Making good quality lucerne hay is a specialist business, requiring specialised equipment. There are many alternatives in haymaking plant available. Listed here are typical items of haymaking plant appropriate to the small-scale lucerne hay enterprise.
The availability of second-hand equipment, local contractors and bulk purchase deals will obviously affect the size of this outlay. However, these estimates cover only the haymaking plant. Other, less specialised, essential plant include: a tractor; cultivation and planting equipment; a boomspray; fertiliser spreader; irrigation equipment; truck and/or trailers; and hayshed storage.
Variability of the price of hay is a key consideration. Prices for hay vary from $2 to $8 or more per bale throughout the year. Generally, only the best hay is sold at high prices and then only when hay is in short supply. Hay spoiled by rain, and weedy or grassy hay, is often sold at prices of around $2 per bale, which scarcely covers the cost of baling.
The next consideration is the economics of the enterprise. The gross margin format given in Table 10.3 on page 74 is an example of the typical elements of variable cost and returns that could be expected. The inputs and costs used here are expressed on a per hectare basis. The return per hectare will vary depending on farm size, rainfall, how many cuts per year are spoilt by rain, the number of cuts per year, and the yield of hay per cut and per year. It is also affected by soil type and fertility, cultivar of lucerne being grown, weed competition, aphid and other insect pests, and the life expectancy of the stand.
The gross margin calculations in Tables 10.1, 10.2 and 10.3 are intended only as a template for use as an aid to budgeting for a lucerne hay enterprise. Details of the assumptions that have been made to allow calculations in this example are also shown.
Assumptions in calculation of gross margin
Assume that a lucerne stand should last for three years including the establishment year. Well-managed lucerne, grown under ideal conditions, is likely to have a much longer productive life. Yield and price will vary according to factors such as rain damage, cultivar, summer or winter sale, supply and demand, quality (i.e. leafiness, stalkiness, bleaching, greenness, weediness, softness) and, in recent years, the laboratorydetermined feed values and whether hay is shedded or sold straight from the the paddock. However, for the purposes of this budget, we have assumed a saleable hay yield of 17.5 t/ha coming from 8 cuts/year (i.e. 2.2 t/ha per cut or 88 bales/ha per cut. Yield varies from 1.5-3 t/ha). Bale weight varies greatly and is reflected in the price received. Selling should be by weight. Bales/t vary from 30 to 50 depending on machine and operator, so buying per bale is not recommended.
Table 10.1 Typical elements of variable establishment costs — irrigated lucerne
(a) Fertiliser requirement varies with soil type, age of cultivar and cropping history. Costs are at 2001 prices.
(b) Grass and broadleaf weed control is very site specific. These are examples only. Numerous other herbicides and tank mixes are registered for specific weed problems.
(c) Insecticide usage is not common. Occasionally, sprays for aphid and leaf roller are applied.
(e) Water charges vary between districts. In central lockyer valley surface water and groundwater charges are currently $13/ML. Contact the nearest Sunwater office for charges in other areas of Queensland. Pumping cost is as computed for Gatton Research Station.
Table 10.2 Typical elements of recurring variable costs — irrigated lucerne
(a) Fertiliser requirement varies with soil type, age of cultivar and cropping history. Costs are at 2001 prices.
(b) Grass and broadleaf weed control is very site specific. These are examples only. Numerous other herbicides and tank mixes are registered for specific weed problems.
(c) Insecticide usage is not common. Occasionally, sprays for aphid and leaf roller are applied.
(d) Fungicide Rovral® ($36/ha) is registered for some leaf spot control, but early cutting/harvesting is used as the main means of management of diseases.
(e) Water charges vary between districts. In central lockyer valley surface water and groundwater charges are currently $13/ML. Contact the nearest Sunwater office for charges in other areas of Queensland. Pumping cost is as computed for Gatton Research Station.
(f) Twine $55/3000 m roll. 200 mit hay, assumed 40 bales/t.
(g) Machinery operation costs are essentially fuel, oil, repairs and maintenance. These will differ from farm to farm, depending on machinery employed.
Table 10.3 Gross margin summary based on example costs used above
Hay yields of 17.5 t may be sold in the following rates and prices to give the average price of $160/t
5t @ $200 $1000
7.5 t @ $160 $1200
5t @ $120 $600
Average price $2800
N.B. Values in the above tables were rounded to the nearest $ for ease of illustration.
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