2020 Cost of Production

Hay: Round Bale and Silage

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Date: January, 2020**revised 02/24 with 2020 MASC data**

This tool is available as an Excel worksheet at: or at your local is also available to helpdetermine machinery costs.

Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and use of this information is the responsibility of the user. If you need help with a budget, contact your local Manitoba Agriculture office.

Guidelines For EstimatingHay Production Costs - 2020

The assumptions on which the costs were calculated are clearly defined in the supporting pages. They were developed using a combination of recommended practices and methods followed by many producers.

These budgets may be adjusted by putting in your own figures. As a producer, you are encouraged to calculate your own costs of production for your alfalfa hay crops. On each farm, costs and yields differ due to soil type, climate and agronomic practices.

This guide is designed to provide planning information and a format for calculating the costs of producing a forage crop of 100% alfalfa or alfalfa grass mixture for the purpose of feeding livestock or export in Manitoba. General Manitoba Agriculture recommendations are assumed in using fertilizers and chemical inputs. These figures provide an economic evaluation of the crops and estimated yields required to cover all costs. Costs include labour, investment and depreciation, but do not include managmement costs, nor do they necessarily represent the average cost of production in Manitoba.

Round Bale Hay and Silage

The Farm Machinery Custom and Rental Rate Guide

www.manitoba.ca/agricultureManitoba Agriculture Office.

Guidelines: Hay Production Costs 2

Manitoba Agriculture, Farm Management

Annual (Years 2 to 8)

(as fed) (Dry Matter-DM) (as fed) (DM) (as fed) (DM)$/acre $/ton $/ton $/acre $/ton $/ton $/acre $/ton $/ton Your Farm

A. Operating CostsForage Seed & Treatment - - -Nurse Crop Seed - - $18.13Establishment (amortized) $38.74 1 $26.42 2 -Fertilizer $55.52 $43.66 $52.41Herbicide/Insecticide $0.00 $0.00 $12.00Fuel $9.60 $6.69 $11.32Machinery Operating $12.10 $12.10 $12.10Machinery Lease $2.40 $2.40 $2.40Rental and Custom $14.00 $11.16 $11.32Crop Insurance $15.89 $9.91 $10.94Twine/Net Wrap $5.17 $4.07 $4.18Plastic Silage Wrap - - -Other Costs $2.00 $2.00 $2.00Land Taxes $10.00 $10.00 $10.00Interest on Operating $4.55 $3.53 $4.04Total Operating $169.97 $131.94 $150.85

B. Fixed CostsLand Investment Costs $46.20 $46.20 $46.20Machinery Depreciation $27.67 $27.67 $27.67Machinery Investment $9.51 $9.51 $9.51Storage Costs $0.00 $0.00 $0.00Total Fixed $83.38 $83.38 $83.38Total Operating & Fixed $253.35 $215.32 $234.22

C. Labour $28.80 $28.80 $36.00

Total Costs $282.15 $80.61 $91.61 $244.12 $87.50 $100.05 $270.22 $95.49 $111.20Total Costs ($/lb.) $0.040 $0.046 $0.044 $0.050 $0.048 $0.056Total Costs ($/1500 lb. bale) $60.03 $65.98 $71.11

Estimated Farmgate As Fed DM As Fed DM As Fed DMPrice $ per ton $120.00 $136.36 $100.00 $114.34 $95.00 $110.64Yield per acre (ton) 3.50 3.08 2.79 2.44 2.83 2.43Gross Revenue $420.00 $279.00 $268.85

(as fed) (DM) (as fed) (DM) (as fed) (DM)Marginal Returns $/acre $/ton $/ton $/acre $/ton $/ton $/acre $/ton $/ton

Over Operating Costs $250.03 $71.44 $81.18 $147.06 $52.71 $11.34 $118.00 $41.70 $48.56Over Total Costs (Net Profit) $137.85 $39.39 $44.76 $34.88 $12.50 $3.90 ($1.37) ($0.49) ($0.57)Operating Expense Ratio 40.5% 47.3% 56.1%

Breakeven Price ($/ton)Operating Costs $48.56 $55.19 $47.29 $54.07 $53.30 $62.08Total Costs $80.61 $91.61 $87.50 $100.05 $95.49 $111.20

Breakeven Yield (tons/acre)Operating Costs 1.416 1.246 1.319 1.154 1.588 1.363Total Costs 2.351 2.069 2.441 2.135 2.844 2.442

Cost of Standing Hay ($/lb.) $0.025 3 $0.025 3 $0.030 4

1. Alfalfa establishment (without nurse crop) net cost of $154.96 (total cost minus estimated gross revenue) were amortized over 4 hay production years.

