Financing expansion with alfalfa?

The 40 next to us has no house and will be up for sale soon. I'm friendly with the owners and we've been working toward buying it from them. The deadline he'd given me before has probably been moved up. He's not in good health is the issue and it's getting worse. We had 3 years to come up with the money but we may be looking at winter now.

We have alfalfa growing randomly on our property. I know it grows here. I know a farmer who grows it as well. Still, I've never farmed anything substantial before. So we have 35 acres of our land open to alfalfa production and I spoke with the neighbor. He is willing to entertain us leasing the land for planting from him. He has 40, probably 35 of which is open for farming.

So there it is. 70 acres of alfalfa. We are estimating 30k. $250 in seed costs. We need to come up with a good number for leasing the neighbors land for the season. Help with that please! We have no idea what is fair. As for planting we have a tractor and can rent a discer or harrow as needed and have a seed spreader.

Depending on the lease price our costs would be extremely minimal.

Anyone think this can work??

Both properties are basically weeds right now. Would that cause a large problem?

I can't quite follow what's the question here. I mean, you specifically asked about the price of the land lease. That varies wildly in different parts of the country, so I'd say ask your farmer friend. Odds are, he leases some land, or has inquired about leasing some land, or knows someone who leases some land. He'll know the going rate in your county.




But as for the rest- are you asking how to farm alfalfa?
It goes roughly like this:
-prep the field
-plant
-fertilize/irrigate
-harvest
-transport
-sell

Do you have all those steps lined up? You mentioned:

elle sagenev wrote:As for planting we have a tractor and can rent a discer or harrow as needed and have a seed spreader.

And that covers the beginning, but what about the middle? Do you plan on fertilizing and/or irrigating?

And how about the end? How are you harvesting this? Who are you selling it to? How are you going to get it to them when they pay you?



O, maybe the question was about buying the neighboring property? You said "we are estimating 30k"; does that mean you've done the math, and you think you'll net $30,000 after expenses? That seems a little high. I didn't hunt very hard, but here's a discussion on another forum, where some guys who seem to be doing this for a living are throwing around gross numbers from $400 - $1,000 acre in all different parts of N. America. For you to net that amount on your first try, without owning the equipment ... seems unrealistic to me. (Then again, maybe that's not what you meant.)

In either case, I would NOT enter into any sort of real estate transaction that depended on me successfully farming something I had never farmed before. The risk of it going wrong and me losing my money would be scary enough. To know that it would also blow up something else important in addition to losing the money? That doesn't sound good to me. At all.



Or maybe you meant neither of those things! What exactly are you asking?

elle sagenev wrote:The 40 next to us has no house and will be up for sale soon. I'm friendly with the owners and we've been working toward buying it from them. The deadline he'd given me before has probably been moved up. He's not in good health is the issue and it's getting worse. We had 3 years to come up with the money but we may be looking at winter now.

We have alfalfa growing randomly on our property. I know it grows here. I know a farmer who grows it as well. Still, I've never farmed anything substantial before. So we have 35 acres of our land open to alfalfa production and I spoke with the neighbor. He is willing to entertain us leasing the land for planting from him. He has 40, probably 35 of which is open for farming.

So there it is. 70 acres of alfalfa. We are estimating 30k. $250 in seed costs. We need to come up with a good number for leasing the neighbors land for the season. Help with that please! We have no idea what is fair. As for planting we have a tractor and can rent a discer or harrow as needed and have a seed spreader.

Depending on the lease price our costs would be extremely minimal.

Anyone think this can work??

We are debt free. The financial risk here is minimal. If it does not work we will not be able to purchase the property next to us. That's it. We would not lose anything we already have and it would not alter our lifestyle. We are financially secure. We just fear what could move in next to us and would like the extra acreage.

We own a nice tractor. We know people who have the necessary equipment, so renting it from them will be fairly inexpensive. Even if we have to rent from a tractor rental place I checked and a discer is $75 for a day. Hardly cutting into profits.

As for fertilizing, nope. Not planning on doing that. We have alfalfa growing fairly wild already. I've not planted it and I've not done anything to it.

Again, for harvest, we know someone with the equipment.

