Ranch Talk

[dmount]

Range Livestock Systemics
– Eric Peterson
Nope, were not talking about some new wormer! The Wyoming Extension Range Livestock Team is taking on the challenge of looking at various elements of the systems operating in Range Livestock operations in Wyoming. Too often, articles, advertisements, workshops, and opinions fail to look at the total system. We pledge to always keep the system in mind. To that end, we introduce Range Livestock Systemics as an avenue to tackle an issue in Range Livestock Production, look at it objectively from a number of angles, and maybe toss out some things to think about. In this first issue, we will look at energy costs.
Watch for future Range Livestock Systemics featuring multiple viewpoints on a topic! We have articles in the works dealing with the topics of Supplementation and Range Based Heifer Development – surely interesting topics to anyone in Wyoming’s Range Livestock industry. We would also invite you to visit Ranch-Talk Forum, the home of his project, where you can read the thoughts of others on this and many other topics.

Energy costs in the Ranch Operation
Fuel costs are, without a doubt, the hot topic in about any gathering of stock growers. In agriculture, we are incredibly reliant on fuel. And, as fuel prices go, so go the prices of most of the other inputs that we use. When summer diesel prices approached the $5/gallon mark; gasoline was over $4. Oils, lubricants, fertilizers, pesticides - everything dependent on energy prices set record highs. So, what can be done about it? A doubling of the fuel costs account in our budgets cannot go un-noticed, nor unmanaged. To help livestock producers think about ways that they can reduce the financial impact of increasing fuel costs, we’ve assembled here the thoughts of a number of folks we have challenged to provide some insight into this question of managing high energy costs. Here are the categories we’ve assigned. To share your thoughts about the strategies presented here, visit Ranch Talk Forum at http://ranchtalk.forumer.com/
Slowing the Flow of Fuels in Your Machinery and Vehicles, by Hudson Hill
Often simple measures can help reduce fuel cost and increase efficiency. Regular maintenance and care of equipment, including keeping air and fuel filters clean is a key factor in improving fuel consumption for farmers and ranchers. Additionally, there are a few other examples farmers and ranchers can do to increase fuel efficiency in their tractors.
First, as with all vehicles, proper tire pressure on your tractor reduces fuel consumption and increases productivity. Studies suggest that this may have as much as a 20% impact on fuel consumption.
Second, when possible match the proper equipment for each job. Using the new “big” tractor may just be a waste of horse power and fuel. Conversely, using too small of a tractor will also lead to poor fuel economy.
As long are we are talking about matching equipment to the job, do you use the most economical vehicle to get around the ranch and to town? Do you really need that 1 ton dually to check water in the back pasture, or could you do it on a 4 wheeler or that old half-ton? Keep in the back of your mind average costs for vehicle fuel, tires, oil, depreciation, etc are close to 60 cents a mile!
Finally, many industry experts recommend following the “Gear Up and Throttle Back” method when using equipment. The assumption here is that often agriculture producers use a tractor with more horsepower than needed for many jobs. If that is the case, significant fuel savings can be obtained by shifting to a higher gear and throttling back. This allows an operator to conserve fuel while maintaining the same field speed needed for the job at hand.

