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THE ECONOMICS OF BALE GRAZING

Over the last few years, I have had many producers come up to me a year or two after they have heard my presentation and thank me for sharing my bale grazing information with them. They usually end the statement with, “I will never go back.” Bale grazing is a no brainer when you look at it from an economic standpoint. Last month I described a few different methods of bale grazing. Now let’s look at the economics of this system. There are two types of costs when feeding livestock. The first is the actual feed costs (hay and trucking in this case) and the second is the yardage costs (which is the labour and equipment costs — time, fuel, repairs, depreciation and opportunity costs) that go into the work of feeding.

The market sets the price for feed. Most people call this a variable cost. But I can’t control it, so does that make it fixed? Yardage is usually considered a fixed cost, but I have the ability to change it! So is that the variable cost? You decide.

I’ve spent a great deal of time figuring out how to reduce my yardage costs and I have had it as low as seven cents per cow per day. According to the statistics, the average yardage on an Alberta farm last year was about 70 cents/head/ day. That’s where I can make money as a custom operator — I can feed cattle cheaper than most producers because of my yardage. Instead of 50-70 cents, I only charge 40 cents. Do the numbers for your own operation.

To simplify yardage, I charge out my equipment at a reasonable hourly rate. Let’s say a tractor and a bale processor is worth $75/hour. That would cover all the fuel, repairs, labour, depreciation and opportunity costs associated with that equipment.

How many hours a day does it take to feed your herd? Two? Four? Let’s say you have 200 head and it takes two hours a day to feed them. Two hours @ $75/hour divided by 200 head gives you a yardage cost of $0.75/head/day. Now add in the $0.80 (plus or minus) for feed costs, and you end up with a $1.55/head/day. Be honest with yourself. Time yourself from the time you turn the key to when you turn it off again.

If I have the bales delivered to the field and bale graze those 200 cows, all I need to do is pull the twine. What happens to my yardage costs? If I pull twine at 42 bales/hour, and I charge for my quad sitting there turned off at $50/hour, five bales a day costs me about 16 cents/ head/day (5 bales @ 1,300 lb. for 200 cows = 32.5 lb./ head/day).

Still a tough sell? The biggest stumbling block for most producers is the thought of cows trampling all that expensive feed into the ground, especially this year with the feed price where it is. In addition to the “waste,” most producers are concerned with “dead spots” after bale grazing. This is the impeded growth the following spring due to the extra residue left

covering the ground. I have found that the grass quite easily grows through the bale circles by midsummer. (If you did not fall for the “Brown Eyed Syndrome.”) It takes a little longer to get growing if too much residue is left and it also depends on what type of feed you used and how palatable it was. It will take longer for the grass to grow through mature greenfeed or straw residue than with good hay. I have had pea straw bales that left dead spots for up to four years. But normally on my ranch, I have very little impeded growth the following year.

The tendency is for a producer to want to harrow the residue. Resist this urge! I would need to own the tractor and harrows, burn the fuel, and spend the time turning circles. And I see no economic benefit to any of it. My time is more valuable than that! If you leave it, it will grow!

So what is all this “waste” residue worth? On my farm, every day that a dry cow is bale grazed with imported feed, I charge out $0.30/head/day in fertilizer costs to my grazing profit centre payable to my feeding profit center.

I have sat down and gone through different research and compared my numbers to what I have found elsewhere and I am quite confident in my estimation. So is my feed cost $0.30 cheaper than I think? ($0.80 – $0.30 = $0.50/ head/day plus yardage) You decide. I’ve seen the pasture improvement. I have seen the production of a paddock covered by bale grazing, more than double the following year compared to an unbale grazed paddock. And that improvement continues on for years.

Why do I state “with imported feed?” That is because if you are using your own feed off land you manage, you are only transferring nutrients around. It is not a net gain. It’s not a bad thing, but don’t credit the $0.30/ head/day.

And at, say, 80 cents per cow per day, feed is a bigger factor than yardage, right? Wrong, let’s assume that with bale grazing, I’m going to leave more feed on the ground, but for the 59 cents I can save on yardage, I can waste a lot of feed. Even if I waste 15 per cent of the bale, (which I think is quite high) that only costs me about 15 cents/head/day in waste (1,300 lb. X 15% = 195 lb. X 5 bales = 975 lb. at $0.03/lb. = $29.25 divided by 200 cows = $0.15/head/day).

But that 15 cents is fertilizer for the next five to 10 years. And this is assuming we waste no feed with our alternative method of feeding. Let’s see, 200 cows at $0.30/head/day for 200 days equals $12,000 worth of fertilizer value. For Free!!! It was only a management decision that caused it. I also saved all those labour and equipment costs in the process. Like I said, a no brainer! I would be happy to hear from you if you have any question, concerns or complaints. Here’s hoping your cows do all your work for you this winter. Best wishes!

Steve Kenyon runs Greener Pastures Grazing Management in Busby, Alta.,www.greenerpasturesgrazing.com,

780-307-2275.

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Steve Kenyon runs Greener Pastures Ranching Ltd. in Busby, Alta. You can email him at [email protected] or call 780-307-6500.

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