Dry Hay Production Costs - 2020

2. Alfalfa-grass establishment (with oat greenfeed nurse crop) net cost of $184.96 (total cost minus estimated gross revenue) were amortized over 7 hay production years.

3. Cost of alfalfa and alfalfa-grass standing hay (includes: establishment, fertilizer, pesticide, land taxes, crop insurance, 5% of fuel and labour, 50% of other costs, and 2.75% land investment costs.)

Alfalfa Hay Alfalfa-Grass Hay

Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user.

4. Cost of greenfeed standing hay (includes: seed; fertilizer; pesticide; land taxes; crop insurance; 40% of fuel; 20% of labour,machinery lease, and machinery operating; 50% of other costs, and 2.75% land investment costs.)

Production Costs

Greenfeed Hay

Profitability & Breakeven Analysis

Production Costs Production CostsAnnual (Years 2 to 5)

Guidelines: Hay Production Costs 3

Manitoba Agriculture, Farm Management

Annual (Years 2 to 8)

(as fed) (DM) (as fed) (DM) (as fed) (DM)$/acre $/ton $/ton $/acre $/ton $/ton $/acre $/ton $/ton Your Farm

A. Operating CostsForage Seed & Treatment - - -Nurse Crop Seed - - $18.13Establishment (amortized) $42.66 1 $30.26 2 -Fertilizer $55.52 $43.66 $52.41Herbicide/Insecticide $0.00 $0.00 $12.00Fuel $10.25 $8.05 $12.68Machinery Operating $16.77 $16.77 $16.77Machinery Lease $2.40 $2.40 $2.40Rental and Custom $20.67 $16.35 $16.56Crop Insurance $15.89 $9.91 $10.94Twine/Net Wrap $7.59 $6.05 $6.05Plastic Silage Wrap $25.27 $20.14 $20.14Other Costs $2.00 $2.00 $2.00Land Taxes $10.00 $10.00 $10.00Interest on Operating $5.75 $4.55 $4.95Total Operating $214.77 $170.13 $185.03

B. Fixed CostsLand Investment Costs $46.20 $46.20 $46.20Machinery Depreciation $37.18 $37.18 $37.18Machinery Investment $13.18 $13.18 $13.18Storage Costs $0.00 $0.00 $0.00Total Fixed $96.55 $96.55 $96.55Total Operating & Fixed $311.32 $266.68 $281.59

C. Labour $33.60 $33.60 $40.80

Total Costs $344.92 $50.06 $99.98 $300.28 $55.10 $109.99 $322.39 $58.40 $116.81Total Costs ($/lb.) $0.025 $0.050 $0.028 $0.055 $0.029 $0.058Total Costs ($/2000 lb. bale) $49.99 $54.60 $58.62

Estimated Farmgate As Fed DM As Fed DM As Fed DMPrice $ per ton $65.00 $129.81 $60.00 $119.78 $57.50 $115.00Yield per acre (ton) 6.89 3.45 5.45 2.73 5.52 2.76Gross Revenue $447.85 $327.00 $317.40

(as fed) (DM) (as fed) (DM) (as fed) (DM)Marginal Returns $/acre $/ton $/ton $/acre $/ton $/ton $/acre $/ton $/ton

Over Operating Costs $233.08 $33.83 $67.56 $156.87 $28.78 $57.46 $132.37 $23.98 $47.96Over Total Costs (Net Profit) $102.93 $14.94 $29.83 $26.72 $4.90 $9.79 ($4.99) ($0.90) ($1.81)Operating Expense Ratio 48.0% 52.0% 58.3%

Breakeven Price ($/ton)Operating Costs $31.17 $62.25 $31.22 $62.32 $33.52 $67.04Total Costs $50.06 $99.98 $55.10 $109.99 $58.40 $116.81

Breakeven Yield (tons/acre)Operating Costs 3.304 1.654 2.835 1.420 3.218 1.609Total Costs 5.307 2.657 5.005 2.507 5.607 2.803

Cost of Standing Hay ($/lb.) $0.013 3 $0.013 3 $0.015 4

1. Alfalfa establishment (without nurse crop) net cost of $170.63 (total cost minus estimated gross revenue) were amortized over 4 hay production years.

