Intensive Grazing Economic Study

PROJECT BACKGROUND
I am on the Board of Directors of the Andrew Jackson Demonstration Farm (AJDF), a 320 acre farm in Jackson County, Iowa. The AJDF was organized to demonstrate innovative and/or different farming concepts and is a non-profit corporation which leases the farm from Jackson County. The farm has 98 acres of corn, 38 acres of soybeans, 67 acres of alfalfa hay, and the remaining acres are pasture and timber ground. In cooperation with the Iowa State University Extension Service, Natural Resources Conservation Service, and other governmental agencies many innovative practices are in place. Also on this farm is the Jackson County Care Facility, a facility caring for mental patients of the County. In the year of 1995 I implemented an intensive rotational grazing system in conjunction with a heifer project focused on raising beef heifer replacements. This year the intensive rotational grazing system was perpetuated but doing it with steers. However, the AJDF Board and I felt the intensive grazing concept should be focused on a cow/calf operation so this project was conceived and initiated on a part of the farm separate from the project mentioned above and the grant was requested for this project.

PROJECT DESCRIPTION AND RESULTS
To implement this project, a committee of interested parties got together to discuss the goals, objectives and implementation strategies. The following objective was established for this project and presented to the Andrew Jackson Demonstration Farm Board:

The objective of this project is to establish and operate a management intensive grazing system for a beef cow/calf operation in order to generate detailed economic records to determine if raising beef cows on well managed pasture will generate more net income per acre than other less sustainable agricultural systems.

The AJDF Board did not feel we should purchase the cow/calf herd to carry out this project but to get the consent of a nearby herd owner to submit his herd (or part of it) to this project. We were able to convince a nearby neighbor, Paul Schwager, to submit thirty of his cows and their calves. When we approached Paul he wanted to be able to grow the calves without having to creep feed them and he wanted to be able to breed the cows by AI while on intensive grazing. Since there were no facilities for restraining the cows, a corral was constructed. Our goals were: 1) graze the cows and calves intensively on 45+ acres, 2) install a water distribution system to paddocks of 5+ acres, 3) realize a return on the marginal acres better than we had in the past, 4) put on satisfactory gains on the calves as well as the cows, and 5) engage a cooperative herd owner that would help us achieve the above goals.

The pasture utilized for this project was 45+ acres on the southeast extremity of the farm. The portion containing paddocks, 601, 602, 603, 604, and 605 is a permanent pasture of Kentucky bluegrass which we frost seeded some red clover seed and birdsfoot trefoil seed the later part of February 1995, but very little of the seed germinated. We feel the reason there was not adequate seed-soil contact. There were cows pastured on this portion in 1995 by the adjacent neighbor. The portion of the pasture in paddocks 606, 607, 608, and 609 in previous years was utilized for hay and it consisted of brome grass, orchard grass, Reed’s canary grass, alfalfa, and ladino clover. Production of hay left something to be desired. The soil in paddock 607 was used for covering the adjacent landfill about four years ago and we have nurtured it along by seeding and applying manure, lime and commercial fertilizer. This year we applied 100# per acre of 40-30-40 on all 45 acres in April and in July 60# of nitrogen per acre on 18 acres of selected portions of the 45 acres.

Process:
Through seminars conducted by the Extension Service on intensive grazing that I attended, my observation of intensive grazing operations not only in Iowa but also in Tennessee, guidance and direction furnished by Tony Harvey (Extension Beef Specialist) and the planning of paddocks by Theresa Weiss (National Resources Conservation Service), a project plan evolved. Even though there were two ponds on the pasture land where the project was planned, it was decided not to utilize the ponds as a source of water for the cows and calves for a number of reasons: 1) this was not a reliable source of water for the livestock during the grazing season, 2) this was not a healthy source of water (particularly worm infestation) and 3) a continued use of the ponds daily for watering livestock will cause erosion around the perimeter. To resolve the problem of providing water for the cows and calves a water distribution system was installed. Since there was a well at the landfill building adjacent to the corral it was initially decided to use it as a source of water because of the proximity. The well had not been used for approximately four years so a plumber was engaged to investigate the well. The plumber discovered the pump was not working and it would need to be pulled to correct the problem. The landfill formerly was collecting garbage from Jackson County and the Jackson County Sanitary Waste Disposal Agency (per federal regulations) decided to cover the landfill (with soil from paddock #607) and abandon the facility approximately four years ago. Because of the anticipated cost of pulling the pump, it was decided to tap the water well at the Transfer Station which is also governed by the Waste Disposal Agency. The landfill building is the source of electricity for the electric fence. The water distribution system involved a hydrant being installed at the Transfer Station and the installation of 1” plastic pipe and hydrants (6” to 12” below the ground surface). It is approximately one mile from the hydrant by the Transfer Station to the most distant plastic hydrant. The plastic pipe and hydrants were plowed in by a tractor drawn plow in a matter of a day. The installation of the water distribution system was not completed until June 9th because of the above described delays. When Paul Schwager and I decided to put the cows and calves on the pasture on May 10th, the cows and calves were allowed to graze paddocks 601, 602, 603, 604, and 605 before the electric fence was installed so the cows could have access to the pond for water. By the time the water distribution system was installed we were not synchronized to correctly utilize the pasture to have available pasture around the corral when the owner began breeding the cows on June 18th. Consequently, hay had to be fed to the cows in the proximity of the corral until they were bred. Next year this will not happen!

