Returns per acre?

[cowman]

Have you ever figured out what your return per acre is in cow/calf? Or maybe running yearling grassers?
Now I realize quite a bit of land isn't fit for farming and pasture is the best use for it.
If we consider 2 acres of good tame pasture is needed to pasture a cow and one and a half acre of production to feed her in the winter, then it takes 3.5 acres of land to feed that cow?
Now I know those numbers don't apply to everyone, different soil types,rainfall, systems etc., so this is just a general type thing?
If that land was broke and in grain/canola production what would be the profit potential?
In my area cropland rent is generally in that $60 range...some higher...some a bit lower(but not much less)! So at the end of the day 3.5 X $60 =$210? A cow would need to generate that kind of income to match a land rent for a crop?
Consider all that is involved in cattle raising, including replacement costs, capital interest, inventory interest,labor, lost income opportunities, etc...well you get the picture?
Are we fast coming to a time where raising livestock on our good land is really not very viable?
In my own situation I have some land that really isn't farmable, so the only option is livestock on that land. But I also have some very good land that is in pasture/hay that is very desirable. We are looking very hard at putting it into crop production, if my cousin is willing.
Anyone else thinking this way?

[grassfarmer]

Or you could stick with cows and compare like with like Cowman. If it takes you two acres to summer a cow I'll assume you are talking for 5 months = 75AUDs per acre production. 75 AUDs x 3.5 acres = 262AUDs at $1(the rental for a grazing cow/calf pair per day)Return $262, before time required for supervising the cows certainly. Add in a few cross fences and some management and you could return 25% more than this through increased production. I think I'll stick with cows.

[smcgrath76]

If you look at potential rent as an opportunity cost, I guess that is one approach. A lot of guys are renting pasture for pairs in our area at over $1.25 per day (pretty cheap AUMs when you look at some of the cow sizes involved).
Is the guy actually growing the canola (or other crop) really netting that much at the end of the day than the guy with the cows?
There are production costs associated with both cows and grain production.
I am in the camp that pastures need to be managed as opposed to the traditional turn cows in, pick cows up sometime later approach. This does not always mean a MIG type system. In cropping or pasture I think that management is essential to profit and a responsible land ethic.

[farmers_son]

Cowman: Forget “all that is involved in cattle raising, including replacement costs, capital interest, inventory interest,labor, lost income opportunities, etc”. All that is relevant to your question are two things:

1. Rent for grain production
2. Rent for grass/pasture production

Assuming the land can generate $60 per acre per year cash rent if rented for grain production, what would rent for cattle grazing have to be to generate the same revenue.

Using your figures, it takes 3.5 acres to keep one cow for one year, therefore each acre will keep one cow for 3.43 months or put another way each acre will keep 3.43 cows for one month. $60 divided by 3.43 cows would only require pasture rental to be worth $17.49 per month per cow to equal cropping rent.

Since the rates for pasture quoted fall between $1 per day to $1.25 per day or an average of $1.125 per day or $33.75 per month per cow (30 day month) it would seem that using your figures pasture rent can generate $115.71 per acre or almost double what could be generated if the land were rented for cropping.

Renting pasture does need to consider the amortized cost of seeding the grass if you are considering tame pasture. However unless the annualized cost of seeding the grass exceeded $115.71-$60.00 or $55.71 per acre per year it would seem that it would be better to leave the land in grass and rent the pasture to someone willing to pay $33.75 per month per cow/calf pair for pasture.

I did calculate the annual cost of grass. Assuming $60 per acre up front cost, stand lasting for 7 years with the grass being broke on the last year the investment in seeding grass needed to return $15 per acre in years 1 to 6 to have an IRR of 8% or a NPV of zero with an 8% discount rate. If so, then rent for cropping would need to return $115.71-$15.00 or approximately $100 per acre to equal the returns you could get from pasture rent.

I would suspect fewer nutrients are removed from the pasture than would be removed from the land by cropping although that would depend upon how the grain crop was fertilized.

[cswilson]

Yeah what he said!!!!!