Beef cow-calf producers have seen a drastic increase in the prices they receive for cattle over the last 10 years. Unfortunately, the cost of production has risen at a comparable rate over this same time frame. Cost of fuel, fertilizer, machinery and drought have driven feed production costs to levels, offsetting profit. Critical cost of production analysis can give producers an opportunity to find expenses that can be reduced.
Pasture rates should be evaluated. The cost of renting pasture has risen across much of the Midwest due to pressure from grain and forage production. As cost of pasture increases, the need to intensively manage those acres increases. Utilizing management intensive grazing practices is an important aspect of increasing productivity of those acres. Better grazing practices will improve quality of the forage and increase yield. Cows will gain condition and weight, which can lead to better pregnancy conception rates and put cows in position to allow for marginal forages to be fed through the winter months. Better pastures allow better calf gains and higher gross sales.
In various locations of the country, rental rates have not been pressured to the same extent. In these situations, pasture yield can be increased by renting more acres. Practices, such as fertilization, should be evaluated to determine cost effectiveness. If pasture costs are at a premium, increasing productivity is important. In areas where pasture acres are readily available and not overly expensive, simply renting more acres may be a more economical decision.
Decreasing hay production by extending the grazing season can have major impact on the cost of feeding the cow herd. As a Michigan State University Extension ruminant educator, I have worked with producers across the Midwest who continually implement production practices that allow cattle to graze farther into the winter and earlier in the spring. Even in the northern regions across Wisconsin, Minnesota and the Upper Peninsula of Michigan, some producers are feeding stored feeds for as little as 120-135 days. Planting crops for grazing into the fall, winter and spring can greatly shorten the feeding period of stored feeds such as: Brassicas or corn planted after harvest of small grains; Winter rye or other cereal grains planted after soybeans or corn silage for late fall and early spring grazing; Planting corn for later gazing during the winter months allows for high quality forage consumption, even with significant snow cover. Grazing planted crops is best accomplished with strip grazing to limit access and improve grazing efficiency.
Balancing rations for cows and decreasing feed waste can lower production costs. Feeding average quality hay to the dry gestating cow can be inefficient. Feeding stored crop residues can lower feed cost while maintaining body weight and condition. Full feeding average quality hay to the dry cow is an excess of nutrients over maintenance requirements. Feeding lower quality, high fiber feeds, such as corn stalks can meet the nutrient requirements of the cow at lower cost of production.
Performance measures are important to consider when comparing cost of production and profitability. Attempting to maximize performance measures such as weaning weight and breeding percentage will at some point result in increasing cost of production. Performance measures should be evaluated and optimized. Decisions to optimize performance should be considered as to how they affect cost of production based on pounds of calf weaned. Animal and Plant Health Inspection Service data indicates, for example, that average calves weaned per pregnant cow was 93.6 percent. Over half of the calf mortality came from birthing difficulties. An example of evaluating producers selecting low birth weight and calving ease sires can improve the number of calves born alive and also improve subsequent rebreeding percentage. Producers selecting to improve calving can also select bulls with moderate growth and frame size to maintain or improve weaning weights. Selection for high weaning weights alone can result in large cows that require more feed than smaller cows. Comparing calf weight to cow weight is a good measure of cow efficiency and correlates closely with cost of production. Ultimately, cow calf producers should be comparing cost of production to pounds of calf weaned. This measure allows producers to best analyze management decisions.
Beef producers should utilize enterprise budgets to evaluate areas of improvement. Finding cost savings in the budget can help lead to profitability. The most expensive area of producing beef calves is found in the feed costs. Finding better and cheaper methods to feed cattle without sacrificing performance is critical. Cost of production should be compared to pounds of calf weaned rather than doing so on a per cow basis. In doing this, every management decision is more accurately evaluated as it relates to profitability.