Potential Solution to Pasture Limitations During Expansion
Confinement options explored during Learning Lounge session.
SAN ANTONIO, Texas (Feb. 5, 2015) — There is no doubt that the beef industry needs to expand the cow herd to remain viable as an industry, but capital requirements, fewer available grazing acres and older cow owners are all limitations to expansion, said Don Close, vice president of the Food & Agribusiness Research and Advisory Department for Rabobank. He spoke to a large group in the new Learning Lounge booth in the NCBA Trade Show during the 2015 Cattle Industry Convention in San Antonio Feb. 4-7.
Of these limitations, land cost is the biggest inhibitor. During a 10-year period, he said there was a 6% decrease of available grazeable acres. However, this was offset by a 9% reduction in cow numbers. Now that cow numbers are on a slow, but predicted steady rise, the beef industry will feel the squeeze more. Additionally, as cows have gotten bigger, they require more acres of forage.
Close reported research that investigated the use of excess feedyard capacity or confinement buildings such as linear slant buildings and hoop barns by cow-calf operations. The study evaluated comparative production costs with Southern Plains conventional, Northern Plains conventional, young cow full confinement, young cow semi-confinement and older cow full confinement. Additionally, three different price scenarios were applied and compared to calculated breakeven costs — looking at current high calf prices, mid-range 38%-50% retracement prices, and low-end prices.
For the mid-range prices, which Close deemed the most viable, the revenue per cow per year in the conventional operations was within the $258.50-$220 range. He reported that for semi-confinement, revenue was $324.50; older cow confinement revenue was $363.00; and young cow confinement was $253.00.
“Economically, confinement options make sense,” he offered. He said calves raised in confinement are weaned more easily because they are already used to feed and water being available. Calves who go on to the feedyard experience less stress because their environment hasn’t changed drastically. He added that more time is required for this system, but not the number of laborers. A confinement system also lends itself for an artificial insemination program to increase genetic quality.
He explained that limit-feeding of cows drives increased efficiencies, which can result in 10%-20% feed savings, and permits changing feed intake to the reproduction cycle. Improved cow health due to consistent nutrition enhances calf prenatal health, he said. Finally, confinement options provide income enhancement to allow young family members to return to the farm.
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