4. Cost of greenfeed standing silage (includes: seed; fertilizer; pesticide; land taxes; crop insurance; 40% of fuel; 20% of labour,machinery lease, and machinery operating; 50% of other costs, and 2.75% land investment costs.)

Baled Silage Production Costs - 2020Greenfeed Baled SilageAlfalfa Baled Silage Alfalfa-Grass Baled Silage

2. Alfalfa-grass establishment (with oat greenfeed nurse crop) net cost of $211.79 (total cost minus estimated gross revenue) were amortized over 7 hay production years.

3. Cost of alfalfa and alfalfa-grass standing silage (includes: establishment, fertilizer, pesticide, land taxes, 5% of fuel and labour, 50% of other costs, and 2.75% land investment costs.)

Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user.

Annual (Years 2 to 5)Production Costs Production Costs Production Costs

Profitability & Breakeven Analysis

Guidelines: Hay Production Costs 4

Manitoba Agriculture, Farm Management

Alfalfa HayAlfalfa-Grass

HayAlfalfa Baled

SilageAlfalfa-Grass Baled Silage

Establ. 1 Establ. 2 Establ. 1 Establ. 2$/acre $/acre $/acre $/acre Your Farm

A. Operating CostsForage Seed & Treatment $42.50 $36.00 $42.50 $36.00Nurse Crop Seed - $9.06 - $9.06Establishment (amortized) - - - -Fertilizer $55.52 $62.65 $55.52 $62.65Herbicide/Insecticide $25.00 $25.00 $25.00 $25.00Fuel $15.15 $12.40 $15.81 $13.27Machinery Operating $12.10 $12.10 $16.13 $16.77Machinery Lease $2.40 $2.40 $2.40 $2.40Rental and Custom $8.00 $7.20 $11.82 $10.56Crop Insurance $5.00 $5.00 $5.00 $5.00Twine/Net Wrap $2.93 $2.64 $4.33 $3.87Plastic Silage Wrap - - $14.43 $12.89Other Costs $2.00 $2.00 $2.00 $2.00Land Taxes $10.00 $10.00 $10.00 $10.00Interest on Operating $4.97 $5.13 $5.64 $5.76Total Operating $185.58 $191.58 $210.58 $215.23

B. Fixed CostsLand Investment Costs $46.20 $46.20 $46.20 $46.20Machinery Depreciation $27.67 $27.67 $37.18 $37.18Machinery Investment $9.51 $9.51 $13.18 $13.18Storage Costs $0.00 $0.00 $0.00 $0.00Total Fixed $83.38 $83.38 $96.55 $96.55Total Operating & Fixed $268.96 $274.96 $307.13 $311.79

C. Labour $36.00 $36.00 $40.80 $40.80

Total Costs $304.96 $310.96 $347.93 $352.59

Total Costs ($/lb.)

Estimated FarmgatePrice $ per ton $75.00 $70.00 $45.00 $40.00Yield per acre (ton) 2.00 1.80 3.94 3.52Gross Revenue $150.00 $126.00 $177.30 $140.80

Marginal Returns $/acre $/acre $/acre $/acreOver Operating Costs ($35.58) ($65.58) ($33.28) ($74.43)Over Total Costs (Net Profit) ($154.96) ($184.96) ($170.63) ($211.79)

Operating Expense Ratio 123.7% 152.1% 118.8% 152.9%

Establishment Cost (amortized) $38.74 $26.42 $42.66 $30.26Years of Production 4 7 4 7

Forage Establishment Cost Summary - 2020

Profitability & Breakeven Analysis

1. Alfalfa hay establishment (without nurse crop) net cost of $154.96 (total cost minus estimated gross revenue) were amortized over 4 hay production years.

