Grass is Plentiful
This year, many in our state may have a fortunate problem – more grass than mouths to put it in. Granted, it is still early in the year, but most drought monitors say we are finally out of our drought situation, and many areas of the state have been receiving adequate – and sometimes too much – moisture. We should have a much better feel for forage production in the coming weeks, as most of our forage production can be attributed to precipitation received by early June.
If we do have a good year for grass, you may be wondering what to do with it. According to the USDA Jan. 1 cattle numbers, our state has roughly three percent fewer cows and heifers than it did before the drought hit a few years back. At first, I thought this number must be wrong. Surely we destocked more in response to the latest drought, but it turns out we never really restocked after the drought of the mid-2000s. As of Jan. 1, we had roughly 18 percent fewer cows and heifers than we did in 2001.
If we get good grass production and we have fewer mouths to feed, the question is, what do we do about it?
I’d be remiss, and likely upset my colleagues in range science, if I didn’t at least suggest letting your range recover after what it’s been through the last decade or so. This is especially important if you did not destock enough in the dry years to prevent damage to your forage supply.
There are plenty of models that show that the long-term benefits of range recovery more than cover the reduced revenue of not fully harvesting a forage crop in a year. If you are interested in this option, I suggest talking with your local range specialist to determine if you should just decrease use on all your rangeland equally this year, change season or timing of use, or if certain areas would benefit from total rest, at least until dormancy.
With that said, I also realize that many people see standing grass as wasted grass and feel the need to utilize at least part of it.
One problem with this approach is the current cost of breeding stock. The going price for bred cows and heifers will limit the amount you can bring home and likely require quite a few years to recover the costs. Both of these issues can be problematic.
Unless you have a sizeable cash reserve, you will need to convince a banker that you can in fact make a profit on bred cows at current costs. With the added fact that one calf crop alone will not cover the price of a cow, you will likely have a hard time sending her down the road if we bounce back into a drought in the next few years. Just look at what’s happening in the southwest right now.
One other option for cow/calf producers is to hold some of your calves back this fall and use them to graze any excess forage you end up with.
Calves are a lot easier to send to the sale barn in May if rains don’t materialize next year, and they can carry quite a lot of value into August.
The graph below shows the increased value of a steer held over into the next summer using Wyoming prices for the last decade. I assume we could have sold a 525-pound steer in October. By using our excess grass during the fall and winter, we have the option to sell him at 725 pounds the following May, if we don’t have adequate grass for our cow herd and yearlings, or sell him at 925 pounds in August, given we end up with good forage production the second summer.
First, I want to point out the graph only shows increases in value, not any production costs. Whether or not it is profitable to hold calves will be dependent on how much it will cost to carry those calves for seven to 10 months, including both opportunity costs of forage and hay and labor costs.
There are two other things to notice in the graph.
The first is that 725-pound steers in May add less value than holding a steer through the summer, and you are less certain of the added value.
The second major point is that the added value is dependent on corn prices. When corn prices fall, cost of gain in a feedlot is lower, and feeders are willing to pay more for lighter calves. However, when corn prices spike, as they have the last few years, feeders are happy to take heavier animals in order to decrease feeding costs. The forecasts for this year’s corn crop are still relatively optimistic, even though we are starting to hear rumblings of late plantings, but I argue it really is too soon to tell.
Luckily, you don’t need to decide what to do with your calf crop yet. I would watch what is going on with the corn crop though, and if yields fail to materialize as currently expected, there very well could be some money to be made in holding at least some of your calves over winter, as long as you have adequate grass to support them.
On that note, I hope you end up with the problem of too much grass this year; it is one of the better problems to have.