business plan for hay production

Small Business Trends

How to start a hay farm.

Hay farming is an agricultural practice that has been around for centuries. It involves the growing and harvesting of hay, which is used primarily as feed for livestock.

Hay is a critical component of the agricultural industry and plays a vital role in sustaining the livelihoods of farmers across the world. In this article, we will discuss what a hay farm is, the different types of hay that are commonly grown, and how to start a farm that produces hay.

Table of Contents

What is a Hay Farm?

A hay farm is a type of agricultural operation that focuses primarily on the growing and harvesting of hay. Hay is a type of grass or legume that is cut and dried for use as animal feed. It is typically grown in large fields and harvested using specialized equipment, such as hay balers and mowers. Hay farms can be found all over the world, from small family-run operations to large commercial enterprises.

How to Start a Hay Farm: 12 Practical Steps

1: research and plan.

• Conduct thorough research on hay farming, focusing on different types of hay that thrive in your area.
• Decide on the type of hay you plan to grow based on the local climate, soil type, and market demand.
• Develop a detailed business plan that includes your farming goals, target market, and financial projections.

2: Selecting the Right Hay Varieties

• Choose hay varieties that are well-suited to your region’s climate and soil conditions.
• Consider the needs of your potential customers, whether they require alfalfa, timothy, clover, or Bermuda grass hay.

3: Securing Suitable Land

• Look for land that has the right soil type for your chosen hay variety, ideally well-draining with a pH between 6.0 and 7.5.
• Ensure the land has adequate sunlight and access to water sources for irrigation if needed.

4: Understanding Soil Health and Fertility

• Test the soil to determine its nutrient levels and pH balance.
• Amend the soil based on test results to create the optimal growing conditions for your hay crop.

5: Preparing the Land

• Till the land to create a smooth seedbed for planting.
• Remove any weeds or debris to minimize competition and pest risks.

6: Planting the Hay

• Plant your selected hay variety according to the best practices for seeding rates and depths.
• Consider using a no-till drill or broadcast seeding method, depending on your land and equipment.

7: Irrigation and Water Management

• Implement an efficient irrigation system to ensure your hay crop receives enough water, especially during dry periods.
• Monitor moisture levels regularly to avoid over or under-watering.

8: Pest and Disease Management

• Apply integrated pest management strategies to control pests and diseases.
• Regularly inspect your crop for signs of infestation or illness and take action as needed.

9: Harvest Timing and Techniques

• Determine the optimal time to harvest your hay, usually in the early bloom stage for legumes and late boot to early head stage for grasses.
• Use sharp, well-maintained harvesting equipment to ensure a clean cut and minimize losses.

10: Post-Harvest Handling and Storage

• Bale the hay at the correct moisture level to prevent mold and spoilage.
• Store the hay bales in a dry, well-ventilated area, off the ground, to maintain their quality.

11: Marketing and Selling Your Hay

• Develop a marketing strategy to sell your hay, targeting local farmers, livestock owners, and feed stores.
• Build relationships with your customers to encourage repeat business and referrals.

12: Evaluating and Adjusting Your Practices

• After each growing season, evaluate the success of your hay farm by analyzing yields, customer feedback, and financial performance.
• Adjust your farming practices as necessary to improve efficiency, yield, and profitability.

By following these steps, you can establish a successful hay farming operation that produces high-quality hay for your target market while managing resources efficiently and sustainably.

The Business Side: Simple Steps to Start a Hay Farm Business

Starting a hay farm business involves several steps to ensure success. Here are ten simple steps to help you establish and grow your hay farm business.

1. Name and Brand Your Hay Farm Business

Choosing a name and brand for your hay farm business is an important step. The name should be easy to remember, and it should accurately represent your business. You should also consider trademark and domain availability before finalizing your decision. Your brand should reflect your target audience and the values of your business.