2. Alfalfa-grass hay establishment (with oat greenfeed nurse crop) net cost of $184.96 (total cost minus estimated gross revenue) were amortized over 7 hay production years.

3. Alfalfa silage establishment (without nurse crop) net cost of $170.63 (total cost minus estimated gross revenue) were amortized over 4 hay production years.

Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user.

4. Alfalfa-grass silage establishment (with oat greenfeed nurse crop) net cost of $211.79 (total cost minus estimated gross revenue) were amortized over 7 hay production years.

Guidelines: Hay Production Costs 5

Manitoba Agriculture, Farm Management

Increase/Decrease # Bales Wrapped per Year 25%

Based on # Bales Wrapped Per Year 1,656 2,070 2,588 1,320 1,650 2,063

Cost per Wrapped Silage BalePlastic Silage Wrap Cost $3.66 $3.66 $3.66 $3.66 $3.66 $3.66Silage Wrapper - Fuel Usage $0.25 $0.25 $0.25 $0.25 $0.25 $0.25Machinery Depreciation $1.93 $1.55 $1.24 $2.42 $1.94 $1.55Machinery Investment $0.66 $0.53 $0.43 $0.83 $0.67 $0.53Labour (Additional for wrapper only) $0.70 $0.70 $0.70 $0.87 $0.87 $0.87Total ($ per bale) $7.20 $6.68 $6.27 $8.04 $7.39 $6.87

AgriInsurance Analysis

Forage Region 6 GreenfeedRisk Area 14 70% Coverage

Select Hay Basic Hay Select Hay Basic Hay Your FarmHigh -

$84/tonneHigh -

$84/tonne80%

Coverage

AgriInsurance Probable Yield - IC (tons/acre) 2.709 2.709 1.581 1.581 2.075Coverage per acre (tons) 2.167 2.167 1.265 1.265 1.660Dollar Coverage per acre $330.27 $165.13 $158.37 $96.40 $146.11Premium ($/Acre) $15.89 $4.54 $9.91 $4.83 $10.42Premium Cost (% of Insured) 4.8% 2.7% 6.3% 5.0% 7.1%

Costs Not Covered By AgriInsuranceOperating Costs $0.00 $4.84 $0.00 $35.54 $4.73Operating & Fixed Costs $0.00 $88.21 $56.95 $118.92 $88.11Total Costs $0.00 $117.01 $85.75 $147.72 $124.11

AgriInsurance Risk Ratio (AgriInsurance Coverage / Cost)Operating Costs 194% 97% 120% 73% 97%Total Costs 117% 59% 65% 39% 54%

Percent Market Price Change -5.0%Percent Crop Yield Change -10%

Alfalfa HayAlfalfa-Grass

HayGreenfeed

Hay Your Farm

Market Price ($ per unit) $114.00 $95.00 $90.25Yield (per acre) 3.15 2.51 2.55

Stress Test Scenario = Market Price Down 5%, and Crop Yield Down 10%Net Profit (Loss) $76.95 ($5.67) ($40.09)

Operating Expense Ratio 47.3% 55.3% 65.5%

>4 years

Note: This budget is only a guide and is not intended as an in depth study of the cost of production of this industry. Interpretation and utilization of this information is the responsibility of the user.

Baled Silage Wrapper Cost Summary ($ per Bale)

Alfalfa-Grass Baled SilageAlfalfa Baled Silage

Risk & Sensitivity Analysis (Stress Test)

Alfalfa Alfalfa Grass<=4 years MASC Forage Insurance

MASC Forage Region Map

Guidelines: Hay Production Costs 6

Manitoba Agriculture, Farm Management

194%

97%

120%

73%

97%

117%

59% 65%

39%54%

0%

50%

100%

150%

200%

250%

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

Alfalfa Select Hay<=4 years

Alfalfa Basic HayHigh - $84/tonne

Alfalfa GrassSelect Hay >4

years

Alfalfa GrassBasic Hay High -

$84/tonne

Greenfeed

$ Pe

r Acr

e

AgriInsurance Risk Analysis - 2020 Manitoba - Forage Region 6/Risk Area 14

80% Insured Value 80% Coverage of Operating Costs80% Coverage of Total Costs (Risk) Manitoba Agriculture

