NAICS 111940 Quarterly Industry Report
Hay Farming
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 111940Sector: Agriculture, Forestry, Fishing and Hunting (11)Updated: Q1 2026
About This Report
This industry report for NAICS 111940 (Hay Farming) has been prepared by Fair Market Value for business owners, buyers, valuers, lenders, CPAs, and brokers. The analysis draws on data from the U.S. Census Bureau[5] NAICS classification system, USDA National Agricultural Statistics Service[6] (NASS) production data for 2023 and 2024, SBA size standards[7], and industry-specific sources including the American Forage and Grassland Council[8]. Published by Fair Market Value and updated quarterly, it provides valuation professionals and agricultural lenders with the classification context, market dynamics, and operational metrics needed for assessing the value of hay farming businesses. Additional data is drawn from Bureau of Labor Statistics[9].. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Definition & Overview
Hay farming (NAICS 111940) encompasses establishments primarily engaged in growing hay, alfalfa, clover, and mixed forage crops for livestock feed and other agricultural purposes. The United States hay farming industry represents a fundamental component of livestock agriculture, with total domestic production reaching about 122.5 million tons in 2024 USDA NASS Crop Production[3]. Wisconsin leads production with 5.72 million tons of alfalfa annually, followed by Idaho, South Dakota, and Nebraska. Profit margins stay thin, typically below 10 percent, reflecting commodity price volatility and exposure to weather-related production risks.
Market fundamentals for hay farming are shaped by livestock demand, particularly from the dairy and beef cattle industries which together support about 94 million cattle nationwide. Export markets also influence pricing dynamics, with hay demand across the Western United States experiencing sluggish conditions in recent years due to weak export activity and reduced dairy demand. Production efficiency has improved substantially, with farmers harvesting more hay on fewer acres through yield improvements. Operating costs average $375 per acre USDA Economic Research Service[4], with fertilizer representing the single largest expense category at $244 per acre on average.
The hay farming industry has declined at a compound annual growth rate of about 3.2 percent between 2020 and 2025, reflecting consolidation trends and shifts in livestock management practices. Competition remains high and steady throughout the industry. Geographic concentration is notable, with Montana, South Dakota, Idaho, and North Dakota collectively representing the dominant hay production regions. Long-term industry projections suggest continued modest decline over the next five years, driven by structural changes in livestock herd management and regional weather patterns.
What's Included in This Industry
- Cultivation and harvesting of alfalfa in dry hay form
- Timothy grass and timothy-legume mixture production
- Clover hay growing and baling operations
- Bermuda grass, brome grass, and orchard grass farming
- Ryegrass and other forage grass species production
- Haylage and greenchop operations by primary hay producers
- Commercial hay production for sale to livestock operations
- On-farm hay production for integrated livestock feeding
- Custom hay baling services provided as secondary activities
- Soil preparation, fertilization, and pest management for hay crops
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Agriculture, Forestry, Fishing and Hunting | 11 |
| Subsector | Crop Production | 111 |
| Industry Group | Other Crop Farming | 1119 |
| NAICS Industry | Hay Farming | 11194 |
| National Industry | Hay Farming | 111940 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 112111 | Beef Cattle Ranching and Farming | Primary consumer of hay farming output; beef cattle operations depend heavily on hay production for feed, making cattle ranching the dominant downstream customer for hay farming businesses across the country. |
| 112120 | Dairy Cattle and Milk Production | Major end user of hay and forage crops; dairy operations represent the largest source of demand for high-quality alfalfa and mixed hay, influencing pricing and production volumes in hay farming. |
| 112410 | Sheep Farming | Consumer of hay and forage products; sheep operations rely on hay as a primary feed source, though representing a smaller demand segment compared to cattle and dairy industries. |
| 112920 | Horses and Other Equine Production | Buyer of specialty hay products including timothy hay and premium mixed hays; equine operations require specific hay characteristics distinct from standard livestock feed requirements. |
| 115112 | Soil Preparation, Planting, and Cultivating | Provides custom harvesting, baling, and mechanical services to hay farming operations; custom farming services often work closely with hay producers for field preparation and harvest support. |
| 424910 | Farm Supplies Merchant Wholesalers | Handles distribution and wholesale of hay and forage products to retailers and end users; wholesale hay distribution serves as a critical marketing channel for hay farming operations. |
SBA Lending Summary
88
Total SBA Loans
$28.0M
Total Loan Volume
$318K
Average Loan Size
10 yrs
Average Loan Term
10.38%
Average Interest Rate
232
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[2]
Key Insight: The Small Business Administration size standard for NAICS 111940 (Hay Farming) is $2.5 million in average annual receipts SBA Size Standards[7]. This threshold determines eligibility for SBA loan programs, federal contracting set-asides, and other small business support initiatives. Hay farming operations with annual revenues of $2.5 million or less generally qualify as small businesses for SBA purposes. Hay farmers meeting this threshold can access SBA 7(a) loan programs, 504 loans for fixed asset financing, and microloans for working capital and equipment needs.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | First-Citizens Bank & Trust Company | 8 | $16.2M | $2.0M |
| 2 | BOKF, National Association | 16 | $7.3M | $459K |
| 3 | Northeast Bank | 8 | $1.2M | $150K |
| 3 | Columbia Bank | 24 | $1.2M | $50K |
| 3 | Celtic Bank Corporation | 8 | $1.2M | $150K |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 111940?