2. Form a Legal Entity and Register Your Hay Business

To protect your personal assets and comply with legal requirements, you should register your hay farm business as an LLC or corporation. This also helps establish credibility and trust with potential customers and partners. You should also obtain any necessary licenses and permits for your business, and make sure you have adequate insurance coverage.

3. Sort Out Taxes, Licenses, Permits, and Insurance

When starting a hay farm business, you need to familiarize yourself with tax requirements, obtain any necessary licenses and permits, and ensure you have adequate insurance coverage. This helps you comply with legal requirements, protect your business and assets, and avoid any potential fines or penalties.

4. Create a Hay Farm Business Plan

Creating a business plan is essential for any successful hay farm business. It defines your business objectives, target market, marketing strategies, and financial projections. Your business plan should also identify potential challenges and solutions, and include a clear roadmap for the future growth of your business.

5. Market Research

Conducting market research is crucial to understanding your target market and competition. You need to identify market trends and potential customers and assess demand and pricing in your area. This helps you tailor your marketing strategies to effectively reach and engage with your target audience.

6. Buy the Necessary Equipment for Baling Hay

To operate a successful hay farm business, you need to invest in the necessary equipment, including tractors, mowers, balers, and storage facilities. You can purchase or lease equipment, depending on your budget and long-term goals. It’s important to research and compare options to ensure you get the best value for your investment.

7. Open a Business Bank Account

Opening a separate business bank account is important for managing your finances and keeping accurate records. It also helps you separate your personal and business finances, making it easier to track expenses, monitor cash flow, and prepare tax returns. You can also access financial services and benefits specifically designed for small businesses.

8. Market the Business

Developing a comprehensive marketing strategy is crucial to the success of your hay farm business. This should include a mix of online and offline tactics to reach and engage with your target audience. You can use social media, email marketing, content marketing, and advertising to increase brand awareness and drive sales.

9. Choose Where to Sell Your Products

Identifying potential buyers and sales channels is an important step in growing your hay farm business. This includes feed stores, horse stables, and livestock auctions, as well as offering delivery services to customers who need it. You should also consider building relationships with potential buyers to establish long-term partnerships.

10. Expand Your Hay Farm Business

Exploring opportunities to expand your hay farm business is key to sustained growth. This can include diversifying your product line, increasing production, or offering value-added services. You should also continuously monitor market trends and adapt your strategies to meet the evolving needs of your customers.

What is Needed to Start a Hay Farm and How Much Does it Cost?

Starting a hay farm requires suitable land, equipment, and baling machinery. The costs of starting a hay farm depend on factors such as land availability and equipment quality. A small hay farm can cost between $10,000 to $20,000, while a large one can easily cost hundreds of thousands.

• Suitable Land:  Hay farming requires land that is suitable for growing hay. The ideal soil type should be well-draining and have a pH between 6.0 and 7.5. The land should also receive adequate sunlight and have access to water. The cost of purchasing or leasing suitable land varies depending on location and size.
• Equipment:  Starting a hay farm requires a significant investment in equipment. This includes a tractor, mower, tedder and hay rake, and baling equipment. The cost of equipment depends on the size and quality. Used equipment can be a cost-effective option for beginners.
• Tractor:  A tractor is a critical piece of equipment for any hay farm. It is used for plowing, tilling, planting, and harvesting. The cost of a new tractor can range from $20,000 to $100,000, while a used tractor can cost between $5,000 to $30,000.
• Mower:  A mower is used to cut the hay before it is baled. The cost of a new mower can range from $2,000 to $10,000, while a used mower can cost between $500 to $5,000.
• Tedder & Hay Rake:  After the hay is cut, it needs to be dried before it can be baled. A tedder is used to fluff up the hay and allow it to dry evenly. A hay rake is used to gather the dried hay into rows for baling. The cost of a new tedder and hay rake can range from $5,000 to $15,000, while used equipment can cost between $1,000 to $5,000.
• Baling Equipment:  Baling equipment is used to compress the hay into bales for storage or transport. The cost of a new baler can range from $10,000 to $50,000, while a used baler can cost between $2,000 to $10,000. Other baling equipment includes wagons, trailers, and wrappers, which can add additional costs.

