5
2003 GRASS HAY PRODUCTION BUDGET 1
 Large Bale System
5 year stand
                     
ITEM   EXPLANATION PRICE PER YIELD (ton/A) 2   YOUR
UNIT BUDGET
                  2.0 3.0 5.0    
RECEIPTS 3
Grass Hay $65 /ton $130 $195 $325  
VARIABLE  COSTS
Seed (prorated over 5 years) 10 pounds 1.50 /lb 3 3 3  
Fertilizer 4
Establishment 5 19 /A (prorated) 4 4 4  
N (lbs.) 0 65 130 0.24 /lb 0 16 31  
P2O5(lbs) 25 40 65 0.24 /lb 6 10 16  
K2O(lbs) 60 85 110 0.13 /lb 8 11 14  
Lime(ton) 0.5 12 /ton 6 6 6  
Fuel, Oil, Grease 6 7 7 7  
Repairs 7 13 13 13  
Miscellaneous 8 14 15 16  
Int. on Oper. Cap. 9 6 mo 9.0% 3 4 5  
Hired Labor 10 0 0 0    
TOTAL VARIABLE COSTS - Per Acre 63 88 115  
- Per Ton 31.56 29.21 22.93  
FIXED COSTS
Labor Charge 10 5 hours 9.00 /hr 45 45 45  
Mach. And Equip. Charge 11 31 31 31  
Seedbed Preparation/Seeding Costs - Custom Hire  12 14 14 14  
Land Charge 13 50 70 90  
Management Charge 5% of gross revenue 7 10 16    
TOTAL FIXED COSTS 147 170 197  
TOTAL COSTS   - Per Acre 210 258 311  
- Per Ton 105 86 62  
RETURN ABOVE VARIABLE COSTS 67 107 210  
RETURN ABOVE TOTAL COSTS (80) (63) 14  
RETURN TO LABOR AND MANAGEMENT 14 (29) (8) 75  
                                 
1 Does not include costs for moving bales or storage. 6
2 Assumes a 2.5 ton yield in seeding year; yields of approximately 2.5, 3, and 4 tons, respectively, in the 
following years; middle yield shown reflects weighted average.
3 Based on 90% DM grass hay.  Price could be higher for small square bales.
4 Maintenance fertilizer only.  If grass acreage utilized as summer and winter pasture, potash requirements will 
be approximately 1/3 of that shown. Prices were quoted in October, 2002.  Fertilizer prices vary over time 
and by area.  Check with local sources for current prices.
5 Annual application , plus 30 lb. N at seeding (prorated).  Soil test values CEC=20, P=25 ppm, K=150 ppm.
6 See table below for specific calculations. Lubrication costs are assumed to be 15% of fuel costs.
7 See table below for specific calculations.
8 Includes supplies, utilities, soil tests, small tools, crop insurance, etc…
9 Interest charged for 6 months at 9% interest rate.
10 Part or all of labor may be a variable cost if paid labor varies with acres farmed.
 It’s a fixed cost if labor costs do not change with acres farmed.
11 Reflects 500 acres, conservation tillage. See table below for details.
12 Seedbed preparation and seeding costs are charged at custom hire rates and prorated over 4 years.  The following
rates are included: Plowing-$13, Field Cultivate-$8, Cultimulch-$9, Spray(3x)-$5, Seeding-$12.
13 Average based on 1999 data.  Land charges vary throughout the state, check your local rates.
14 Return to labor and management is the revenue less total expenses except operator labor and management.
It is a measure of the returns to the operator's labor and management.
Machinery Inventory 
Number times used Cost  Acres/    Hr Fuel*        ($/A) Repairs ($/A)
Mower 4 $16,300 6.55 $2.00 1.72
Hay Baler 4 $16,800 4.4 1.60 7.76
Hay Rake 4 $4,600 3.5 2.00 1.40
75 HP Tractor $30,300 1.14
60 HP Tractor $24,300 0.97
Pickup Truck (1/2) $12,500   0.10 0.05
Total per Acre   104,800 5.70 13.04
Fixed Costs Rate 15%
Mach. And Equip Charge =   $31 Price of Diesel Fuel = $1.00 /gal
                       
Machinery and Equipment charge = Total Machine Inventory Cost x Fixed Costs Rate  / 500 acres
=$104,800 x 15% / 500 acres = $31/acre
Machines are all assumed to be new and in the first year of use.  Older/used machines will likely have lower 
machinery costs.  Size of operation will also effect cost of machinery per acre.  For an analysis on machine 
costs for different sized operations, see economies of scale budgets in this publication
Fixed costs rate includes depreciation, interest, housing, and insurance.
*Fuel calculations are based on the implement plus tractor.