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Investing in hay-producing ground, or land with the potential to produce hay, offers a property owner a unique opportunity to create a revenue stream, even if that landowner lacks the equipment or know-how required to put up a hay crop.
Custom-haying businesses work with landowners in harvesting hay crops. Services can range from a la carte to comprehensive. Perhaps a landowner can handle cutting and hauling hay, but needs to outsource baling. Or, an absentee owner might want a contractor to take on everything from seeding, fertilizing and irrigation, to cutting, baling, hauling, storing and marketing.
Haying contractors charge* for those a la carte services, of course, but in cases where the haying operation takes on full management of hay harvesting, something akin to a sharecropper arrangement can be struck, with the contractor taking part of the resulting crop as payment, with no cash outlay from the landowner. The contractor then earns actual revenue from selling his share of the hay crop.
This leaves the landowner with a portion of the crop to sell; or, the contractor can assume the responsibility of marketing the entire crop and splitting the revenue with the landowner. In that latter scenario, the property owner has earned a paycheck with no investment in time, labor or equipment. Money simply lands in the bank.
As an added benefit, that landowner’s property should be in outstanding condition, given the intensive management required by farming. Falling short on weed elimination, or maintenance of irrigation lines, fences and roads, will threaten a haying contractor’s ability to earn a living, so such tasks will be among a professional’s priorities.
As with any business arrangement, the expectation of each participant (the landowner and the custom harvester) should be spelled out in advance, in a written agreement. It’s in the interest of both parties to a harvesting agreement to have a productive, friendly, long-term arrangement that assures a harvester access to productive ground and a landowner a steady income stream.
Of course rates can vary by region and market, but consistencies can be seen throughout the Rockies, Plains and Midwest.
Recent surveys of custom harvesters show that, in Colorado, mowing rates range from $10 to $20 per acre, while baling rates range from 50 cents to $1.50 per bale for small, square bales, and $8 to $12 per bale for large, round bales.
For comparison, recent figures in Kansas reflect mowing rates of $13.50 to $15 per acre, and baling rates around $1 per bale for small squares and $12 to $14 for large, round bales.
Further east, rates in Iowa range from $8 to $15 per acre for mowing; 40 cents to $1 per bale for small squares; and $8 to $15 per bale for large, round bales. Additional data on current custom-harvesting rates can generally be obtained from state extension services, which routinely survey service providers.