Economic Considerations
of Livestock Grazing in 2009
UW Extension Beef Workshop
Mauston-March 21st , 2009
Keith VanderVelde, UW Extension
Economic Considerations
 Is Grazing a Profitable Enterprise ?
 Yes,
• BECAUSE it INCREASES PRODUCTION and
REDUCES COST if done properly.
Economic Considerations
 What if you were told of a special crop
production system that would increase
output by at least 30% and reduce your cost
by 50%
I think most of you would not have any trouble
adapting to such a system
Economic Considerations

In Most Situations Managed Rotational Grazing
will do both increase production and reduce cost
by:
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Increasing carrying capacity
Increase ADG
Improved herd health
Longer productive life
It also results in larger calf crops and producers
are more aware of the health of the herd
Economic Considerations

In Most Situations Managed Rotational Grazing
will do both increase production and reduce cost
by:
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Reducing Feed cost
Reducing Fertilizer Needs
Greater weed control
Less Fuel needs
Less Labor(yes you move the cows but they harvest)
Less manure to haul
It also results in more free and family time to get
away
Economic Considerations
 Is Grazing a Profitable Enterprise
 Do I have the Necessary
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Land
Cattle
Fencing
Labor
Capital
Economic Considerations
 Profitability
 Do a Balance Sheet
 Project Expenses and Income
 Look at History of Operations
 Remember Most Markets are Cyclical
• Get in when prices are low
• Get out or reduce inventory when prices up
Economic Considerations
Grazing Economics
 Beef-Cow industry looks break even in
2009based on Cattle-Fax projections
 Time to reduce input cost
 One of the common pitfalls is increased
expenses.
 If income goes up and expenses also
increase we have lost a profit opportunity
Grazing Economics
Grazing Economics
 Cow /calf economic factors are
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Reproductive efficiency
Weaning weight
Sales price
Feed Cost
Market Cycle
Fixed Costs
Grazing Economics
 Managed Intensive Grazing (MIG)
• Offers greater management Flexibility
• Comes at an added cost
– Fence
– Water systems
– Labor
– Higher level of management required
– Greater investment per animal
Fencing Cost
 One of the largest expenses in Grazing
 Many different options but some rules
apply
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Have secure perimeter fence
Use temporary or portable fence in cells
Use the lay of the land to your advantage
Be flexible in cell sizing
Cost of Fencing
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48” woven wire, one barb-----------$1.07/foot
5 barbed wire fence------------------$0.83/foot
High tensile 8 strand 12.5 gauge---$0.56/foot
High tensile 5 strand electric-$0.14/foot
Polywire fence(interior use only)--$0.03/foot
Plastic Electric 4 Tape Wide--$0.89/foot
Electric Rope, steel, 3 strand-$0.16/foot
Plastic Coated non electric, 3 tapes--$2.46/foot
Shape effect on Fencing Requirements
744 feet
836 feet
Length=2 X Width
888 feet
1007 feet
951 feet
Length=4 X width
1,040 feet
Cost of Reseeding
 Most sources recommend frost seeding as
the best and most cost effective method of
establishing and improving pastures
 With frost seeding the costs are primarily
the cost of the seed
What about Equipment
 One of the primary benefits of Grazing is the
Machinery necessary
• Many producers limit themselves to a:
– Tractor with loader
– Manure spreader
– One hay making set of equipment(square bales or round
baler)
Time Requirements
 Remember Cattle Need to be Moved
• Make sure you have the time and labor to move
cattle to new paddock
• You must learn to know when is it time to move
them
• Timing will vary with the amount of available
pasture
Winter Feed Supply
 Winter feeding often accounts for 70 % of
the total feed cost for a beef cow-calf
operation
 As a grazer our goal is to reduce the
amount of feed brought to the cow and to
have the cow go get it herself
• this reduces costs
• gets the manure in the field
Wintering Costs
 Stockpiling forage is recommended
• Set pastures aside for late fall and winter
grazing
• Consider corn stalk grazing or other refuse
grazing
• Consider windrowing in Nov and let the cows
eat the forage out of the windrow when snow is
present
Reducing Winter Feed Cost
 Purchase cheap hay not suitable for dairy
and horse owners during the summer
 Substitute cheap corn and oats for forage
 Remember 10 lbs of a 50/50 corn oats mix
is only $.60 with today's grain prices
 Look at cheap alternatives, i.e. potato
waste, sweet corn silage, candy waste
Cutting Winter Feed Cost
 Figure out a way to feed a cow for $150 or
less from Nov-April
 Have some pasture available for April 15
grazing
 Try to keep the manure out of the feeding
area and in the pastures where it will
fertilize next years forage supply
Fertilizer Costs and Pastures
 Very high prices
 UWRF Research shows fertilize May 1st
 Only fertilize improved grasses
• ?? Bluegrass
 Work to establish legumes in pastures
• Frost seed-red & white clover, orchardgrass,
Italian rye grass
• Drill into grass sod-legumes
Make it Profitable
 Stocking Rate Is Critical
• Goal is to maximize production per acre and
production per head
• Greatest profits are not generated by the
greatest production
• Economically optimum stocking rate will occur
somewhere between the point of maximum
output and maximum per head performance
Calf gain under various grazing
systems—Iowa State University
Using a 100 cow herd for the analysis
 Return to operator labor, capital and management
per acre
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• Brome
– $99.53 w/high, 51.30 w/low intensity
• Mixed grass/legume
– $140 w/high, $119 w/low and $108 w/continuous
– $99.53 w/high, 51.30 w/low intensity
Importance of individual animal
performance
Stocker cattle rule of thumb
It takes 150 lbs of gain for a stocker to
cover it’s costs
200 lbs of gain returns 75 lbs of profit
250 lbs of gain returns 125 lbs of profit
Calf gain under various grazing
systems—Iowa State University
Two grazing intensities
-high with one cow/calf pair per acre
-low or continuous with 1.67 acres per
cow/calf pair
Two pastures-mixed legume and brome
Calf gain under various grazing
systems—Iowa State University and
Nebraska
Results:
-on mixed grass/legume, ADG was
similar but gain per acre was 100 lbs
higher with MIG pasture
-on brome grass , ADG was greater for
low intensity but gain/ac was 60 lbs
higher for MIG pasture
University of Missouri Forage
Research Data
Comparison of 3 vs. 12 vs. 24 paddock
system for cow /calf production
Greatest return from 12 paddock
system—the 24 had the highest
production but this advantage was
offset by more labor and material cost