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Superintendent
David Davis
21262 Genoa Road
Linneus, MO 64653
Phone: 660 895-5121
FAX: 660 895=5122
Email: DavisDK@missouri.edu

Economic Analysis of
Alternative Grazing Intensities

While Management Intensive Grazing (MIG) has been shown to improve animal gains per acre via greater utilization of forages and higher stocking rates, the question of economic feasibility still remains. The substantial investment in fence and water system that can come with a move to MIG has many producers wondering if the costs are justified.

Materials and Methods: Using data from the MU Forage Systems Research Center for the years 1992-94, we compared the costs and returns for three different grazing systems: a 3-paddock system where cattle are moved about every two weeks (Low management); a 12-paddock system in which cattle were moved every 3 to 4 days (Medium management); and a 24-paddock system where cattle were typically rotated every day (High management). Each grazing system is a cool-season grass legume mix, with costs representing an 80 acre unit. Cow/calf pairs enter the pastures in spring, as well as stocker steers which are used as forage management tools. Animal weights were taken at the beginning and end of the grazing season and at 28 day intervals through the season, the cow/calf pairs coming off late October while the steers only graze for about 3 months on these acres. Steers are man- aged as forward grazers in the High and Medium systems while they graze in the same paddock as the cows in the Low system. Stocking rates for the cow/calf pairs begin at .31 pairs/acre in the 3-paddock system on up to .48 pairs/acre for the most intensive system. Likewise stocking rates for the steers increase with intensity.

Results: Table 1 on the opposite page presents animal performance data and economic returns for each of the three systems. Calf average daily gains (ADG) were greater under the two lower intensity systems, reflecting the benefit of increased diet selectivity afforded the animals under these systems. But calf gain per acre follows the pattern of intensity due to the stocking rate effect, being lowest under the 3-paddock system and highest under the 24-paddock system. But when we adjust these figures for calving percentages (since cows that don't calve are replaced with those that do in order to measure gains per acre when fully stocked), there is only a slight edge in pounds per acre for the 24-paddock system versus the 12-paddock system, but both are signifi- cantly above the gains in the 3-paddock system.

Steer gains, both on an individual animal basis and on a per acre basis, improved as intensity increased. This resulted from the greater consistency in forage availability as well as higher quality diet provided the forward grazing steers by the faster rotations. When animal gains and hay raised are combined and valued as potential income, returns from the 24-paddock system exceed $191 per acre while the 3-paddock system only generated $132 per acre gross returns. The 12-paddock system fell in the middle at a 3-year average of $175 per acre gross returns.

Pasture fence, water and establishment costs in Table 1 represent actual development costs for the grazing systems, spread over 10 years at 8.5% interest. The expense amounts shown would be the annual principal and interest payments on the loan. While certainly only interest is a deductible ex- pense, the principal portion represents depreciation expenses for the asset spread over 10 years. Fence costs are based on permanent installation of single strand 12.5 ga hi-tensile wire for all paddock subdivisions. Water is based on permanent installation of 1" HDPE pipe buried at 42" and open stock tanks.

Fertilizer costs are based on calculated nutrient removal rates based on soil tests taken in 1992 and 1994. Clipping is based on actual number of acres clipped in each system averaged across three years and charged at $5/acre for each mowing.

Salt, mineral and veterinary costs for the systems increase with intensity, due to the higher stocking rates per acre. Animal investment costs represent an 8% opportunity cost for money tied up in livestock ownership, adjusted for the length of time grazing these systems and stocking rate.

Bottom line net returns measure income above the pasture and animal costs outlined above. These figures represent income left per acre to cover additional expenses such as taxes, commissions, hauling, and most importantly overwintering and breeding costs. But remember that the calf weight (approximately 150 pounds) prior to going to grass is not valued as income in this analysis, and is thus available to pay for these costs as well. If valued at $0.85/lb., this $127.50 can go a long way towards meeting these expenses. If this value covers costs not included in the above analysis, then the bottom line shown represents returns to pasture per acre. You can look forward to an analysis of these costs at F.S.R.C. in a future issue of this newsletter.

                             
 Table 1.  Performance levels, costs and returns for alternative
 grazing systems at the MU Forage Systems Research Center, 1992-94    
 
                      3 Paddock      12 Paddock          24 Paddock         
                     -----------------------------------------------
Cow-calf pairs/acre     0.31               0.38           0.48       
Grazing days - cows      225                212            215        
Grazing days - calf      181                181            181        
ADG - calf              2.27               2.30           2.03       
Gain per acre - calf     126                156            176        
Conception rate         95.0%              97.2%          90.0%      
Steers per acre         0.35               0.44           0.54       
Grazing days-steers       88                 88             88
ADG - steers            2.01               2.16           2.17
Gain/acre - steers        62                 83            102

Returns per acre
Calf gain @ $0.85    $101.75            $128.89        $134.64
Steer gain @ $0.50     31.00              41.50          51.00
Net hay production      0.00               4.48           5.50
                     --------           --------      ----------
Total returns        $132.75            $174.87        $191.14
Pasture costs/acre 
Fence (10yr @ 8.5%)   $ 0.84             $ 2.91         $ 5.49
Water (10yr @ 8.5%)     2.44               3.87           5.22
Estab. (10yr @8.5%)    14.52              19.23          19.23
Fertility (removal)     2.31               3.77           7.66
Clipping                4.44               1.59           0.27
                     ---------          --------      ----------
Pasture costs         $24.55             $31.37        $ 37.87
Animal costs/acre
Salt, minerals-cows    $3.39              $4.16          $5.26
Salt, miner.-steers     2.37               2.91           3.68
Veterinary-cow/calf     3.26               4.00           5.05
Veterinary-steers       2.28               2.80           3.54
                     ---------         ---------       ---------
Animal costs          $11.30             $13.87         $17.53
Interest costs
$600 cow @ 8%          $9.17             $10.59         $13.57
$425 steer @ 8%         2.87               3.61           4.43

Total pasture,
animal & int. costs   $47.89             $59.44         $73.40
                     --------           ---------     ----------
Income above pasture,
animal & int. costs   $84.86            $115.43        $117.7