The Economics of Grazing Leah Duzy Agricultural Economist USDA-NRCS March 12, 2008

The Economics of Prescribed Grazing is…  the study of the economic implications of alternative investments and management decisions that change the:  Grazing System Structure  Grazing Animal Behavior  Grazing System Performance  The primary concern in economics is efficiency.

Economic Analysis  Do the benefits of an investment exceed the associated costs over some specified time frame?  Is an investment worth making?  System  PROFITABILITY

Financial Analysis  Does the business operator have the cash flow, or can he/she borrow under specified terms, to support making a given investment and return an acceptable profit?  Individual business  AFFORDABILITY

Why Use Rotational Grazing?  Economic Benefits  Time Savings  Environmental Benefits  Wildlife Advantages  Increased Pasture Productivity  Aesthetics and Human Health Benefits  Animal Health and Welfare

Economic Benefits  Lower input costs  Reduced equipment, fuel, fertilizer, pesticide, and labor costs  Reduced maintenance costs of confinement system

Time Savings  Time to move cattle is minimal if paddock and fencing design is efficient  Average of 15 minutes per day  Decrease in need for hay  Average of 7 hours per acre each season  Effective, efficient manure management

Environmental Benefits  Well-manage perennial pastures  Decrease soil erosion potential  Require minimal pesticides and fertilizers  Decrease amount of barnyard runoff

Wildlife Advantages  Resting paddocks provide undisturbed nesting habitat for native grassland birds  Reduced pesticides help protect birds, mammals, aquatic invertebrates, and non-target vegetation that may serve as wildlife habitat

Increase Pasture Productivity  Improve long term pasture quality and fertility by favoring desirable pasture species and allowing for even manure distribution  Increase the amount of forage harvested per acre over continuous grazing by as much as 2 tons dry matter per acre  High forage yields and quality results in healthier, more productive livestock

Aesthetics and Human Health Benefits  Peaceful way of farming  Quieter than mechanically harvesting feed  Wildlife viewing

Animal Health and Welfare  Healthier Animals  Reduction of exposure to high levels of microorganisms  Increase physical fitness of animals  Decreased opportunity for injuries and abrasions  Fewer herd health problems

Adoption Hurdles  Cash-cost  Large initial investment to set up a system  Learning-curve  Aversion to making costly mistakes  Perception  Tradition or traditional attitudes get in the way of adoption

Two Keys to Success  System Design/Layout  Management – The Manager’s observation skills/attentiveness and decision making

What is the Goal?  Maximize the on-farm harvesting of sunlight and rainwater by taking care of the soil.  You take care of the soil by taking care of the forage plants.  You take care of the plants by having periods of rest through the rotation of livestock.  Through rotation, you take care of the animals by providing them with higher quality and more easily digested and absorbed forages.

4 Important Points  Too much grazing damages the plants and soil  Too little grazing decreases the quality and the quantity of forage  Appropriate levels of grazing maximize productivity and efficiency.  The returns to management are far greater than the returns to labor inputs.

Livestock Budgets   University of Minnesota – FINBIN     South Dakota State University     Iowa State University     Kansas State University   default.asp   University of Tennessee  

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