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UNIVERSITY OF CALIFORNIA COOPERATIVE EXTENSION
2013
SAMPLE COSTS TO ESTABLISH AND PRODUCE
ORGANIC ALFALFA HAY
Picture by Rachael F. Long
CALIFORNIA – 2013
Prepared by:
Rachael F. Long
Steve B. Orloff
Karen M. Klonsky
UC Cooperative Extension Farm Advisor, Yolo, Solano & Sacramento Counties
UC Cooperative Extension Farm Advisor, Siskiyou County
UC Cooperative Extension Specialist, Department of Agriculture and Resource
Economics, UC Davis
Richard L. De Moura UC Cooperative Extension Staff Research Associate, Department of Agriculture
and Resource Economics, UC Davis
UNIVERSITY OF CALIFORNIA - COOPERATIVE EXTENSION
SAMPLE COSTS TO ESTABLISH AND PRODUCE ORGANIC ALFALFA HAY
IN CALIFORNIA – 2013
STUDY CONTENTS
INTRODUCTION ...................................................................................................................................................................
ASSUMPTIONS ......................................................................................................................................................................
Stand Establishment Practices and Material Inputs ..............................................................................................................
Production Cultural Practices and Material Inputs for Established Alfalfa ..........................................................................
Labor, Equipment, and Interest .............................................................................................................................................
Cash Overhead ......................................................................................................................................................................
Non-Cash Overhead ..............................................................................................................................................................
References ................................................................................................................................................................................
Table 1. Costs Per Acre to Establish Organic Alfalfa..............................................................................................................
Table 2. Material Costs Per Acre to Establish Organic Alfalfa ...............................................................................................
Table 3. Whole Farm Equipment Used to Establish Organic Alfalfa ......................................................................................
Table 4. Costs Per Acre to Produce Organic Alfalfa ...............................................................................................................
Table 5. Costs and Returns Per Acre to Produce Organic Alfalfa ...........................................................................................
Table 6. Monthly Cash Costs Per Acre to Produce Organic Alfalfa .......................................................................................
Table 7. Ranging Analysis .......................................................................................................................................................
Table 8. Whole Farm Annual Equipment, Investment, and Business Overhead Costs ...........................................................
Table 9. Hourly Equipment Costs ............................................................................................................................................
Table 10. Operations with Materials and Equipment ..............................................................................................................
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INTRODUCTION
Organic alfalfa production involves growing, labeling, and marketing the crop according to National
Organic Program (NOP) standards as defined by the United States Department of Agriculture (USDA).
These standards require that alfalfa be produced with approved inputs given in the national materials list
with brand names listed by the Washington State Department of Agriculture or the Organic Materials
Review Institute. Farmers must also take precautions against pesticide drift and other sources of
prohibited contaminants. In addition, hay handling equipment as well as storage areas must be
designated organic or properly cleaned between conventional and organic use, with documentation.
Fields must be managed organically for at least three years prior to being certified as organic.
Federal laws regulating organic products require producers to be certified organic through a USDA
accredited certifier (public or private) and they must also register with the California Department of
Food and Agriculture’s (CDFA) Organic Program. This registration process is handled through the
County Agricultural Commissioners’ Offices throughout the state. The certification process requires
that the producer develop a written organic farm plan that describes how the farm is to be managed in
accordance with USDA-NOP rules and subsequent approval of the plan by the certifier. In addition,
yearly updates to the farm plan are required as well as yearly on-site farm audits by certifiers to ensure
compliance with federal regulations. There are many organic certifiers and costs and fees vary with
each. Sample fees are included in this study.
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California
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The detailed costs for organic alfalfa hay establishment and production in California are presented in
this study. The hypothetical farm used in this report consists of 1,000 acres, with 100 acres in organic
alfalfa hay production, 890 acres in other organic and conventional field and row crops such as melons,
beans, processing tomatoes, mixed vegetables, fruit and nut crops, and 10 acres to roads, buildings, and
unused land. Crops that can be rotated with alfalfa hay vary considerably throughout the state
depending on location, soil type, climate, and marketing opportunities.
This cost study provides guidelines on how to establish and produce organic alfalfa hay to help make
production decisions, determine potential returns, prepare budgets, and evaluate production loans.
Practices described are based on the production practices considered typical for organically grown
alfalfa in California. However, due to the diversity of environments in California, actual production
practices can vary widely from one location to another. The “Your Costs” columns in Tables 1, 2, 4, and
5 allow growers to pencil in their own costs based on their individual farming practices. Sample costs
for labor, materials, equipment, and custom services are based on current figures.
The hypothetical farm operations, production practices, overhead, and calculations are described under
the assumptions. For additional information or an explanation of the calculations used in the study call
the Department of Agricultural and Resource Economics, University of California, Davis, California,
530-752-3589 or the local UC Cooperative Extension office, 530-666-8734.
Current and archived “Sample Cost of Production Studies” for many commodities can be downloaded at
http://coststudies.ucdavis.edu, requested through the Department of Agricultural and Resource
Economics, UC Davis, 530-752-6887 or obtained from the local county UC Cooperative Extension
offices.
The University of California does not discriminate in any of its policies, procedures or practices. The university is an affirmative action/equal opportunity employer.
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California
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ASSUMPTIONS
The following assumptions refer to Tables 1 to 10 and pertain to sample costs to establish and produce
organic alfalfa in California. The costs are based on cultural practices used by growers in the state,
some of which may not be used during every establishment or production year. The cultural practices
and production inputs for growing organic alfalfa vary considerably among growers and fields
throughout the state. Costs are represented on an annual per acre basis. The use of trade names and
cultural practices in this report does not constitute an endorsement or recommendation by the
University of California, nor is any criticism implied by omission of other similar products.
