Published: May 16, 2008 11:30 am            

High input costs force rethinking of cattle grazing strategies

Change never stands still for a cattleman trying to throw a saddle on it.

Back in the once-upon-a-times, great cattle drives stirred the dust across Texas and Oklahoma as ranchers pointed their herds up the trail toward Kansas.

That era lasted less than 20 years, though, because the industry changed and, suddenly, being the best trail boss in the world didn’t count for much.

Genetics, health, nutrition, handling, merchandising — none of it looks the same as it did just a decade or two back. And right now, as feed and fertilizer costs leave "through the roof” in the rear-view mirror, the industry may be poised to shift once again.

From his perspective as Oklahoma State University’s Extension agronomy specialist in Northeast Oklahoma, Bob Woods can feel change on the wind.

“Over time, our predominant forage system has evolved from a low-input native system to one that’s high input, relying on introduced forages and relatively cheap fertilizer,” he said. “With the recent steep escalation of fertilizer prices, our cattle industry may have to rethink the methods it uses to produce beef.”

Bermuda grass, tall fescue and plenty of fertilizer transformed the eastern Oklahoma cattle industry from running a cow on 10 or 12 acres of non-fertilized native to a dramatically increased carrying capacity of a cow on 5 acres or less and in some cases a cow on a couple of acres on fertilized bermuda.

But in the past couple years, the nitrogen fertilizer required to maintain that system has doubled from roughly from 34 cents a pound to 69 cents. The climb for phosphorus is even steeper, from about 22 cents to around 86 cents and potassium is up from 22 cents to 54 cents a pound.

What that has done, in effect, is to increase fertilizer cost per cow from roughly $70 to $100.

It’s a cost that’s hard to escape, Woods said.

“A lot of cattle producers increase stocking rates without purchasing adequate amounts of fertilizer and without soil test recommendations,” he said. “As a consequence, the amount of hay required increases, adding even more cost to the forage system.

“In other words, the rancher who has a stocking rate of one cow to five acres but doesn’t fertilize is probably feeding hay for nearly six months and fighting a losing battle with forbs - or, as they probably refer to them, weeds.”

With or without fertilizer, fuel, equipment and fertilizer price increases drive up the value of a bale of hay, Woods said. For one thing, the value of the nutrients removed when a ton of bermuda grass is harvested has increased dramatically - from about $13.10 per ton for 5 percent crude protein hay in 2006 to around $40.10 in 2008. For high quality hay of 15 percent crude protein, it’s gone from $19.50/ton a couple years ago to $56.58 today.

Take the nutrient removal value and add in a baling cost of $16.46 per bale and you’ve got $59 in a 1,200-pound bale of alfalfa and $49 in a bale of bermuda.

What’s it all add up to? Well, Woods suggests many cattlemen may want to rethink their current systems.

He points out that soils capable of maintaining a stocking rate of a cow to three acres or less are probably suitable for farming.

Currently, crop budgets indicate more profit potential than cow/calf budgets. If a stockman considering switching some of those better acres into grain production doesn’t have the equipment to farm, Woods suggests he may want to consider a cash rent or share-cropping arrangement.

Or, maybe double-cropping that good bermudagrass ground is an option. Woods points out that OSU reported 35-bushel per acre yields for sod-seeded wheat at the experiment station near Muskogee.

“At least one Northeast Oklahoma rancher I know of has routinely followed this approach to produce grain or graze-out, depending on prices, and then grazes or hays the bermudagrass later in the summer," he said. “This grower has also said that his wheat planted in bermudagrass sod is the first to combine when it’s too wet to get on the crop fields.

“Current wheat prices would pay for the expensive phosphorus and potassium while improving the fertility status of the pasture.”

The current situation might also be an opportunity to replace endophyte-infected fescue with the non-toxic kind, Woods said.

Growers might consider destroying existing fescue, growing crops on that ground while prices are high, and then replanting to a non-toxic variety of fescue.

Woods suggests cattlemen analyze the profit potential of using a stocking rate that correctly reflects no fertilizer input and no additional purchased hay.

If he comes to the conclusion that fertilizer is a must, the OSU agronomist recommends fertilizing to achieve optimum yields but doing it on fewer acres.

“It’s possible to double the stocking rate of one cow per 10 acres to one cow to 5 acres and only fertilize the best 15 percent of the acreage,” Woods said. “As an example, assume one cow requires 12,000 pounds of forage per year. Then 10 acres that yields 1,200 pounds of harvestable forage per acre equals 12,000 pounds of forage - two cows per 10 acres will need 24,000 pounds of forage per year.

“If 8.5 unfertilized acres produce 10,200 pounds of forage, that will leave a deficiency of 13,800 pounds that has to be made up from the remaining 1.5 acres," he said. "That means the 1.5 acres will need to produce 4.6 tons per acre, which should be possible with bermudagrass or bermudagrass/fescue if you’re fertilizing only the best soils. Will the additional cow cover the cost?”

Woods stresses that soil testing should be used to identify the acres that require the least P and K. Soil test recommendations for P and K are based on achieving optimum yields and don’t change as the yield goal increases. As a result, fertilizing for a higher yield goal on fewer acres of the best soil reduces the cost per ton of forage for these nutrients.

“Most producers that have fertilized in the past could maintain the same number of cows and still fertilize fewer acres by fertilizing for higher yield goals,” he said. “But, is it important to run the same number of cows? With fewer cows the workload is reduced, less hay would be needed and cow performance often improves when stocking rates are appropriate.

“Fewer cows may be the more profitable option and just might be more enjoyable.”

Other considerations, Woods said, include using poultry litter or adding legumes. In seven years of research at the Eastern Research Station at Haskell, Okla., it’s been demonstrated that cool season legumes could provide grazing equivalent to non-legume pastures fertilized with 150 pounds of nitrogen per acre.

Woods cautioned that legumes aren’t always easy to grow and maintain.

“If they were, everybody would have them,” he said.

Multiple-paddock grazing systems might be another consideration for some producers, Woods said. This more intensive grazing approach can increase carrying capacity by as much as 40 percent, assuming that initial stocking rates were correct. The payoff he said, could be in less fertilizer, less hay and more gain per acre.

A large bermuda pasture fertilized with 150 pounds of nitrogen may be capable of providing the same amount of grazing with only 90 pounds of nitrogen if it’s cross-fenced and managed correctly. Multiple-paddock grazing, Woods said, would also contribute to successfully managing legumes.

And one more thing:

“With high fertilizer prices and higher input costs, hay prices can be expected to increase,” he said. “Every month that a cow can graze stockpiled forage saves conservatively $20 per cow in harvest and handling costs. Also, if fewer acres are fertilized due to high fertilizer prices, there could also be less hay available.”

Woods knows that a lot of these suggestions won’t sound particularly palatable to many cattle producers but he urges them to step back and take a good look their current beef production systems.

“It’s human nature to resist change,” he said. “Too often, some in the cow/calf industry are slow to make necessary changes such as reducing cow numbers when faced with a changing business environment.

"This has the effect of extending a crisis in the next year’s calf crop," he said. "Don’t let that be you. The current price structures justify careful evaluation of our livestock production systems.”



Mark Parker writes for Farm Talk in Parsons, Kan.

        

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