Mostly I've never farmed anything before and we just formulated this plan last night. I'm looking for input. We need to make a fair amount of money quickly. Temporarily planting and harvesting alfalfa for the money necessary to buy the property next to us seems like a good enough plan. I suppose we could look into wheat as well. We know that grows, it's all around us, but would require more equipment.

Selling it leaves me with options. We are a busy agricultural area. I could sell it for hay here or I could look to get better prices farther away, perhaps through a few co-ops. Selling it here would mean a reduced price but the benefit of people coming to us to get it, so no transport.

Not having farmed before I did wonder if the weedy mess our property is would hinder our ability to grow alfalfa. That's why I asked.

I see costs hovering around $500 without factoring in whatever we agree upon for the lease price. This is our neighbor and the land we want to lease would be land we would be buying. He is on board with us buying his property and he would like us to do it soon because of his health. He still wants a nice, tight, legal lease (and I agree with that) so we will need to come up with a decent lease price.

Is that clearer?

Mike Cantrell wrote:I can't quite follow what's the question here. I mean, you specifically asked about the price of the land lease. That varies wildly in different parts of the country, so I'd say ask your farmer friend. Odds are, he leases some land, or has inquired about leasing some land, or knows someone who leases some land. He'll know the going rate in your county.




But as for the rest- are you asking how to farm alfalfa?
It goes roughly like this:
-prep the field
-plant
-fertilize/irrigate
-harvest
-transport
-sell

Do you have all those steps lined up? You mentioned:

elle sagenev wrote:As for planting we have a tractor and can rent a discer or harrow as needed and have a seed spreader.

And that covers the beginning, but what about the middle? Do you plan on fertilizing and/or irrigating?

And how about the end? How are you harvesting this? Who are you selling it to? How are you going to get it to them when they pay you?



O, maybe the question was about buying the neighboring property? You said "we are estimating 30k"; does that mean you've done the math, and you think you'll net $30,000 after expenses? That seems a little high. I didn't hunt very hard, but here's a discussion on another forum, where some guys who seem to be doing this for a living are throwing around gross numbers from $400 - $1,000 acre in all different parts of N. America. For you to net that amount on your first try, without owning the equipment ... seems unrealistic to me. (Then again, maybe that's not what you meant.)

In either case, I would NOT enter into any sort of real estate transaction that depended on me successfully farming something I had never farmed before. The risk of it going wrong and me losing my money would be scary enough. To know that it would also blow up something else important in addition to losing the money? That doesn't sound good to me. At all.



Or maybe you meant neither of those things! What exactly are you asking?

elle sagenev wrote:
The financial risk here is minimal...
We would not lose anything we already have ...
We own a nice tractor. We know people who have the necessary equipment, so renting it from them will be fairly inexpensive.
Even if we have to rent from a tractor rental place I checked and a discer is $75 for a day. Hardly cutting into profits....
Again, for harvest, we know someone with the equipment....

Mostly I've never farmed anything before and we just formulated this plan last night. ...

Selling it leaves me with options. We are a busy agricultural area. I could sell it for hay here or I could look to get better prices farther away, perhaps through a few co-ops. Selling it here would mean a reduced price but the benefit of people coming to us to get it, so no transport. ...

Not having farmed before I did wonder if the weedy mess our property is would hinder our ability to grow alfalfa. That's why I asked. ...

I see costs hovering around $500 without factoring in whatever we agree upon for the lease price. This is our neighbor and the land we want to lease would be land we would be buying. He is on board with us buying his property and he would like us to do it soon because of his health. He still wants a nice, tight, legal lease (and I agree with that) so we will need to come up with a decent lease price.

Is that clearer?

Much clearer, thank you!

The takeaway I'm seeing is, you've got access to every part of this process at substantially below-market rates. You've got friends who are going to lend you their haymaking equipment at haymaking time (you know it's time-critical, right?) for next to nothing, you're going to make your hay, and you've got buyers already lined up to pay market rates for it.

If that's the case, then go get 'em, tiger!

elle sagenev wrote:We need to make a fair amount of money quickly.

