 24.44 22.51 36.02
3 20.61 20.21 18.80 29.97

2000 1 37.25 35.89 32.34 51.09
.2 22.28 21.64 19.79 31.66
3 17.67 17.26 15.94 25.49

aTotal cost per ton is the summation of operating and ownership cost.
The sum of operating and ownership costs may not exactly equal total cost
due to rounding errors.






17


respond to increases in tons harvested annually are reflected in lower fixed
costs per ton, while increases in yield (tons per acre) resulted in lower variable
costs per ton (but higher cost per acre). The combination of lower fixed
and variable cost results in lower total costs per ton.


SUMMARY


The budgets in this study show that establishing, growing, and harvest-
ing hay can be an expensive proposition. Hay harvesting can be especially
expensive depending on the type system used and the amount harvested. This
study shows that hay harvesting cost per ton decreases as increases of tons
harvested annually and tons per acre are realized.
There are factors other than cost which may influence the hay making
decision. The decision to custom hire or purchase a system must include
such factors as taxes, timeliness, convenience, and quality.
The hay market is thin; very little hay is bought and sold on a large
scale. As such, prices reported may not be an accurate representation of
the value of the hay because of the quantity and quality differences. Net
returns per acre increase with increases in yield and price, but it is the
amount of good quality salable hay that will provide a positive return. What-
ever the combination, these results indicate that large yields of high quality
hay which are marketed at top prices are required for hay to be considered
as a feasible cash crop.





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