Don't let feed costs eat your profits.
In January's article "The Rubber Hits The Road," page 30, I described a herd where the breeding season was delayed two weeks to allow cattle to remain on crop residue (corn stalks) two weeks longer, which reduced their hay requirement.
The two-week delay also postponed the protein-feeding period as cows entered their last trimester two weeks later and two weeks closer to grass. As a result, purchased feed costs in this herd dropped in FY 1997 to $57.84/exposed female from $101.86.
The optimal utilization of crop residue is an excellent way to reduce feed costs, even if crop residues must be rented. Any time you can allow the beef cow to harvest her own feed, which is what she was designed to do, you save money. The less you mechanically harvest feed, the less you have to feed and the more money you make.
A grazing system is paramount in any operation, especially those in the southern U.S. A properly designed and correctly implemented grazing system can allow you to increase your stocking rate, maybe even double it.
More importantly, a good intensive grazing program increases forage diversity. This extends the grazing period and greatly reduces the feeding period.
In one Georgia herd I reduced the hay requirement from more than 2 tons/exposed female to less than 1 ton/exposed female using a very simple, five-pasture rotational grazing system. At $50/ton for hay, the savings were substantial. In addition, protein supplementation was reduced by 45 lbs./exposed female, another $9.28/exposed female in savings.
Always price your feed by the desired ingredient. Alfalfa hay may be a less expensive protein source than cottonseed cake or soybean meal when priced by ton of protein, rather than ton of feed.
The least expensive feed is normally the least value on a desired unit basis. Cottonseed cake (41% protein) at $300/ton is a much better buy than a 20% range cube at $165/ton. Cottonseed cake is $740.74/ton of protein, while the 20% cube is $825/ton of protein.
Straight urea is usually the least cost protein source. There's a danger, however, of urea toxicity if over consumed or roughage is in short supply, which it normally is during the winter months.
Bid And Buy In Bulk Does your neighbor feed a similar mineral, or does he feed protein supplement in the winter? Get together, early bid the product from several sources and buy in bulk to take advantage of economies of scale. Savings of as much as 25% when buying in bulk are common.
The same goes for hay purchases. Most operations under 1,000 cows shouldn't be putting up their own hay. If a 200-head operation has just $25,000 in haying equipment, the depreciation alone will be $20.71/exposed female, not to mention fuel, labor, maintenance and repair costs.
In most operations, it's difficult to keep production costs of haying below $15/exposed female or anywhere from $5-10/ton of hay. In addition, a ranch that limits or eliminates hay can run more "factories" on the hay ground, or at least on the marginal hay ground (as was described in last month's article).
And, never rely on one haying crew - two or more creates competition. Get them to sign a contract which includes starting date, penalties for delays and incentive bonuses for feed value (quality) and timely harvest. Pay them on a per-bale basis, with a minimum weight to the bale. Get a commitment on how many acres they think they are capable of harvesting each day and monitor it closely.
Don't Overlook Water Water - we often overlook it or take it for granted. Clean, clear, fresh water is one of the least expensive nutrient items we can provide. On a Florida operation, I placed chlorine tablets from a pool supply store in concrete tanks to prevent algae growth and actually improve the smell of the high sulfur water. Water consumption increased, as did milk production and weaning weights.
I often see tanks in the Sandhills where the sand has moved away and calves have to drink water out of the overflow puddles where parasites and disease abound. All it would take is to push some dirt up on the down wind side so calves can get to the tank and get a drink of fresh, clean water.
Feed expense must be worked on constantly throughout the year. Salt and mineral, bid and purchased in bulk for summer grazing, can save several dollars per exposed female annually.
We must also encourage our land-grant universities and breed associations to implement feed efficiency research which will result in feed efficiency EPDs. It's not a new concept. Pick up a swine boar book. One of the main selection EPDs is feed efficiency!
Next month: the challenges presented by land lease and depreciation expenses.
Tom Hogan co-owns and operates AGRI-PLAN Corp., an operational efficiency and financial management consulting firm. For more information or his 100+page manual, "Planning Your Way To Profit," which guides you through the development of an Integrated Business Management Plan (IBMP), call 800/793-1671 or e-mail: [email protected]