Farm Setup. This study is based on a 1,000 acre organic and conventional field, row crop, fruit and nut
crop farm, of which 100 acres are dedicated to growing organic alfalfa hay, 890 acres are used to grow
other crops, and 10 acres are occupied by roads and the farmstead. Typically, the grower will rotate a
portion of the alfalfa crop each year and establish a new stand on land previously occupied by rotation
crops. Land that is suitable for growing alfalfa in California ranges from $3,000 to $8,000 per acre. In
this study, the land is valued at $6,000 per acre.
Stand Establishment Practices and Material Inputs
Land Preparation. The ground is ripped to a depth of 20 to 32 inches to fracture the soil to improve
water infiltration. The field is disced to break up large clods, creating better seed-to-soil contact for
good seed germination. Composted chicken manure is spread over the ground and incorporated by a
second discing. The land is leveled and the fields are floated to remove high and low spots that may
affect stand establishment due to too much or too little water. Borders are pulled to make checks for
flood irrigation. Healthy alfalfa stands compete well against weeds, insects, and diseases, so it is
important to spend time on land preparation to ensure a dense and vigorous stand. This is particularly
important for organic production.
Planting. A custom operator seeds the alfalfa with an airflow planter. A cultipacker is used to firm the
seedbed prior to and after planting. Certified alfalfa seed is recommended for nematode and weed
management. In addition, select a variety with the appropriate fall dormancy rating and pest resistance
for your area. USDA standards require the use of organic seeds, but if not available, conventionallyproduced seeds may be used as long as they are not genetically engineered and there is clear
documentation of non-availability of organic seed that is adapted to the growing area. The seed should
be inoculated with the appropriate organically-approved nitrogen-fixing bacteria if alfalfa has not been
grown in the area for at least ten years.
The optimum planting time varies throughout the state. For example, in the Intermountain area seeding
should be done from mid to late-August, but successful seeding can still be done in the spring. In the
Sacramento and San Joaquin Valley, planting should occur from mid-September to mid-October. In this
study, alfalfa is planted in September at 25 pounds per acre to a depth of 1/4 inch. Slightly higher
seeding rates are recommended in organic alfalfa production to ensure strong, competitive stands. The
optimal planting date is important to minimize weed competition and maximize alfalfa vigor. Early fall
is the best time to plant alfalfa when summer weeds are less aggressive and before winter weeds
germinate, to minimize weed competition. The life of an organic alfalfa stand varies from the northern to
the southern area of the state. The Intermountain region will have a longer productive life (typically 5 to
8 years) than the Southern San Joaquin Valley, but will have less hay cuttings annually than a stand
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further south. The Sacramento Valley usually ranges from three to five years. Stand life in this study is
four years.
Fertilization. Sample and analyze soils as required by the National Organic Program to determine crop
needs, such as pH and nutrient levels. Incorporate the recommended amounts of nutrients using compost
or other approved materials. Alfalfa frequently needs supplemental phosphorus (P), and sometimes
sulfur (S), and potassium (K), depending on inherent soil fertility and previous crop fertilization. Alfalfa
does not need supplemental nitrogen because the plant fixes its own from the atmosphere via nitrogenfixing nodules on the roots. In this study, composted chicken manure (90% dry matter, 2.29% P2O5) at
four tons per acre is applied prior to planting. This should provide about 165 lbs of P2O5 and sufficient
sulfur and potassium for several years of production. If the soil is too acidic (pH less than 6.3), add an
organically approved liming material such as ash or limestone to ensure optimum nitrogen fixation by
the Rhizobia bacteria that colonize the alfalfa roots. The composted chicken manure is hauled and
custom spread at a cost of $13.00 per ton for hauling and $8.00 – $10.00 per ton to spread, then disced
and incorporated by the grower during field preparation. Manure breaks down gradually, and the
nutrients contained in them are slower to become available than those in commercial fertilizer.
Therefore, a portion of the nutrients from the chicken manure will be available in subsequent years. The
cost is allocated over the four year stand life at 25% per year. Use plant tissue sampling and analysis
during the summer of the first year’s growth, and in additional years, to assess plant nutrient needs for
the second and subsequent years’ production. In this study, it is assumed that no additional nutrients are
applied. See http://alfalfa.ucdavis.edu/IrrigatedAlfalfa/pdfs/UCAlfalfa8292Fertilization_free.pdf for
more nutrient information.
Irrigation. The field is pre-irrigated using sprinkler irrigation before seeding and then sprinkled twice
after planting. Fields are sprinkled twice in September and once in October for a total of six acre-inches
applied to the new planting at $25.47 per acre-foot or $2.12 per acre-inch. Irrigation costs shown in the
tables include the water costs and labor for setting up, moving, taking down sprinkler pipe, siphon tubes,
and/or gated pipe.
Pest Management. The organic pesticides, rates, and procedures mentioned in this cost study are listed
in the UC Integrated Pest Management Guidelines: Alfalfa. For more information on other available
organic pesticides, pest identification, monitoring, and management visit the UC IPM website at
http://www.ipm.ucdavis.edu/PMG/crops-agriculture.html. Other sources of organically approved inputs
include the Washington State Department of Agriculture materials lists http://agr.wa.gov/Portals/Org or
the Organic Materials Review Institute (http://www.omri.org). For information and specific pesticide
use, contact your organic certifier.
Weeds. A fall planting will help reduce weed competition because the alfalfa seedlings emerge after
most summer weeds have completed their lifecycle and before winter weeds have a chance to emerge
and compete. Pre-irrigation followed by cultivation can help reduce weed density in seedling alfalfa.
Unfortunately, there is not an effective method for selectively controlling emerged weeds in organicallygrown seedling alfalfa, but a strong stand will help the alfalfa suppress weeds by out-competing them.
If the weed pressure is severe and weeds overtop the alfalfa, it may be beneficial to graze the field with
sheep or cut early to allow sunlight to reach the young alfalfa plants. When grazing seedling alfalfa
fields, make sure that the field is dry so that the soil will not be compacted and the stand weakened.
Rotate the sheep on and off quickly so fields are not overgrazed and damaged.
Harvest. Fall plantings will produce a crop the following spring (not during the calendar year of
establishment).
