SMALL GROUP ACTIVITY ON
FORAGE ECONOMICS:
4 Options
GEOFF BENSON
EXTENSION ECONOMIST
DEPT. OF AGRICULTURAL & RESOURCE ECONOMICS
NORTH CAROLINA STATE UNIVERSITY
Small Group Activity:
 It is late summer. A farmer comes
to you for advice about a winter
feeding program for a group of
heifers
 How do you set about answering
his question?
GEOFF BENSON, ARE, NCSU
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What To Do?
1.Determine the number of animals,
feeding period, animal performance
targets, available forages and feeds
2.Identify alternative feeding
strategies
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What To Do?
3.For each strategy, develop a
detailed feeding program that
meets animal goals
4.Estimate costs of each strategy
and select the most profitable
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Small Group Activity:
Farm Scenario
 Plan to feed 32 heifers for a 120
day winter feeding period
 Heifers need 15 lb. DM/day
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Small Group Activity:
 Farmer has 24 acres of fescue with
2,000 lb. of dry matter per acre
 Farmer could over seed 16 acres of
bermuda grass with rye and get a
harvestable yield of 3,000 lb. DM per
acre if this is more economical
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4 Alternatives
1. Stockpile fescue, graze intensively –
daily moves
2. Stockpile fescue, graze extensively –
mover every 14 days
3. Make and feed fescue hay
4. Plant rye/ryegrass, graze intensively
– daily moves
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Instructions
 Grazing Groups:
1. Pasture Budget Worksheet to
calculate grazing days & cost
2. Cost of managing the grazing
4. Amount & cost of hay
5. Cost of putting out hay
6. Total $$, cost/head, cost/day
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Instructions
 Hay Group
1. Budget the amount of own hay
available to feed & cost
2. Estimate total hay needs, amount to
be bought & cost
3. Cost of putting out hay
4. Total $$, cost/head, cost/day
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Instructions
 Stockpiled fescue and rye will not
feed the cattle for the entire
period
 Buy additional hay at $80 per ton.
Quality is similar to stockpiled
fescue & own hay
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Instructions
 Select a discussion leader,
recorder & reporter
 Review the worksheets & other
materials
 Consult the roving helpers
 Report to the whole group using
overhead transparency
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Your Turn
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Standardized Example
 Labor cost of $9.00 per hour
 Trip time is 30 minutes to move
cattle on the grazing systems.
Truck is used 15 minutes.
 Trip time to put out hay is 45
minutes
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Standardized Results
Option
1. Intensively grazed
fescue
2. Extensively grazed
fescue
3. Hay
4. Intensively grazed
rye/ryegrass
Cost
$3,374
$4,039
$5,317
$4,354
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Standardized Results
Option
$/Hd/Day
1. Intensively grazed
fescue
$0.88
2. Extensively
grazed fescue
$1.05
3. Hay
4. Intensively
grazed rye/ryegrass
$1.34
$1.13
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Standardized Example
 This is only an example!
 Many factors affect costs on a
specific farm
Time and distance to the cattle
Labor cost or charge per hour
Equipment used
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Review
 Set feeding period and animal
performance targets
 Identify alternative feeding
strategies that can meet goals
 Estimate costs of each strategy, +/income changes
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Step 1: Feed Budgeting
 Estimate feed(s) available for the
feeding period, with known
nutrients, on a dry matter basis
 Estimate animal needs, as lb. of dry
matter per day & nutrients required
 Add supplementary feed needs
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Step 2: Economic Budgeting
 Estimate costs of producing and
managing pasture & hay:
Cash costs
Fixed (Investment related) costs -DITI
Labor cost or charge
 Other cash & fixed costs
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Step 2: Economic Budgeting
 Estimate any differences in
revenue or value of production if
animal performance changes
under the alternative feeding
programs
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Management factors
1. Intensively managed stockpiled
fescue or rye/ryegrass:
 Less waste -- more pasture is used,
grazing period is longer
 Less hay and hay feeding is needed
 Takes more time and management
 May require more investment in
fencing and watering systems
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Management factors
2. Extensively managed stockpiled
fescue:
 More pasture is wasted, fewer days of
grazing
 More hay must be fed
 Less time is spent moving cattle but
cattle should be checked more often,
so real labor savings may not be great
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Management factors
3. FALL HAY
 Hay making is expensive--in
investments and time
 Include risk of bad weather and
resulting losses of yield and quality
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Hay feeding costs
Added Costs:
 Storage losses and costs of
protecting hay against loss
 Feeding losses
 Handling costs, including time
and equipment
 Pasture damage
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Losses affect true cost
 For alternative systems
Harvest losses range from 5 to 50%
of production
Storage losses -- 5 to 20%
Feeding losses -- 5 to 15%
Combined losses = 15 to 50%
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Results
 Evaluating the economics takes time
and effort, but it is critical for
improving the financial performance
of a farm or justifying a change in
farming practices
 In our example, the range in cost was
$1,763 on 32 heifers for 120 days!
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Which system is best?
 Depends on farm and family situation
Farm & financial resources
Lifestyle goals
 Economics is important to making
wise decisions but may not be the
only criterion
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Geoff Benson
 Phone: 919.515.5184
 Fax: 919.515.6268
 E-mail: Geoff_Benson@ncsu.edu
 Web page:
http://www.ag-econ.ncsu.edu/
faculty/benson/benson.html
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