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My local farmers produce a lot of ' Lucerne ' as a food supply for sheep farmers ( processed much the same as hay ). As they keep it stored outside some of it cannot be fed and goes to waste. Can this be used as it was originally baled dry and has been exposed to rain, snow and lots of sun ( 30c - 40c ) and has started to rot in many cases.

Yes. It sounds like a good feedstock. The fact that it has already started to rot should be a benefit.