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SMALL GROUP ACTIVITY ON FORAGE ECONOMICS: 3 Options. GEOFF BENSON EXTENSION ECONOMIST DEPT. OF AGRICULTURAL & RESOURCE ECONOMICS NORTH CAROLINA STATE UNIVERSITY. Small Group Activity:. It is late summer. A farmer comes to you for advice about a winter feeding program for a group of heifers - PowerPoint PPT Presentation
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SMALL GROUP ACTIVITY ON FORAGE ECONOMICS:
3 Options
SMALL GROUP ACTIVITY ON FORAGE ECONOMICS:
3 Options
GEOFF BENSONEXTENSION ECONOMIST
DEPT. OF AGRICULTURAL & RESOURCE ECONOMICS
NORTH CAROLINA STATE UNIVERSITY
GEOFF BENSON, ARE, NCSU
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Small Group Activity:Small Group Activity: It is late summer. A farmer comes
to you for advice about a winter feeding program for a group of heifers
How do you set about answering his question?
GEOFF BENSON, ARE, NCSU
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What To Do?What To Do?
1.Determine the number of animals, feeding period, animal performance targets, available forages and feeds
2.Identify alternative feeding strategies
GEOFF BENSON, ARE, NCSU
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What To Do?What To Do?
3.For each strategy, develop a detailed feeding program that meets animal goals
4.Estimate costs of each strategy and select the most profitable
GEOFF BENSON, ARE, NCSU
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Small Group Activity:Small Group Activity:Farm ScenarioPlan to feed 32 heifers for a 120
day winter feeding periodHeifers need 15 lb. DM/dayThe farmer has 20 acres of fescue
with 2,000 lb. of dry matter per acre
GEOFF BENSON, ARE, NCSU
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3 Alternatives3 Alternatives
1. Stockpile fescue, graze intensively – daily moves
2. Stockpile fescue, graze extensively – move cattle every 14 days
3. Make and feed fescue hay
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InstructionsInstructionsGrazing Groups:
1. Pasture Budget Worksheet to calculate grazing days & cost
2. Cost of managing the grazing
4. Amount & cost of hay
5. Cost of putting out hay
6. Total $$, cost/head, cost/day
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InstructionsInstructionsHay Group
1. Budget the amount of own hay available to feed & cost
2. Estimate total hay needs, amount to be bought & cost
3. Cost of putting out hay4. Total $$, cost/head, cost/day
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InstructionsInstructionsStockpiled fescue will not feed
the cattle for the entire periodBuy additional hay at $80 per ton.
Quality is similar to stockpiled fescue & own hay
GEOFF BENSON, ARE, NCSU
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InstructionsInstructionsSelect a discussion leader,
recorder & reporterReview the worksheets & other
materialsConsult the roving helpersReport to the whole group using
overhead transparency
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Your TurnYour Turn
GEOFF BENSON, ARE, NCSU
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GEOFF BENSON, ARE, NCSU
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Standardized ExampleStandardized ExampleLabor cost of $9.00 per hourTrip time is 30 minutes to move
cattle on the grazing systems. Truck is used 15 minutes
Trip time to put out hay is 45 minutes
GEOFF BENSON, ARE, NCSU
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Standardized ResultsStandardized ResultsOption Cost 1. Intensively grazed
fescue
$3,374
2. Extensively grazed fescue
$4,039
3. Hay $5,137
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Standardized ResultsStandardized ResultsOption $/Hd/Day
1. Intensively grazed fescue $0.88
2. Extensively grazed fescue $1.05
3. Hay $1.34
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Standardized ExampleStandardized ExampleThis is only an example!Many factors affect costs on a
specific farm Time and distance to the cattleLabor cost or charge per hourEquipment used
GEOFF BENSON, ARE, NCSU
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ReviewReviewSet feeding period and animal
performance targets Identify alternative feeding
strategies that can meet goalsEstimate costs of each strategy,
+/- income changes
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Step 1: Feed BudgetingStep 1: Feed Budgeting
Estimate feed(s) available for the feeding period, with known nutrients, on a dry matter basis
Estimate animal needs, as lb. of dry matter per day & nutrients required
Add supplementary feed needs
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Step 2: Economic BudgetingStep 2: Economic BudgetingEstimate costs of producing and
managing pasture & hay:Cash costsFixed (Investment related) costs --
DITI Labor cost or charge
Other cash & fixed costs
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Step 2: BudgetingStep 2: BudgetingEstimate any differences in
revenue or value of production if animal performance changes under the alternative feeding programs
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Management factorsManagement factors1. Intensively managed stockpiled
fescue: Less waste -- more pasture is
used, grazing period is longer Less hay and hay feeding is
needed Takes more time and management May require more investment in
fencing and watering systems
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Management factorsManagement factors2. Extensively managed stockpiled
fescue: More pasture is wasted, fewer
days of grazing More hay must be fed Less time is spent moving cattle
but cattle should be checked more often, so real labor savings may not be great
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Management factorsManagement factors
3. FALL HAY Hay making is expensive--in
investments and time Include risk of bad weather and
resulting losses of yield and quality
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Hay feeding costsHay feeding costsAdded Costs:Storage losses and costs of
protecting hay against lossFeeding lossesHandling costs, including
time and equipment Pasture damage
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Losses affect true cost
For alternative systemsHarvest losses range from 5 to 50%
of production
Storage losses -- 5 to 20%
Feeding losses -- 5 to 15%
Combined losses = 15 to 50%
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ResultsResults Evaluating the economics takes
time and effort, but it is critical for improving the financial performance of a farm or justifying a change in farming practices
In our example, the difference in cost was $1,763 on 32 heifers for 120 days!
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Which system is best?Which system is best?
Depends on farm and family situationFarm & financial resources
Lifestyle goals
Economics is important to making wise decisions but may not be the only criterion
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Geoff BensonGeoff Benson Phone: 919.515.5184 Fax: 919.515.6268 E-mail: Geoff_Benson@ncsu.edu Web page:
http://www.ag-econ.ncsu.edu/ faculty/benson/benson.html
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