Demonstrating the Economics of Managed Grazing Systems

Name and Title: 
Denise Schwab, Beef Field Specialist

POW Number & Title:  
141 Reduced feed cost for beef producers

Title: 
Demonstrating the Economics of Managed Grazing Systems

Issue:
In Iowa we are very blessed with adequate top soil, moisture, and nutrients to produce abundant feed supplies for cattle.  But the competition to grow more grain on even semi-marginal ground has pushed cattlemen to increase stocking rates on pasture, as the better pastures are pushed to grain or stored forage uses. 

Much work has happened in the past to educate cattlemen on the merits of forage improvements and grazing management.  Partnerships between ISU Extension, Iowa NRCS, Soil and Water Conservation districts, and private entities have held pasture walks, grazing schools, grazing days, and many more educational events.  Much of this education has focused on the importance of fertility, weed control, stand evaluation and improvement, and rotational management, but little has focused on determining the costs and returns of improved pasture management.  Pinpointing the costs of managing sustainable forages is a necessary step to increase or maintain pasture acreage.

This project will enumerate the costs and returns of pasture management, including the economic inputs into the pasture system and the grazing days and weight gains from the pasture. 

What Did You Do?:
Nine beef producers in eastern Iowa kept beef cow records that included tracking expenses related to pasture costs and grazing days for 2008 or 2009, resulting in 14 data points to compare.   The summary of this data follows:

Cost of Grazing

Average

Number of Acres Pastured

338

Animal Unit Months from Pasture

1507

Land Charge per Acre

$58.03

Depreciation Cost per Acre

$0.61

Operating Cost per Acre

$10.25

Family & Operator Labor per Acre

$5.18

Total Cost per Acre of Land in Pasture Production

$74.07

TOTAL PASTURE COSTS per AUM

$15.16

Acres per Cow-Calf Pair

2.1

Cows in herd January 1

146

Total Feed Fed per Cow

4277

Participating herds averaged 146 cows, but ranged from 47 to 239 cows.   The average stocking rate was 2.1 acres per cow-calf pair with a rainge from 0.8 to 3.4.  All producers used some type of rotational grazing system.

Two pasture walks were held in Benton and Jackson counties focusing on pastures with new water systems.  One had a new pond with a tank below the pond and newly established pastures.  The other had diverted a spring into a holding tank where it was pumped to a tank.  It also had converted cropground into rotationally grazed pastures.   Another was held in Tama County in conjunction with the Soil and Water Conservation District on a pasture that was converted from CRP.   Three other pasture programs were held specifically for participants in the young cattlemen project.  One of these was designed to provide input on subdividing a newly acquired pasture with water challenges.  Participants contributed several ideas for possible subdivision methods and watering alternatives.  Fifty producers attended one or more of the pasture walks.
 
Results/Outcome:
Currently there are three Extension resources used to answer questions related to pasture costs.  One is the Estimated Costs of Livestock Production, PM1815.  It suggests $35.00 per acre for pasture ownership or rent at 2.5 acres per cow ($87.50/cow) plus $20 per acre for pasture fertilizer and miscellaneous  costs ($50.00) for a total pasture cost of $137.50 per cow.

The other two publications focus on pasture rental rates.  One is the Iowa Cash Rent Survey FM1851, which shows an average rent for improved pastures in eastern Iowa at $66 per acre, unimproved pasture at $41/ac and monthly rent at $13/AUM.  The other publication is a 2006 Iowa Cattle Grazing Survey published as a part of the Cows & Plows series at http://www.iowabeefcenter.org/content/cows%20plows/Iowa%20Cattle%20Grazing%20Survey%20(section%201).pdf .   This survey of 237 land owners and tenants showed an average pasture rent of $18.69/AUM.

The fourteen participants in this project had a total cost of pasture production of $74.07 per acre at 2.1 acres per cow or approximately $155 per cow.  This is much higher than the estimated budget, so more work is needed in comparing actual pasture costs to estimated budget costs.  The $15.16 per AUM from our record participants would cover the $13/AUM rent from the Cash Rent Survey but is less that that charged for rent in the 2006 survey.  Again, more work is needed to compare actual pasture costs to estimated costs.

A short evaluation survey was mailed to the 50 pasture walk participants in September with 12 being returned(24%).  Ten of the respondents were farmers, two were USDA agency staff and one was an agribusiness person.  Eight (67%) currently use a rotational grazing system with three rotating at least weekly or more often.  They ranged in size from 25 to 160 cows, and from 70 to 350 acres of pasture.  Nine (75%) had attended pasture walks prior to 2009.  Eight (66%) said the pasture walks help them improve their ability to assess grazing production problems.  Participants were asked  what economic impact pasture walks have had on their operation.  Two said up to $100, three said $100-500, and two said $500-1000.  As a result of attending a pasture walk, three planned to frost seed, three planned to change their fertility program, one would change their weed control practices, six planned to interseed a new forage variety, five planned to adopt a new fencing or watering system, and three planned to stockpile pasture for late  fall or winter grazing.  One of the USDA agency staff also wrote, “The information from the pasture walk will help to better understand the needs of the people that we serve.”

 Summary
Actual on-farm production costs and returns are still a challenge to collect from producers.  More data is needed in terms of actual pasture costs of production to improve estimated budget costs.  More data is also needed to identify the costs and benefits of pasture improvements and differences between intensity of rotational grazing system costs.

Pasture walks are an effective tool to educate producers about improved pasture management.  Participants have documented the skills they’ve learned from them as well as goals for improving their own pastures.

Acknowledgements
Thank you to the Leopold Center and the Grass Based Livestock Working Group for the opportunity to develop and work on this project.  Also to the Iowa Beef Center and to the ISU College of Ag and Life Sciences demonstration project for helping fund the annual forages demonstration.

2010

141 Reduced feed cost for beef producers

 

Page last updated: June 30, 2010
Page maintained by Linda Schultz, lschultz@iastate.edu