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California
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Production Cultural Practices and Material Inputs for Established Alfalfa
Irrigation. Once fields are established, water use ranges from about 18-28 acre-inches in Northern
California (Intermountain) to over 50 acre-inches in the Southern San Joaquin Valley. For this cost
study, they are flood irrigated with a total of 42 acre-inches of water per acre per year. Flood irrigation
of established fields starts in April and continues through September. A total of 3.5 acre-feet of water
(42 acre-inches) per year at $25.47 per acre-foot or $2.12 per acre-inch are applied. Irrigation costs
shown in the tables include the water costs and labor for setting up, moving, taking down sprinkler pipe,
siphon tubes, and/or gated pipe.
Pest Management. The organic pesticides, rates, and procedures mentioned in this cost study are listed
in the UC Integrated Pest Management Guidelines: Alfalfa. For more information on pest identification,
monitoring, and management visit the UC IPM website at http://www.ipm.ucdavis.edu/PMG/cropsagriculture.html.
Insects: The Egyptian and alfalfa weevils are the most serious pests of alfalfa, causing yield and quality
losses to the first harvest in late winter/early spring. Entrust (spinosad) with a surfactant is applied in
March by the grower for weevil control (suppresses weevils with 60%-70% control). Sheep grazing in
the winter may provide partial weevil control by destroying the eggs that are laid in the old alfalfa stems.
Most organic growers rely on early harvest to minimize weevil damage, but yields will be reduced.
Microbial insecticides are used to control armyworms and alfalfa caterpillars during the summer months
(one application per year is assumed). An application of XenTari, a Bt containing organically-approved
insecticide, is assumed in this study. Entrust can also be used, but is not efficacious on western
yellowstriped armyworms. Aphids are managed with resistant alfalfa varieties or early harvest before
economic damage occurs.
Pathogens: Diseases are managed through the use of resistant varieties or early harvest before the
pathogens cause economic damage. Nematodes (root knot and stem) are managed primarily via
resistant plant varieties. Stem nematode may further be managed by crop rotation and the use of
certified seed. Maintaining soil health through rotation and the use of cover crops will also help
improve soil and plant health, potentially mitigating pathogen problems.
Weeds: In January, a year after the stand has been established, the field can be lightly harrowed for
weed management. Winter grazing by sheep when the alfalfa is dormant can also be used to control
winter weeds in the first year of establishment as well as subsequent years. Sheep grazing may also
provide some weevil control, as the sheep consume the old alfalfa stems where weevils often lay eggs.
Watch for soil compaction and stand loss when “sheeping off”, especially in wet years on heavy soils.
Grazing costs or revenues are not included in this study.
Harvest. Alfalfa is custom harvested in this cost study. The NOP requires that organic growers use
harvesting equipment that has been designated organic, or properly cleaned between organic and
conventional uses, with documentation of this practice noted in the organic plan. A custom operator
cuts the hay with a self-propelled swather. After drying in windrows for several days, the hay is turned
with a center-delivery rake. When dried to the correct moisture, the hay is baled with a pull-type baler
and then picked up with a harrowbed and moved to hay stacks. For this study, the costs for all of these
operations were converted to per acre costs and are simply labeled as Harvest.
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Growers may choose to own harvesting equipment, purchased either new or used, or hire a custom
harvester. Many factors are important in deciding which harvesting option a grower uses. The options
are discussed in "Acquiring Alfalfa Hay Harvest Equipment: A Financial Analysis of Alternatives". The
publication can be found at http://www.ipm.ucdavis.edu/PMG/selectnewpest.alfalfa-hay.html.
Yield. Average annual yields in California range from 5.0 to 10 tons per acre with three to ten cuttings
depending on location and alfalfa variety. Eight tons per acre over seven cuttings per year is common in
the Central Valley. The crop in this study is assumed to yield 7.0 tons of hay per acre because yields of
organic alfalfa are often slightly lower than conventional due to only partial control of many pests and
weeds and the difficulty meeting the nutritional needs of alfalfa using solely organic sources.
Returns. Returns will vary during the season, depending upon the market and quality of the hay, but
are approximately 20% higher than conventionally grown alfalfa. Based on current organic markets for
premium to rain damaged hay, an estimated price (rounded) of $260 ($220 + 20%) per ton of hay is used
to calculate returns. In some areas in the state, additional revenue is generated by charging a per head
fee for grazing sheep on alfalfa during the dormant season, a practice that will also help control winter
weeds and weevils. However, this income is not included in this study. Table 7 shows a range of yields
over a range of returns.
Labor, Equipment, and Interest
Labor. Basic hourly wages for workers are $10.20 per hour for machine operators and $9.00 per hour
for non-machine (field workers) labor. Adding 40% for the employers’ share of federal and state payroll
taxes, insurance, and other benefits increases the labor rates to $14.28 per hour for machine and $12.60
per hour for non-machine labor. The labor for operations involving machinery are 20% higher than the
operation time to account for the extra labor involved in equipment set up, moving, maintenance and
repair. Any returns above total costs are considered a return to management and investment.
Equipment Operating Costs. Repair costs are based on purchase price, annual hours of use, total
hours of life, and repair coefficients formulated by American Society of Agricultural and Biological
Engineers (ASABE). Fuel and lubrication costs are also determined by ASABE equations based on
maximum power-take-off (PTO) horsepower, and fuel type. Prices for on-farm delivery of diesel and
gasoline are $3.84 and $4.07 per gallon, respectively. Fuel costs are derived from the Energy
Information Administration (EIA) 2012 monthly data. The cost includes a 7.5% local sales tax on diesel
fuel and gasoline. Gasoline also includes federal and state excise tax, which are refundable for on-farm
use when filing your income tax. The fuel, lube, and repair cost per acre for each operation in Tables 1
and 4 are determined by multiplying the total hourly operating cost in Table 9 for each piece of
equipment used for the selected operation by the hours per acre. Tractor time is 10% higher than
implement time for a given operation to account for setup, travel and down time.
