Cow-calf producers have to find the right grazing system to fit their operations. Sometimes it takes a little investigation to decide on the right one.
Iowa State University Extension along with the Leopold Center, the Iowa Nutrient Research Center and Iowa Farm Bureau hosted a series of meetings earlier this spring and most recently hosted a webinar looking at three different management systems for cow-calf production in the state.
“We really wanted to look at the three different systems that we’ve seen as developing in Iowa,” Denise Schwab, Benton County Extension agent, said.
The traditional system was defined as any cattle operation that grazed about half of the year, give or take, and then brought delivered feed or had stored feed on hand for the other half of the year.
“That’s what we defined as traditional,” Schwab said.
An extended grazing period is grazing more than three quarters of the year with delivered feed the other quarter. In a limit grazing system, which has taken off the past 10 to 15 years, according to Schwab, is defined as those cowherds that graze less than a quarter of the year.
“So they might have grazed corn stover or cover crops, but for the majority of the year, they were confined in some type of system,” Schwab said. “It might have been a drylot, it might have been just very little grazing pasture with it, or it might have been in a totally confined building.”
The team looked at the cost of production and then how those different systems are managed differently.
“What are some of the best management practices?” she said. “As we looked at our objectives, again, cost is a big one, and we looked at a lot of environmental impact.”
Impact on environment included everything from the soil to the seed production, as well as best practices. Twenty-eight producer cooperators were in the project, with some participating in only segments, while others completed the entire project. As part of it, they collected data on their cost of production.
The project also collected samples on stored feeds, grazed feeds, forage quality and stockpiled feed quality.
“That was a big part of it,” she said. “We did a lot of looking at what their feeds were, what some of their rations were, and then we also did some soil testing.”
They really wanted to look at how close estimates were in terms of sample budgets that were put through the Ag Decision Maker tool, as well as developing some tools and decision tools that operators can use to help develop and look at analyzing their operations.
In the project they did a quick overview of the cow-calf industry in Iowa based on a few things.
“We have a lot of abundant feed stuffs, at least most years. We have very productive land and very high quality cattle,” she said. “That’s something that we see as a huge respect to a benefit to our industry.”
They’re not without challenges.
“Probably one of our biggest challenges to the cow industry in Iowa is access to land,” Schwab said. “Whether that be pasture land, or low quality forage land that we can use to grow the cowherds in Iowa.”
Schwab also recognizes livestock, at least in the past, has been a great avenue for new and young producers to get into agriculture.
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“Kind of our old philosophy of walk the grain off the field—how to get those younger young producers started,” she said.
There are also environmental challenges that need to be worked on, as well as the good stockmanship, herdsmanship aspect of protecting the environment. However, the biggest challenge in the industry is profitability and actually being able to make money in the cow herd. When looking at return to the cow operation above cash costs, 2014 and 2015 were very profitable. This year isn’t any where near those levels.
“But we’re back kind of in that normal,” she said. “If we look at long-term profitability in the cow herd, we’re probably in the return area of about $50 a return above cash cost.”
Schwab pointed out they were looking at cash costs in the study.
“So a big part of our project was looking at cost of production,” she said.
Feed costs were obviously the biggest factor in cost of production for most enterprises. They broke it down further into three categories—stored feed, pasture costs and grazing costs—to come up with a total feed cost.
“And as we expect, as we looked at stored feed cost, we average about $300 per cow. When I say per cow, it really is per female,” Schwab said.
Developing first calf heifers are also counted in this number because they still have to be fed and cared for even though getting a calf crop from them is delayed.
“Obviously, our limited grazing herds had our highest feed cost,” she said. “Our extended grazing herds had our lowest feed costs.”
Schwab pointed out in the operation’s records they looked at there was a “huge range” of costs. From the lowest of $45 per cow to a high of $955 per cow. There was a large variation between operations and across systems.
“As we look at pasture cost then, on average, we average about $117 per cow for pasture costs, obviously lowest being the limited graze, and the highest being the extended graze system,” she said. “Again, part of the difference between traditional and extended is that as we looked at our traditional system, those operations, on average, ran about 1.8 acres per cow-calf pair, versus our extended grazing operations that ran about 4 acres per pair.”
The big reason for that, Schwab said, is producers are trying to have enough acres to stockpile for winter, as grazing is their winter feed source. Many didn’t have a lot of stored feed on the extended grazing system.
When it comes to residue costs, or stalk grazing, average is $6 with one as high as $12.
“When you hear us talk a lot about cover crop grazing and stalk grazing, or residue grazing, this is the reason why it’s really, really key,” she said. “We want to reduce our feed input costs. We want to try to take advantage of our cheapest resource, which is corn stover in Iowa.”
When they reached total feed costs for all the operations participating, totals ended up at $430 per cow. Limit grazing was the highest at $560 and extended grazing was the lowest at $323.
“But again, see that very large range that we see in terms of the differences in feed costs,” Schwab said.
Schwab and her team also looked at other feed costs, beyond the feed itself. These non-feed operating costs included things like fuel, utilities, insurance, vet med, hired labor and custom work. All those things that are not feed, but are considered an operating cost for an operation.
“We saw much less variation across systems here,” she said.
These costs averaged about $254. Traditional grazing was the highest at $274, then limit grazing at $248 and extended grazing the cheapest at $218.
Schwab said it’s very important, especially when exploring best practices for management, to know “your own cost of production and your data.”
Ownership was also evaluated—ownership of cows, equipment and facilities. It’s beyond depreciation values. Average cost of ownership was $286; it went from $195 per pair on the extended grazing to $440 on the limit grazing.
They also looked at unpaid family labor even though it wasn’t a cash cost and doesn’t get accounted for in some data sets when looking at cash costs. That average was $116 per pair. “Not a huge range, about a $35 to $40 range from the different system.”
“But this is what puts the food on the table, groceries on the table, puts shoes on the kids—is what you as an operator live off of,” Schwab said.
Again, there was a wide range in costs when it came to the total cost of production—from $615 on the low side to $2,300 on the high side.
“We averaged $1,095 per pair per female in terms of our total cost of production cash,” she said. “As we looked across systems our limit grazers were the highest at $1,300. Our traditional was $984, and our extended grazers were down at $869.”
In the end, Schwab and her team saw extreme variation across the different enterprises.
“Regardless of system, you can be in the low cost operator, low cost group if you pay attention to some of the details in your own clock,” she said. “Again, the cost represents about half of our cost of production.”
Schwab and her team focus heavily on controlling input costs.
“Indirect costs are really more important than a lot of our other non feed operating costs,” she said. “We really need to pay attention for that, as we’re looking at our enterprise and that’s one of those items that’s really easy for producers to overlook, because it’s just not a cash cost.”
All three systems Schwab discussed can be low cost, and there are economies of scale benefits that they saw in each the system.
“Again it’s important to know your own costs and benchmark against other enterprises, other operations,” Schwab said.
Kylene Scott can be reached at 620-227-1804 or [email protected].