Economic Considerations of Livestock Grazing in 2009 UW Extension Beef Workshop Mauston-March 21 st,...

Economic ConsiderationsEconomic Considerationsof Livestock Grazing in of Livestock Grazing in 20092009

UW Extension Beef WorkshopUW Extension Beef Workshop

Mauston-March 21Mauston-March 21stst , 2009 , 2009

Keith VanderVelde, UW Keith VanderVelde, UW Extension Extension

Economic ConsiderationsEconomic Considerations

Is Grazing a Profitable Enterprise ?Is Grazing a Profitable Enterprise ?

Yes,Yes,• BECAUSE it INCREASES BECAUSE it INCREASES

PRODUCTION and REDUCES PRODUCTION and REDUCES COST if done properly.COST if done properly.


What if you were told of a special What if you were told of a special crop production system that would crop production system that would increase output by at least 30% increase output by at least 30% and reduce your cost by 50%and reduce your cost by 50%

I think most of you would not have I think most of you would not have any trouble adapting to such a any trouble adapting to such a systemsystem


In Most Situations Managed Rotational In Most Situations Managed Rotational Grazing will do both increase production Grazing will do both increase production and reduce cost by:and reduce cost by:• Increasing carrying capacityIncreasing carrying capacity• Increase ADGIncrease ADG• Improved herd healthImproved herd health• Longer productive lifeLonger productive life

It also results in larger calf crops and It also results in larger calf crops and producers are more aware of the health of producers are more aware of the health of the herdthe herd


In Most Situations Managed Rotational In Most Situations Managed Rotational Grazing will do both increase production and Grazing will do both increase production and reduce cost by:reduce cost by:• Reducing Feed costReducing Feed cost• Reducing Fertilizer NeedsReducing Fertilizer Needs• Greater weed controlGreater weed control• Less Fuel needsLess Fuel needs• Less Labor(yes you move the cows but they Less Labor(yes you move the cows but they

harvest)harvest)• Less manure to haulLess manure to haul

It also results in more free and family time to It also results in more free and family time to get away get away


Is Grazing a Profitable EnterpriseIs Grazing a Profitable Enterprise Do I have the NecessaryDo I have the Necessary

• LandLand• CattleCattle• Fencing Fencing

• LaborLabor• CapitalCapital


ProfitabilityProfitability Do a Balance SheetDo a Balance Sheet Project Expenses and IncomeProject Expenses and Income Look at History of OperationsLook at History of Operations Remember Most Markets are CyclicalRemember Most Markets are Cyclical

• Get in when prices are lowGet in when prices are low• Get out or reduce inventory when prices Get out or reduce inventory when prices

upup

Grazing EconomicsGrazing Economics

Beef-Cow industry looks break even in Beef-Cow industry looks break even in 2009based on Cattle-Fax projections2009based on Cattle-Fax projections

Time to reduce input cost Time to reduce input cost One of the common One of the common pitfalls is pitfalls is

increased expenses.increased expenses. If income goes up and expenses also If income goes up and expenses also

increase we have lost a profit increase we have lost a profit opportunityopportunity


Cow /calf economic factors areCow /calf economic factors are• Reproductive efficiencyReproductive efficiency• Weaning weightWeaning weight• Sales priceSales price• Feed CostFeed Cost• Market CycleMarket Cycle• Fixed CostsFixed Costs


Managed Intensive Grazing (MIG) Managed Intensive Grazing (MIG) • Offers greater management FlexibilityOffers greater management Flexibility• Comes at an added costComes at an added cost

– FenceFence– Water systemsWater systems– LaborLabor– Higher level of management requiredHigher level of management required– Greater investment per animalGreater investment per animal

Fencing CostFencing Cost

One of the largest expenses in GrazingOne of the largest expenses in Grazing Many different options but some rules Many different options but some rules

applyapply• Have secure perimeter fenceHave secure perimeter fence• Use temporary or portable fence in cells Use temporary or portable fence in cells • Use the lay of the land to your advantage Use the lay of the land to your advantage • Be flexible in cell sizingBe flexible in cell sizing

