Economic Comparison of Hay Storage Methods

Economic Comparison
of Hay Storage Methods
Tammy L. McKinley
Extension Assistant
Agricultural Economics
Why Consider?
• Feed cost is largest
variable expense in
cow/calf operation
• Storage of hay (or lack
thereof) can greatly impact
these costs
• Method of storage can
impact quality of hay which
can impact performance
and efficiency of the herd
Outside Uncovered
30% loss
On 1,000 lbs bale
loss = 300 lbs
@ $30.35 / bale
loss = $9.11
Stacked & Tarped
On rock pad
12% loss
120 lbs
$3.64
On pallets
or tires
14% loss
140 lbs
$4.25
Hay Barn
5% loss
50 lbs
$1.52
Example
• 50 cow herd
– Average weight = 1100 lbs
• Feed at 2% of body weight
– 22 lbs / head / day
• 150 day feeding period
• 82.5 tons dry matter
required
Example
• 5’ diameter x 4’ bales
– 1000 lbs / bale @ 15% moisture
– Need 97 tons or 194 bales to meet herd’s dry
matter requirements
Example
• Cool season grass / clover hay
– Average yield = 2.5 tons / acre
– 39 acres needed
– Estimated expenses
per acre = $250.34
– Total expenses
for 39 acres = $9,764
Cool Season Grass / Clover Hay
Estimated Expenses
Variable Expenses
Fertilizer
$/acre
71.60
Overseeding
6.87
Weed Control
2.32
Twine
1.19
Machinery
Fuel
Oil & Filter
Repairs & Maintenance
Operating Interest
Total Variable Expenses
30.18
4.41
24.87
5.66
147.11
Cool Season Grass / Clover Hay
Estimated Expenses
Variable Expenses
$/acre
$/ton
71.60
28.64
Overseeding
6.87
2.75
Weed Control
2.32
0.93
Twine
1.19
0.48
30.18
12.07
4.41
1.76
24.87
9.95
5.66
2.26
147.11
58.84
Fertilizer
Machinery
Fuel
Oil & Filter
Repairs & Maintenance
Operating Interest
Total Variable Expenses
Cool Season Grass / Clover Hay
Estimated Expenses
Variable Expenses
$/acre
$/ton
$/bale
71.60
28.64
14.32
Overseeding
6.87
2.75
1.37
Weed Control
2.32
0.93
0.46
Twine
1.19
0.48
0.24
30.18
12.07
6.04
4.41
1.76
0.88
24.87
9.95
4.97
5.66
2.26
1.13
147.11
58.84
29.42
Fertilizer
Machinery
Fuel
Oil & Filter
Repairs & Maintenance
Operating Interest
Total Variable Expenses
Cool Season Grass / Clover Hay
Estimated Expenses
Fixed Expenses
Establishment Cost
$/acre
47.63
Machinery
Depreciation
9.63
Interest
12.58
Housing & Insurance
1.21
Total Fixed Expenses
71.04
Labor
Total Budgeted Expenses
32.18
250.34
Cool Season Grass / Clover Hay
Estimated Expenses
Fixed Expenses
$/acre
$/ton
47.63
19.05
Depreciation
9.63
3.85
Interest
12.58
5.03
Housing & Insurance
1.21
0.48
Total Fixed Expenses
71.04
28.42
32.18
12.87
250.34
100.14
Establishment Cost
Machinery
Labor
Total Budgeted Expenses
Cool Season Grass / Clover Hay
Estimated Expenses
Fixed Expenses
$/acre
$/ton
$/bale
47.63
19.05
9.53
Depreciation
9.63
3.85
1.93
Interest
12.58
5.03
2.52
Housing & Insurance
1.21
0.48
0.24
Total Fixed Expenses
71.04
28.42
14.22
32.18
12.87
6.44
250.34
100.14
50.07
Establishment Cost
Machinery
Labor
Total Budgeted Expenses
Storage Methods Losses
Loss (%)
Hay barn
5
Stacked & tarped on rock pad
12
Stacked & tarped on tires or pallets
14
Plastic sleeve
19
Net wrap
23
Outside uncovered
30
Additional Hay Needed
Total
Required Add’l Total Acres
Needed
-------------- (tons) --------------
Prod.
Cost
Compared
to Barn
($)
($)
Hay barn
97
6
103
42
10,515
Stacked & tarped
on rock pad
97
14
111
45
11,266
751
Stacked & tarped
on tires or pallets
97
16
113
46
11,516
1,001
Plastic sleeve
97
23
120
48
12,017
1,502
Net wrap
97
29
126
51
12,768
2,253
Outside
uncovered
97
42
139
56
14,019
3,504
Storage Methods & Costs
• Outside uncovered
• Net wrap
– $246 per roll which wraps 150 bales (4x / bale)
– $1.64 per bale
• Plastic sleeve
– $3.70 per sleeve
Storage Methods
• Stacked & tarped on tires or pallets
– 25’ x 48’ tarp covers 60 bales @ $260 / tarp
• Stacked & tarped on rock pad
– 25’ x 48’ tarp covers 60 bales @ $260 / tarp
– 20’ x 54’ rock pad @ $0.87 / ft2
• Hay barn
– 48’ x 48’ stores 210 bales
– $6.10 / ft2
48’ Wide Hay Barn
Storage Costs
Repair
Interest & Maint.