Because of the difficulty described above, the quality of the crazed pasture and the production of grass was not measured as originally planned. Paddock #609 was abused but his fall we noted that particular paddock recovered quite well since the cows and calves were removed on September 12th. The number of days the cows were left on a paddock was determined by visual observation and the problems that evolved above.

People:
Board members of the AJDF were very supportive of this project and expressed their support by helping to build the corral in September of 1995 when one day they set all the posts needed for the corral. The members were:
- Albert Knake – farmer
- Ron Kilburg – Albert’s hired man
- Scott Gent – banker
- Floyd Peters – farmer
- Charles Lane – farmer
- M. O. Pitcher – retired veterinarian
- Eldon Hoerschelman – coordinator for AJDF

Even though Tony Harvey, Extension Beef Specialist, is not mentioned above I must emphasize he has played a monumental role in the development of this report.

Ron Irvin, Extension Beef Specialist and a colleague of Tony Harvey, has also given critical and valuable guidance in this project.

Warren Johnson, Limestone Bluffs Resource Conservation and Development coordinator, has been very helpful in the administration and project report of this project.

Results:
The initial year of implementing the rotational grazing system for a cow/calf enterprise was challenging and the results indicate that challenge of evaluating the economic outcomes for a start-up year.

Thirty cow/calf pairs on a 45 acres 9 paddock grazing system produced 236.33 pounds of calf per acre or a total of 10,635 pounds. This was produced in 125 days of grazing. Some supplemental hay was fed for 15 days during the AI breeding and to allow for some additional pasture rest.

Although cow gain during the grazing season is not utilized in the economic calculations summarized later, it is worth noting that the cows gained 1.2 pounds per day they grazed even though they were nursing calves that were gaining at the rate of 2.83 pounds per day throughout the season with no supplemental creep feed. Table 1 summarizes the production information.

Table 1 – 1996 Cow/Calf Production Data

Acres , 45
Dates on/off pasture , May0/September 12
Days on pasture , 125
Number of pairs , 30
Pairs per acre , .67
Acres per pair , 1.5
Average calf starting weights (lbs) ,156.16
Average calf ending weights (lbs) ,510.67
Average calf gain (lbs) ,354.51
Average daily gain (lbs) , 2.83
Calf gain/acre (lbs) , 236.33
Average beginning cow weight (lbs) ,1, 230.8
Average ending cow weight (lbs) ,1, 381.3
Average cow gain (lbs) ,150.5
Average daily cow gain (lbs) , 1.2
Cow gain per acre (lbs) ,100.3
Cow and calf gain per acre (lbs) ,336.6
Cow days per acre , 83.33
Average ending body condition score , 5.12

The economic costs to the Andrew Jackson Demonstration Farm for establishing the paddock and production costs for the year are found in Table 2. Fertilizer applications totaled $964.80 for N-P-K in the spring on 45 acres and $338.40 for nitrogen on 18 acres in July. Taxes on the 45 acres totaled $522. The cost for building some additional perimeter fence and fencing materials for subdividing the pastures totaled $1,708. A water system that included running pipe buried about 8 inches to all paddocks cost $1,536. These costs were amortized at 9% interest over 10 years. Hay was fed 5 days during AI breeding and 10 days when pasture growth had slowed.

Table 2 – Economic Costs of Pasture

Expenses
Fertilizer, $1,300.00
Mowing , 40.00
Hay fed (8.5 tons @ $45/ton), 382.50
Taxes , 522.00
Amortization of fencing & corral, 591.27
Amortization of water system, 239.31
Total , $3,075.08

Grazing System Investments
Corral , $2,087.00
Fence , 1,708.00
Water , 1,536.00

This project involved a producer leasing the pasture from the demonstration farm for grazing 30 cow/calf pairs. Table 3 compares the producer’s costs for leasing the pasture with the costs of the farm to provide the pasture. The rental charge was $.40 per cow/calf pair per day. A bull was in with the cows for 72 days. This resulted in a per acre rent for the season of $33.97. The cost per pair for the season was $50 and the cost per pound of calf gain was $.15.