I'm not a farmer, but I've never heard or read a farmer say anything that would lead me to believe you're barking up the right tree.

Between my first post and now, I got a hold of a friend whose family is in the hay business in northern Ohio. They've been doing it a long time, farm several thousand acres, and have a few dozen employees. Decent-sized operation. He says they gross $1,000 acre "if it gets made well". With respect to netting $30,000 on 70 acres without experience or owning the equipment, his opinion is, "no way in hell, if you could everyone would just do that."

So for what it's worth, there's input from one real-life hay farmer.
Hope that's helpful!



EDIT:
It's also worth pointing out that here at Permies, we get used to being on the fringe of things, where there aren't lots of carefully-documented and precisely-measured figures available for what we want to do.
Haymaking is not a fringe activity, and HAS been carefully documented and precisely measured.
Here's cost for production in Kansas:
http://www.agmanager.info/farmmgt/machinery/Tools/KCD_CustomRates%28Feb2014%29.pdf
Here's "estimated costs for owning and operating forage machinery" (looks like you might be in for about $700 of diesel fuel for this project?)
http://www.farmdoc.illinois.edu/manage/machinery/machinery_forage.html
Similar, from Univ of Arkansas:
http://www.uaex.edu/publications/pdf/fsa-34.pdf
"This report summarizes estimated costs of improving pasture by fi ve different systems. For each system, both the initial cost per acre and the annual maintenance cost per acre are presented. In addition, costs of establishing alfalfa or alfalfa-grass hay meadows and annual maintenance costs for alfalfa-based hay production are presented."
https://store.extension.iastate.edu/Product/ag96-pdf
"Guidelines for estimating hay production costs for 2015, Manitoba"
http://www.gov.mb.ca/agriculture/business-and-economics/financial-management/pubs/cop_forage_alfalfahay.pdf

We have a smallish Kubota tractor I do everything with. While I am not positive on fuel costs what I know is that last year I did 4 large swales with the bucket of it without having to fuel at all. Plus I'm in Wyoming where we are pretty below average in fuel prices.

Yes I know hay making is time sensitive. lol I've just never done it. This will be my very first growing experiment.

We were discussing this further during lunch and the hay farmer we know sells ALL of his hay to Texas and CA. They drive up here and cover the costs of purchasing it. I'm not saying this will be super easy and we might not make the 30k but I think we can do fairly well. I guess we will see. Maybe we'll fail and be out our seed money. But if we do fail, hay, we just seeded our property with alfalfa which is 100% better than what it was before.

Mike Cantrell wrote:

elle sagenev wrote:
The financial risk here is minimal...
We would not lose anything we already have ...
We own a nice tractor. We know people who have the necessary equipment, so renting it from them will be fairly inexpensive.
Even if we have to rent from a tractor rental place I checked and a discer is $75 for a day. Hardly cutting into profits....
Again, for harvest, we know someone with the equipment....

Mostly I've never farmed anything before and we just formulated this plan last night. ...

Selling it leaves me with options. We are a busy agricultural area. I could sell it for hay here or I could look to get better prices farther away, perhaps through a few co-ops. Selling it here would mean a reduced price but the benefit of people coming to us to get it, so no transport. ...

Not having farmed before I did wonder if the weedy mess our property is would hinder our ability to grow alfalfa. That's why I asked. ...

I see costs hovering around $500 without factoring in whatever we agree upon for the lease price. This is our neighbor and the land we want to lease would be land we would be buying. He is on board with us buying his property and he would like us to do it soon because of his health. He still wants a nice, tight, legal lease (and I agree with that) so we will need to come up with a decent lease price.

Is that clearer?

Much clearer, thank you!

The takeaway I'm seeing is, you've got access to every part of this process at substantially below-market rates. You've got friends who are going to lend you their haymaking equipment at haymaking time (you know it's time-critical, right?) for next to nothing, you're going to make your hay, and you've got buyers already lined up to pay market rates for it.

If that's the case, then go get 'em, tiger!

elle sagenev wrote:We need to make a fair amount of money quickly.

I'm not a farmer, but I've never heard or read a farmer say anything that would lead me to believe you're barking up the right tree.