Interest on Operating Capital. Interest on operating capital is based on cash operating costs and is
calculated monthly until harvest at a nominal rate of 5.75% per year. A nominal interest rate is the
going market cost of borrowed funds. The interest cost of post-harvest operations is discounted back to
the last harvest month using a negative interest charge. The rate will vary depending upon various loan
factors. The rate in this study is considered a typical lending rate by a farm lending agency as of
January 2013.
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California
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Risk. The risks associated with the production of organic alfalfa hay should not be minimized. Weather
and other risks are a continual concern for conventional growers, but organic growers face additional
risks such as pest outbreaks that cannot be adequately controlled with organic methods. While this study
makes every effort to model a production system based on typical, real world practices, it cannot fully
represent financial, agronomic and market risks, which affect the profitability and economic viability of
organic alfalfa hay production. Because of the risks involved, access to a market is crucial. A grower
should identify potential markets and, where possible, have a market for their hay before an organic
alfalfa hay stand is established.
Cash Overhead
Property Tax. Counties charge a base property tax rate of 1% on the assessed value of the property. In
some counties special assessment districts exist and charge additional taxes on property including
equipment, buildings, and improvements. For this study, county taxes are calculated as 1% of the
average value of the property. Average value equals new cost plus salvage value divided by 2 on a per
acre basis.
Insurance. Insurance for farm investments varies depending on the assets included and the amount of
coverage. Property insurance provides coverage for property loss and is charged at 0.817% of the
average value of the assets over their useful life. Liability insurance covers accidents on the farm and
costs $1,346 for the entire farm or $1.35 per acre.
Office Expense. Various farm and office expenses are estimated at $12.00 per acre for the ranch.
These expenses include office supplies, utilities, telephones, computers, bookkeeping, accounting, legal
fees, and maintenance, etc.
Organic Certification: Cost and fees will vary with different organic certifiers used by organic
growers in California. In this study, a site visit and annual certification is assumed to cost $1,000 or $10
per organic acre. Certification and their associated costs are for the whole farm, paid annually. The
state and many certification agencies have a onetime fee when a grower first becomes organic. This cost
is not included in this study.
Investment Repairs. Annual maintenance/repairs on investments (Non-cash Overhead) are calculated
as two percent of the purchase price.
Non-Cash Overhead
Investment. The investments shown in Tables 3 and 8 are those that are partially or completely
allocated to the organic alfalfa hay operation. Costs of investments such as tractors, trucks, buildings,
etc. can be spread over the whole farm. Annual investments shown in the tables represent depreciation
and opportunity cost for each investment on an annual per acre basis.
Capital Recovery Costs. Capital recovery cost is the annual depreciation and interest costs for a capital
investment. It is the amount of money required each year to recover the difference between the purchase
price and salvage value (unrecovered capital). It is equivalent to the annual payment on a loan for the
investment with the down payment equal to the discounted salvage value. This is a more complex
method of calculating ownership costs than straight-line depreciation and opportunity costs, but more
accurately represents the annual costs of ownership because it takes the time value of money into
account (Boehlje and Eidman). The formula for the calculation of the annual capital recovery costs is
((Purchase Price – Salvage Value) x Capital Recovery Factor) + (Salvage Value x Interest Rate).
2013 Organic Alfalfa Hay Cost and Returns Study
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Salvage Value. Salvage value is an estimate of the remaining value of an investment at the end of its
useful life. For farm machinery (tractors and implements) the remaining value is a percentage of the
new cost of the investment (Boehlje and Eidman). The percent remaining value is calculated from
equations developed by the American Society of Agricultural and Biological Engineers (ASABE) based
on equipment type and years of life. The life in years is estimated by dividing the wearout life, as given
by ASABE by the annual hours of use in this operation. For other investments including irrigation
systems, buildings, and miscellaneous equipment, the value at the end of its useful life is zero. The
salvage value for land is the purchase price because land does not depreciate. The purchase price and
salvage value for equipment and investments are shown in Table 3 and 8.
Capital Recovery Factor. Capital recovery factor is the amortization factor or annual payment whose
present value at compound interest is 1. It is the function of the interest rate and equipment years of life.
Interest Rate. An interest rate of 5.75% is used to calculate capital recovery. The rate will vary
depending upon loan amount and other lending agency conditions, but is the basic suggested rate by a
farm lending agency as of January 2013.
Non-Cash Equipment Costs. Much of the equipment used on a typical organic alfalfa hay farm in
California has high hours of use, which reduces its value. This study shows current purchase prices for
new equipment with an adjustment of 50% of new value to indicate a mix of new and used equipment.
The equipment listed in Tables 3 and 8 indicates only that equipment which is used in the organic alfalfa
hay enterprise and does not necessarily include all of the equipment that would be found on a typical
organic farm growing alfalfa hay.
Establishment Costs. The establishment cost is the sum of cash costs for land preparation, planting,
production expenses, and cash overhead for growing the alfalfa stand. NOTE: there will not be returns
during the fall of the establishment year. The Total Accumulated Net Cash Cost in the first year as
shown in Table 1 represents the establishment cost per acre. For this study, the cost is $473.77 per acre
or $47,377 for the 100 acres. The establishment cost is amortized over the remaining three years of
stand life.
Land. Land values will vary with soil type, water source and location. For this study, the land is
estimated to cost $6,000 per acre.
Buildings. Buildings include a shop/shops and pole barn to store hay.
Siphon tubes. Two-hundred siphon tubes are in inventory and used on other fields in addition to the
organic alfalfa.
Fuel tanks. Two fuel tanks with pumps are placed in cement containment for use on the farm. A fuel
wagon is also maintained to service field equipment (tractors, etc.)
Tools. Includes shop tools/equipment, hand tools and field tools such as shovels.
Table Values. Due to rounding, the totals may be slightly different from the sum of the components.
