How Much Does Your Hay Storage Cost?

Be careful how you answer that question. Cost and expense are two different things. Everyone worries about the expense of building barns for hay storage. Yes, barns are a big capital expense. Sometimes the method with the least expense ends up costing you the most.890159389_b7b3217a7f

For this article we will review three different hay storage methods; uncovered outside storage, tarp covered outside storage, and a barn. Most farmers that store round bales of hay use at least one of these methods on their farm.
For this discussion we will assume the hay needs for a herd of 50 cow, weighing 1,200 pounds, fed for 150 days is 266 bales (133 tons) of bermudagrass hay. This also assumes the cows consume 2.5% of their body weight per day on a dry matter basis, and each bale of hay weighs 1,000 pounds and is 15% moisture.

Every storage method will have some hay loss. Table 1 shows the amount of hay loss associated with various storage methods. For this example we will assign a loss of 5% to barn storage, 10% to tarp covered outside storage (Stack pad, covered), and both 30% and 40% to uncovered outside storage (on the ground).

Table 1. Hay Loss From Various Storage Methods

% of dry weight

Barn

2-5%

Tarp

5-10%

Stack pad Covered

5-10%

Uncovered

15-40%

Plastic Wrap

5-10%

On ground Well drained, twine

20-40%

Well drained, net wrap

15-40%

Poor drainage, twine

30-60%

Poor drainage, net wrapped

30-45%

Source: Hancock, D. University of Georgia

 

Given that storage losses will occur, we need to have more hay production to account for these losses. Simply put, we will need more acres of hay to produce the amount of hay required by the herd. From Clemson Extension Bermudagrass Hay Enterprise budgets, the total cost of producing bermudagrass hay is approximately $512 per acre. Assuming a yield of 5 ton per acre, total cost will equal $51 per bale ($102/ton). We must account for the extra production required to make up for the lost hay during storage. Table 2 shows these calculations based on our assumed losses for each storage method, and comparing each to barn storage. From the calculations you will see that it takes 2 additional acres of hay production to account for losses when stored under a tarp compared to barn storage. Hay storage outside and uncovered will require 7 to 10 additional acres of hay production to account for storage losses compared to barn storage. Additional production costs (when compared to barn storage) are $1,024/year for tarp covered storage,  $5,121/year for uncovered outside storage with 40% loss, and $3,585 for uncovered storage with 30% loss.

Table 2. Additional Hay Production Required Due to Storage Loss

Required Tons of Hay

 Storage Loss

— (tons) —

Total

Total Acres Needed

@ 5 ton/ac

Production cost

($)

Compared to barn

($)

Barn

(5% storage loss)

133

7

140

28

14,341

Stacked & Tarp

(10% storage loss)

133

14

147

30

15,365

1,024

Uncovered

(40% storage loss)

133

54

187

38

19,462

5,121

Uncovered

(30% storage loss

133

40

173

35

17,926

3,585

Adapted from: McKinley, T. University of Tennessee 

Each storage method has cost associated with them. Annual barn cost are $2,006 per year (initial cost of $7.00 per square foot for a 48ft.x 48ft. barn [approx. 210 bales capacity], 5.5% interest, and annual repair and maintenance at 2% of initial cost, and a 20 year life).  Tarp cost is $390 per year (24ft.x48ft. tarp covers 60 bales). To cover the same number of bales as the barn, 4 tarps are required for on initial cost for $1,280 and a life span of 4 years, and no annual repair and maintenance. For our example, no annual cost were assigned for uncovered outside storage.

Now that we have established annual costs associated with each storage method, we can calculate the total annual cost (additional annual production cost plus annual storage cost) for each storage option. In Table 3 you can see the comparison. Outside storage with 40% loss has a total annual cost of $3,115 higher than the total cost of barn storage ($1,579 higher for 30% storage loss). Tarp covered hay has a total annual cost of $592 less than barn storage. Outside uncovered hay, 40% loss, is $3,707 higher than tarp covered hay annually and 30% loss is $2,171 higher.  This example does not account for the additional labor required to handle hay tarps during covering and uncovering the hay stack.

Table 3. Production and Storage Cost of Various Hay Storage Methods

Annual Production Cost

($)

Annual Storage Cost

($)

Production + Storage

($)

Compared to Barn

($)

Barn

14,341

2,006.00

16,347.00

Stacked & Tarp

15,365

390.40

15,755.40

-591.60

Uncovered – 30% loss

17,926

0.00

17,926.00

1,579

Uncovered – 40% loss

19,462

0.00

19,462.00

3,115

Adapted from: McKinley, T. University of Tennessee

 

In conclusion, if you are currently using uncovered outside storage for your hay, building a barn can save you $3,115 per year with 40% outside storage loss. At that level of savings you will be able to pay off the barn used in this example in 5 ½ years. If storage loss is 30%, then barn pay off will be 11 years based on saving of $1,579 per year. There is some truth in the old saying “you will pay for a barn, whether you build it or not” with uncovered outside storage.

If you currently use tarps, you will need to determine if it is worth $592 a year to not handle hay tarps. Some farmers that use tarps will tell you that they would gladly spend $592 to quit messing with tarps, because they can be aggravating to deal with, especially while feeding hay.

Regardless of the method, it is clear that it is economically worth the expense to cover stored round hay bales, either in a barn or with a hay tarp.

 

References:

 

One Comment

  1. Ryan Seier September 12, 2017 at 12:05 am #

    You also have to add on taxes. I would agree if your going to store hay for more than 2 years. I am from central Nebraska and I would say our loss with net wrap would only be 25% max here if stored in well drained area in a year but we don’t get a lot of rain either.

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