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

2. 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.

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

4. 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

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

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

7. 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

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

9. 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

10. 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

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

12. 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

13. 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

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

15. 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.

16. 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.

17. Livestock Budgets   University of Minnesota – FINBIN   http://www.finbin.umn.edu/   South Dakota State University   http://econ.sdstate.edu/Extension/Tools/budgets.htm   Iowa State University   www.extension.iastate.edu/Publications/FM1815.pdf   Kansas State University   http://www.agmanager.info/livestock/budgets/projected/ default.asp   University of Tennessee   http://economics.ag.utk.edu/budgets.html

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