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Pricing Hay

For any hay producer, the price of their hay has a significant effect on their bottom line. For this reason, it’s important to price hay intelligently. There are a number of factors that go into hay price, and it’s vital that hay producers take these into account to get the most bang for their buck from their hay.

First of all, when pricing hay for livestock feed, it is important to assess the nutrients present. Each time of nutrient has a different monetary value. For instance, thirty-nine percent of hay’s value comes from its protein content and twenty-five comes from the fiber present.

However, hay’s value is not entirely dependent on the type of nutrients found in it, especially when one considers that one-dimensional type hay can be detrimental for livestock’s health, thus lessening its overall value. For instance, hay that has too much fiber can stunt milk production, so pricing hay based on its fiber content alone would be irrational, as hay that is too fiber-rich would actually be problematic. Therefore, one should also consider the presence of neutral detergent fiber (NDF). When forty-four percent of the forage is NDF, it is worth $17 dollars approximately (for every hundred units of weight), and this value decreases by $4.75 (per one ton) for each percent lower than forty-four it is.

Although it is not unreasonable to take into account relative nutrient values and price hay accordingly, it is not consistent with how it is typically priced. With this in mind, therefore, it is important to understand the more typical ways that forage value is derived. One of these is known as relative feed value, which, despite its fancy name, is mostly dependent upon fiber content. On the other hand, there is another index known as relative forage quality. This, too, hinges upon fiber concentration; however, other characteristics of the forage, such as digestibility and ash, are also used in determining this metric. These methods for calculating hay price are imperfect but dominate the market; thus, using them to price one’s hay is perfectly reasonable. Nevertheless, using the presence of nutrients that are not typically used in determining price is not out of the question either. It is up to the discretion of the hay producer, then, to understand the relative values of the nutrients present so to price hay in a way that will great an adequate return on investment without being too cost prohibitive for consumers.

Posted By: The Hay Manager

Posted on: 12/31/2017
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