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REFERENCES
American Society of Agricultural and Biological Engineers. March 2011. Agricultural Machinery
Management Data. ASAE D497.7. St. Joseph, Michigan. http://elibrary.asabe.org. Internet
accessed February 2013.
American Society of Farm Managers and Rural Appraisers. 2012. Trends in Agricultural Land & Lease
Values. California Chapter of the American Society of Farms Managers and Rural Appraisers.
Woodbridge, CA.
Boehlje, Michael D., and Vernon R. Eidman. 1984. Farm Management. John Wiley and Sons. New
York, New York
Blank, Steve, Karen Klonsky, Kim Norris, and Steve Orloff. 1992. Acquiring Alfalfa Hay Equipment: A
financial analysis of alternatives. University of California. Oakland, California. Giannini
Information Series No. 92-1. http://giannini.ucop.edu/InfoSeries/921-HayEquip.pdf; Internet
accessed January 2007.
CDFA-OP. California Department of Food and Agriculture, California Organic Program,
http://www.cdfa.ca.gov/is/i_&_c/organic.html. Internet accessed January, 2013.
Long, Rachael F., Jerry L. Schmier, Karen M. Klonsky, and Richard L. De Moura. Sample Costs To
Establish And Produce Alfalfa Hay, Sacramento Valley – 2008. UC Cooperative Extension,
University of California, Department of Agricultural and Economics, Davis, CA.
http://coststudies.ucdavis.edu.
Long, Rachael, Roland D. Meyer, and Steve Orloff. 2007. Producing Alfalfa Hay Organically.
University of California, Division of Agricultural and Natural Resources. Publication number 3512.
In: Irrigated Alfalfa Production Manual.
http://alfalfa.ucdavis.edu/+producing/index.aspx?cat=Organic%20Alfalfa
Meyer, Roland, Dan Marcum, Steve Orloff and Jerry Schmierer. 2008. Alfalfa fertilization strategies.
University of California, Division of Agricultural and Natural Resources. Publication number 3512.
In: Irrigated Alfalfa Production Manual.
http://alfalfa.ucdavis.edu/IrrigatedAlfalfa/pdfs/UCAlfalfa8292Fertilization_free.pdf
National Alfalfa and Forage Alliance. http://www.alfalfa.org.
Organic Materials Review Institute. OMRI Products List. http://www.omri.org.
Orloff, Steve B., Karen M. Klonsky, and Kabir Tumber, 2012. Sample Costs To Establish And Produce
Alfalfa Hay, Intermountain Region – Siskiyou County – 2012, Butte Valley – Center Pivot Irrigation.
UC Cooperative Extension, University of California, Department of Agricultural and Economics,
Davis, CA. http://coststudies.ucdavis.edu.
Orloff, Steve B., Karen M. Klonsky, and Kabir Tumber, 2012. Sample Costs To Establish And Produce
Alfalfa Hay, Intermountain Region – Siskiyou County – 2012, Scott Valley – Mixed Irrigation. UC
2013 Organic Alfalfa Hay Cost and Returns Study
California
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Cooperative Extension, University of California, Department of Agricultural and Resource
Economics, Davis, CA. http://coststudies.ucdavis.edu.
University of California Statewide Integrated Pest Management Program. UC Pest Management
Guidelines, Alfalfa. 2012. University of California, Division of Agriculture and Natural Resources,
Davis, CA. http://www.ipm.ucdavis.edu/PMG/selectnewpest.alfalfa-hay.html;
United States Department of Agriculture, Agricultural Marketing Service, USDA-AMS. California
Weekly Hay Report. Livestock and Seed Program, Livestock and Grain Market News Branch.
USDA. Washington, DC. http://www.ams.usda.gov/mnreports/ml_gr311.txt. Internet accessed
February 2013.
United States Department of Agriculture, National Organic Program. USDA-NOP Regulations
(Standards) and Guidelines. http://www.ams.usda/AMSv1.0/nop. Internet accessed January 2013.
Washington State Department of Agriculture. WSDA, Organic Food Materials Lists and Material
Registration http://agr.wa.gov/Portals/Org/. Internet accessed January 2013.
For information concerning the above mentioned University of California publications contact UC ANR Communications
Services (1-800-994-8849) or http://ucanr.edu (and select ‘publications’ from the top horizontal bar),_, or contact your
local county Cooperative Extension office.
