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Bale your own hay or hire out?

Jeff Caldwell 04/25/2012 @ 8:17am Multimedia Editor for Agriculture.com and Successful Farming magazine.

Can you get a better deal baling your own hay or having a custom baler do the work for you?

It all depends on your equipment costs, operating costs and what it takes to raise your crop versus what you pay for custom haying or buying hay from another producer, says University of Missouri Extension ag business specialist Whitney Wiegel. It starts with your iron and takes into account more than just what you paid for it.

"These costs depend upon the market value of the equipment, how each equipment purchase is financed, insurance costs and property tax rates," Wiegel says in a university report. "Machinery ownership costs are often prohibitive when equipment is not used to its full capacity or when the hay produced has little value."

To get a true picture of what this means to what you pay for your hay, it's important to break your machinery costs, which Wiegel says are "relatively fixed" in this scenario, into a cost of production for each bale. And, the more hay you put up, the less you'll pay in fixed costs per bale.

"The situation of owning hay equipment is made more favorable when the volume of hay produced with the equipment can be increased,” Wiegel says.

Then, add in your operating costs: Labor, fuel, maintenance and repairs.

"These costs are considered variable because the cumulative dollar value of these expenses will vary with the quantity of hay baled," Wiegel says.

Add it all up and, if your operating and machinery costs are lower than a custom baler or producer, consider doing it yourself. But, always remember to not just take into account the costs alone, but spread them out over the number of bales you'll be putting up.

"Dividing the total ownership and operating cost by the units of hay baled provides a dollar value that signifies the ownership and operating costs embodied in each unit of hay," Wiegel says.

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Darrin Steinert Depends on how many acres are produced annually 04/29/2012 @ 1:24pm We only produce around 60 acres of hay, so we hire it done by one of our neighbors. He rolls up around 20,000 bales annually so he always has the latest and greatest of equipment. He is only 1/4 mile up the road and we do a bunch of labor swapping so by years end there is very little money that needs to change hands. In my eyes, trading labor vs. trading $ is always the better route.

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