Cost of FencingCost of Fencing• 48” woven wire, one barb-----------$1.07/foot48” woven wire, one barb-----------$1.07/foot• 5 barbed wire fence------------------$0.83/foot5 barbed wire fence------------------$0.83/foot• High tensile 8 strand 12.5 gauge---$0.56/footHigh tensile 8 strand 12.5 gauge---$0.56/foot• High tensile 5 strand electric-$0.14/footHigh tensile 5 strand electric-$0.14/foot• Polywire fence(interior use only)--$0.03/footPolywire fence(interior use only)--$0.03/foot• Plastic Electric 4 Tape Wide--$0.89/footPlastic Electric 4 Tape Wide--$0.89/foot• Electric Rope, steel, 3 strand-$0.16/footElectric Rope, steel, 3 strand-$0.16/foot• Plastic Coated non electric, 3 tapes--$2.46/footPlastic Coated non electric, 3 tapes--$2.46/foot

Shape effect on Fencing Shape effect on Fencing RequirementsRequirements

744 feet 836 feet1007 feet 951 feet

Length=2 X Width888 feet

Length=4 X width1,040 feet

Cost of ReseedingCost of Reseeding

Most sources recommend frost Most sources recommend frost seeding as the best and most cost seeding as the best and most cost effective method of establishing effective method of establishing and improving pasturesand improving pastures

With frost seeding the costs are With frost seeding the costs are primarily the cost of the seedprimarily the cost of the seed

What about EquipmentWhat about Equipment

One of the primary benefits of One of the primary benefits of Grazing is the Machinery Grazing is the Machinery necessarynecessary• Many producers limit themselves to a:Many producers limit themselves to a:

– Tractor with loaderTractor with loader– Manure spreaderManure spreader– One hay making set of equipment(square One hay making set of equipment(square

bales or round baler)bales or round baler)

Time RequirementsTime Requirements

Remember Cattle Need to be Remember Cattle Need to be MovedMoved• Make sure you have the time and Make sure you have the time and

labor to move cattle to new paddocklabor to move cattle to new paddock• You must learn to know when is it You must learn to know when is it

time to move themtime to move them• Timing will vary with the amount of Timing will vary with the amount of

available pastureavailable pasture

Winter Feed SupplyWinter Feed Supply

Winter feeding often accounts for 70 Winter feeding often accounts for 70 % of the total feed cost for a beef % of the total feed cost for a beef cow-calf operationcow-calf operation

As a grazer our goal is to reduce the As a grazer our goal is to reduce the amount of feed brought to the cow amount of feed brought to the cow and to have the cow go get it herselfand to have the cow go get it herself• this reduces coststhis reduces costs• gets the manure in the fieldgets the manure in the field

Wintering CostsWintering Costs

Stockpiling forage is recommendedStockpiling forage is recommended• Set pastures aside for late fall and Set pastures aside for late fall and

winter grazingwinter grazing• Consider corn stalk grazing or other Consider corn stalk grazing or other

refuse grazingrefuse grazing• Consider windrowing in Nov and let Consider windrowing in Nov and let

the cows eat the forage out of the the cows eat the forage out of the windrow when snow is presentwindrow when snow is present

Reducing Winter Feed Reducing Winter Feed CostCost

Purchase cheap hay not suitable for dairy Purchase cheap hay not suitable for dairy and horse owners during the summerand horse owners during the summer

Substitute cheap corn and oats for forageSubstitute cheap corn and oats for forage Remember 10 lbs of a 50/50 corn oats Remember 10 lbs of a 50/50 corn oats

mix is only $.60 with today's grain pricesmix is only $.60 with today's grain prices Look at cheap alternatives, i.e. potato Look at cheap alternatives, i.e. potato

waste, sweet corn silage, candy wastewaste, sweet corn silage, candy waste

Cutting Winter Feed CostCutting Winter Feed Cost

Figure out a way to feed a cow for Figure out a way to feed a cow for $150 or less from Nov-April$150 or less from Nov-April