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UC COOPERATIVE EXTENSION
California 2013
Table 1. COSTS PER ACRE TO ESTABLISH ORGANIC ALFALFA
Operation
Preplant:
Subsoil/Rip Ground
Disc Field 2X
Laser level
Fertilize: Compost (1X per 4 Yrs, 25% of cost)
Float Field
Pull Borders
TOTAL Preplant COSTS
Cultural:
Roll Field 2X (pre and post plant)
Irrigate: Sprinkle (water & labor)
Plant: Alfalfa seed (25 lbs/acre)
Pickup Truck Use
TOTAL Cultural COSTS
Interest on Operating Capital @ 5.75%
TOTAL OPERATING COSTS/ACRE
CASH OVERHEAD:
Liability Insurance
Office Expense
Property Taxes
Property Insurance
Investment Repairs
TOTAL CASH OVERHEAD COSTS/ACRE
TOTAL CASH COSTS/ACRE
NON-CASH OVERHEAD:
Operation
Time
(Hrs/A)
Labor
Cost
Fuel
0.39
0.33
0.00
0.00
0.12
0.22
1.06
7
6
0
0
2
4
18
16
13
0
0
2
9
39
6
5
0
0
1
2
13
0
0
0
45
0
0
45
0
0
75
22
0
0
97
28
24
75
67
4
15
212
0.20
0.70
0.00
0.57
1.47
3
9
0
10
22
3
0
0
7
10
1
0
0
2
3
0
13
106
0
119
0
0
11
0
11
2.53
40
49
16
164
108
7
22
117
19
165
4
380
Fuel Tanks & Pumps
Fuel Wagon
Hay Barn
Land
Shop Building
Shop Tools
Siphon Tubes
Sprinkler Pipe
Equipment
TOTAL NON-CASH OVERHEAD COSTS
TOTAL COSTS/ACRE
2013 Organic Alfalfa Hay Cost and Returns Study
Cash and Labor Costs per Acre
Lube
Material
Custom/
& Repairs
Cost
Rent
Total
Cost
Your
Cost
1
12
64
3
13
93
474
Per producing
Acre
11
3
525
6,061
61
13
17
33
151
6,874
California
Annual Cost
Capital Recovery
1
0
41
288
4
2
1
3
17
356
1
0
41
288
4
2
1
3
17
356
830
UC Cooperative Extension
12
UC COOPERATIVE EXTENSION
California 2013
Table 2. MATERIAL COSTS PER ACRE TO ESTABLISH ORGANIC ALFALFA
OPERATING COSTS
Fertilizer:
Compost – Chicken Manure
Irrigation:
Water
Custom:
Laser Level
Compost Hauling
Compost Spreading
Plant w/Air Flow Seeder
Seed:
Seed - Alfalfa
Labor:
Equipment Operator Labor
Non-Machine Labor
Machinery:
Fuel-Gas
Fuel-Diesel
Lube
Machinery Repair
Interest on Operating Capital (5.75%)
TOTAL OPERATING COSTS/ACRE
Quantity/
Acre
Unit
Price or
Cost/Unit
1.00
ton
45.00
6.00
acin
2.12
1.00
1.00
1.00
1.00
acre
ton
ton
acre
75.00
13.00
9.00
10.50
25.00
lb
4.25
2.19
0.70
hrs
hrs
14.28
12.60
1.71
10.93
gal
gal
4.07
3.84
Value or
Cost/Acre
45
45
13
13
108
75
13
9
11
106
106
40
31
9
65
7
42
7
9
4
380
UC COOPERATIVE EXTENSION
California 2013
Table 3. WHOLE FARM EQUIPMENT USED TO ESTABLISH ORGANIC ALFALFA
Yr Description
13 165 HP 4WD Tractor
13 62 HP 2WD Tractor
13 Cultipacker - 16'
13 Disc - Border
13 Disc Stubble 14'
13 Float - 16'
13 Pickup 4WD 3/4 Ton
13 Subsoiler 5 Shk10'
TOTAL
50% of new cost*
Price
155,748
46,000
6,000
2,000
28,500
2,800
38,000
26,534
305,582
152,791
2013 Organic Alfalfa Hay Cost and Returns Study
Yrs
Life
10
10
10
10
12
15
7
10
Salvage
Value
46,006
13,588
1,061
354
3,947
269
14,415
4,692
84,331
42,166
California
Capital
Recovery
16,225
4,792
682
227
2,919
253
4,724
3,017
32,840
16,420
Cash Overhead
Insurance
Taxes
824
1,009
243
298
29
35
10
12
133
162
13
15
214
262
128
156
1,593
1,950
796
975
Total
18,058
5,334
746
249
3,214
280
5,200
3,301
36,382
18,191
UC Cooperative Extension
13
UC COOPERATIVE EXTENSION
California 2013
Table 4. COSTS PER ACRE TO PRODUCE ORGANIC ALFALFA HAY
Operation
Cultural:
Weed: Harrow
Insect: Weevil (Entrust)
Irrigate: (water & labor)
Fertilize: Tissue Analysis
Fertilize: Compost (1X per 4 Yrs, 25% of cost)
Insect: Worms (Xen Tari)
Pickup Truck Use
TOTAL Cultural COSTS
Harvest:
Harvest - 7X
TOTAL Harvest COSTS
Interest on Operating Capital @ 5.75%
TOTAL OPERATING COSTS/ACRE
CASH OVERHEAD:
Liability Insurance
Office Expense
Organic Certification
Property Taxes
Property Insurance
Investment Repairs
TOTAL CASH OVERHEAD COSTS/ACRE
TOTAL CASH COSTS/ACRE
NON-CASH OVERHEAD:
Operation
Time
(Hrs/A)
Labor
Cost
Fuel
0.08
0.11
1.50
0.00
0.00
0.11
0.57
2.37
1
2
19
0
0
2
10
34
2
0
0
0
0
0
7
9
0
0
0
0
0
0
2
3
0
54
89
0
45
43
0
231
0
0
0
2
22
0
0
24
3
56
108
2
67
45
19
300
0.00
0.00
0
0
0
0
0
0
0
0
350
350
2.37
34
9
3
231
374
350
350
12
663
Establishment Cost
Fuel Tanks & Pumps
Fuel Wagon
Hay Barn
Land
Shop Building
Shop Tools
Siphon Tubes
Equipment
TOTAL NON-CASH OVERHEAD COSTS
TOTAL COSTS/ACRE
2013 Organic Alfalfa Hay Cost and Returns Study
Cash and Labor Costs per Acre
