|
Oklahoma State University Stillwater, OK |
|
Oklahoma Alfalfa |
|
|
|
Oklahoma State University Stillwater, OK |
|
Oklahoma Alfalfa |
|
ALFALFA PROFITABILITY Almost everyone knows how much hard work is involved in producing and marketing alfalfa hay. Every once in a while someone asks if it is really worth the effort. The answer is clearly "yes", if you want to work hard and get some lucky breaks with the weather and machinery. The following is a "general" budget for alfalfa hay. How do your figures compare? Oklahoma alfalfa hay has averaged a little over $80/ton over the last several years, and this year may bring higher prices, if the rains don't come soon. Prices vary greatly with quality and marketing skills but generally run a little over $80/ton for fair to good quality. To determine expected profits from alfalfa hay production, the following budgets have been developed; however, they should be modified to fit a specific production unit. The first budget outlines the basic per acre variable or operating costs for stand establishment. The total establishment cost of $131/acre is prorated over each of five years (expected life) and used in the production budget. The second budget includes average costs and returns for the 2nd through 5th years. This shows producers can expect good profits from alfalfa hay with a good fertility and weed control program. The expected net returns above operating costs are $333/acre. The break-even price per ton of hay is about $20 to cover the operating costs for an average production level of 5.5 ton/acre. The break-even production level is 1.4 tons/acre at an average price of $80/ton to cover operating costs. |
ESTABLISHMENT BUDGET |
PRODUCTION BUDGET |
||
| Operating Inputs ($/acre) | INCOME ($/acre) | 440.00 |
|
| Seed & inoculant | 52.00 |
Assume: 5.5 tons/acre and $80/ton | |
| Fertilizer & lime | 50.00 |
||
| Machinery, fuel, lube, & repairs | 17.00 |
EXPENSES ($/acre) | |
| Capital & labor | 12.00 |
Fertilizer & chemicals | 32.00 |
| Establishment (prorated for 5 yr.) | 26.00 |
||
| Total Establishment Costs | 131.00 |
Baling wire | 14.00 |
| Machinery, fuel, lube, & repairs | 13.50 |
||
| Capital & labor expenses | 21.00 |
||
| TOTAL OPERATING COSTS | 107.00 |
||
| RETURN ABOVE TOTAL OPERATING COSTS | Income - Expenses ($/acre) | 333.00 |
|
| J.C. Hobbs, Former Area Agric. Economist, John Caddel, Forage Agronomist Department of Plant and Soil Sciences Oklahoma State University |
 |
