The grass is green, and grazing season is upon us. That said, how do you evaluate your grazing program to know whether you are utilizing pasture forage efficiently? How does pasture use impact the cost of production, and are you capturing that in your budget and decision-making process?
For many years, different folks have said that livestock production in eastern and southern Ohio was a byproduct of land ownership. That is no longer the case as cattle, sheep and goat prices have experienced record-high prices this past spring season. As livestock continues to be a profit source for many farmers in the area, the case can be made that farm management, record-keeping and cost of production are even more important in order to know how profitable the farm truly is.
Calculating value
Capturing the value of pasture isn’t always easy. I can think of about four different ways to do so, depending on land ownership, forage production capabilities and the ability or lack thereof to measure animal performance.
The most accurate way to evaluate the value of pasture is as a feedstuff, similar to grain or purchased hay. What is the nutrient content of the available forage? What would be the cost to purchase supplemental feedstuffs? For those who have experienced drought in recent years, we should have a handle on these types of costs.
The ability to calculate nutrient costs per head per day or pound of gain is ideal. One of those calculations requires a set of scales, while the other involves analyzing forages and calculating the carrying capacity of a pasture.
What’s it worth?
Several times a year, I get the question, “What is pasture worth per acre?”
My answer: It depends.
If the pasture is owned, free and clear by the operator, at a bare minimum, it is worth the value of the annual property taxes that must be paid.
If there is a bank note to pay off on the acreage, the case could be made that the principal payment on that pasture is the minimum value.
If the pasture is rented, the next question I usually ask is how much demand there is for pasture in your area, and is there anyone else interested in renting the grass? Having more than one party looking to rent the pasture typically drives up costs.
If looking to rent pasture, other factors will determine value. Is the fence in good shape? If not, repair costs will need to be calculated in your grazing budget.
The length of the contract is another factor to consider when negotiating price. A longer-term contract will add stability to the grazing operation and can add value to the pasture being rented.
Budget notes
Budgeting for pasture isn’t as straightforward as calculating some of the other variable costs in livestock production.
Be realistic when plugging in your budget numbers, as grass isn’t free. It never was, but it is surely more valuable than ever.
