Published: April 14, 2008 04:14 pm            

Fertilizer prices, commodity prices cause dilemma for cattle producers

Beef cattle production in Southeast Oklahoma is primarily a forage and grazing based industry. Over time, the predominant forage system has evolved from a low input native system to a high input system relying on introduced forages and relatively cheap fertilizer. This system will work as long as cheap fertilizer is available, but with the recent steep escalation of fertilizer prices our cattle industry may have to rethink their high input forage and cattle production methods.

History

It might be interesting to review how Southeast Oklahoma became so reliant on introduced forages and fertilizer. The first step toward bermudagrass becoming a predominant forage grass began with the soil bank program of 1956.  The government paid farmers to remove cropland from production and the forage of choice at that time was apparently bermudagrass. Bermudagrass was relatively easy to establish and responded favorably to fertilizer. Bermudagrass also supported a higher stocking rate than native range. Recently, more cropland was taken out of production due to urbanization, smaller acreages, land prices that were higher for pastureland and low grain prices. Again, the forage of choice was usually bermudagrass.

In the 1970’s there was a large amount of tall fescue, a cool season perennial grass, planted to extend the grazing season beyond what was bermudagrass. OSU released a fact sheet titled “Tall Fescue Establishment and Management” in 1971. In 1973, fescue was reported to be the predominant cool season forage grass in the United States. 

Both of these forage grasses had been selected to respond favorably to fertilizer inputs and allowed more cattle to be grazed on fewer acres than was possible with a predominantly native forage system. Fertilizer, during this time was relatively cheap and this high input system worked economically.

Cause and Effect

So, w now have forage systems based on high inputs and cheap fertilizer but the economics have changed. In the past 2 years fertilizer prices have increased dramatically.

Nitrogen has increased 50% from 34¢ to 51¢ per pound, phosphorus by 304% from 22¢ to 89¢, and potassium is up 127% from 22¢ to 50¢. These increases have been attributed mostly to the increased world demand and transportation costs.

Forage yields from introduced forages can be increased by about 1 ton per acre for each additional 50 pounds of nitrogen up to a reasonable limit based on expected rainfall and the water holding capacity of the soil.  Reasonable yield goals for bermudagrass can be as much as 3 to 5 tons per acre and 2 or 3 tons from fescue. Soils in Southeast Oklahoma are also typically deficient in phosphorus and sometimes potassium, which are needed where nitrogen is applied.

A typical stocking rate for a low input (no fertilizer) native range type grazing system in Southeast Oklahoma would be 1 cow to 10 or 12 acres. With more introduced pasture and fertilizer the carrying capacity could be increased to 1 cow to 4 acres. Over the past 2 years the cost of fertilizer across a range of stocking rates has increased by approximately $70 to $100 per cow. If you assumed gross sales of $580 per cow unit including both calf and cull cow sales, then the amounts that have to pay for all the other expenses (land, labor, health, supplemental feed, etc.) will be decreased. These numbers will be different for all ranches but should be considered as low on the expense side and high on the return side.

 Surveys have shown that many cattle producers increase stocking rates without purchasing adequate amounts of fertilizer and without the benefit of soil test recommendations. As a consequence the amount of hay required increases adding even more cost to the forage system. In other words, the rancher that has a stocking rate of 1 cow to 5 acres but does not fertilize is probably feeding hay for nearly 6 months, and fighting a continuing battle with “forbs” or, as they probably refer to them, “weeds”.  Fuel, Equipment, and fertilizer prices will drive up the value of a bale of hay with or without fertilizer.  Fertilizer alone has in effect increased the cost of feeding hay between $20 and $30 per cow per month assuming about 1000 pounds of hay is required per cow per month. 

Responding to Reality

Based on the previous discussion it becomes apparent that survival in the cow calf business may require changes away from the high input low efficiency systems that we have evolved to. So following are some recommendations to consider. 

Fertilize Fewer Acres

First, determine how much it costs, or how much profit potential there is, in maintaining a cow without purchasing any fertilizer... Use a stocking rate that does not require purchasing any additional hay and relies on the cow to harvest her own forage. 