The Hay Farm Industry in the United States

The hay farming industry in the United States is a significant sector of the agriculture industry. Hay is an essential feed source for livestock, making it a crucial element for the country’s meat and dairy production.

The United States is the world’s largest hay producer, with over 53 million acres of hay harvested annually. The top hay-producing states in the U.S. include California, Texas, South Dakota, Montana, and North Dakota.

The industry has been growing steadily over the years, and advancements in technology and farming techniques have improved the efficiency and profitability of hay farming operations.

The demand for hay continues to rise, and the industry is expected to remain an important contributor to the U.S. agriculture industry.

Deciding What Type of Hay Farm to Run

Choosing the right type of hay to grow on your hay farm is essential to your farm’s overall success. By considering your livestock’s nutritional needs, soil type and climate, market demand, and cost and labor, you can make an informed decision that will benefit both your farm and your livestock.

Common Plants to Grow for Hay Production

There are several different types of hay that are commonly grown on hay farms. These include:

• Timothy Hay: Timothy hay is a type of grass hay that is widely grown in North America. It is known for its high nutritional content and is often used as feed for horses.
• Alfalfa Hay: Alfalfa hay is a legume hay that is high in protein and other essential nutrients. It is commonly used as feed for dairy cows and other livestock.
• Clover Hay: Clover hay is another type of legume hay that is commonly grown on hay farms. It is high in protein and is often used as feed for horses, sheep, and other livestock.
• Bermuda Grass Hay: Bermuda grass hay is a warm-season grass hay that is commonly grown in the southern United States. It is known for its high yields and is often used as feed for cattle and other livestock.

Growing Hay for DIY on a Family Farm or Growing Hay to Sell

You can either grow and let your livestock eat hay on your own farm, or you can grow hay to sell to other farmers and livestock owners. Consider factors such as soil type, climate, and market demand when choosing which type of hay to grow.

How to Source Equipment to Grow Hay and For Harvesting Hay

Sourcing equipment is essential to growing and harvesting hay. The process involves finding the right equipment that matches your needs, budget, and timeline. There are three main ways to source equipment:

• New: Buying new equipment is an option if you have a higher budget and want to invest in equipment that will last for years. Many farm equipment suppliers offer warranties on new equipment, and you can customize purchases to your specific needs. However, it’s more expensive than used or rented equipment.
• Used: Buying used farm equipment is a cost-effective option. However, it’s crucial to inspect the equipment carefully to ensure it’s in good condition. Look for reputable sellers, and research the equipment’s maintenance history before buying. Used equipment may have a shorter lifespan than new equipment.
• Rent: Renting equipment is an option if you don’t want to invest in equipment or only need it for a short period. Renting allows you to use high-quality equipment without the upfront costs of buying. However, it may be more expensive in the long run if you need equipment for extended periods. Renting is also subject to availability, so plan accordingly.

The Steps in Making a Hay Crop

Understanding the steps in making a hay crop can help farmers achieve maximum yield and quality. Let’s look at what the process involves…

Preparing the Soil

Soil preparation is vital to ensure the hay crop’s success. This involves tilling the soil to create a smooth seedbed, adding fertilizers and lime to correct soil pH, and removing any weeds or debris.

Planting and Growing

After the soil is prepared, the hay crop is planted and grown. The seed is spread evenly across the prepared seedbed and then covered with a layer of soil. The crop is then allowed to grow, and farmers must monitor it for weed growth and disease.

Mowing is a crucial step in the hay crop process. Farmers must wait until the crop reaches the optimal height before mowing. This typically occurs when the crop is in the mid to late bud stage.

Tedding involves fluffing and spreading the cut hay out to dry. This step helps to ensure the hay is dry and ready for raking.

