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NWIL | I don't have a whole lot of hay, but enough due to having a cow herd that needs fed, and I decided long ago that I'm going to provide my own feed for them instead of relying on buying it after watching my dad struggle to find what he needed for so many years to supplement what he raised, and would often times end up paying way too much for marginal quality stuff. Its also taught me that no way/no how am I going to get into the business of raising to to sell.
Anyways, what I've learned is on this ground where I generally raise 225-245 corn and 65-75 beans, hay just doesn't compare as a profit center if its purely for sale. Several reasons:
-The years that hay is at a price that makes a decent profit are due to the area as a whole having a low production year due to low rainfall, excessive rainfall, or excessive winterkill. Which means that 95% or better of the time, you yourself will have lower production to sell. The years you have high production, everyone else does as well, and the price corresponds. If a guy is willing to spend some money and build the shed space to be able to hold it at high quality for a year or two in hopes of a production hit coming it may work, but that's a lot of capital tied up on a hope, and in order for someone to be willing to buy aged hay in storage at the premium price, it better have gone in in premium condition.
-Our weather cycles make it extremely difficult to plan on the vast majority of the hay being put up at premium condition that will allow it to be priced at premium prices. Rainfall patterns, humidity, all play into that. The weather we usually get that allows for our high row crop yields inversely affects the ability to put up high quality dry hay in marketable bales. On this high productivity soil, it retains moisture so well that one isn't just fighting the sky and clouds, you are also fighting the ground in terms of dry down.
-With the growing usage of bale wrappers, it is possible to put up high quality hay at higher moistures and have it keep well. I do quite a bit of that with my triticale and sorghum sudangrass acres, and is my emergency backup for the alfalfa acres that are laying there and won't get to the point to be put up before that storm front rolling towards you arrives that wasn't even thought up when it was laid down. Selling high moisture bales really, really limits your potential buyer pool, and due to the higher moisture content you need to adjust the price downward to compensate for water weight, yet you still have the higher volume to handle and a higher volume of bales to put up/pay the costs of doing so on.
-Shipping hay out of the area is something some people do, but its fairly tough to get into those markets as the buyers that bring in hay already have their contacts built, vast majority of the time from an area where the weather is much more conducive to consistently put up top notch hay that is worth the cost of trucking it in due to their weather patterns and soil conditions.
-Even with these high cattle prices, the number of herds in the midwest continues to drop as the older guys with them continue to leave the arena and fewer of the next generation want to deal with them. Those of us on the younger side with cows are more of the mindset of someone like me, we want to control our own feed supply and are much more willing to figure how, be it with introducing wrapped or chopped cover crops, corn silage, distillers/gluten, baling grass waterways, cornstalks, or whatever as opposed to just dumping in round bales of dry hay from wherever as was generally done in the past. That means the buyer pool keeps getting smaller, even if overall cow numbers remain the same. The guys that had 5-15 cows and just planned on buying their hay needs are dropping out, with those with 50-250+ cows staying around that want to keep it all in house without buying.
-When it comes to small squares, there can be potential, but its not a slam dunk either. The ultra picky that will reject half or more of what you have for XXX reason and refuse to pay or accept/return what has been delivered (I'll leave my comments at that). Getting proper pricing to actually make some money is also difficult as there are piles of weekend warriors that have 4 acres of grass and grandpas equipment that they make 150-200 bales on and put em on marketplace for $4-5. If one is going to be serious about the small square market, its a big investment in order to get ones ducks in a row to put up enough of them in the even shorter available time, and then get them under cover. Even then, a round baler better be near by, either in your shed or someone that can arrive soon, to finish up a field quickly as its a whole lot more forgiving and quicker to put up dry hay in a roll then in a SS and when that front is coming towards you, it needs to get off the ground and soon.
-All equipment is getting crazy priced, but from what it seems to me, whether buying new/used, with all the equipment needed to do hay in a serious manner the ROI gets much tighter when the plan is to sell the hay as a commodity compared to row crops.
-And once again, I keep coming back to the weather issues, but here I am again. No matter how one tries, there will be hay made that isn't the best, be it due to getting rained on, put up on the tougher side due to weather coming in, is overly rank due to delayed mowing because these shower/rain fronts keep stacking up, or everything is working just great and the baler blows the knotter or something of the like. One either needs to have their own animals to run it through, or being good with taking a steep discount to move it, as there is essentially no market for year old marginal hay. Selling it for grinding hay pretty well guarantees no profit, but its gone.
All in all, I am pretty discouraging on going into hay production here in IL on a commodity based basis, especially with what you are saying at the 200 acre level. I know there are a few operations that do just that, but they are at a much larger size that can justify the equipment/labor needed to have a better chance at hitting that peak quality, but they still end up with a lot of trainwrecks. I'm not saying that its a no go, not by any means, but what I am saying is that while there is a chance of some home runs, the cards are stacked against a guy here with this crop. A really good friend of mine has been in the hay business for a long time along with his row crops/cattle, and while he's made it work, at the end of the day he admits the battle all summer puts him about even with just doing the crops and enough for his cows.
Edited by j.p 3/8/2025 11:06
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Hay guys