Slowing the Flow of Fuel Dollars into your Hay Production, by Calvin Strom
Fertilizer and fuel are increasing the cost of hay to the point where it may no longer feasible to harvest by machinery. If you feel it is essential to your operation to machine harvest your meadows instead of using them as a source of spring forage and stockpiled fall/winter forage there are some management strategies available to reduce your cost per ton. With the high price of fertilizer several factors need to be addressed. These include your soil type, yield goals, value of production and your cost to harvest.
Do you test your soils and fertilize based on test results and your yield goals? Are your yield goals in the band where fertilizer is most efficient? The research shows that rates between 60-100lbs of Nitrogen per acre are the most efficient on grass based forages and therefore more cost effective than higher rates. The University of Wyoming has a spread sheet available at http://fp1.centurytel.net/sublette/fertilizer.htm to assist you in making fertilizer application decisions based on fertilizer cost/production.
Timing of fertilization of grass forage is critical if you want to receive the biggest benefit from it. Application of nitrogen fertilizer prior to initiation of stem elongation (before the boot stage) is critical for highest yields.
Irrigation water management is crucial to maximizing fertilizer return on investment. If the spring rains have not occurred and the soil is dry, irrigation needs to occur in early May. Delaying watering will reduce yields. When the soil profile is full you need to move that water off the meadow. If you let water pond or stand for extended periods you leach some nitrogen from the root zone. Plus, nitrogen left is subject to de-nitrification where nitrogen you applied is being released into the atmosphere instead of being utilized by the grass plants. This is true of both supplemental nitrogen (fertilizer) and naturally occurring nitrogen.
Consider harvesting steer/heifer and late gestation cow forage in the boot or early flowering (beginning to head) stages. You will likely achieve double digit crude protein in your hay, enabling you to skip or curtail buying expensive protein supplements. You will give up some production but you gain digestibility of the forage. Per ton costs may be higher, but feed is higher quality and you will need fewer supplements, maybe none!
Enterprise selection and production practices which can make a difference by Dallas Mount
How is your operation positioned to face a future that is likely to be one of high energy costs? Are you an energy intensive operation, or do you let the cows do the work for you? Given the nature of Wyoming Agriculture, my comments will focus primarily on livestock operations, although it is just as important for farming operations to consider these questions as well. Here are some changes that can reduce the fuel usage of the ranch.
Stop harvesting hay! If the cost of running all that machinery and labor doesn’t put up hay significantly cheaper then you can purchase hay, then stop doing it. Remember that if you are not machine harvesting those meadows then you have that feed as an additional resource for summer grazing. Grazing meadows during the early growing season and then returning during the late summer and winter should take considerable pressure off the uplands. Granted – not all climates or operations will allow this, but it is something to consider. And, there are very few of us that don’t have a few fields that are either tiny or especially inefficient to machine harvest.
Feed supplemental protein only a few days a week. Research has consistently shown that protein supplements fed once every 3-4 days show almost the same benefit as protein supplements fed daily. Type of delivery and the type of protein fed will play into this. Contact your extension office for more information.
Windrow grazing. Why do we spend so much fuel and effort bailing up and hauling off hay, just to haul it back out and unroll it later? Let the cattle pick it up for you. Research at the University of Wyoming and Nebraska has shown this to be a viable method of wintering cows. There are a few tricks to know that will make it easier if you decide to go this route.
Stop feeding hay altogether, or greatly reduce hay feeding. No I’m not crazy. Some climates in Wyoming may not allow this, but most will. This will however likely involve a total redesign of traditional production systems.
This certainly isn’t an exhaustive list of changes that can reduce the use of fuel on the ranch. You know best what will work on your ranch. Be aggressive in your management and constantly re-evaluate your operation based on current markets and costs.
Strategies to enhance certainty in budgeting, reduction of price risk, by Bridger Feuz
Identifying risks to your operation’s success and taking steps to properly manage those risks is an essential part of long term sustainability. High fuel costs certainly contribute to the overall risk burden that you are facing as a rancher. However, managing the impact of fuel prices can be difficult for an individual ranch. Possible solutions include directly trying to reduce the price variability of purchased fuel, and taking steps to insure against other potential risks.
A couple of reliable methods that agricultural producers use to control production prices can also be applicable to control fuel prices. Many producers forward contract their production, whether it is crops or livestock, to lock in an acceptable price early on so that they can plan accordingly. In many areas this option also exists with fuel prices. Talk to your local cooperative or bulk fuel supplier and see if it is possible for you to forward contract your fuel. If you are unable to forward contract, buying bulk at relatively low price points and utilizing on farm storage may be another option to consider. Another method producers use to control variability in production prices is to utilize the futures market. While this can be a very successful strategy for production prices, in most cases it is not practical for individual producers to utilize the futures market for fuel prices due to the large contract size (42,000 gallons) that is required for these strategies. If you are big enough – give it a look!
Since directly managing the risk of fuel prices may be challenging for some individual producers, it may be more beneficial to focus on establishing successful risk management practices for the overall operation. Certainly, for livestock producers, as the input costs continue to rise even more pressure is placed on successful production strategies, coupled with strong pricing strategies. Both can be managed with a couple of different options. Some of the tools available to producers are forward contracting, hedging and diversifying production (both in terms of products and market timing). Another option producers may want to consider is using federal insurance programs. Several programs exist for livestock producers that allow them to insure prices, production and even gross revenues. For detailed information on insurance products and strategies go to www.insuringsuccess.org and click on the 2008 Insurance and Risk Management Course. You can also contact your local extension educator to get a CD copy of the course.
Summary
Many ranchers around the state and nation are taking a hard look at the operating structure of the ranch in light of higher energy prices. Although cattle prices are holding near the record high prices of a couple years ago, net returns to ranchers are approaching or have already crossed into the red with the rapid rise in input costs. When looking at the entire ranch budget, cost control measures are appropriate to consider. I challenge you to not look at just small cuts in fuel use, such as taking a few less trips to town, or buying that smaller pickup, but to also consider operational changes to reduce fuel expenditures. Decisions and operations that made economic sense when fuel was $1.00/gallon and machinery was less expensive may not make sense in today’s market.
_________________
Dallas Mount
University of Wyoming Cooperative Extension Service
Southeast Area Livestock Extension Educator
57 Antelope Gap Rd
Wheatland, WY 82201
307-322-3667
dmount@uwyo.edu
http://plattecountyextension.com

[lrtaylor]

These are all great suggestions to consider in a livestock operation with increased energy costs. However, saving money on energy costs when they are moderate is still an important consideration. Most of these practices may be worth looking into regardless of energy prices, or when considering long term upward trends in energy prices.

If it costs you 1/3 as much to feed protein supplements every 3 days, it is still a savings to the operation. Driving the pickup with the caker 2-3 days a week and driving the 4-H wheeler out to check water the rest of the winter can still decrease costs and thereby increase profits. Even small savings add up and small savings now can translate into long term sustainability.