Total
Annual
Initial
Cost
Useful
Life
Depr.
($)
(years)
($)
(%)
($)
($)
Hay barn
14054.40
20
702.72
421.63
281.09
1405.44
Stacked & tarped
on rock pad
1040.00
4
260.00
31.20
0.00
3758.40
20
187.92
112.75
20.00
Stacked & tarped
on tires or pallets
1040.00
4
260.00
31.20
0.00
291.20
Plastic sleeve
888.00
1
0.00
0.00
0.00
888.00
Net wrap
418.20
1
0.00
0.00
0.00
418.20
0.00
0.00
0.00
0.00
0.00
0.00
Outside
uncovered
611.87
Other Costs to Consider
• Insurance on barn
– Would increase annual costs
• Insurance on hay
– Premiums could be dependent on
• How hay is stored
• How hay is valued
– Cost of production or Purchase price or Selling price
• Taxes
Production + Storage Costs
Annual
Annual
Production Cost Storage Cost
Prod. +
Storage
Compared
to Barn
($)
($)
($)
($)
Hay barn
10,515
1406
11,921
Stacked & tarped
on rock pad
11,266
612
11,878
-43
Stacked & tarped
on tires or pallets
11,516
291
11,807
-114
Plastic sleeve
12,017
888
12,905
984
Net wrap
12,768
418
13,186
1,265
Outside
uncovered
14,019
0
14,019
2,098
Outside Uncovered vs Hay Barn
• Additional cost of production due to loss
storing outside uncovered = $3,504
• Annual cost of storing hay in barn = $1,406
• Annual savings = $2,098
• Pay off barn with savings = 10 years
Outside Uncovered vs
Stacked & Tarped on Rock Pad
• Additional cost of production due to loss storing
outside uncovered = $2,753
• Annual cost of storing hay stacked and tarped on
a rock pad = $612
• Annual savings = $2,141
• Pay off rock pad & tarps with savings = 3 years
Outside Uncovered vs
Hay Barn or Stacked & Tarped
• Fewer acres required to produce hay to
meet herd’s needs
• More acres available to be grazed
• Hay stored in barn or stacked & tarped
would
– Be of higher quality
– Better meet nutritional requirements of herd
– Improve performance and efficiency of herd
Baleage - High Moisture Hay
Baleage – also known as round bale silage
or haylage – is a storage unit for longstemmed grasses and legumes
• Systems
– Bags
– Hay Wrap (spear type)
– Bale Wrapper (table type)
– Tubeolators (bags rows of bales)
– Sausage Wrapper (wraps rows of bales)
Baleage Advantages
• Fewer weather constraints and risks
• Harvest at peak quality
• Time savings
• Decreases barn space needed
• No significant loss
• Palatability typically excellent
Baleage Disadvantages
• Initial investment
• Cost for wrap
• Wrap disposal
• Risk of loss due to poor ensiling
• Difficult to move bales after wrapping
Baleage - Other Observations
• Expensive method, therefore, put on productive
soils
• Make a tight, dense bale
• Pay extremely close attention to moisture level
• Store bales on a clean, well-drained site
• Wrap as soon as possible to optimize fermentation
• Handle wrapped bales gently, don’t break the seal
• Wrap at storage location to minimize moving
wrapped bales
Baleage
• Most newer balers will handle high moisture hay
– Silage baler preferred cost - $25,000
• Wrap machine $22,000
• Twine or net wrap and film costs
– Untreated twine
• $30-32 per bundle which wraps 25-30 bales @ $1 to $1.28
per bale
– Net wrap
• $246 per roll which wraps 150 bales (4x / bale) @ $1.64 per
bale
– Film (wrapping in line)
• $75 per roll – 2 rolls on machine - 2 rolls will wrap 75 4’x5’
rolls or 60 5’x5’ rolls @ $2 to $2.50 per bale
Baleage
• Possible length of storage
– 40-60% moisture store up to 1 year
– 30-40% moisture feed before 6 months
– 60% + moisture feed before 3 months
Demonstration
Results & Observations
• Demonstration NOT controlled research
• Baleage – 147 4x5 bales
– Mowed on May 17
– Baled & wrapped on May 18
• Dry Hay – 94 4x5 bales
– Mowed, tedded, raked, baled May 20 – 23
Demonstration
Results & Observations
Baleage
Dry Hay
15.6
11.6
TDN
66
61
Rel. Feed Value
106
93
Crude Protein
Demonstration
Results & Observations
• Time Savings
– Baleage – 10.9 minutes per bale
– Dry Hay – 22.8 minutes per bale
• Newer, more modern equipment used in
baleage
• Landowner very impressed with equipment, but
unlikely to purchase due to expense as related
to returns to size of cow herd of less than 80
cows
Take Home Message
• No “one size fits all” solution
• Know your production costs
• Know your storage costs
• Compare alternatives based on your costs
and resources
• Control feed costs, but still meet nutrient
requirements of herd
The End
Questions?
www.TNBeefCattleInitiative.org