Then determine how much it will cost to add additional cows.  If the decision is to apply fertilizer then fertilize to achieve optimum yields on fewer acres. It is possible to double the stocking rate from a no fertilizer stocking rate of 1 cow per 10 acres to 1 cow to 5 acres and only fertilize the best 15% of the acreage. As an example, assume 1 cow requires 12,000 pounds of forage per year. Then 10 acres that yields 1200 pounds of harvestable forage per acre is 12,000 pounds of forage. Two cows per 10 acres will need 24,000 lbs of forage per year. If 8.5 unfertilized acres produce 10,200 lbs of forage, this will leave a deficiency of 13,800 pounds that will have to be made up from 1.5 acres.  That means the 1.5 acres will need to produce 4.6 tons per acre which should be possible if fertilizing only the best soils. Will the additional cow cover the additional cost? 

Soil test results should be used to identify the acres requiring the least amount of phosphorus and potassium. The soil test recommendations for P and K are the amounts required annually to achieve optimum yields and do not change as the yield goal increases.

 So, fertilizing for a higher yield goal on fewer acres of the best soil reduces the cost per ton for these nutrients. In a high yield system, regular soil testing at three year intervals is especially critical.  Fertilizing fewer acres of the best soils for higher yields is a good policy to follow even as stocking rates are increased beyond a cow to 5 acres.  Most producers that have fertilized in the past could maintain the same number of cows and still fertilize fewer acres by fertilizing for higher yield goals. But is it important to run the same number of cows? With fewer cows the work load is reduced, less hay would be needed, and cow performance often improves when stocking rates are appropriate.  Fewer cows might be the more profitable option and be more enjoyable.

 

Add Legumes

Incorporating legumes into a grazing system could help reduce the amount of nitrogen fertilizer required. Experience over several years at the Eastern Research Station near Haskell, Oklahoma demonstrated that cool season legumes could provide grazing equivalent to non-legume pastures that had been fertilized with 150 pounds of nitrogen per acre. Legumes are not easy to grow and maintain or everyone would have them.

Phosphorus, potassium, and pH are critical considerations for establishing and maintaining legumes. If you are not committed to soil testing and fertilizing as recommended, then the legumes will fail. The next critical step for legumes is residue management. Cool season legume pastures need to be grazed or hayed to accomplish a short (less than 3 inches) residue height during the fall or winter. Therefore, legumes will not work well in pastures that are stockpiled during the summer and fall for winter grazing.

 

Multiple paddocks are required to accomplish the necessary residue height in the legume pastures while saving other paddocks for winter grazing.

 

Also, many producers are hesitant about establishing legumes because of their desire to spray pastures on a regular basis.

 

Improve Harvest Efficiency

 

Research has generally shown that carrying capacity on introduced forages such as bermudagrass and fescue can increase 40% by implementing a multiple paddock grazing system. This assumes the stocking rates were correct initially and if so the pay-off could be in less fertilizer, less hay, and more gain per acre.  A large, grazed bermudagrass pasture typically fertilized with 150 pounds of nitrogen per acre might provide the same amount of grazing with 90 pounds of nitrogen if cross fenced into smaller paddocks. This would also contribute to successfully managing legumes.

 

Feed Less Hay

 

With high fertilizer prices, and higher input costs, hay prices can be expected to increase. Every month that a cow can graze stockpiled forage saves conservatively $20 per cow in harvest and handling costs. Also, if fewer acres are fertilized due to high fertilizer prices, then there could also be less hay available. A past OSU Range Nutritionist once said the worst thing that ever happened to the cow calf industry was the invention of the round baler because it made feeding hay too easy. Changing the forage system to feed less stored forage and rely on the cows to harvest their own will be increasingly important.

 

Summary

 

Bermudagrass and tall fescue were originally introduced to complement native range. But in parts of Southeast Oklahoma we have nearly replaced native range with introduced forages. Now our grazing systems may once again rely on low input grazing strategically complemented with introduced forages.  This discussion should have built the case for modifying grazing practices. The suggested changes and alternatives are no different than our past extension recommendations for economic efficiency, but the urgency of implementation has increased.

 

Human nature is to resist change. Too often, some in the cow calf industry are slow to make necessary changes when faced with a changing business environment. This has the effect of extending a crisis into the next year’s calf crop. Don’t let that be you. The current price structures justify careful evaluation of our livestock production systems.



 

 





 

 

 

 

 

 

        

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