Profitability Calls For
Efficient Forage Production
When you look at the numbers, it's no surprise that efficient forage production has a major impact on profitability. Alan Miller, University of Illinois Extension animal specialist, tells beef producers to consider all costs when evaluating forage production's role with their enterprises.
"Our SPA (Standardized Performance Analysis) Beef Cow Business Record data indicate that 45% of total costs associated with beef cows are due to forage production costs, be it pasture or hay," he says. "When determining those costs, I encourage producers to not underestimate their land value and to be sure and include those 'hidden' start-up costs of forage production."
Miller notes that land costs continue to rise, with some Midwest cash rents reported at more than $300 per acre. Such costs affect the economics of permanent pasture on highly productive farm ground and may point to using aftermath or annuals for grazing after a cash crop is removed.
"There are many financial considerations for hay production as well, including the cost of seed and all tillage operations. Fertilizer costs are still high, but land costs dictate that fertilizer use may still be crucial. You must also factor in the cost of your labor," he says.
Miller says SPA data suggest 57% of variation in profitability from one producer to another can be explained by variation in feed costs. Most is explained by the fact that 65% of total annual cow costs are feed costs, and thus a "big ticket item."
The data also indicate huge amounts of variation exist among producers in what it costs to feed a cow. He observes that no producer thinks he or she is a high-cost producer. But when data are gathered, the reality is that some producers can feed a cow for less than $200 per year, while others spend in excess of $500 just on feed. In such scenarios, profits are virtually impossible.
"Profitable beef production starts and stops with efficient forage production," Miller reiterates. "Determining if you are efficient requires that you do an in-depth analysis with an honest value assessed for your land and labor resources devoted to forage production."