It's that time of year again when the horse-trading begins on standing alfalfa and other perennial forage crops.  There will always be those who either need additional forage or have more than they can use.  Here are some considerations when buying and selling standing hay and some of my thoughts on determining value. 

        First, we need to distinguish between what standing hay is worth and what is actually being paid on the market.  In our area, these are often two different numbers.  Next, let’s also assume we are talking about a "good" stand of alfalfa.  Anything less and the price will need to be adjusted downward accordingly. 

        Actual prices being paid in the county vary based on location and the condition of individual fields.  In recent years, the price for renting a field of standing alfalfa (3 cuttings for the season) has increased along with land values and bare ground cash rent values.  Typically, alfalfa stands have rented for $125 or higher where bare ground cash rents are in the $70 to $80 per acre range.  In some portions of the western part of Fond du Lac County, where bare ground cash rents are often $100 to $140 per acre, we often see standing alfalfa rent for $150 to $200 per acre.  

        Renting a good stand of alfalfa is still a very economical way to supplement forage supplies if you already have the harvesting equipment and the alternative is to buy harvested alfalfa.  This statement is made based on the following explanation.  At $140 per acre, you are paying $35 per ton of dry matter for a 4 ton per acre total season yield.  In addition, harvesting costs range from $30 to $35 per ton of dry matter on most farms.  Thus, your investment in the crop is about $65 to $70 per ton.  Of course you assume the risk of getting the crop made.  It’s difficult to put a value on risk but it certainly needs to be considered. Most years, high quality alfalfa hay is going to cost $100 or more per ton.   This is why I consider renting standing alfalfa to be a good buy in the current (and past) markets relative to the alternative of buying hay on the open market. 

        Here are a few other considerations when renting standing hay.  If possible, don’t commit until you know what the stand looks like coming out of winter.  Obviously, as yield potential drops, the price you pay per ton of dry matter harvested goes up.  Also consider how far the crop will need to be hauled.  This adds to harvesting costs.  Finally, determine who will bear the cost of a fertilizer application.  Considering only potassium, this can total $40 per acre on a 4 ton per acre crop removal basis.  Fertilizer is a negotiable item that can either add to your cost as the renter or subtract from the price received as the landowner.   Make sure all agreements are signed and put into writing.