How Much Can I Pay For Standing Hay?

Mike Rankin
Crops and Soils Agent - Fond du Lac County
University of Wisconsin - Extension

    "How much should I charge or pay for standing hay?"  This question rings through the old UW-Extension phone lines on numerous occasions during the course of a year.  As you might guess, the answer varies depending upon several factors.

    First, we need to distinguish between what standing hay is worth and what is actually being paid.  In our area, these are two different numbers in many cases.  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, standing alfalfa (3 cuttings for the season) has typically rented for $100 to $125 per acre in areas where "bare ground" cash rents are in the $50 to $60 per acre range.   In some portions of the western part of Fond du Lac County, where bare ground cash rents are $75 to over $100 per acre, we often see standing alfalfa rent for $140 up to $200 per acre.

    Renting a good stand of alfalfa for three cuttings at $125 per acre or less is a great deal 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 $120 per acre, you are paying $30 per ton of dry matter for a 4 ton per acre total season yield.  In addition, harvesting costs range from $20 to $25 per ton of dry matter on most farms. Thus, your investment in the crop is about $55 to $60 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.

    A similar analysis can be made for renting standing alfalfa in the $175 to $225 per acre range.  At $200 per acre you’re paying $50 per ton for the crop (4 ton yield) or $70 to $75 per ton with harvesting costs added.  If you can beat that price in the open market then walk away, but I think it would still be difficult for top quality alfalfa.

    Here’s 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. This 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.

For more information contact Mike Rankin