Profit/acre matters, not just returns/cow
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Managing for profit per acre, not just return per cow, can improve the bottom line of the whole operation.
Big calves and heavy average weaning weights make good coffeeshop conversation. But measuring production and profit for the whole operation or even per acre is better for management.
“Producers manage both land and cattle, and the land deserves attention because it plays a significant role in overall profitability,” says Scott Flynn, Ph.D., a field scientist with Corteva Agriscience. “Keep the big picture in mind — total profit to the operation.”
Economists typically calculate cow/calf budgets on a per-cow basis. The bottom line is profit or loss per cow. But if a producer narrowly focuses on the individual cow, there are potential pitfalls to profit, Flynn contends.
One of those pitfalls is understocking, explains Kenny Burdine, Ph.D., an agricultural economist with the University of Kentucky.
Cows in understocked pastures could show large returns per head, but low returns per acre. A higher stocking rate may decrease individual performance but yield more total return.
“Looking at production and profit on a per-acre basis can be very helpful,” Burdine says. “Run returns on a per-head basis, and then express the same thing on a per-acre basis. Just one or the other could be misleading. It’s usually a good idea to think about profitability for the overall operation.”
HAY AND PASTURE COSTS
Hay and pasture are typically the two biggest cost items in a cow-calf budget, Burdine says. Those are starting points to affect profitability.
It’s a little easier with a per-acre mindset, Flynn says. “Thinking per-acre, it follows then to grow more grass and harvest it more efficiently.”
Where do you start?
Better grazing management offers huge potential, Flynn says.
“It’s no problem to increase carrying capacity by 20% minimum based on a rotation that allows 30 to 45 days of recovery before it’s grazed again,” he says. “Grass production goes through the roof compared to continuous grazing. You can often double carrying capacity.”
Don’t waste resources on broadleaf weeds.
In competition for resources, a pound of broadleaf weeds (measured at end of season) will cost you 1 to 1.5 pounds of grass, Flynn says. That’s before you consider that some weeds — because of thorns or stickers — act as a barrier to grazing. You can recover those losses by spraying, especially with a soil residual herbicide.
In improved pastures, pull a soil test. It will help you optimize production per acre.
“Be aware that maximum production may not be the goal,” Flynn says. “There is a point of diminishing returns where more fertilizer doesn’t give yield enough extra production to cover the extra cost.”
USE EXTRA FORAGE
Some producers stock lightly so they’re always prepared for drought. That could mean foregoing several years of extra production, Flynn says. Instead of increasing the cow herd, there may be other ways to use extra forage and stay flexible. Grazing management really helps here.
“Maybe you could bring in cull cows to fatten for a short window of maybe 90 days in the spring, put 200 pounds on them and send them back to market,” he says.
Burdine suggests stockpiling forage for winter pasture so you don’t have to feed as much hay to the cows. “Or wean calves on stockpiled pasture,” he says. “Then pay weight goes up with little additional cost.”
Land productivity is key, Flynn contends. “Grandad’s stocking rate may not pay for the ranch today,” he says.
“The key is to run more cattle per land unit, use less stored feed, reduce feed costs and lower your overhead.
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