Raking is the process of gathering the hay into rows to facilitate drying and baling. Farmers use specialized machinery, such as a rake or tedder, to move and shape the hay into neat rows.

Stacking and Baling in Round Bales or Square Bales

The final step in the hay crop process involves stacking and baling so there’s no loose hay. Farmers can choose to bale hay in either round or square bales, depending on their preference and the type of machinery they have. The farmer can then store hay so it’s ready for transport.

Hay Farm: Downsides to Consider

Despite its benefits, hay farming has downsides to consider. Weather conditions, such as drought or excessive rain, can reduce hay quality and yield. Hay storage can also be a challenge, and the cost of equipment and labor can be high.

Hay Farming: A Sustainable Business Venture

In conclusion, starting a hay farm represents a promising and sustainable business venture in the agricultural sector. With careful planning, appropriate land selection, and adherence to best farming practices, hay farming can yield significant returns while contributing to the agricultural community and supporting livestock nutrition.

It requires dedication to soil health, crop management, and market understanding, but the rewards can be plentiful for those willing to invest the time and resources.

As the demand for quality animal feed continues, hay farming stands out as a valuable and enduring business idea.

Whether you’re looking to support your own livestock or supply to local farmers and businesses, a well-managed hay farm can serve as a robust foundation for a thriving agricultural business.

Hay Farm FAQs

What is the difference between hay and straw.

Hay is a forage crop harvested for livestock feed, while straw is a byproduct of harvested grains used primarily for bedding and other non-feed purposes.

How Hard is Hay Farming?

Hay farming can be physically demanding and time-consuming, requiring specialized equipment and knowledge. However, it can also be a rewarding and profitable industry.

Can a Hay Farm be Profitable?

Yes, a well-managed hay farm can be profitable. Factors such as crop yield, market demand, and operational efficiency can impact profitability.

Is Hay Easy to Grow?

Hay requires specific soil, moisture, and weather conditions for optimal growth. However, with proper preparation and care, hay can be successfully grown in many regions.

How Much Hay Can 1 Acre Produce a Year?

The amount of hay 1 acre can produce in a year varies depending on factors such as soil quality, crop variety, and weather conditions. On average, 1 acre can produce 1-4 tons of hay per year.

Is it Worth it to Grow Hay?

Whether growing hay is worth it depends on factors such as market demand, crop yield, and operational costs. With proper management, growing hay can be a profitable endeavor.

How Should Hay Bales be Stacked to Reduce Waste?

Hay bales should be stacked on a well-drained surface, preferably with a moisture barrier, and kept out of direct sunlight to prevent spoilage. Stacking bales in a crisscross pattern can also help reduce waste.

Are Round Bales or Square Bales Better for Hay?

The choice between a round bale and small square bales or large square bales depends on factors such as storage space, feeding method, and equipment availability. Round bales are generally better for outdoor storage, while square bales are easier to handle and stack.

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How to Start a Farm: Plan Your Operation

Think about your operation from the ground up and start planning for your business.  A good farm business plan is your roadmap to start-up, profitability, and growth, and provides the foundation for your conversation with USDA about how our programs can complement your operation. 

Keep reading about planning your business below, get an overview of the beginning farmer's journey , or jump to a different section of the farmer's journey.

On This Page

Why you need a farm business plan.

A comprehensive business plan is an important first step for any size business, no matter how simple or complex. You should create a strong business plan because it:

• Will help you get organized . It will help you to remember all of the details and make sure you are taking all of the necessary steps.
• Will act as your guide . It will help you to think carefully about why you want to farm or ranch and what you want to achieve in the future. Over time, you can look back at your business plan and determine whether you are achieving your goals.
• Is required to get a loan . In order to get an FSA loan, a guarantee on a loan made by a commercial lender, or a land contract, you need to create a detailed business plan . Lenders look closely at business plans to determine if you can afford to repay the loan.