5%

3%

6%

5%

7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

Alfalfa Select Hay<=4 years

Alfalfa Basic HayHigh - $84/tonne

Alfalfa GrassSelect Hay >4

years

Alfalfa GrassBasic Hay High -

$84/tonne

Greenfeed

$ Pe

r Acr

e

AgriInsurance Insured Value Analysis - 2020 Manitoba - Forage Region 6/Risk Area 14

80% Insured Value Premium Cost (% of Insured)Manitoba Agriculture

$0

$20

$40

$60

$80

$100

$120

$140

Alfalfa Hay Alfalfa-Grass Hay Greenfeed Hay Alfalfa Baled Silage Alfalfa-Grass BaledSilage

Greenfeed BaledSilage

Barley Silage Corn Silage(14 ton)

Corn Silage(20 ton)

Pric

e ($

/ton

)Forage Dry Matter vs. As Fed Cost Comparison

DM Cost ($/ton) As Fed Cost ($/ton)Manitoba Agriculture, Farm Management

Analysis of your AgriInsurance coverage of operating and total

costs is an important step in RiskManagement Planning for your farm.

Analysis of AgriInsurance coverage and premium cost is useful in comparing cost efficiency and production cost risk. This is an

important step in Risk Management Planning for your farm.

Guidelines: Hay Production Costs 7

Manitoba Agriculture, Farm Management

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

Alfalfa Hay Alfalfa-Grass Hay Greenfeed Hay Alfalfa Baled Silage Alfalfa-Grass BaledSilage

Greenfeed BaledSilage

Barley Silage Corn Silage(14 ton)

Corn Silage(20 ton)

Pric

e ($

/lb.

)Total Digestable Nutrient (TDN) Cost Comparison

TDN Cost ($/lb DM)Manitoba Agriculture, Farm Management

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

Alfalfa Hay Alfalfa-Grass Hay Greenfeed Hay Alfalfa Baled Silage Alfalfa-Grass BaledSilage

Greenfeed BaledSilage

Barley Silage Corn Silage(14 ton)

Corn Silage(20 ton)

Pric

e ($

/lb.

)

Crude Protein (CP) Cost Comparison

CP Cost ($/lb DM)Manitoba Agriculture, Farm Management

$0.000

$0.010

$0.020

$0.030

$0.040

$0.050

$0.060

$0.070

Alfalfa Hay Alfalfa-Grass Hay Greenfeed Hay Alfalfa Baled Silage Alfalfa-Grass BaledSilage

Greenfeed BaledSilage

Barley Silage Corn Silage(14 ton)

Corn Silage(20 ton)

Pric

e ($

/lb.

)

Dry Matter (DM) Cost Comparison

DM Cost ($/lb)Manitoba Agriculture, Farm Management

Guidelines: Hay Production Costs 8

Manitoba Agriculture, Farm Management

Alfalfa Alfalfa-Grass Greenfeed Alfalfa Alfalfa-Grass GreenfeedYears tons/acre tons/acre tons/acre tons/acre tons/acre tons/acre

(establishment year) 1 2.0 1.8 2.83 3.94 3.52 5.522 3.6 3.2 7.09 6.273 3.6 3.2 7.09 6.274 3.6 3.0 7.09 5.875 3.2 2.8 6.30 5.486 2.6 5.097 2.4 4.708 2.3 4.5091011

Total Yield (tons) 14.0 19.5 2.83 27.6 38.2 5.52Average Yield (tons/acre) 3.50 2.79 2.83 6.89 5.45 5.52Avg. Dry Matter Yield (tons/acre) 3.08 2.44 2.43 3.45 2.73 2.76Bales (per acre) 4.7 3.7 3.8 6.9 5.5 5.5Years production 4 7 1 4 7 1Years rotation 5 8 1 5 8 1AgriInsurance - Individual Coverage 1.00 1.00 1.00 1.00 1.00 1.00

Dry Hay Wrapped SilageBale Weight (lbs.) 1,500 2,000Estimated Storage Loss 20% 5%

Alfalfa Alfalfa-Grass Greenfeed Alfalfa Alfalfa-Grass GreenfeedCrude protein DM (CP)% 18.2 14.0 9.9 18.2 14.6 10.6Energy DM (TDN) % 61.5 60.0 58.4 62.5 60.4 60.4As fed moisture % 12.1 12.6 14.2 50.0 50.0 50.0

1. Users are reminded to adjust fertilizer rates when making changes to forage yields.Forage yields are based on Forage Region #6 average yields with an IC of 1.25. Baled Silage DM yields are increased 12%.

