One of the challenges in coming up with a value for standing hay is the lack of daily commodity market pricing like corn and soybeans. Another challenge this year is the significant drop in hay price, in some cases almost half of what it was going for just a few years ago. So the price for standing hay last year might not be appropriate this year.
Keep in mind ownership costs can run $300-400/acre when considering the opportunity cost of rent, establishment costs and top-dress fertilizer to maintain soil fertility. That’s why the same price is not always the right price for everyone. As the old saying goes” a fair price is whatever a willing seller and an able buyer can agree on”.
When determining purchase agreements, if the arrangement is for the entire season, the landowner and the tenant should take into consideration what factors each party is responsible for, in particular, who is responsible for applying fertilizer and what information is used to determine the fertilizer application rate.
To help farmers and landowners better evaluate their pricing options, UW-Extension released a Smartphone app last year for pricing standing hay. With over a thousand users since last spring, the app provides easy access to the current baled hay market for reference prices, and calculates standing value per acre for each cutting based on projected annual yield and harvest costs. The app is free and can be downloaded on all Android smart phones and tablets through the Google Play store (search for Hay Pricing).
A recent fact sheet showing annual yield breakout by cutting and approximate pricing under current hay market price reports can be found here: 2016 Standing Hay Price
Changing hay prices will influence the value of standing hay, so it is important for buyers and sellers to be aware of any changes if sales are negotiated later in the season.