Opportunities to purchase low-quality forage

By Adele Harty and Ken Olson, iGrow October 04, 2016

DROVERS – Evaluating low-quality forages: This year, producers are getting creative in finding ways to cut costs without having a negative impact on production. The current market situation has producers wondering if they will reach their breakeven and what they can do to help improve that picture. One option is to evaluate your feeding program. The cost to feed a cow makes up the largest percentage of annual production costs. Therefore, finding cheaper ways to feed the cow herd may be the difference between breaking even and making a profit.

When evaluating low-quality forages as cheaper alternative feeds and whether or not they will fit into your feeding program, you not only need to determine the value of the feed, but whether or not you have the equipment available to deliver the feed, and what additional supplemental nutrients might be needed.

Determining total digestible nutrient (TDN) costs: The first thing to do is determine the cost per ton of total digestible nutrients (TDN) in the forage and compare it in price to other feeds of differing quality. It is critical to ensure that it is cheaper on a ton of TDN basis, otherwise you may end up spending more money than planned. For example, consider a low-quality CRP hay that contains 50% TDN and is 88% dry matter (DM) for $65 per ton. The feed that you want to compare this to is an alfalfa/grass hay with 60% TDN and 88% DM for $125/ton. On an equal TDN basis, the CRP hay costs $148 per ton of TDN and the alfalfa/grass hay costs $237 per ton of TDN. Choosing the CRP hay would provide a potential savings of $89/ton of TDN, but this savings may need to be used to provide a protein supplement if crude protein (CP) is deficient in the CRP hay.

Example:

$65/ton ÷ 88% DM ÷ 50% TDN = $148 per ton of TDN

$125/ton ÷ 88% DM ÷ 60% TDN = $237 per ton of TDN

Equipment and processing costs: The equipment for delivering these two forages is very likely the same, but the CRP hay will benefit from some form of processing, whether that is through a bale processor or tub grinder. In addition to processing, the low-quality forage may require a protein supplement to ensure the best utilization by the cattle. If we assume the CRP hay is 5.5% crude protein (CP) and the cows need 8% CP in their diet, a protein supplement is needed. For an example, we will consider a 30% CP supplement. The assumption is that a 1300 lb cow eats 26 lbs of DM of a forage of this quality. In order to meet her CP requirements, she needs 3 lbs DM of a 30% CP supplement. For the alfalfa/grass hay, she will eat approximately 29 lbs of DM, due to increased forage quality.

As mentioned earlier, the CRP hay is $65 per ton and tub grinding will add approximately $4 per ton. Therefore, the hay cost per head per day is $1.02. If the supplement costs $175 per ton, this adds $0.29 per head per day to the cost, which makes for a total feed cost per day of $1.31. If the alfalfa/grass hay were fed, the cost per head per day of this forage would be $2.06. No waste was figured into either of these rations.

Ranch-scale budget perspective: To put this into a ranch scale perspective, if you have 250 head of cows that you are wintering using one of these two rations for 4 months, the CRP hay-based feeding program would cost $22,500 less, or a savings of approximately $90/head.

As you are calculating this, remember to convert everything to dry matter so they are compared on a similar basis. Also, be sure to use your own prices as they will vary by region and availability.

Source: http://www.cattlenetwork.com/advice-and-tips/stockerpasturerangeland/opportunities-purchase-low-quality-forage

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