Although it might be tempting to use your land to cultivate hay, not all land is equally suitable for hay production. As such, it is vital to consider the multitude of factors that dictate whether hay production is economically viable.
First, it is important to account for the surrounding markets. That is, if no demand exists nearby, it might be a waste of time and money to produce hay. In a similar vein, if there is in fact demand, but you lack the resources to ship the hay to interested buyers, this will likewise be a poor use of your time and money. In short, when it comes to evaluating whether producing hay is the right decision to make, it is important to also incorporate transportation and equipment costs as well as to understand demand for your product. Even if you produce the highest-quality hay possible, if no one wants to buy it, you will likely find yourself in the red.
Certain types of hay also generally perform better than others. For instance, alfalfa that will be fed to dairy cows generally has superior profit margins. Therefore, you must ask yourself if you can produce dairy-quality alfalfa. As was noted above, you must keep tabs on the market for dairy-quality alfalfa. You must also be vigilant about the demand for dairy products overall. If no one is drinking milk, dairy-quality alfalfa’s demand will also likely plummet.
Optimizing the profitability of your hay production means monitoring the weather, as well. For instance, if a season is predicted to bring with it heavy rainfall, it is possible that potential customers may simply allow their livestock to graze on their own land since it will be more conducive to feeding these animals. Likewise, if a particularly brutal winter is projected, hay may be a particularly sought-after commodity.
Finally, evaluate your irrigation abilities in advance of beginning the process of producing hay. Hay is not necessarily straightforward to produce, so if you are able to more efficiently irrigate the land from which this hay will come, this is a huge plus.
Overall, hay can be a risky product to sell. It is difficult to lock in a price like you might be able to with other commodities, so to make sure that you are compensated for the time, money, and effort it takes to produce hay, you should take heed of these factors that have been described above.