How USDA Can Help

Whether you need a good get-started guide, have a plan that you would like to verify, or have a plan you’re looking to update for your next growth phase, USDA can help connect you to resources to help your decisions.

Your state's beginning farmer and rancher coordinator  can connect you to local resources in your community to help you establish a successful business plan. Reach out to your state's coordinator for one-on-one technical assistance and guidance. They can also connect you with organizations that specifically serve beginning farmers and ranchers.

It is important to know that no single solution fits everyone, and you should research, seek guidance, and make the best decision for your operation according to your own individual priorities.

Build a Farm Business Plan

There are many different styles of business plans. Some are written documents; others may be a set of worksheets that you complete. No matter what format you choose, several key aspects of your operation are important to consider.

Use the guidelines below to draft your business plan. Answering these kinds of questions in detail will help you create and develop your final business plan. Once you have a business plan for your operation, prepare for your visit to a USDA service center. During your visit, we can help you with the necessary steps to register your business and get access to key USDA programs.

Business History

Are you starting a new farm or ranch, or are you already in business? If you are already in business:

• What products do you produce?
• What is the size of your operation?
• What agricultural production and financial management training or experience do you, your family members, or your business partners have?
• How long have you been in business?

Mission, Vision, and Goals

This is your business. Defining your mission, vision and goals is crucial to the success of your business. These questions will help provide a basis for developing other aspects of your business plan.

• What values are important to you and the operation as a whole?
• What short- and long-term goals do you have for your operation?
• How do you plan to start, expand, or change your operation?
• What plans do you have to make your operation efficient or more profitable ?
• What type of farm or ranch model (conventional, sustainable, organic, or alternative agricultural practices) do you plan to use?

Organization and Management

Starting your own business is no small feat. You will need to determine how your business will be structured and organized, and who will manage (or help manage) your business. You will need to be able to convey this to others who are involved as well.

• What is the legal structure of your business? Will it be a sole proprietorship, partnership, corporation, trust, limited liability company, or other type of entity?
• What help will you need in operating and managing your farm or ranch?
• What other resources, such as a mentor or community-based organization , do you plan to use?

Marketing is a valuable tool for businesses. It can help your businesses increase brand awareness, engagement and sales. It is important to narrow down your target audience and think about what you are providing that others cannot.

• What are you going to produce ?
• Who is your target consumer ?
• Is there demand for what you are planning to produce?
• What is the cost of production?
• How much will you sell it for and when do you expect to see profit ?
• How will you get your product to consumers ? What are the transportation costs and requirements?
• How will you market your products?
• Do you know the relevant federal, state, and local food safety regulations? What licensing do you need for your operation?

Today there are many types of land, tools, and resources to choose from. You will need to think about what you currently have and what you will need to obtain to achieve your goals.

• What resources do you have or will you need for your business?
• Do you already have access to farmland ? If not, do you plan to lease, rent, or purchase land?
• What equipment do you need?
• Is the equipment and real estate that you own or rent adequate to conduct your operation? If not, how do you plan to address those needs?
• Will you be implementing any conservation practices to sustain your operation?
• What types of workers will you need to operate the farm?
• What additional resources do you need?

Now that you have an idea of what you are going to provide and what you will need to run your operation you will need to consider the finances of your operation.

• How will you finance the business?
• What are your current assets (property or investments you own) and liabilities (debts, loans, or payments you owe)?
• Will the income you generate be sufficient to pay your operating expenses, living expenses, and loan payments?
• What other sources of income are available to supplement your business income?
• What business expenses will you incur?
• What family living expenses do you pay?
• What are some potential risks or challenges you foresee for your operation? How will you manage those risks?
• How will you measure the success of your business?

Farm Business Plan Worksheets

The Farm Business Plan Balance Sheet can help gather information for the financial and operational aspects of your plan.

Form FSA-2037 is a template that gathers information on your assets and liabilities like farm equipment, vehicles and existing loans.