Estimated Yield of Forage - Tons per Acre 1

Forage Analysis

Dry Hay Wrapped Bale Silage

Dry Hay Wrapped Bale Silage

Guidelines: Hay Production Costs 9

Manitoba Agriculture, Farm Management

Seeding Rate Price CostCrop per Acre per Unit per AcreAlfalfa Hay

Alfalfa hay 10 lb. $4.25 /bu $42.50Alfalfa-Grass Hay

Alfalfa-grass hay 10 lb. $3.60 /lb. $36.00Oat greenfeed (nurse crop) 1.25 bu $7.25 /bu $9.06

Greenfeed HayOats 2.50 bu $7.25 /bu $18.13

Bulk Price Actual Nutrient Nitrogen SulphurFertilizer Type $/tonne $/lb. Usage UsageNitrogen: (urea) 46-0-0 $500 $0.493 100% -Nitrogen: (NH3) 82-0-0 $790 $0.437 0% -Nitrogen: (liquid) 28-0-0 $320 $0.518 0% -Phosphorus: 11-52-0 $615 $0.432 - -Potash: 0-0-60 $470 $0.355 - -Sulphur: 20.5-0-0-24 $425 $0.382 - 100%MES S15: 13-33-0-15 $630 $0.527 - 0%

TotalCrop lbs. $/acre lbs. $/acre lbs. $/acre lbs. $/acre $/acreAlfalfa Hay

Alfalfa hay 0 $0.00 60 $25.93 65 $23.10 17 $6.50 $55.52Alfalfa-Grass Hay

Alfalfa-grass hay 0 $0.00 45 $19.45 52 $18.48 15 $5.73 $43.66Oat greenfeed (nurse crop) 50 $24.65 50 $21.61 30 $10.66 15 $5.73 $62.65

Greenfeed HayOats 80 $39.44 30 $12.97 0 $0.00 0 $0.00 $52.41

1. Users are reminded to adjust silage yields when making changes to fertilizer rates.

Weed Insect Forage TotalControl Control Removal Cost

Crop $/acre $/acre $/acre $/acreAlfalfa Hay

Alfalfa hay $0.00 $0.00 $0.00Alfalfa establishment $15.00 $0.00 $10.00 $25.00

Alfalfa-Grass HayAlfalfa-grass hay $0.00 $0.00 $0.00Oat greenfeed (nurse crop) $15.00 $0.00 $10.00 $25.00

Chemicals

Seed & Treatment

Fertilizer 1

Amount of Actual Pounds of Elements Applied Per AcreNitrogen Phosphorus Potash Sulphur

The fertilizer recommendation will vary depending on the soil type, climate and crop rotation. Manitoba Agriculture recommends that soil test sampling and analysis be conducted each year to produce a better baseline for fertility. On many Manitoba soil types, potash application can be reduced based on soil test results. Custom soil sampling and analysis typically costs $1.00 to $2.00/acre.

Guidelines: Hay Production Costs 10

Manitoba Agriculture, Farm Management

Interest Rate on Operating 5.50% Twine/net wrap cost per unit $55.00Hay machinery repair 3.50% (% of total investment) Bales per unit 50 ($1.10/bale)

Land Taxes ($/acre) $10.00 Plastic Silage Wrap Cost $130.00 (per roll)

Fuel Cost ($/litre) $0.95 Bales per Roll Silage Wrap 35.5 (bales/roll)

Labour Cost per Hour $24.00 Silage Wrapper - Fuel Usage 0.26 (Litres / bale)

