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Use of Irrigated Pastures and Economics of Establishment and Grazing

Use of Irrigated Pastures and Economics of Establishment and Grazing. Jerry D. Volesky Range / Forage Specialist West Central Res. & Ext. Center 461 West University Drive North Platte, NE 69101 (308) 532-3611 ext. 147 jvolesky1@.unl.edu. Richard T. Clark Interim Head

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Use of Irrigated Pastures and Economics of Establishment and Grazing

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  1. Use of Irrigated Pastures and Economics of Establishment and Grazing Jerry D. Volesky Range / Forage Specialist West Central Res. & Ext. Center 461 West University Drive North Platte, NE 69101 (308) 532-3611 ext. 147 jvolesky1@.unl.edu Richard T. Clark Interim Head Department of Agricultural Economics 102 H.C. Filley Hall Lincoln, NE 68583-0922 (402) 472-3401 rclark3@.unl.edu

  2. Planning Considerations • Grazing forage and/or hay needs. • Use within your operation. • Site selection - livestock fence and water development. • Forage type and establishment. • Economics.

  3. Management Considerations • Seeding and establishment. • Livestock fence & water development. • Irrigation. • Fertilization. • Grazing management.

  4. Forages for Irrigated Pasture Annuals Wheat Millet Triticale / rye Sudangrass Oats / barley Sorghum Turnips S X S hybrids Annual legumes Corn CS / WS annual grasses (e.g. ryegrass, crabgrass)

  5. Irrigated Cool-Season Perennial Forages

  6. Irrigated Cool-Season Perennial Grasses Species and Variety Evaluation – North Platte

  7. Species and Variety Evaluation – North Platte Production range (2003): 5.1 to 8.7 tons/acre

  8. Species and Variety Evaluation – North Platte Production range (2003): 5.1 to 8.7 tons/acre

  9. Irrigated pasture mixture: Example 1 Species lb / acre Seeds / ft2 Cost/acre1 Orchardgrass 5 75 $7.50 Smooth bromegrass 3 9 $3.75 Meadow brome 5 9 $12.50 Creeping foxtail 1 17 $6.50 Alfalfa 2 10 $4.00 Total 16 120 $34.24 1 November 2003 Prices.

  10. Establishing Irrigated Pasture

  11. Irrigation Management

  12. Average monthly precipitation North Platte and Torrington.

  13. Irrigation Management • Irrigation: 16 - 20“ /growing season (North Platte). Irrigation + rainfall: 32 – 36“. • Crop water use: 0.20 to 0.35 inches/day. • Applications at higher frequency (5 - 12 days); lesser amounts (0.50” – 1.00”). • Generally applied after a paddock has been grazed.

  14. Monthly rainfall and irrigation water on cool-season perennial grasses, North Platte, 2002. 8.75” 26.75” 35.50”

  15. Fertilization • Seasonal-split applications: 50% early spring, 25% in summer, and 25% in fall. • Spoon-feeding split applications. • Applications timed with forage-need. Forage yield response up to 200 to 250 lb N / acre.

  16. Grazing Management

  17. Rotation Grazing: • At least 5 to 6 pastures (paddocks). • 28 to 35 day rest periods. • Flexibility in pasture movements, haying, stocking.

  18. Example paddock arrangement under a center pivot 7 day grazing and 28 day recovery period / paddock Livestock water . Gates Pivot Head

  19. Using stubble height as a guide for paddock moves.

  20. Effect of clipping stubble height on fall tiller density of 3 irrigated, cool-season perennial grasses, North Platte, 2002.

  21. Grazing Strategies for Cool-Season Perennial Irrigated Pasture

  22. Pairs Yearlings (Range) Pairs Cows or Calves No use - stockpile (Range) Grazing Strategies

  23. Pairs Calves Wean: cows range Yearlings Calves No use - stockpile Grazing Strategies

  24. Grazing Strategies

  25. Economic Considerations • Pasture establishment and development costs • Annual operating costs for grazing and maintaining pasture • Valuing the production and comparison to other alternative uses • Impact on farm program payments • Evaluating irrigated pasture in a system

  26. First-year seeding and pasture establishment costs for a 130-acre pivot.1 Item Cost/acre Seed $36.00 Burn-down herbicide $13.64 No till-drill seeding $12.00 Nitrogen 30 lb/ac N @ $0.23/lb $ 6.90 Fall irrigation water (3 inches) $10.95 Seeding & establishment total $79.49 1 Assumes an August seeding following a summer annual forage crop.

