Contributed by Carl Stafford, Senior Extension Agent, Animal Science, Culpeper County
Wintering cost is one of the biggest expenses in producing beef cattle. John Howe, Spotsylvania Extension Agent, explained the difference in the cost of a pound of dry matter from pasture vs. that from harvested feed. He found that the equipment harvested feed can run 3 to 4 times the cost of that harvested by cattle. Gordon Groover supports Howe in his article, “What I Know about Forage Economics,” Virginia Forager, Fall 2016, page 7. He finds that each ton of hay could have more than $200 per ton equipment depreciation before “out-of-pocket” expenses are added.
The big difference between grazing and feeding cattle hay is the significantly lower equipment cost and lower fertilizer requirement experienced in winter grazing systems. Cattle farmers are crop farmers; their crop is pasture. The cattle are harvesters and just like tractors, they have to be used to be justified. Look at them as employees and keep them busy working. The more cattle are used to harvest what’s grown, the lower the annual carrying cost will be. In some states it is common practice to haul cattle to the feed; maybe Virginia producers could justify doing this if it supports the bottom line.
Kansas State Economist, Kevin Dhuyvetter, found, in his study of the most efficient beef producers, that herd size mattered but was not the only route to efficiency. Of course the biggest producers can buy and sell in volume and use equipment to its full advantage even if they have a lot of it. However, Dhuyvetter found that small producers could still compete if they were able to control their winter feed cost. Grazing in the dormant season is how they did it.
Lower stocking rates support this type of management as surplus grass is accumulated during the growing season for use in the dormant season. In the end, grazing a day in the winter helps you keep more of the revenue you make. Explore Graze 300 VA if you want to learn more on this.
Everyone can agree that in order to improve the efficiency of any enterprise, the biggest expense must be cut first. Since winter feeding is the biggest expense with cattle, this is the logical place to start improving net revenue. With a soft cattle market, changing net revenue is about the only control one has. However, do keep in mind the cost/benefit from weaning and vaccinations. The net from these is paying off now.
Most people reading this have equipment investments that they feel are necessary to be in the cattle business. Timely hay harvest is one justification for these investments; having control over your hay supply is another. On the other hand, other cattle farmers have very low equipment investments and go out into the market to “harvest” their hay. All cattle farmers should evaluate the initial investment costs and long-term profits associated with hay equipment and cattle herds, taking into account equipment depreciation and likely cattle sales. Farmers have struggled in the long-run, to recoup the initial money invested in hay harvesting equipment with cattle sales alone. To avoid this situation, consider adding days of grazing to your operation and seek to be a Graze 300 producer.