Greenfeed Hay

Greenfeed Hay

Establishment Production Establishment Production Production Establishment Production Establishment Production ProductionField Fuel Cost ($/acre) $15.15 $9.60 $12.40 $6.69 $11.32 $16.13 $11.30 $13.27 $8.05 $12.68

Crop Insurance 1 ($/acre) Select Hay Select Hay 80% Coverage

$5.00 $15.89 $5.00 $9.91 $10.94 $5.00 $15.89 $5.00 $9.91 $10.94

Other Costs ($/acre) $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00

Rental and Custom WorkSeeding ($/ace) $0.00 - $0.00 - $0.00 $0.00 - $0.00 - $0.00Application ($/acre) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Mower/Conditioner ($/acre) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Baling ($/bale) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00Bale Moving ($/bale) $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00General ($/acre) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Total ($/acre) $8.00 $14.00 $7.20 $11.16 $11.32 $11.82 $20.67 $10.56 $16.35 $16.56

Labour Hours per AcreHours per acre 1.5 1.2 1.5 1.2 1.5 1.7 1.4 1.7 1.4 1.7

Total ($/acre) $36.00 $28.80 $36.00 $28.80 $36.00 $40.80 $33.60 $40.80 $33.60 $40.80

Trucks

Crop L/acre 1.29 1.85 0.75 2.42 0.42 0.26 1.48 1.32 0.42 0.5Alfalfa Hay

Alfalfa hay 10.10 0 0 0 0 0 3 3 3 1 0.5Alfalfa establishment 15.95 1 2 2 1 1 2 2 2 0 0.5

Alfalfa-Grass HayAlfalfa-grass hay 7.04 0 0 0 0 0 2 2 2 1 0.5Oat greenfeed (nurse crop) 13.05 1 2 2 1 1 0 1 1 1 0.5

Greenfeed HayOats 11.92 1 0 1 1 2 2 2 2 0 0.5

hay bine

Wrapped Bale Silage

harrow

Number of Field Operations

Dry Hay

Alfalfa Hay Alfalfa Grass Hay

air drill round baler

Alfalfa Hay

spin spreader

SP sprayer

Alfalfa Grass Hay

3/4 ton pickuphay rake

Operating Costs

Field Fuel Usage

tandem diskcultivate

1. Crop insurance: (2019 rates) Forage Establishment Insurance for $80/ac coverage. Annual Insurance for Alfalfa Select Hay coverage in MASC (Forage Region 6) with LTAY <=4 years yield=2.709 tons/acre and for Alfalfa Grass Select Hay coverage with LTAY >4 years yield=1.581 tons/acre. Annual Insurance for Greenfeed 80% Coverage coverage in MASC (Risk Area 14) with LTAY yield=2.075 tons/acre including $0.52/acre EMI coverage.

Guidelines: Hay Production Costs 11

Manitoba Agriculture, Farm Management

Land value ($/acre) $2,000 Machinery Investment ($/acre)Land cost ($/acre) $46.20 Hay Equipment $345.83Dry Hay Crop acres 300 Baled Silage Equipment $133.33Baled Silage Crop acres 300

Machinery Depreciation cost ($/acre)Investment Rate 2.75% Hay Equipment $27.67Machinery Residual Value 20.0% Baled Silage Equipment $10.67Machinery Useful Life (years) 10Depreciation Rate 10.0% Machinery Investment cost ($/acre)

Hay Equipment $9.51 Baled Silage Equipment $3.67

Hay Storage ($/Acre) $0.00Machinery Lease cost ($/acre) $2.40

Market Forage Forage Market Forage ForagePower & Misc Equipment Value Usage % Allocation Harvest Equipment Value Usage % Allocation

MFD Tractor 100HP $128,000 50% $64,000 Mower/Conditioner $40,000 100% $40,0002WD Tractor 60HP $40,000 50% $20,000 Hay Rake $15,000 100% $15,000

$0 0% $0 Baler $55,000 100% $55,000$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0

Total $84,000 Total $110,000

Market Forage Forage Market Forage ForageSeeding, Tillage, Spraying Value Usage % Allocation Trucks & Trailers Value Usage % Allocation

