Trimming livestock feed expenses
Instructor, S.D. Center for Farm/Ranch Management
Agriculture is a risky business with many uncontrolled variables, so every producer has to control what they can to show a profit at the end of the year. When it comes to livestock production, one of the biggest variables that need to be evaluated each year is feed expense. It is a documented fact that feed costs represent the largest portion of the cost for beef cow/calf producers.
When looking at the 2013 South Dakota Annual Report, published by the South Dakota Center of Farm/Ranch Management, the average herd’s total cost of running a cow for the year was $764.07. Feed costs alone were $518.86 or 68 percent of the expense of maintaining a cow. Pasture made up 43 percent of the average feed costs at $233.90. It is important to note that raised feedstuffs are valued to reflect market opportunities so producers that feed hay, or grain, produced on their own land are charged a cost on the feed based on current market values. The same valuation calculations are done on owned pasture land.
Knowing these numbers, what can be done to manage feed expense? Those farms with lower than average feed expenses in the South Dakota Farm/Ranch Management program tracked all feed, by weight, fed to the cow/calf herd. Producers knew exactly what was given to the herd throughout the year, much like a producer with feedlot cattle tracks the ration fed to the feedlot every day. Farms with higher than average feed expenses kept track of bale counts but estimated the weight of the bales they were feeding. This can skew the feed weights dramatically if those estimations are too high which, in turn, causes the feed expenses to be higher than if the exact weight of feed fed is known.
Producers with lower than average pasture costs implemented one or more of the following grazing strategies:
1. Intensive grazing of smaller pastures with a rotation system that gave pastures an adequate rest period.
2. Took advantage of aftermath grazing on stubble.
3. Planted cover crops to be used as grazing in the fall/winter season.
Any of these strategies increased the animal unit months (AUM) of grazing available, with little or no additional cost to the rancher. Some of these same producers have bred cows to calve later in the spring or early summer, which has decreased their use of hay during the winter months. The cow does not need as much energy during the winter with a late spring calving period, allowing the producer to leave the cows on stalks/grazing much longer without supplemental feeding. Some of the grazing strategies listed here do require more labor, but the producers that use these plans feel the tradeoff is worth it.
Individual producers must make decisions for what is best for their operation. Producers cannot plan for all expenses in a year but by having some management strategies in place, profits may be generated. If any producer would like more information on the South Dakota 2013 Annual Report, it can be found at http://www.sdcfrm.com under Resources. To contact the SDCFRM office or any of our instructors, call 1-800-684-1969 or email us at firstname.lastname@example.org.