The University of Georgia College of Agricultural and Environmental Sciences/Athens
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Economics of Farm Storage Buildings

John Worley, Extension Engineer and William D. Givan, Extension Economist

It is widely accepted that storing farm equipment under a shelter is better than storing it outside and that hay stored in a barn is better than hay stored in the field. But how can we determine just how much a farm storage building is worth? The answer is different for every individual operation, but there are some guidelines that will help you make an intelligent decision about whether or not you can afford a building (or afford not to have one).

The following is a discussion of the costs and benefits of owning a building, along with some example calculations. In each example, you are given the opportunity to substitute your figures, which might more accurately reflect your local markets and conditions.

Cost of Owning A Building

The cost of a building depends on many factors including the amount of side enclosure, type of floor, height, and type of construction. Costs also vary depending on steel and wood prices. For an example calculation, we will use a pre-engineered steel building 50 by 100 feet with 14 foot eave height (vertical clearance). The building is open sided and has a dirt floor. It would be suitable for storing equipment or hay.

Benefits of Storing Machinery Inside

In a nationwide survey (Meador, 1981), farmers were asked about the resale value of their farm equipment at trade-in and whether or not it was stored inside when not in use. The results in Table 1 show that farmers who traded their equipment after five years got significantly more for tractors and other equipment that were stored inside than for equipment stored outside.

A 3% savings per year on barn-stored equipment is a conservative estimate of storage benefits. Using a resale value of 50% of new cost after five years, we can expect the savings shown in Figure 1 from storing equipment.

The equipment described in the example in Figure 1would require approximately 1,100 of the 5,000 ft² of available space. Additional savings can be expected from reduced down time. Deterioration of rubber and plastic parts due to exposure to the sun is a major contributor to breakdowns and increased maintenance time. It has been estimated that barn-stored equipment has less than half the down time of field-stored equipment.

Benefits of Barn Hay Storage

A number of studies have been done comparing various storage methods for large round bales of hay. The results varied greatly depending on the weather during the storage period. The kind and quality of hay, tightness and size of bales, and the length of time stored also affect losses. In each test, though, it was clear that a significant amount of dry matter was lost in field-stored hay, and the quality (digestibility) of the remaining hay was lowered. Results of three of these tests (1. Ely, 1984; 2. Collins et al., 1987, and 3. Hoveland et al., 1997) are shown in Table 2. All of these tests were based on a storage period of seven months.

The effect of increased digestibility in barn-stored hay is greater than it initially appears from the figures at the bottom of Table 2. If we start with a 1,000-lb bale at 85% dry matter and 54% digestibility, we have (1000 x 85%) = 850 lb of dry matter and (850 x 54%) = 459 lb of digestible hay. If that bale is stored on the ground, losing 30% of its dry matter and lowering the digestibility to 45%, we now have (850 x 70%) = 595 lb of dry matter and (595 x 45%) = 268 lb of digestible hay. This represents a loss of 42% of digestible hay. The actual savings on hay storage depends on the value of the hay, the length of storage, and the weather during the storage period.

The chart in Figure 2 is a conservative example of the benefits of barn storage. The example does not include the benefits of using the building for other purposes when it's not needed for hay storage.

Should you store all of your hay in a barn? Probably not. Hay harvested late in the season and fed early in the winter would have much less loss than hay stored over a longer period. One strategy would be to store early hay in a barn, mid-summer hay under tarps, and late hay in the open (if barns and tarps are all full).

General Recommendations

1. Open-sided barns should generally be oriented with the long axis east and west to minimize the amount of sun intrusion into the building.
2. If only one side of the barn is open, it should be facing away from prevailing wind (generally South), to minimize rain being blown into the barn.
3. All buildings should meet Southern Building Code requirements.
4. Sidewalls add protection to both equipment and hay, but add significantly to the cost of the building. You should get a bid on different types of buildings and do your own analysis using the guidelines in this publication.
5. Buildings for hay storage should be as open as possible in the gable ends (peak of the roof) to allow moisture to escape as the hay drys while in the barn. Other-wise, condensation and rust will occur on the inside of the roof. Ridge vents should also be considered in large barns.
6. More large round hay bales can be stored in a barn by stacking the bales on their (flat) end rather than on their (round) side. This can be done with a 4-foot front-end-loader fork. It does, however, take a little more time and effort than storing on the side.
7. Make sure the eave height (vertical clearance) of your barn is high enough to fit your needs (usually at least 14 feet.) Nothing is more frustrating than realizing that one more foot of ceiling height would allow you to put another layer of hay bales in the barn or that your barn is one foot too short for the new combine.

References

Collins, W.H., B.R. McKinnon, and J.P. Mason. 1987. Hay production and storage: economic comparison of selected management systems. ASAE Paper # 87-4504, ASAE, St. Joseph, MI.

Ely, Lane C. 1984. The quality of stored round hay bales or how much of your hay bale is left to feed. Georgia Dairyfax. January 1984. University of Georgia, Animal and Dairy Science Dept.

Hoveland, C.S., J.C. Garner, and M.A. McCann. 1997. Does it pay to cover hay bales? The Georgia Cattleman, July, 1997, pp.9,10.

Meador, Neal. 1981. Spend 35% of equipment investment for storage. Farm Building News, Sept. 1981. p. 56.

Bulletin 1173/March, 1999

The University of Georgia and Ft. Valley State University, the U.S. Department of Agriculture and counties of the state cooperating. The Cooperative Extension Service offers educational programs, assistance and materials to all people without regard to race, color, national origin, age, sex or disability.

An Equal Opportunity Employer/Affirmative Action Organization Committed to a Diverse Work Force

Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, The University of Georgia College of Agricultural and Environmental Sciences and the U.S. Department of Agriculture cooperating.

Gale A. Buchanan, Dean and Director