We all have noticed hay prices climbing in the last few years.  in 2007, hay was moving at around $150/ton, and consumers thought $180 was a steep price to pay for premium orchard grass.  Now fast forward to the fall of 2012, anything remotely green is commanding over $200 a ton, and premium orchard or timothy prices are reaching $270 per ton or more in the barn!

With these hay prices climbing, one interesting thing I have noticed is that custom rates have not budged.  The standard rate in Central Oregon has been roughly $80-$100/acre for the last 5 years, and it looks to stay steady for 2013.  This phenomena was stated in an article I remember reading online last year.  It was an article advocating large hay operations to consider hiring custom haying done versus tying up large amounts of capital in equipment.  I can’t seem to find it now, but one of the points was that custom rates have been raising slower than the cost of fuel and equipment, making hiring a custom operator look more and more attractive.  The way custom operators stay in business is by becoming more and more efficient.

For 2013, I plan to keep my standard rates for custom haying the same as 2012 at $80-$100/acre depending on the size of fields and smoothness. I have been eating the rising diesel costs, hedging myself as much as I can by getting it delivered on the price dips, I am waiting for the price to fall a bit and I will stock up so I have my fuel cost fixed.  That is  one cost I can control!

Advertisements