  27. First-year fencing and livestock water development costs for a 130-acre pivot Item Cost/acre 5-pasture cross-fencing (Energizer & 6600 ft. 2-wire HTE @ $0.58/ft1) $31.75 Perimeter fencing (10,560 ft. 2-wire HTE @ $0.41/ft.) $47.10 Livestock water (tank, hydrant & 1320 ft. pipeline @ $1/ft.) $15.46 Fence and livestock water total $94.31 Seeding & establishment total $79.49 Grand total $173.80 1Allows about $300 for energizer

  28. Annual fertilizer and irrigation costs for a 130-acre pivot pasture Item Cost/acre N fertilizer (200 lb/ac @ $0.23/lb) $46.00 P fertilizer (50 lb/ac @ $0.13/lb) $10.50 Irrigation water1, labor & move cattle $81.00 Annual O & M on fence & water $12.00 Total annual operating costs $149.50

  29. Total operating and amortized costs for 130-acre pivot pasture—No land, overhead or management costs (long recovery) Item Cost/acre Total operating costs $149.50 Stand establishment (amortized 25 years @ 5% annual interest) $5.64 Fence and livestock water development (amortized 25 years @ 5% annual interest) $6.69 Grand total annual cost excluding land etc. $161.83

  30. Total operating and amortized costs for 130-acre pivot pasture—No land, overhead or management costs (short recovery) Item Cost/acre Total operating costs $149.50 Stand establishment (amortized 5 years @ 5% annual interest) $18.36 Fence and livestock water development (amortized 5 years @ 5% annual interest) $21.78 Grand total annual cost excluding land etc. $189.64

  31. Value of AUM • Rental value • @ $20/Cow-calf pair. CC pair = 1.4 AUMs so that translates to $14.29/AUM • @$30/CC pair = $21.43/AUM • Feed value based on drylot feeding of Alfalfa diet • Hay only @ $90/ton = $1.14/hd/day for a dry cow or $0.95/aud or $28.50/AUM (dry cow = 1.2 AU)

  32. Value of AUM • Pounds of gain for yearlings • Research at North Platte over 3 years • Yearlings averaged 1.75 lb/head/day for about 150 days or about 668 lb/acre • In some years did see 2 lb/head/day gain for the 150 days or about 800 lb/acre

  33. Value of Gain(1.75 lb/hd/d) for E.WY & W. NE Prices 1992-2001 • Value--May = $88.77/cwt x 6.06 cwt = $538 • Interest cost for 5 months @ 5% = 11 • Total Cost of steer onto grass = $549 • Value Sept/Oct = $75.44/cwt x 8.66 cwt = $653 • Gain in value = $653 - $549 = $104/hd • Value of gain/pound = $104/260 = $0.40/lb

  34. Value of Gain(2 lb/hd/d) for Average Prices 1992-2001 • Value--May = $88.77/cwt x 6.06 cwt =$538 • Interest cost for 5 months @ 5% = 11 • Total Cost of steer onto grass =$549 • Value Sept/Oct $73.51/cwt x 9.06 cwt = $666 • Gain in value = $666 - $549 = $117/hd • Value of gain/pound = $117/300 = $0.39/lb

  35. Gross return comparisons aAssumes 10 AUMs/acre and pair requires 1.4 AUMs/month for grazing period.

  36. Other Crop Comparison 1Costs include use related depreciation on equipment and irrigation system

  37. Short-term net returns

  38. Pasture and the Farm Program • Two types of standard payments • Direct payment (DP) • Counter cyclical payment (CCP) • Both are based on the base acreage in the farm and the payment yield • Base is your historical base that existed prior to the new bill or your updated base which depends on actual plantings 1998-2001

  39. Pasture and the Farm Program • Neither base figure will be impacted by irrigated pasture unless you had some in the 1998-2001 time period and then only if you update. • Payment yields are as you had prior to 2002 bill or as you update based on 1998-2001 • Makes no difference what you plant. Still get these payments if available

  40. Loan and Loan Deficiency Payment (LDP) • Must have crop to receive so in times of low corn and wheat prices, growing another crop e.g. irrigated pasture will impact your payments • Loan rates • Corn & sorghum--$1.98 will drop to $1.95 in 2004 • Wheat--$2.80 will drop to $2.75 in 2004 • Remember, if LDP is in effect, prices for these commodities are low!

  41. Evaluating irrigated pasture in a cow-calf system • Use partial budgeting procedure • Estimate number of cows to be carried with and without irrigated pasture • Examine forage requirements and availability by time period • If irrigated pasture fills a shortage in your forage availability the number of animals should be affected • Estimate the change in costs of cow-calf enterprise due to the irrigated pasture

  42. Evaluating Irrigated Pasture in a Cow-calf System • Estimate change in total returns WITH the irrigated grass • May increase number of cows that can be carried in total • May increase productivity of cows (weaning rates and/or weaning weight) • May reduce costs of heifer development • Compare the change in returns to change in costs see if irrigated pasture pays its way.

  43. Evaluating Irrigated Pasture in a Cow-calf System • If change in returns exceed change in costs then adding an irrigated pasture may make sense • Also look at cash flow of developing pasture • Can I cash flow the establishment costs? • What about costs of expanding cow operation if that is involved?

  44. THANK YOU!(More discussion at the Bull-Pen session this evening)

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