How to Calculate the Break-Even Point of Purchasing New Hay Conditioner Rollers
April 26, 2022
We all know that hay conditioner rollers are expensive. The good news is that purchasing new rollers can save you money in the long run by producing better quality hay and cutting down labor costs.
While it’s easy to see that the cost of buying replacement rollers will be more than just replacing worn-out bearings on old rollers, how can you tell when it’s time to bite the bullet and purchase a set of new rollers?
Well, understanding the break-even point is the answer and can help you decide when it’s time to make that purchase.
When it is time for that investment, contact B&D Rollers and check out The Crusher. We have the ultimate hay conditioner rollers to give you better quality hay with a higher RFV (Relative Feed Value).
Learn more about hay conditioner rollers and how to calculate a possible break-even point, and then contact us to start producing better forage faster.
What Are Hay Conditioner Rollers?
Hay conditioner rollers are an agricultural tool used to process hay. Hay conditioners are used to help dry out hay. The faster the hay dries, the better it will cure. Hay that cures properly has less chance of heating and catching fire.
Hay that cures properly also has a higher relative feed value. According to the University of Missouri, baled hay must contain about 18 to 22% moisture. Hay baled at the appropriate moisture content can save you 10% to 15% on the cost of feeding.
There are two main types of hay mower conditioners: disc mowers and sickle-type cutters. One difference between the disk and sickle mowers is the use of a reel. Sickle mowers have a reel, whereas disc mowers do not. Another difference is in the type of cutter bar employed by each.
The disc mower contains a series of rotating discs, or “turtles,” on the cutter bar, which cut the hay and throw it back into the conditioner. The cutter bar on a sickle mower has reciprocating triangular blades and uses a reel to feed the crop through those blades and into the conditioner.
Like all farm equipment, crusher rollers are an investment. Before you purchase new replacement parts or a whole new machine, you need to know whether purchasing new rollers will be cost-effective for your business.
You can start to determine this by calculating the break-even point of purchasing new rollers: the amount to be harvested before realizing a profit.
The Break-Even Point
Some farmers keep using equipment that’s not working at top efficiency because the expense of repairs or new equipment seems cost-prohibitive. However, calculating a break-even point may show you where you are losing profitability or sales by not replacing old equipment.
The break-even point is realized when the amount of money you generate or save equals your initial investment in a new piece of equipment. This calculation is necessary because it will help you determine whether purchasing new equipment for your farm will benefit you in the long run.
How to Calculate the Break-Even Point
As mentioned earlier, you achieve the break-even point when buying new rollers equals the cost of replacing existing components and revenue lost due to inefficiency or poor quality hay. To determine your break-even point, you need first to understand that there are two types of equipment costs — fixed and variable.
Fixed costs are those you incur regardless of how much hay you bale. They may include depreciation on equipment and property or lease values if renting equipment or land, interest, taxes, and fixed labor costs.
In calculating your break-even point for purchasing new hay conditioner rollers, you must identify the initial cost (how much it costs to buy and install the equipment), the variable costs per unit sold, and the price per unit sold.
- Fixed Cost of new rollers: $5,600
- Variable Cost per ton: $28
- Hay price/ton: $120
- Hay tons/acre: 3.00
- Break even point (tons of hay) = 2,000 / (120 – 28) = 60.9 tons
In general terms, you need to harvest 20.3 acres to cover the costs of the new rollers outright.
However, this example doesn’t consider any salvageable value from the existing rollers, increase in profit due to a higher RFV, or lower operating costs due to faster dry-down time, which may lower fuel and labor costs due to less tedding and decreased job hours.
- Fixed Cost of new rollers: $5,600
- Salvageable cost of old rollers: $650
- Variable Cost per ton: $25.20 (assume a 10% efficiency increase)
- Hay price/ton: $130 (assume a higher RFV)
- Hay tons/acre: 3.20 (assume better moisture content, less leaf loss)
- Break even point (tons of hay) = (5,600 – 650) / (130 – 25.2) = 47.2 tons
Adding in these factors means breaking even after harvesting 14.7 acres.
Importance of the Break-Even Point
The break-even calculation is a simple tool for helping with decisions regarding new equipment purchases. However, as you can see from the calculations above, the break-even point does not provide a complete answer but is part of the bigger picture.
Like any other major purchase, other factors to consider include: how long you will continue to operate this equipment, the lifespan of the item being considered, or its potential resale value if you decide to change direction.
Break-even point or not, you don’t need a calculator to figure out where to find good rollers. We at B&D Rollers have the best to offer. The Crusher increases RFV, decreases dry-down time, and works with all brand-name machines. Get in touch if you have any questions or need more information on the benefits your foraging operations will achieve with new hay conditioner rollers.
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