Between my first post and now, I got a hold of a friend whose family is in the hay business in northern Ohio. They've been doing it a long time, farm several thousand acres, and have a few dozen employees. Decent-sized operation. He says they gross $1,000 acre "if it gets made well". With respect to netting $30,000 on 70 acres without experience or owning the equipment, his opinion is, "no way in hell, if you could everyone would just do that."

So for what it's worth, there's input from one real-life hay farmer.
Hope that's helpful!



EDIT:
It's also worth pointing out that here at Permies, we get used to being on the fringe of things, where there aren't lots of carefully-documented and precisely-measured figures available for what we want to do.
Haymaking is not a fringe activity, and HAS been carefully documented and precisely measured.
Here's cost for production in Kansas:
http://www.agmanager.info/farmmgt/machinery/Tools/KCD_CustomRates%28Feb2014%29.pdf
Here's "estimated costs for owning and operating forage machinery" (looks like you might be in for about $700 of diesel fuel for this project?)
http://www.farmdoc.illinois.edu/manage/machinery/machinery_forage.html
Similar, from Univ of Arkansas:
http://www.uaex.edu/publications/pdf/fsa-34.pdf
"This report summarizes estimated costs of improving pasture by fi ve different systems. For each system, both the initial cost per acre and the annual maintenance cost per acre are presented. In addition, costs of establishing alfalfa or alfalfa-grass hay meadows and annual maintenance costs for alfalfa-based hay production are presented."
https://store.extension.iastate.edu/Product/ag96-pdf
"Guidelines for estimating hay production costs for 2015, Manitoba"
http://www.gov.mb.ca/agriculture/business-and-economics/financial-management/pubs/cop_forage_alfalfahay.pdf

I will say that if I have to broadly apply chemicals to the properties to do this we won't be doing it. I don't want that stuff anywhere near where we live and play.

Well I bought the alfalfa seed. $300. Not too bad really. Planting it will cost us $375 not including fuel costs. If all else fails we just improved our land 1000000%

We decided to offer the neighbor a %. If we aren't successful they just got a free pasture seeding. Either way they win.

I am still not understanding your math on costs. Is that seed cost for 70 acres? I farm a few hundred acres of hay and can tell you that alfalfa establishment cost are around $300 per acre if you plan on planting a money making crop that will recover establishment costs. Nationally alfalfa is only profitable 3 out of 5 years and certainly will not pay for purchase of land. There are also so many other problems with the scenario too numerous to write about right now but my advice would be to not plan on establishing the alfalfa for that purpose. And the presence of ferrel alfalfa growing on your property would be no indication of a commercially viable crop. If you want to message me I would be happy to give you more advice.

Hi Elle,

I'm not a farmer, but I grew up farming alfalfa on my families small farm and also for our neighbor who irrigated 140 acres.

My family dry-farmed alfalfa on 40 acres and this fed all of our stock, but if alfalfa is not irrigated, you will only get 1 crop per year. This will be a very small crop the first year since the perennial plants will not have the root structure to grow large like they will in successive years. If you have weeds in with the alfalfa, you will also not get the $/ton that other farmers will be receiving for their up to 4 crops/year.

Instead of competing with the pure, weed free alfalfa farmers, try planting in native and other grasses to produce horse hay. Horses have a hard time digesting straight alfalfa, so many farmers have gone to Timothy grass as a crop, but you since you are a smaller more holistic farmer, you could recreate a native/introduced grassland for ultimate nutritional/digestable feed. This seems to me to be the permaculture way.

So I was using the seeding rate that the company I bought the seed from had. Now I'm not sure what that rate meant. I did do more research. My numbers were a bit off. It'll cost a bit more up front but based on the 2015 alfalfa hay price and the 3 ton per acre rate I saw on most other websites I believe it will still be a profitable venture. I'll keep this thread updated and we'll see how it goes.

elle,
is the land you are referencing irrigated?