Cultivator $10,000 20% $2,000 enter equipment here $0 0% $0Harrow 50ft $10,000 20% $2,000 $0 0% $0Air tank $10,000 20% $2,000 $0 0% $0Air drill 40ft $30,000 20% $6,000 $0 0% $0PT sprayer $7,500 20% $1,500 $0 0% $0

$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0

Total $67,500 $13,500 Total $0

Owned Equipment TOTAL $207,500

Market Forage Forage Market Forage ForageMiscellaneous Equipment Value Usage % Allocation Harvest Equipment Value Usage % Allocation

enter equipment here $0 0% $0 Silage Bale Wrapper $40,000 100% $40,000$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0

Total $0 Total $40,000Silage Equipment TOTAL $40,000

Annual Forage Forage Annual Forage ForageSeeding, Tillage, Spraying Lease Usage % Allocation Trucks & Trailers Lease Usage % Allocation

enter equipment here $0 0% $0 3/4 ton pickup $9,600 15% $1,440$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0$0 0% $0 $0 0% $0

Total $0 $0 Total $1,440

Leased Equipment TOTAL $1,440 $2.40 per acre* Leased equipment costs are listed under Operating Costs on the Summary Page.

Fixed Costs

Hay Equipment Inventory and Current Values

Baled Silage Equipment Inventory and Current Values

Leased Equipment Inventory

Guidelines: Hay Production Costs 12

Manitoba Agriculture, Farm Management

Fuel Costs:Includes fuel used for field work, and trucking in inputs.

Machinery Operating Costs:Includes costs for maintenance, repairs, licenses and insurance.

Crop Insurance: (2020 rates)

Other Costs:Includes overhead expenses: hydro, telephone, accounting, buildings, supplies and insurance, etc.

Bale Moisture:

Land Taxes:

Interest On Operating:Interest charges on operating costs are calculated at 5.5% for six months.

Land Investment Cost:

Depreciation:Assumed 10% on machinery, 20% salvage value.

Investment Cost:Assumed 2.75% opportunity cost on machinery.

Estimated Farmgate Values:Forage prices are based on estimated prices for fall/winter 2019/20.

Storage Cost:Dry hay storage costs are estimated at $0.00 per acre.

Profitability & Breakeven Analysis:Gross Revenue = Price per unit x Yield per acre (eg. alfalfa: $120.00/ton x 3.5 ton/ac = $420.00/ac)

Net Profit = Gross Revenue - Total Cost (eg. alfalfa: $420.00 gross revenue - $282.15 total cost = $137.85 per acre)

Operating Expense Ratio = (Operating Cost / Gross Revenue) x 100 (eg. alfalfa: $169.97 operating expense / $420.00 gross revenue = 40.5%)

Breakeven Price = Cost / Target Yield (eg. alfalfa cost $282.15 / 3.5 ton = $80.61 per ton)

Breakeven Yield = Cost / Price per Unit (eg. alfalfa cost $282.15 / $120.00 ton = 2.35 ton)

Created and maintained by January, 2020For more information, contact your local

Farm Management Specialist Farm Management Specialist Farm Production Extension

Tod WallaceA/Manager-Farm Management Industry Development Specialist, Beef

Bale moisture based on: 12.1% alfalfa hay; 12.6% alfalfa-grass hay; 14.2% greenfeed hay; 50% alfalfa baled silage; 50% alfalfa-grass baled silage and 50% greenfeed baled silage.

The average for the province was based on land tax assessment and mill rates of a sample of municipalities growing crops less provincial tax rebate.

Land value are based on approximate average land values. Budget assumed 2.75% return net after tax investment cash value (84%).

Greg Fedak

Other Assumptions

Roy Arnott

Benjamin Hamm Ray Bittner

Forage Region 6 - Establishment Insurance at $80/ac coverage and annual Select Hay insurance at 80% coverage. Risk Area 14 - Greenfeed Insurance at 80% coverage.

Manitoba Agriculture Farm ManagementManitoba Agriculture Office or:

Contact us• Go to manitoba.ca/agriculture

• Toll free at 1-844-769-6224

• Email us at mbfarmbusiness@gov.mb.ca

• Follow us on Twitter @MBGovAg

• Visit your local Manitoba Agriculture Office

Available in alternate formats upon request.