OVERTON — While some East Texas cow/calf producers make money on their operation, many are losing money to the tune of hundreds of dollars per cow every year, according to a forage specialist with the Texas Agricultural Extension Service.
Dr. Larry Redmon, new forage specialist at the Texas A&M University Agricultural Research and Extension Center at Overton, believes he has a number of tools that can help producers who are currently losing money turn their situations around.
“We can help them reduce their input costs,” he said. “That’s what we are about.”
A quick look at Standardized Performance Analysis figures backs up Redmon’s statement. SPA is not new, though many producers have yet to adopt it as a production tool. Used across the United States, cow-calf SPA tools were developed by Texas A&M University and include performance measures for reproduction, production, grazing and raised feed, marketing, financial and economic performance. SPA is broken down into two categories, production measures (SPA-P) and financial measures (SPA-F).
“SPA is an integrated analysis tool that links both financial and production performance,” Redmon said.
Many producers might not like what SPA figures show. Not counting opportunity costs, the top 25 percent of Texas cow-calf operations average a net income of $153 per cow in 1991 through 1997. The second 25 percent made about $45 per cow. The third 25 percent lost $24 per cow, and the lowest 25 percent lost an average of $157 per cow.
When opportunity costs are subtracted from the bottom line, profits drop and losses climb dramatically. Opportunity cost is what a farmer or rancher might be making if the money spent on hay, feed and other inputs were invested differently, in a certificate of deposit or the stock market, for examples. There are no statistics available for Texas producers only, but by this reckoning, during the same 1991 through 1997 period, the top 25 percent of cow-calf operations in the Southwest averaged a profit of only $27.80 per cow; the second 25 percent lost an average of $41; the third 25 percent lost $73; and the least efficient 25 percent lost $246.
Obviously, there is room for improvement in the cow-calf business, and one way in East Texas is to reduce winter feeding costs, Redmon said.
“People spend too much money on winter feeding programs. Hay is very expensive. So is sack feed,” said Redmon, who received his doctorate in range science from Texas A&M University in 1992.
There are a number of ways to do this, some of them familiar with most producers, others not.
Over-seeding bermuda grass pastures with rye, ryegrass or a mixture of the two is one way that’s tried and true, but a production technique many producers still don’t use. Using legumes such as crimson clover is another way to reduce inputs purchased off-farm. Though seeding clover can be expensive, it usually pays for itself in terms of the nitrogen it fixes in the soil. Plus it produces additional forage at a time when forage is usually limited.
Another hay-saving method that Redmon believes may prove worthy is “stockpiling bermuda grass.”
Stockpiling means simply allowing bermuda grass to accumulate during the fall for grazing at a later time, primarily in mid to late fall. In effect, the farmer is storing the bermudagrass on the stalk instead of as hay.
Conventional wisdom says that crude protein levels drop and energy levels decline if bermuda grass, or any grass hay for that matter, is allowed to mature. But one Oklahoma State University study showed that crude protein levels didn’t dip below 10 percent and energy levels didn’t drop that much if the bermudagrass is grazed before mid-December. Redmon hopes to participate with Texas Agricultural Research Station faculty at Overton to see if this holds true for East Texas, too.
If stockpiled bermuda grass does hold its nutritive value on the stalk, then it would work very well with overseeded rye or ryegrass to reduce the need for hay during the winter and early spring. Producers could graze their cattle on the stockpiled bermuda grass until late November or mid-December, at which time rye would be tall enough to graze. By early spring, overseeded ryegrass pastures could carry them through to when bermuda grass pastures are ready.
This strategy would involve, of course, paying strict attention to stocking rates in conjunction with forage production.
“Many people have too many animals for what their pastures can support and are forced to buy hay or feed extra rations during the winter. In many cases, they might find themselves making more money with fewer animal units,” Redmon said.
Redmon also noted that the primary goal of many people in the cattle business is not to make money.
“For some, it’s a lifestyle choice,” he said.
Redmon received his bachelor’s and master’s degrees in agriculture with emphasis in agronomy from Stephen F. Austin State Univeristy and his doctorate from Texas A&M. He did post-doctorate work at Oklahoma State University and was OSU Extension forage specialist for more than four years.