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Broad-based dry conditions pinch cow/calf producers from two sides:
- Grazing days fall short of expectations
- On-farm and regional feed supplies are diminished, which increases short term costs. Typically, the first reaction to a shortened grazing season is to purchase higher priced feeds in anticipation of a longer feeding season. However, short term options do exist to acquire cereal aftermath that extends grazing into the fall, which will reduce the costs of wintering the cow herd. A partial budget can be a valuable tool in assessing these options.
Budget: Graze Cereal Aftermath or Feed?
An example scenario guides producers to incorporate their own specific realities in their own budgets. This approach estimates available grazing days from an aftermath parcel, grazing costs, and then how much this would reduce feeding costs for a similar number of days. If advantages (reduced costs) exceed disadvantages (increased costs), then pursue the grazing opportunity.
- The grazing budget (added costs) assumes:
- 155 acres of aftermath for 200 cows (1,400 lbs)
- Available straw and chaff will meet the cows’ nutritional needs
- Miscellaneous operating, labour and fixed costs is included Grazing cost estimates for these items derived from "Swath Grazing - Interesting Concept, But Does It Pay?", AgriProfit$ Technical Bulletin, Alberta Agriculture, Dec./02..
- Round trip trucking to the rented grazing location costs $20/head
- Starting baseline rental rate is $25/acre
- Dry matter availability and utilization efficiency are estimated for barley straw on black soils Estimates of barley straw and chaff production on black soils and cow utilization derived from "Increasing Cow/Calf Profitability Using Straw and Chaff/Straw Feedstuffs," Alberta Agriculture, Agdex 420/50-2, Jan./08.
The budget solves for available grazing days and unit grazing costs.
- The feeding budget (reduced costs), assumes:
- Hay is costed into the herd at $60/ton
- Feeding yardage at $0.70/cow/day Yardage cost estimates drawn from "Yardage - The Cost Beyond Feed", AgriProfit$ Technical Bulletin, Alberta Agriculture, June/04.
The budget solves for feeding costs incurred if the cows were not grazed.
Given the variation in cow size from farm-to-farm, budget results are quoted in $ / Animal Unit Day (AUD). Convert to a per cow basis by multiplying by a factor of average cow weight/1,000.
Details of the scenario, including pricing, costing and utilization are listed in the section "Partial Budget Estimates and Parameters".
The Budgeted Result
The partial budget table (above) lists the scenario analysis outcome. Added costs of grazing tally $1.15/AUD.
Reduced feeding costs amount to $1.76/AUD of feeding days replaced by grazing days. The net advantage for this scenario is $0.61/AUD, suggesting the operator would be better off to pursue grazing the aftermath.
The risk of these options can be examined through a sensitivity analysis of key factors. The charts and tables on the following page show the sensitivity of unit costs and profitability to straw and chaff yield for a few rental rate scenarios.
Other Considerations
In any budgeting process, it’s important to identify the other considerations that can affect profitability and risk, such as:
- Check your average cow weights. This will affect available grazing days.
- Does the straw and chaff meet nutritional needs? Supplemental feeding comes at an added cost.
- Firm up the costing estimates. Use actual costs for yardage, trucking, hay price, etc.
For a complete copy of this bulletin, please click here. |
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