Economics costs for the pasture provided was about twice what the rental charge was. The costs per pair came to $.82 per day; per pound of calf gain was $.29 per pair for the season was $102.51. The farm was responsible for providing feed for the entire time period they were on the pasture, so when pasture slowed down the farm had to provide the additional feed.

Table 3 – Summary of Rental Charges and Economic Cost

Rental Charges
Cow-calf pair/day, $.40
Per pound of calf gain , .15
Cow-calf pair/season, 50.00

Economic Costs
Pasture & feed costs/pair/day, . 82
Pasture & feed costs/lbs of calf gain, .30
Pasture & feed costs/pair/season, 120.51

A number of observations can be made from the results of this first year of the project.
- Animal performance for this demonstration was comparable to other similar grazing demonstrations in Iowa. The 5 years average at the Adams County CRP cow/calf grazing project showed average daily calf gains of 2.33 pounds and calf gain per acre of 213 pounds with a stocking density of .62 per acre on the 13 paddock systems. On their 4 paddock system the average daily calf gain was 2.38 pounds per day 210 pounds per acre with a stocking density of .60 pair acre.

- The grazing season was shorter then desired. A cool and wet spring slowed early pasture growth and delayed the start of grazing. Some drier weather in late summer also slowed growth more than anticipated. The pasture supported about 4 animal units months (AUM) per acre. The goal of the project was to get 150 to 180 days of grazing with no supplemental feed. That would increase AUM’s per acre to 4.3 to 5.1 respectively and be above the 1995 state beef cow business records average 4.0 AUM’s per acre under more conventional systems

- Total calf gain was 10,635 pounds. If priced at the river market price for the week of September 15th of $60.50 per hundred weight, the value of the calf gain on pasture was $6,434.18 or $142.98/acre. Based on the renter’s cost, the return on the use of the pasture was $4,905.38. Based on an owner’s cost if the same set of cattle were grazed, the return would be $3,359.10 or $74.65/acre. No labor costs for moving cattle was included in the costs, but does need to be considered with additional time spent handling the cattle. Producers looking to lease pasture or develop their own rotational grazing system need to evaluate all costs. Initial startup investments need to be watched. Perimeter fence, water system and corral facilities can be amortized over a number of years. The fertilizer cost for the first year of this project was high. Future years will generally just be nitrogen fertilizer. When start-up costs are kept low, increased profits can be realized. Labor was not recorded for moving cattle. This is another aspect in future years that would be valuable to collect.

Even though we experienced problems of implementing this project, we felt we realized a greater return from the marginal acres than we had before. The initial expense of water distribution, fencing and building the corral is certainly a deterrent and a reason for obtaining grant money top help. These expenses can be prorated over the ensuring years to justify the change and help to sustain this phase of agriculture. The board feels we should demonstrate this further by incorporating more of the buffer strips into rotational grazing. With this in mind we seeded buffer strips 5G and 5K with a pasture mix of Kura clover, creeper alfalfa, and Satin orchard grass this year and it is coming along well. We plan to incorporate buffer strips 5G, 5H, 5I, 5K and 6A into the total number of acres in this pasture for the future.

I envision being able to graze more cows and calves per acre of pasture than has been done in the past. If a producer were to ask me if he should launch into a project like this with his herd on his farm with marginal land he is now cropping, I would ask him some questions such as:
1) How many cows do you have or expect to have?
2) Do you want to take full advantage of the explosive growth of grass and legumes in the spring and begin grazing earlier?
3) Will you fertilize your pastures and incorporate legumes with your grasses?
4) Are you willing to plant warm season grasses for available grazing in a dry summer?
5) Do you want 400# to 500# calves when you wean them early and without creep feeding?
6) Can you sustain your marginal acres with the cropping procedures you are now maintaining?

OUTREACH
On June 13, 1996 the AJDF had a field day when the public was invited to have a hamburger, beans, and potato salad provided by the Jackson County Cattlemen and to see the many projects being conducted at the farm. Approximately 63 farmers from primarily Jackson County were there but only a few observed this part of our intensive grazing project primarily because of the trouble we had “getting into gear”. On August 27th a field day was held particularly focused on this cow/calf intensive grazing and the intensive grazing with the steers. Fifteen farmers and Extension personnel signed the roster and observed what had been done with the cow/calf portion of intensive grazing. I was the moderator. Many questions were brought up and the interest in the project was observable. The local paper and radio station in Maquoketa as well as WMT Radio of Cedar Rapids disseminated the forth coming events of June 13th and August 27th.