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Tom Baer
307-703-4020
tom@AmericanAgVA.com

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Wendy Fischer
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August 24, 2015

 

(Click for a larger .pdf)

8-26-15 American Ag Video Auction What's My Hay Worth Infographic

What's My Hay Worth?

In this business I not only get the opportunity to provide all types of hay services for buyers and sellers, but I also get those million dollar questions: What do I plant or What is my hay worth? Although, I would like to be able to give a direct answer for those types of questions it’s a little more complicated due to variable factors. 

Let’s take a look at all the variable factors just for the most common question:  What’s my hay worth?  First, we have to understand some very basic things; the hay market is unlike any other commodity. There is no standard, board of exchange, or elevator price due to hay having far too many variables. If I was just to name off a few: location, weather, quality, protein, RFV, bale size, did it get rained on, stacks tarped or shedded, net wrapped or string…and the list goes on. 

Let’s breakdown the topic of location and how it factors into the price of hay.  As an example, let’s say there’s a grower in North Central, North Dakota who has a beautiful, bright green stack of 3x4 squares. They are testing 205 RFV, 23% Protein, 68% TDN, just perfect dairy hay!   But the closest dairy market is 800 miles away.   Another grower has the same exact hay 10 miles from a large dairy operation; unfortunately the North Dakota’s hay is going to cost the end dairy much more to transport, so the local guy gets the premium price. The hay in North Dakota in not worth any less than the local grower’s hay but due to the distance and trucking it would cost the end dairy more per ton so the price adjusts according to freight costs. It’s simple of course, but I know is a hard pill for growers to swallow.

Another contributing variable is rain damage. I hear it all the time, “but we don’t get the weather here so there’s no damage” While this may be somewhat true “perception is reality”.  For example, the buyers in the southern states get approximately 60” of rain per year; due to that much rain they grow very mediocre hay at best. They turn to the Midwest for the premium tarped or shedded hay. Those buyers know that square bales will be completely rotten within weeks if left outside. They cannot fathom buying a stack of uncovered hay and expect it to be good. I see it time and time again that tarped squares ALWAYS bring premium and shedded squares even more. No matter where you are located!  And just a quick side note, THERE IS ALWAYS DAMAGE ON TOPS OF UNCOVERED HAY - ALWAYS! But, this is a whole other subject for a later blog.

I’ve only touched on a few variables that factor into “what your hay is worth” but I hope this gives you a better understanding of hay market prices.  A couple other things to keep in mind, ALWAYS, ALWAYS test your hay first by a reputable, certified lab. Some questions to keep in mind:  Where is the hay located? How far is it to a good market? What is the bale size (Round or Square)? Can this be feasibly trucked a long distance? What is the quality of the hay (dairy, horse, or cow)? Is there rain damage? Are we in a drought or is there an abundance of hay? How far is it to the nearest dry area? Is my hay of good enough quality to be worth trucking a long distance? These are only a few questions we can try to help you answer. But keep in mind, the higher the quality, the less damage, and proper bale size will always bring top market values and keeps the banker
away from your kitchen table for one more year.... maybe!

Tom Baer, Owner and Auctioneer