To own or not to own?

Posted on November 20, 2017 in Forage Foundations
Most all dairy producers share similar headaches during forage harvest.  Those who own their machinery have something breakdown and wonder whether it’s worth the hassle and cost of owning equipment.  Those who hire custom harvesters get frustrated when they can’t completely control the quality of the forages they’ll feed for the next year.

So what is the better option?

As with almost everything in farming – it depends.  Two producers shared their thoughts and insight on the strategies that best fit their business models.

Hire out
When you’re starting from scratch, investing in a line of equipment doesn’t fit the equation for financial success.  That’s the case for Michael McAndrews who farms with his parents at McAndrews Dairy LLC in Sauk Centre, Minnesota.  They started their farm in 2006 and had to put all their resources into the cows and facilities.  Hiring out their forage planting and harvesting was the only option.

Today, that system is mostly still in place as they grow alfalfa and corn for silage and high moisture corn.  The McAndrews also grow some soybeans as a cash crop.  Until three years ago, they didn’t run enough acres to justify investing in equipment and they now rent too many acres for small machinery to do the job.

“It’s a big leap to make that investment when you’re starting with no equipment,” McAndrews said.

While he does continually consider buying equipment, McAndrews explained that hiring out has some advantages:

  1. Budgeting.  Because he pays per acre for harvesting, McAndrews knows what his bill will be for the year and can budget accordingly.  He doesn’t have to worry about unplanned, expensive repair costs.
  2. Labor.  Chopping requires a crew of people to get the job done.  In McAndrews’ case, that would take people away from the cows, which have to be the top priority regardless of whether it’s time to chop.  McAndrews did purchase a planter this past year.  He said they can still make that work from a labor standpoint because planting only requires one person, not an entire crew.
  3. Speed.  For both haylage and corn silage, once the harvester shows up, the job can get done fast.  McAndrews said they can get 300 acres of alfalfa chopped in 36 hours, barring any weather issues.  He wouldn’t be able to go that fast if he was doing it on his own, which could have big implications on forage quality.

McAndrews offered this advice for producers who must hire out for their forage harvesting.

  1. “Find someone that’s actually hungry for work,” he said.
    If a custom harvester is only looking to pick up one or two new customers, those farms are likely to land low on the priority list.  Someone who needs the work is more likely to show up on time and do a good job.
  2. Communication.  McAndrews believes in being very clear with his expectations for forage quality.  For example, he tells his custom harvester what kernel processing score he wants to see.  He said, if he had it to do all over again, he might consider setting up a pay scale based on quality.  In this scenario, the harvester only gets paid in full if quality standards are met.
  3. “Don’t be scared to go with someone else if you’re not happy with quality,” McAndrews emphasized.  The quality of forage you put up will affect the herd’s performance in the upcoming year.  If your harvester can’t meet quality standards, it’s time to look elsewhere.

Own it
The team at Scholze Family Farms LLC in Humbird, Wisconsin controls its own forage quality destiny because the farm owns almost all its own equipment.  Theo Scholze said they raise a combined total of 1,725 acres of corn for silage and grain, alfalfa, wheat, and soybeans.  They do their own merging and chopping as well as combining.  A neighbor owns a triple mower, so he takes care of cutting alfalfa for the Scholzes, and, in turn, they do his merging and chopping.

Scholze said the farm has always owned its own harvesting equipment, starting with his dad.  The equipment line grew in proportion with the growing dairy, which now milks about 500 cows.  He said it would be a lot tougher to purchase equipment outright if they didn’t already have the machinery they do.

Scholze said his team works hard to avoid major issues during harvest by performing a lot of preventative maintenance throughout the winter.  Having employees who focus on maintenance also allows the Scholzes to purchase more cost-effective used equipment.

“You have to have someone who likes the equipment and is willing to invest the time in working on it,” he said.

Scholze said the farm has four employees who are dedicated to the machinery and field work, which also comes in handy during harvest because it doesn’t take any labor away from the dairy.  The farm hires a few students and semi-retired neighbors to help haul wagons and cover bunkers and piles.

Scholze said he firmly believes in maximizing forage quality by hitting the ideal window for harvest.  He said that’s the most valuable part of owning his own equipment – when the crop is at its peak quality, both the machinery and the crew are ready to hit the fields.

Scholze said that’s also why it works well to hire the neighbor to cut alfalfa.  With a triple mower, they can get the job done quicker and with fewer people.  While it makes sense for the team to chop for the neighbor, Scholze said he has no interest in expanding that side of his business to do more custom harvesting.  He prefers to focus on optimal forage quality for his own herd.

“It’s always worth the time and money to maximize quality,” Scholze said.  “That’s the most important goal.”

Category: Equipment
Forage Foundations
Forage harvesting