With the drought in Texas, the grass did not grow in August, and hay was not harvested. The past two years we have purchased our hay from one farmer. We informed him we would need a certain number of bales of hay for this winter, last spring. He said he would hold them for us, but the price would be higher. The cost of fertilizer had doubled since the last year, and the cost of diesel was higher. We responded as not a problem, we understand you need to take care of business.
We called today asking what the price was for hay, and when we could pick some up. He informed us he had no hay for sale, a feed store in town had purchased all his hay at $105.00 USD. I know from calling the two feed stores in town, they are selling the same hay for $250.00 USD and $260.00 USD. Quite a profit margin for the feed stores.
This hay farmer did not make a large profit when he sold his hay. He was glad he made a profit, and does not have to deal with selling hay for the rest of the year. The feed stores are the ones making an over abundance of profit from those who are struggle to stay in business.
At $250.00 USD for a 800 pound bale of hay, I will not make a profit on my sheep, it will cost me more to feed than what the lambs will sell for. I will be a very big negative on the accounting books.
We are looking for hay in areas, hundreds of miles from where we live. People need hay to feed their livestock, but at those prices a sheep farmer or cattle rancher can not stay in business.
A person goes to the store and purchases meat. The meat is expensive, but the person who raised the meat sees very little of the money the person spent for the pound of meat they are taking home.
Will I stay in the business of raising sheep? I pray I do. If I can not find hay to purchase at a price that will allow me to maintain a breakeven margin at least… My work the past eight years will have to be sold. Tough decisions to make.