i also farm alfalfa, but mainly because all of the grasses ive been planting didnt make it through the drought.
we are irrigated and grow 99% of the feed for our farm. (we lease some grass pasture as well) we estimated we put up ~2 tons an acre.
in the west, we have found that good alfalfa will pay for itself - assuming you can market it well. any extra alfalfa we have we market to small dairy operators and people concerned about glysophate in their horse forage. we are able to get a slight premium for our alfalfa because there is no bio-cides and for the time being it is ~90% "weed" free.

as for leasing the land - i think splitting profits is a good way to get in to leasing land. fwiw - irrgated land around here lease for ~$100-400 per acre. (depends on whose pipe, whose water, etc)


you can also check out PV coop (ft collins, co) for seeds, they are close and in the same bioregion.
http://pvcoop.com/agronomy-fort-collins/grass-seed-fort-collins/
we have planted and been happy with their seeds. see here: https://permies.com/t/33453/plants/irrigated-pasture-planting-suggestions

you may also check with your county extension office - our local one has a no till seeder that you can borrow (with a deposit)

if you are not irrigated, you may look into sanfoin. it is a n-fixing, non-bloat causing plant that does better in our irrigated spots than in the irrigated.

also be careful - alfalfa, once established, will put off a toxin that prevents the establishment of other alfalfa around it.

hope something in here helps

Kelly Smith wrote:elle,
is the land you are referencing irrigated?

i also farm alfalfa, but mainly because all of the grasses ive been planting didnt make it through the drought.
we are irrigated and grow 99% of the feed for our farm. (we lease some grass pasture as well) we estimated we put up ~2 tons an acre.
in the west, we have found that good alfalfa will pay for itself - assuming you can market it well. any extra alfalfa we have we market to small dairy operators and people concerned about glysophate in their horse forage. we are able to get a slight premium for our alfalfa because there is no bio-cides and for the time being it is ~90% "weed" free.

as for leasing the land - i think splitting profits is a good way to get in to leasing land. fwiw - irrgated land around here lease for ~$100-400 per acre. (depends on whose pipe, whose water, etc)


you can also check out PV coop (ft collins, co) for seeds, they are close and in the same bioregion.
http://pvcoop.com/agronomy-fort-collins/grass-seed-fort-collins/
we have planted and been happy with their seeds. see here: https://permies.com/t/33453/plants/irrigated-pasture-planting-suggestions

you may also check with your county extension office - our local one has a no till seeder that you can borrow (with a deposit)

if you are not irrigated, you may look into sanfoin. it is a n-fixing, non-bloat causing plant that does better in our irrigated spots than in the irrigated.

also be careful - alfalfa, once established, will put off a toxin that prevents the establishment of other alfalfa around it.

hope something in here helps

We are not able to irrigate. There are water issues here but besides that our land is classified "residential" and so is our well. So we have limits on water usage from our wells. We can't irrigate.

Hmm Sainfoin does look like a good hay crop. Might be a much better option for us. Nice. Thanks.

Yup, Delaney Saifoin seems very well suited for our area. I can see that working rather nicely. The seed rate is higher and it will cost more up front. But it seems like a nice bet for our area. Requires little human intervention, my favorite kind!

Now we are deciding if we want to go straight Sainfoin or if we want to do a planting mix.

I am also considering the alfalfa we already ordered. It's a nice legume, I plan to use it for lots of things. Now, I think, it would be wise to plant it in a wide swath around the poultry run. My birds do free range, though they don't often go very far. Sainfoin is supposed to be extremely palatable. I don't want to lose too much to my own animals. Plus we'll just seed the acres that we can't hay. Nice soil improvement on our land either way.

So yeah. I'm still optimistic. This is still a good plan for us. I think we are at a good location for locally advertised sales. We have Wyoming, NE and CO right at our doorstep. Yes, I'm very optimistic.

so you are asking about dryland haymaking across 70 acres, with some sort of n-fixer?

i dont have much experience in un-irrigated drylands but is it possible to plant the majority in a mix of species with a sprinkling of alfalfa?
a dryland meadow mix of some sorts? may not make the best hay though... (would be great if someone could graze ________ through it 1-2 times a year)


personally, i think i would find more value in the hay grown than i would be able to sell it for. imo, a late harvested meadow hay that was put down as mulch would be better than selling the hay off.
my goal is to have 100% ground cover, 100% of the time. especially important in the arid (windy) drylands to try and hold any moisture that does fall in the soil.