Lube & Material Custom/
Repairs
Cost
Rent
Total
Cost
Your
Cost
1
12
10
64
3
13
102
765
Per producing
Acre
474
11
3
525
6,061
61
13
17
46
7,210
California
Annual Cost
Capital Recovery
173
1
0
41
288
4
2
1
6
516
173
1
0
41
288
4
2
1
6
516
1,281
UC Cooperative Extension
14
UC COOPERATIVE EXTENSION
California 2013
Table 5. COSTS AND RETURNS PER ACRE TO PRODUCE ORGANIC ALFALFA
GROSS RETURNS
Alfalfa Hay
TOTAL GROSS RETURNS
OPERATING COSTS
Fertilizer:
Compost-Chicken Manure
Irrigation:
Water
Insecticide:
Entrust 80W
XenTari
Custom:
Organic Hay Harvest
Plant Tissue Analysis (Lab fee)
Compost Hauling
Compost Spreading
Labor:
Equipment Operator Labor
Non-Machine Labor
Machinery:
Fuel-Gas
Fuel-Diesel
Lube
Machinery Repair
Interest on Operating Capital (5.75%)
TOTAL OPERATING COSTS/ACRE
NET RETURNS ABOVE OPERATING COSTS
CASH OVERHEAD COSTS
Liability Insurance
Office Expense
Organic Certification
Property Taxes
Property Insurance
Investment Repairs
TOTAL CASH OVERHEAD COSTS/ACRE
TOTAL CASH COSTS/ACRE
NON-CASH OVERHEAD COSTS (Capital Recovery)
Establishment Cost
Fuel Tanks & Pumps
Fuel Wagon
Hay Barn
Land
Shop Building
Shop Tools
Siphon Tubes
Equipment
TOTAL NON-CASH OVERHEAD COSTS
TOTAL COST/ACRE
NET RETURNS ABOVE TOTAL COST
2013 Organic Alfalfa Hay Cost and Returns Study
Quantity/
Acre
Unit
Price or
Cost/Unit
Value or
Cost/Acre
7.00
7.00
ton
ton
260.00
1,820
1,820
1.00
ton
45.00
42.00
acin
2.12
1.25
2.00
oz
lb
42.88
21.54
7.00
0.05
1.00
1.00
acre
each
ton
ton
50.00
35.00
13.00
9.00
1.04
1.50
hrs
hrs
14.28
12.60
1.85
0.39
gal
gal
4.07
3.84
45
45
89
89
97
54
43
374
350
2
13
9
34
15
19
12
8
2
1
2
12
663
1,157
1
12
10
64
3
13
102
765
173
1
0
41
288
4
2
1
6
516
1,281
539
California
UC Cooperative Extension
15
UC COOPERATIVE EXTENSION
California 2013
Table 6. MONTHLY CASH COSTS PER ACRE TO PRODUCE ORGANIC ALFALFA
Beginning 01-13
Ending 12-13
Cultural:
Weed: Harrow
Insect: Weevil (Entrust)
Irrigate: (water & labor)
Fertilizer: Tissue Analysis
Fertilize: Compost (1X per 4 Yrs, 25% of cost)
Insect: Worms (Xen Tari)
Pickup Truck Use
TOTAL Cultural COSTS
Harvest:
Harvest - 7X
TOTAL Harvest COSTS
Interest on Operating Capital (5.75%)
TOTAL OPERATING COSTS/ACRE
CASH OVERHEAD
Liability Insurance
Office Expense
Organic Certification
Property Taxes
Property Insurance
Investment Repairs
TOTAL CASH OVERHEAD COSTS
TOTAL CASH COSTS/ACRE
2013 Organic Alfalfa Hay Cost and Returns Study
JAN
13
FEB
13
MAR
13
APR
13
MAY
13
JUN
13
JUL
13
AUG
13
SEP
13
OCT
13
NOV
13
DEC
13
3
TOTAL
2
5
2
2
2
58
2
87
2
18
2
18
45
2
63
2
31
2
18
3
56
108
2
67
45
19
300
0
0
5
0
0
2
0
0
58
50
50
1
138
50
50
1
69
50
50
2
70
50
50
2
116
100
100
3
134
50
50
3
71
350
350
12
663
1
1
10
1
1
1
1
1
1
1
1
56
16
2
67
16
16
16
29
16
0
0
32
3
1
15
20
California
1
2
5
1
2
61
1
34
172
0
32
1
2
72
1
2
72
1
2
118
UC Cooperative Extension
1
2
136
1
2
73
1
1
1
16
1
1
1
1
33
33
1
12
10
64
3
13
102
765
UC COOPERATIVE EXTENSION
California 2013
Table 7. RANGING ANALYSIS
COST PER ACRE AT VARYING YIELDS TO PRODUCE ORGANIC AFALFA HAY
OPERATING COSTS:
Cultural
Harvest
Interest on operating capital @ 5.75%
TOTAL OPERATING COSTS/ACRE
Total Operating Costs/Ton
CASH OVERHEAD COSTS/ACRE
TOTAL CASH COSTS/ACRE
Total Cash Costs/Ton
NON-CASH OVERHEAD COSTS/ACRE
TOTAL COSTS/ACRE
Total Costs/Ton
5.50
6.00
300
276
11
588
107
102
690
125
516
1,206
219
300
301
12
613
102
102
715
119
516
1,231
205
YIELD (Ton/acre)
6.50
7.00
7.50
300
326
12
638
98
102
740
114
516
1,256
193
300
350
12
663
95
102
765
109
516
1,281
183
300
375
13
688
92
102
790
105
516
1,306
174
8.00
8.50
300
400
13
713
89
102
815
102
516
1,331
166
300
424
14
738
87
102
840
99
516
1,356
160
NET RETURNS PER ACRE ABOVE OPERATING COSTS
PRICE ($/Ton)
Alfalfa Hay
215
230
245
260
275
290
305
5.50
595
677
760
842
925
1,007
1,090
6.00
677
767
857
947
1,037
1,127
1,217
YIELD (Ton/acre)
6.50
7.00
7.50
760
842
925
857
947 1,037
955
1,052 1,150
1,052
1,157 1,262
1,150
1,262 1,375
1,247
1,367 1,487
1,345
1,472 1,600
8.00
1,007
1,127
1,247
1,367
1,487
1,607
1,727
8.50
1,090
1,217
1,345
1,472
1,600
1,727
1,855
8.00
905
1,025
1,145
1,265
1,385
1,505
1,625
8.50
987
1,115
1,242
1,370
1,497
1,625
1,752
8.00
389
509
629
