If $80 is the going rate then that is the number you need to use. Not using fertilizer only works for me on continuous swath grazing ground where there is an abundance of natural fertilizer. Using your high value land I suggest a higher value crop needs to be grown.
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Just east of Red Deer Alberta.Actually the $80/ac is on a cash up front rent but the other two ways are 1/3 crop share less 1/3 fert and spray...or 22 bu. feed barley cash based on Jan 1 price next year.
Typically barley(Bold) yields in that 90-110 bu area and canola 50-65.
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Land rent here is avg 40 bucks/ac
Most years if you fert and spray you can get 6 or 7 big round bales/acre. I saw this last year first had baled with a jd 567 net wrap baler...a bale every 225 or so feet. Oats crop.
To pay 80 bucks acre for rent you better be soil testing fertilizing and spraying other wise it won't work economically and soon they won't want to rent to you.
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I will assume a reasonable number to use is 1.5 acres to winter a cow in your area.
Since your cows need to eat I think it is more accurate to compare swath grazing to feeding hay rather than rent to swath grazing. Rent is mutually exclusive from swath grazing. You can rent the land to someone for $80 per acre or you can swath graze it but you cannot do both. If you decide to swath graze it then your return is what you saved by not buying hay to winter your cows minus the cost of producing the swath grazing. Remember the cows have to eat.
See:
http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/agdex8908
If 11 pounds hay is substituted for 6.6 pounds barley and barley is worth $3.75 per bushel then hay should be worth over $90 per ton. I think it is unreasonable to think you will buy hay this fall for $50 per ton like last winter and while people may resist paying $90 per ton the price of hay is sure to rise. I think $80 per ton or more for hay this fall.
A simple ration of 25 lbs hay at .04 cents per pound and 10 pounds straw at .02 cents per pound will cost 1.20 per day per cow. Yardage (tractor etc.) another 25 cents per day…total $1.45 per day. Figuring a 170 day feeding period suggests this coming winter it will cost about $250 to winter a cow on a hay straw ration. If it is a cold winter figure $300 but then the cows will go through the swath grazing faster too.
If so, then the value of the swath grazing is that $250 hay/straw wintering cost divided by 1.5 acres per cow or about $166 per acre gross return.
Now for costs….something to keep in mind is if you have to get seeding and cutting custom done then by all means use custom rates in your costs. But if you have that machinery yourself then something to consider is if you rent out the land your machinery sits idle. If you would not otherwise do custom work for someone else then you should only calculate the actual relevant cash costs of seeding and cutting, such as fuel, grease, repairs but not ownership costs or custom rates.
I would suggest a more reasonable cost for swath grazing would be more like $100 per acre (not including the $80 per rent) and that still seems high to me. Your net return with swath grazing is about $65 per acre. If you really do spend $60 per acre on fert you then should be able to boost the production.
You would be better slightly better off to rent the land out and purchase hay for $80 per ton (keeping in mind how much trucking might add cost on the hay). Your break even level is 1.3 acres per cow. If by reducing costs, reducing waste and/or increasing yield you can get each cow through the winter using less than 1.3 acres of that good productive land then it might start to pencil out to swath graze and maybe even look better then rent.
Something to keep in mind is swath grazing may not remove as many nutrients as would be removed if the land were rented out to someone else. Also if you buy hay you are adding nutrients to your land. However the rent is risk free and that is something to keep in mind too.
I tried to check for errors but some may be found. Been driving tractor all day and it is getting late. It is an interesting question.
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advise from someone who didn't soil test, may not fertilize or spray....but I own the land have only one neighbour on one side and no road going by the field. Also the only way I can work on Sundays with out getting shot at. Never used fert last year or sprayed and on new land likely would have got 4 to 5 bales an acre.
My neighbour is planning on spraying on fertilizer...a foliar application. I think I will get him to do a test pass accross my pasture and oat land.
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Thank you for all the input on this subject. I have often thought about trying swath grazing in the past and have always had a problem with the numbers working for me.
Presently I am in a "sell down mode" in regards to cattle. The plan is to phase completely out by 2012 and was started in 2009 (a dry year here)....which was the first year we never kept any heifers.
I do own some boggy land that can't be cropped and it will be a challenge to use it profitably without cattle.
Breaking up the remaining hayland and "cropable pasture" this fall.
Will have enough pasture on the boggy land to graze a reduced cow/calf herd until Oct 2012...then they all go. Might consider selling the cows this fall if prices are good. Not really turned off by the cattle business...just getting too old to get the work done!
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My suggestion if you are in an area that is $80 / acre is to sell or rent it out... you cannot justify running cows on that for swath grazing... that's $12,800 / quarter rent!!!! there are places to run cows and there are places that are just to expensive to make it work.
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gaucho brings up a good point. Perhaps a
better solution is to rent the land out
for a lesser price and get the renter to
run a jones buncher of likewise, and graze
your cows on the aftermath of crop
production.
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Best idea yet since I am a genius. Grow corn fer silage on the land, duh. We'll say 10 MT yeild per acre on the low end X 2204.62 lbs = 22046.20 lbs of silage per acre. Should be able to push 15 MT plus per acre in the Red Deer area with good management & Pourin the nutrients to er'. Now that you know what I just told you, plug in yer numbers of how many lbs per day yer gon feed per cow, acres needed, number of head, etc. Should be able to find a guy out that way to put it all up fer you fer $1000 - $1200 an hour & within a day all yer feed is made, go to the beach all summer. That Simple.......
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For me the above discussion confirms that even at today's improved prices for cattle grain will continue to bump cattle out to areas that are to risky for grain production. This is happening world wide.
Seems to point to smaller numbers in traditional production areas.
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A couple of thoughts...
We don't see a lot of waste with swath
grazing, however it does require fencing
and some effort. We are running about
20 minutes of work, once a week. We
feel this is much less than if we were
to feed cattle and start a tractor every
day. This needs to be penciled in.
Land will produce what it produces
whether you grow it and bale it, or grow
it and graze it in place. Crop and
variety choices, as well as agronomics
will affect the overall production.
How that crop is harvested/marketed is
also up for grabs.
For some that alternative to swath
grazing is to sell a cash crop and buy
feed, or to bunch crop aftermath, or to
feed in confinement. Just be fair with
your costs. If you have cows anyway,
the opportunity costs (eg: renting land
out) might determine if they are a good
enterprise, but this doesn't change the
fact that you need to feed those cattle
the most cost effective way possible.
If you own the land $80 per acre rent is
an economic cost, but not specifically a
cash cost. Assets used in production
should be valued at cost for accounting
purposes, but obviously should be valued
differently for decision making.
Costs we don't have with swath grazing
are:
feeding labour and equipment (greatly
reduced)
corral cleaning
fertilizer (longer term benefit)
baling
hauling
yardage (greatly reduced)
Winter grazing is a very different way
of doing things for most people
(whatever crop they are grazing), but
there can be big time cost savings with
no impact on animal performance.
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