University of Manitoba agribusiness and agricultural economics masters student Tanis Sirski is currently wrapping up the economic risk and return analysis of the birth-to-weaning phase of the time-of-calving study reported in our story “A Tale of Two Calving Systems on the Canadian Prairies” on page 10. She reported her findings at the recent Manitoba Grazing School in Brandon.
Sirski’s economic analysis involved compiling all of the financial data for the two calving systems at each of the three locations — Swift Current, Lanigan and Brandon. The calving period for the early calving was from March, April 1 and the calving period for the late-calving system was from May, June.
Actual costs were used for some parameters, such as feed components in the four feeding systems (drylot, swath grazing, bale grazing, pasture). Various resources were used to estimate the cost of items such as pasture rent, land rent and cross-fencing for swath grazing and bale grazing, as well as for variable costs including manure removal, building repair, utilities, breeding, taxes, water, insurance, livestock transportation expenses, fuel use and expense. Labour was included $15 per hour.
A simulation model using the cost-of- production analysis was used to compare the degree of economic risk associated with each of the two calving systems at each location. Set values were entered for birth, death and replacement rates, average cull cow weight, feeding system costs, health care, marketing, trucking, water, taxes and salt and mineral expenses. The values for not-set (simulated) costs and revenues were selected from the range of values obtained during the production trials and historical prices from Canfax. Those included calf price, cull cow price, calf weaning weight, and days in each feeding system.
Sirski says the differences within each of the four feeding systems at each location accounted for most of the variation in her results. For example, bale grazing at one location involved setting out a bale each day, while another location set out enough bales to last for a couple of weeks.
Averaged over two years at all sites, production costs were lower for the late calving than for early calving, with environmental conditions and location being the predominant determining factors.
Breaking that out by location, there was very little difference in drylot costs in the two calving scenarios at Brandon, while Lanigan reported a 13 per cent drop in drylot costs with the late-calving cows and Swift Current showing a 31 per cent reduction. Average drylot costs per head per day for the early-calving system were $2.62 at Swift Current, $2.25 at Lanigan and $2.74 at Brandon. For the late calves, they were $1.80 at Swift Current, $1.96 at Lanigan and $2.70 at Brandon.
Relative to drylot costs, bale grazing substantially reduced the feeding cost per head per day in the early calves at Lanigan and Swift Current. However, that wasn’t the case in the late-calves system where bale grazing costs were almost equal to drylot feeding. The average bale grazing cost per head per day was nine per cent higher with late calving than with early calving at Lanigan and 5.5 per cent greater at Swift Current. There was no actual bale grazing used on early-calving cows at Brandon.
Average pasture costs were higher for late-calving cows at all three locations, largely due to supplemental feeding while on pasture. Brandon saw the greatest difference with a 10 per cent increase for late cows over early cows. Pasture costs varied by only one per cent at Lanigan and five per cent at Swift Current.
The variable costs for swath grazing averaged over the two systems was 29 cents per head per day at Brandon and Swift Current, and 40 cents at Lanigan.
Overall, there was little difference in the production costs between the two systems at Swift Current. Lanigan lowered its production cost by 10 per cent with the late-calving system, while Brandon realized a savings of five per cent.
The true tale is in the net revenue. Revenues were the same for both systems at Lanigan and marginally lower for the late-born calves at the other two locations. But the lower costs with the late-calving cows improved the bottom line at all three locations. Net revenues were 20 per cent higher at Swift Current and close to 20 per cent better for late-calving herds at Lanigan and Brandon.
It’s a different picture when the results were evaluated in terms of economic risk, says Sirski. Overall, the total risk was higher for late calving.
Put simply, Sirksi says there wasn’t as much income from the late calves as there was from the early calves. For one thing demand and prices for newly weaned calves in October are typically higher than in January. Compounding that, the weaning rate (calf survival rate) was 92 per cent for the early-calving system and 89.5 per cent in the late-calving system. Averaged across all sites, the average daily gain was 1.13 kg per day for the early-born calves and 0.95 kg per day for the late-born ones.