749
869
989
1,109
8.50
471
599
726
854
981
1,109
1,236
NET RETURNS PER ACRE ABOVE CASH COSTS
PRICE ($/Ton)
Alfalfa Hay
215
230
245
260
275
290
305
5.50
493
575
658
740
823
905
988
6.00
575
665
755
845
935
1,025
1,115
YIELD (Ton/acre)
6.50
7.00
7.50
657
740
822
755
845
935
852
950 1,047
950
1,055 1,160
1,047
1,160 1,272
1,145
1,265 1,385
1,242
1,370 1,497
NET RETURNS PER ACRE ABOVE TOTAL COSTS
PRICE ($/Ton)
Alfalfa Hay
215
230
245
260
275
290
305
5.50
-23
59
142
224
307
389
472
6.00
59
149
239
329
419
509
599
2013 Organic Alfalfa Hay Cost and Returns Study
YIELD (Ton/acre)
6.50
7.00
7.50
141
224
306
239
329
419
336
434
531
434
539
644
531
644
756
629
749
869
726
854
981
California
UC Cooperative Extension
17
UC COOPERATIVE EXTENSION
California 2013
Table 8. WHOLE FARM ANNUAL EQUIPMENT, INVESTMENT, AND BUSINESS OVERHEAD COSTS
ANNUAL EQUIPMENT COSTS
Cash Overhead
Yrs
Salvage
Capital
Insur-
Yr Description
Price
Life
Value
Recovery
ance
Taxes
13 100 Gal Sprayer WbmATV
5,364
10
949
610
26
32
667
53,423
10
15,780
5,565
283
346
6,194
13 90 HP 4WD Tractor
13 ATV
Total
6,640
7
2,519
825
37
46
909
13 Pickup 4WD 3/4 Ton
38,000
7
14,415
4,724
214
262
5,200
13 Springtooth Harrow
2,800
10
495
319
13
16
348
106,227
34,158
12,043
573
702
13,318
53,114
17,079
6,022
287
351
6,659
TOTAL
50% of new cost*
*Used to reflect a mix of new and used equipment
ANNUAL INVESTMENT COSTS
Cash Overhead
Description
Price
Yrs
Salvage
Capital
Insur-
Life
Value
Recovery
ance
Taxes
Repairs
Total
INVESTMENT
Establishment Cost
47,377
3
0
17,316
0
0
0
17,316
Fuel Tanks & Pumps
10,500
20
0
825
43
53
210
1,130
2,500
10
0
320
10
13
50
393
52,500
20
0
4,124
214
263
1,050
5,651
Fuel Wagon
Hay Barn
Land
6,000,000
40
6,000,000
285,000
0
60,000
0
345,000
Shop Building
60,000
30
0
3,793
245
300
1,200
5,538
Shop Tools
13,000
10
0
1,663
53
65
260
2,041
Siphon Tubes
17,000
20
0
1,335
69
85
340
1,830
6,000,000
314,375
635
60,778
3,110
378,898
TOTAL INVESTMENT
6,202,877
ANNUAL BUSINESS OVERHEAD COSTS
Units/
Description
Price/
Total
Farm
Unit
Unit
Cost
1,000.00
acre
1.35
1,350
Office Expense
990.00
acre
12.00
11,880
Organic Certification
100.00
acre
10.00
1,000
Liability Insurance
2013 Organic Alfalfa Hay Cost and Returns Study
California
UC Cooperative Extension
18
UC COOPERATIVE EXTENSION
California 2013
Table 9. HOURLY EQUIPMENT COSTS
COSTS PER HOUR
Alfalfa
Total
Hours
Hours
Capital
Insur-
Used
Used
Recovery
ance
Taxes
Repairs
22
150
2.04
0.09
0.11
1.21
0
1.21
3.44
9
1,600
1.74
0.09
0.11
3.73
16.97
20.70
22.64
13 ATV
22
285
1.45
0.07
0.08
0.82
2.71
3.53
5.13
13 Pickup 4WD 3/4 Ton
57
285
8.29
0.38
0.46
4.17
12.21
16.38
25.50
13 Springtooth Harrow
8
199
0.80
0.03
0.04
0.48
0
0.48
1.36
Yr Description
13 100 Gal Spr WbmATV
13 90 HP 4WD Tractor
Cash Overhead
Operating
Lube &
Fuel
Total
Total
Oper.
Costs/Hr.
UC COOPERATIVE EXTENSION
California 2013
Table 10. OPERATIONS WITH MATERIALS AND EQUIPMENT
Operation
Weed: Harrow
Insect: Weevil (Entrust)
Operation
Month
Jan
Mar
Irrigate - 6 Months
Apr
Tractor
90 HP 4WD
Implement
Springtooth Harrow
ATV
100 Gal Spr WbmATV
May
June
July
Aug
Sept
Fertilizer: Tissue Analysis
Fertilize: Compost (1X per 4 Yrs, 25% of cost)
Apr
Apr
Insect: Worms (Xen Tari)
July
Pickup Truck Use
Harvest - 7X
July
Apr
May
June
July
Aug
Sept
2013 Organic Alfalfa Hay Cost and Returns Study
ATV
100 Gal Spr WbmATV
Pickup 4WD 3/4 Ton
California
Labor Type/
Material
Equipment Operator Labor
Equipment Operator Labor
Entrust 80W
Non-Machine Labor
Water
Non-Machine Labor
Water
Non-Machine Labor
Water
Non-Machine Labor
Water
Non-Machine Labor
Water
Non-Machine Labor
Water
Plant Tissue Analysis
Compost - Chicken
Compost Hauling
Compost Spreading
Equipment Operator Labor
XenTari
Equipment Operator Labor
Organic Hay Harvest
Organic Hay Harvest
Organic Hay Harvest
Organic Hay Harvest
Organic Hay Harvest
Organic Hay Harvest
UC Cooperative Extension
Rate/
acre
0.10
0.13
1.25
0.25
6.00
0.25
6.00
0.25
6.00
0.25
6.00
0.25
12.00
0.25
6.00
0.05
1.00
1.00
1.00
0.13
2.00
0.68
1.00
1.00
1.00
1.00
2.00
1.00
Unit
hour
hour
oz
hour
acin
hour
acin
hour
acin
hour
acin
hour
acin
hour
acin
each
ton
ton
ton
hour
lb
hour
acre
acre
acre
acre
acre
acre
19