• FSA-2037 - Farm Business Plan - Balance Sheet
• FSA-2037 Instructions

Planning for Conservation and Risk Management

Another key tool is a conservation plan, which determines how you want to improve the health of your land. A conservation plan can help you lay out your plan to address resource needs, costs and schedules.

USDA’s Natural Resources Conservation Service (NRCS) staff are available at your local USDA Service Center to help you develop a conservation plan for your land based on your goals. NRCS staff can also help you explore conservation programs and initiatives, such as the Environmental Quality Incentives Program (EQIP) .

Conservation in Agriculture

Crop insurance, whole farm revenue protection and other resources can help you prepare for unforeseen challenges like natural disasters.

Disaster Recovery

Special Considerations

Special considerations for businesses.

There are different types of farm businesses each with their own unique considerations. Determine what applies to your operation.

• Organic Farming  has unique considerations. Learn about organic agriculture , organic certification , and the  Organic Certification Cost Share Program  to see if an organic business is an option for you. NRCS also has resources for organic producers and offers assistance to develop a conservation plan.
• Urban Farming  has special opportunities and restrictions. Learn how USDA can help farmers in urban spaces .
• Value-Added Products . The Agricultural Marketing Resource Center (AgMRC) is a national virtual resource center for value-added agricultural groups.
• Cooperative.  If you are interested in starting a cooperative, USDA’s Rural Development Agency (RD) has helpful resources to help you begin .

Special Considerations for Individuals

Historically Underserved Farmers and Ranchers: We offer help for the unique concerns of producers who meet the USDA definition of "historically underserved,"  which includes farmers who are:

• socially disadvantaged
• limited resource
• military veterans

Women: Learn about specific incentives, priorities, and set asides for  women in agriculture within USDA programs.

Heirs' Property Landowners: If you inherited land without a clear title or documented legal ownership, learn how USDA can help Heirs’ Property Landowners gain access to a variety of programs and services

Business Planning

Creating a good business plan takes time and effort. The following are some key resources for planning your business.

• Farm Answers from the University of Minnesota features a library of how-to resources and guidance, a directory of beginning farmer training programs, and other sources of information in agriculture. The library includes business planning guides such as a Guide to Developing a Business Plan for Farms and Rural Businesses and an Example Business Plan .
• The Small Business Administration (SBA) offers information about starting, managing, and transitioning a business.

SCORE is a nonprofit organization with a network of volunteers who have experience in running and managing businesses. The Score Mentorship Program partners with USDA to provide:

• Free, local support and resources, including business planning help, financial guidance, growth strategies.
• Mentorship through one-on-one business coaching -- in-person, online, and by phone.
• Training from subject matter experts with agribusiness experience.
• Online resources and step-by-step outlines for business strategies.
• Learn more about the program through the Score FAQ .

Training Opportunities

Attend field days, workshops, courses, or formal education programs to build necessary skills to ensure you can successfully produce your selected farm products and/or services. Many local and regional agricultural organizations, including USDA and Cooperative Extension, offer training to beginning farmers.

• Cooperative Extension  offices address common issues faced by agricultural producers, and conduct workshops and educational events for the agricultural community.
• extension.org  is an online community for the Cooperative Extension program where you can find publications and ask experts for advice.

Now that you have a basic plan for your farm operation, prepare for your visit to a USDA service center.

2. Visit Your USDA Service Center

How to Start a Farm with USDA

Get an  overview of the beginning farmer's journey  or jump to a specific page below.

Find Your Local Service Center

USDA Service Centers are locations where you can connect with Farm Service Agency, Natural Resources Conservation Service, or Rural Development employees for your business needs. Enter your state and county below to find your local service center and agency offices. If this locator does not work in your browser, please visit offices.usda.gov.

Learn more about our Urban Service Centers . Visit the Risk Management Agency website to find a regional or compliance office  or to find an insurance agent near you.