NAICS 111940 covers establishments whose primary activity is growing hay crops, alfalfa, clover, and mixed forage for harvest and sale or on-farm use. These operations focus on crops harvested in dried form for storage and later use as livestock feed, distinguishing them from fresh greenchop or silage operations. Establishments specializing in other field crops like corn (111150) or small grains (111199) are classified separately even if they grow some forage as a secondary activity. NAICS 111940 Definition[10]
How is the hay farming industry structured?
Hay farming is highly fragmented, dominated by small and mid-sized family operations. Most producers operate on fewer than 500 acres, though larger commercial operations exist in the Western states. The industry has consolidated steadily, declining at about 3.2 percent annually between 2020 and 2025. Geographic concentration favors the northern Great Plains and Upper Midwest, with Montana, South Dakota, Idaho, and North Dakota as leading production states. USDA NASS Hay Production Data[6]
What is the SBA size standard for hay farming?
The SBA size standard for NAICS 111940 is $2.5 million in average annual receipts. Hay farming businesses with annual revenues at or below this threshold qualify as small businesses for SBA loan programs, federal contracting set-asides, and other assistance. SBA Size Standards[7]
What NAICS codes are related to hay farming?
Closely related NAICS codes include 112111 (Beef Cattle Ranching and Farming), 112120 (Dairy Cattle and Milk Production), 112410 (Sheep Farming), 112920 (Horses and Other Equine Production), 115112 (Support Activities for Crop Production), and 424910 (Farm Supplies Merchant Wholesalers). Each of these industries either consumes hay as a primary input or provides services directly supporting hay production operations.
Which industries work most closely with hay farming?
Beef cattle ranches and dairy farms are the two largest customer segments, together consuming the vast majority of U.S. hay production. Custom harvesting services (115112) provide critical mechanical support during harvest season. Farm supplies wholesalers (424910) distribute hay through regional and national channels. Equine operations purchase premium specialty hays at higher price points. Feed manufacturers (311119) use hay as a formulated feed ingredient.
What activities are included in NAICS 111940?
Activities include cultivation and harvesting of alfalfa, timothy, clover, Bermuda grass, brome grass, orchard grass, ryegrass, and other forage species. Haylage and greenchop operations by primary hay producers also fall within this code. Custom hay baling performed as a secondary activity by the farming operation is included. Soil preparation, fertilization, and pest management for hay crops are covered. Custom harvesting provided by specialized service companies falls under 115112 instead. NAICS 111940 Definition[10]
Can you get an SBA loan for a hay farming business?
Yes. Hay farming operations meeting the $2.5 million annual receipts threshold qualify for SBA loan programs including 7(a) loans for general business purposes, 504 loans for fixed asset and equipment financing, and microloans for working capital needs. SBA-guaranteed loans can fund equipment purchases, land acquisition, operating expenses, and infrastructure improvements. Farmers should work with SBA-preferred lenders experienced in agricultural lending. SBA Loan Programs[11]
Which states have the highest concentration of hay farming?
Wisconsin leads U.S. hay production with 5.72 million tons of alfalfa annually. Idaho ranks second with 4.4 million tons, South Dakota third with 3.60 million tons, and Nebraska fourth with 3.56 million tons. For alfalfa dry hay acres, Montana leads with 1.5 million acres harvested, followed by South Dakota at 1.45 million acres. Production concentrates in the northern Great Plains and Upper Midwest due to climate advantages, water availability, and proximity to major livestock operations. USDA NASS Crop Production[3]
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [3]USDA NASS Crop Production nass.usda.gov
- [4]USDA Economic Research Service ers.usda.gov
- [5]U.S. Census Bureau census.gov
- [6]USDA National Agricultural Statistics Service nass.usda.gov
- [7]SBA size standards sba.gov
- [8]American Forage and Grassland Council afgc.org
- [9]Bureau of Labor Statistics bls.gov
- [10]NAICS 111940 Definition census.gov
- [11]SBA Loan Programs sba.gov
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