|How much should I pay per acre to rent a hay field?
It is difficult to determine a fair cash value per acre for a standing hay crop due to the wide variations in yield and forage quality that occur, even within a small geographic area.
The recommended method is to pay for each ton (or tonne) of hay harvested. This ensures that the producer only pays for what they actually get from the field. It also allows the landlord to share the production risk and rewards.
What is the price per ton for the standing hay crop?
The standing hay crop value is based on the estimated market value of the finished product (in the bale) less expected harvest costs and an allowance for weather risk. The weather risk allowance would be at least 10% (e.g. for grass hay) and as high as 30% (e.g. for alfalfa) of the expected market value. Without it a badly weather damaged crop could cost the producer the same amount as if they had purchased ready made, top quality bales from someone else.
How do we determine what the harvesting costs should be?
The 2008 Farm Machinery Costs provides information on equipment operating costs. Another source is the 2007 Custom Rates Survey Summary which outlines the current rates being charged for most custom haying operations. You can also use our on-line Machinery Cost Calculator to determine what these costs will be for your operation.
Where do I find hay price information?
Many Alberta producers include the asking prices in their hay for sale listings on our Alberta Hay and Pasture Directory. Agriculture Financial Services Corporation or AFSC publishes historical forage price data for all regions of the province.
My neighbour is renting his hay field out on “shares” – how does that work?
A crop share is another simple but effective rental arrangement for a forage crop. The tenant harvests the crop and gives the landlord their share of the crop in bales. The landlord then has a product that is ready for sale or for their own use. The landlord’s crop share for a hay field can vary from 20 to 40%. It is important that the estimated market value, yield potential and harvest costs for the crop are considered to ensure that the arrangement is fair for both parties.
Custom Rates Survey Results: Hay & Silage Making Operations
Machinery Cost Calculator
Alberta Hay and Pasture Directory
AFSC Commodity Price Lists
Prepared by Dale Robinson, Ag-Info Centre, Alberta Agriculture and Rural Development