Pricing 2018 standing alfalfa
University Of Wisconsin Extension
One of the challenges when pricing standing hay is the lack of an established market like corn or soybeans. Another challenge is multiple cuttings of hay versus a single harvest for a grain crop. No wonder the price for standing hay can vary greatly between farms, even between fields. Here’s one approach for pricing standing hay in 2018.
Example: assume 4 ton dry matter (DM) per acre for the entire year of dairy quality alfalfa hay worth $150 to $200 per ton baled ($0.09 to $0.12 per pound DM); half the value is credited to the owner for input costs (land, taxes, seed, chemical and fertilizer) and half the value is credited to the buyer for harvesting, field loss and weather risk. To estimate total annual DM yield potential, determine average stems per square foot at several locations in the field, then calculate using this formula:
DM Yield potential = (0.10 x stems per ft2) + 0.38.
Wait until stems are at least 4 to 6 inches and count only stems tall enough to be cut by the mower. Actual yield may be lower due environmental conditions and individual harvest/management practices.
Using yield distribution data based on the University of Wisconsin-Extension field research for both three cut (43 percent / 31 percent / 26 percent) or four cut (36 percent / 25 percent / 21 percent / 18 percent) harvest system, the following price range (rounded to the nearest $5) may offer a starting point for buyers and sellers to negotiate a sale of good to premium quality standing alfalfa in 2018:
In the graphic example, the sale or purchase value for all cuttings would range from $360 to $475 per acre. That’s why the same price is not always the right price for everyone. Ultimately, a fair price is whatever a willing seller and an able buyer can agree to.