Have some pasture available for Have some pasture available for April 15 grazingApril 15 grazing

Try to keep the manure out of the Try to keep the manure out of the feeding area and in the pastures feeding area and in the pastures where it will fertilize next years where it will fertilize next years forage supplyforage supply

Fertilizer Costs and Fertilizer Costs and PasturesPastures

Very high pricesVery high prices UWRF Research shows fertilize May 1UWRF Research shows fertilize May 1stst

Only fertilize improved grassesOnly fertilize improved grasses• ?? Bluegrass?? Bluegrass

Work to establish legumes in pasturesWork to establish legumes in pastures• Frost seed-red & white clover, Frost seed-red & white clover,

orchardgrass, Italian rye grassorchardgrass, Italian rye grass• Drill into grass sod-legumesDrill into grass sod-legumes

Make it ProfitableMake it Profitable

Stocking Rate Is CriticalStocking Rate Is Critical• Goal is to maximize production per Goal is to maximize production per

acre and production per headacre and production per head• Greatest profits are not generated by Greatest profits are not generated by

the greatest productionthe greatest production• Economically optimum stocking rate Economically optimum stocking rate

will occur somewhere between the will occur somewhere between the point of maximum output and point of maximum output and maximum per head performancemaximum per head performance

Calf gain under various Calf gain under various grazing systems—Iowa grazing systems—Iowa State UniversityState University

Using a 100 cow herd for the analysisUsing a 100 cow herd for the analysis Return to operator labor, capital and Return to operator labor, capital and

management per acremanagement per acre• BromeBrome

– $99.53 w/high, 51.30 w/low intensity$99.53 w/high, 51.30 w/low intensity

• Mixed grass/legumeMixed grass/legume– $140 w/high, $119 w/low and $108 w/continuous$140 w/high, $119 w/low and $108 w/continuous– $99.53 w/high, 51.30 w/low intensity$99.53 w/high, 51.30 w/low intensity

Importance of individual Importance of individual animal performanceanimal performance

Stocker cattle rule of thumbStocker cattle rule of thumb

It takes 150 lbs of gain for a stocker It takes 150 lbs of gain for a stocker to cover it’s coststo cover it’s costs

200 lbs of gain returns 75 lbs of profit200 lbs of gain returns 75 lbs of profit

250 lbs of gain returns 125 lbs of 250 lbs of gain returns 125 lbs of profitprofit

Calf gain under various Calf gain under various grazing systems—Iowa grazing systems—Iowa State UniversityState University

Two grazing intensitiesTwo grazing intensities

-high with one cow/calf pair per -high with one cow/calf pair per acreacre

-low or continuous with 1.67 -low or continuous with 1.67 acres per cow/calf pairacres per cow/calf pair

Two pastures-mixed legume and Two pastures-mixed legume and bromebrome

Calf gain under various grazing Calf gain under various grazing systems—Iowa State University systems—Iowa State University and Nebraskaand Nebraska

Results:Results:

-on mixed grass/legume, ADG was -on mixed grass/legume, ADG was similar but gain per acre was 100 similar but gain per acre was 100 lbs higher with MIG pasturelbs higher with MIG pasture

-on brome grass , ADG was greater -on brome grass , ADG was greater for low intensity but gain/ac was for low intensity but gain/ac was 60 lbs higher for MIG pasture60 lbs higher for MIG pasture

University of Missouri University of Missouri Forage Research DataForage Research Data

Comparison of 3 vs. 12 vs. 24 Comparison of 3 vs. 12 vs. 24 paddock system for cow /calf paddock system for cow /calf productionproduction

Greatest return from 12 Greatest return from 12 paddock system—the 24 had paddock system—the 24 had the highest production but this the highest production but this advantage was offset by more advantage was offset by more labor and material costlabor and material cost

Economic Considerations of Livestock Grazing in 2009 UW Extension Beef Workshop Mauston-March 21 st,...

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