Hay Pricing Spreadsheet

Mike Rankin
Crops and Soils Agent
University of Wisconsin - Extension

       When hay or haylage is routinely sold from one producer to another, it's always a challenge to come-up with a fair and equitable pricing structure that is simple yet accounts for changes in dry matter, forage quality, and the prices of competitive feeds supplying protein or energy.  There are several approaches that can be taken.  One is to consider the value according to the cow.  That is, how much increased milk production or reduced feed cost can be gained from feeding high quality forage?  Clearly, the price of milk and type of ration have a bearing on this method of determination.  Another is to simply base price on the market value of hay (e.g. prices received at local hay auctions adjusted for moisture, sale commission, trucking, etc.).  Often, these two methods result in very different values.  For example, market price is heavily dependent upon local hay inventories irrespective of milk price.  Finally, it's been my experience that producers want a system that is fair but relatively simple.

       The hay pricing structure spreadsheet below combines both methods of value determination.  A base price for 18% CP, 150 RFV hay is agreed upon by whatever method is preferred.  Then, a value is determined for every increase or decrease in CP% or RFV based on competitive feed prices or market analysis.  The spreadsheet then makes the appropriate quality and dry matter adjustments and arrives at a final value based on the actual forage analysis of the forage being priced.  Is it simple yet flexible?  Yes.  Does it reward forage quality?  Yes.  Does it account for both market price and  feeding value?  Yes.  Is it perfect?  No.   Can I use it?  Sure, just download the Excel spreadsheet here.  Note:  the values in the yellow cells can be changed as the situation warrants.