Agriculture along the Cathance River has a long history [Ref 1]. As we evaluate additional improvements to the property and outstanding relations with other local farmers, it was important that we review all the factors that might influence a decision as well as timelines. For well over 15 years, we’ve allowed others to hay our fields without any compensation, and to some degree have tolerated the subsequent damages associated with heavy equipment on property.
In considering the approximate 8 acre Epps field, we reviewed the financial implications of haying as an agricultural option for the field. The following simple example illustrates our findings:
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Annual cost of land or real property- · Considers cost of money associated with present land value, and annual property tax · Assumes the 8 acre parcel has a value of ~$32,500 |
$2,800 |
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One-time cost of land preparation- · Considers plowing, harrowing, fertilizing, seed, and seeding [Ref 2, 3] |
$3,000 |
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Annual cost of fertilizing and harvesting twice- · Assumes fertilizer such as manure is applied at beginning of season to maintain yields at or above 4 tons per acre · Harvesting assumes cutting, conditioning/raking, and baling [Ref 3, 4] |
$2,500 |
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Annual value of hay with two cuttings [Ref 4]- · Considers first year non-productive, thus yields in years 2-5 only · Assuming 1000-lb bales versus small square bales |
$7,000 |
Note: numbers derived from agricultural research in appendix and other sources.
Thus, if one were to consider all the items above in a five year farming project:
Total Costs: $27,000
Total Revenues: $28,000
Profit Margin: ~4%
In the case of another farmer tending to the fields versus the property owner, if you take out the cost of land and look solely at the operational costs against revenue, the other farmer’s profit margin jumps to 54% [Note: this is the current situation with Epps]
However, should a standard sharecropping practice be applied [Ref 5], returning 25% of the harvest to the property owner in return for the cost of land, this would drive the other farmer’s profit margin down to 29%.