Kelly Smith wrote:so you are asking about dryland haymaking across 70 acres, with some sort of n-fixer?

i dont have much experience in un-irrigated drylands but is it possible to plant the majority in a mix of species with a sprinkling of alfalfa?
a dryland meadow mix of some sorts? may not make the best hay though... (would be great if someone could graze ________ through it 1-2 times a year)


personally, i think i would find more value in the hay grown than i would be able to sell it for. imo, a late harvested meadow hay that was put down as mulch would be better than selling the hay off.
my goal is to have 100% ground cover, 100% of the time. especially important in the arid (windy) drylands to try and hold any moisture that does fall in the soil.

The way I see it using an n-fixer improves the land at the very least. At the most it makes us some extra cash on the side. Win-Win really.

Seems Wyoming is loving this Sainfoin. The variety I would like to use was developed at the college which is pretty close to me. Very well suited for our area. I read a few reports from our local ag and livestock agencies. Looked at the info the USDA had and called a ranch in the state that uses it. Seems like a good bet for us. I suppose we will all see.

As far as not selling the hay off, we would like to expand, as stated. A bit of a boost is needed to do that. Sure, we could take out a loan and do it but we'd rather not. So, this will help us on our way to the land next to us and hopefully save us from having a concrete company move in (he had one that was interested previously).

got it.

please keep us updated on what you plant and how it does. im especially interested in the sainfoin


you should save some alfalfa seeds to sprinkle around your trees (you just put in swales/trees if i remember correctly). imo, they will do better there as [i assume] the trees will be irrigated for establishment. and once established alfalfa is pretty drought hardy.

Bill Bradbury wrote:
Instead of competing with the pure, weed free alfalfa farmers, try planting in native and other grasses to produce horse hay. Horses have a hard time digesting straight alfalfa, so many farmers have gone to Timothy grass as a crop, but you since you are a smaller more holistic farmer, you could recreate a native/introduced grassland for ultimate nutritional/digestable feed. This seems to me to be the permaculture way.

Perhaps herbal leys -

https://web.archive.org/web/20150402224940/http://www.nsfarming.com/Media/Jerry%20Brunetti%20-%20Biiodiverse%20Forage.pdf

https://web.archive.org/web/20150402225511/http://www.soilandhealth.org/01aglibrary/010128elliot/010128toc.html

https://web.archive.org/web/20150402225814/http://www.journeytoforever.org/farm_library/turner2/turner2toc.htm

https://web.archive.org/web/20150402231328/http://www.slideshare.net/FIDEL56/alternative-health-practices-for-livestock, page 92, Forage Quality & Livestock Health: A Nutritionist's View by Jerry Brunetti

If you haven't already I strongly suggest you go in person to visit the county at extension and NRCS in your area. They can help advise you on seedbed preparation, seeding rates, etc. Based on your description of the property, I would be very concerned about cleaning up the weeds before you plant. A small amount of weeds will drop the price you get for the hay very quickly.

I hate writing this because I do not like caving to public opinion. However, we met with a very good hay farmer that I actually hold in high esteem last night. I do not agree with his methods, exactly, but I respect his knowledge of his subject matter. He said his neighbor (whom he also said was a terrible farmer) tried sainfoin and it didn't take. So, we are doing a test acreage, using our methods, before going in whole hog. We are also upping our plans to build a dam and harvest more water. He wasn't against our big picture plans. He said he'd rather like to see that. But he thinks haying is not going to work for us. So we'll test it and see.

There's a whole lot of businesses that went belly up by trying to jump in with both feet without knowing what they're landing in. I think you made a good choice to try a small test first. If things go well, you can jump into the whole acreage next year, and have not lost much time.

Thanks for teaching me about sainfoin, I had not heard of it before.

http://www.nrcs.usda.gov/Internet/FSE_PLANTMATERIALS/publications/idpmcpg7792.pdf

This link talks about water needs and not liking grass or salty soils. Also says that there are different types for different areas.
I am wondering if the neighbors neighbor had the wrong conditions or wrong seed?