Alfalfa has the potential to net more dollars per acre than any other traditional agricultural venture in East Texas.
Vincent Haby, soil scientist with the Texas Agricultural Experiment Station, has been working to make alfalfa a viable crop for the acid soil conditions of East Texas for the last decade. Recently, he subjected four years of production costs and returns by actual farmers to economic analysis.
“Alfalfa has the potential to pay for farmland in East Texas. On one site in particular, net profit for alfalfa was more than $1,200 per acre over a four-year period,” said Haby, who is based at the Texas A&M University System Agricultural Research and Extension Center at Overton.
The economic data used for the study were from on-farm alfalfa production evaluations in cooperation with local farmers. In many ways, the on-farm studies were conducted like research — but with an eye on the financial bottom line.
Haby selected the sites in four counties after locating willing cooperators whose fields had good drainage and aeration, and a subsoil pH of 5.5 or higher at depths to 48 inches. The Southern Sustainable Agriculture Research and Education Program provided funds to establish and maintain alfalfa, and in return for owning the hay produced, the farmer-cooperators agreed to fence the sites and harvest the alfalfa.
Greg Clary, Texas Cooperative Extension economist, calculated net returns based on establishment costs, all production and harvesting costs, interest on production costs, labor and what's called opportunity costs — the expected returns had the farmers leased the land rather than grown alfalfa.
Total net return for the first four years, with alfalfa hay valued at $135 per ton and establishment costs prorated over four years, was estimated to be $989 per acre on the Griffin Ranch in Gregg County, $1,206 per acre on the 7-P Ranch in Smith County, $895 per acre on the Taylor Ranch in Cherokee County and $518 per acre on the Riley Ranch in Anderson County. Clary, who is also based at the Overton center, added the returns were considerably higher than any other mainstream agricultural East Texas venture such as cow/calf, stocker cattle or bermudagrass hay.
“Historically, just based on this year's data when calf prices are still relatively high and figuring three acres per cow/calf unit, the producers just break even,” Clary said.
A stocker calf operation does better, with a net return of $132 per acre. Conventional improved grass hay operations might return $10 or less per acre, according to Clary.
“These are best estimates based on current market prices and input costs,” Clary said.
Alfalfa is not new to the South. Southern farmers grew alfalfa earlier in the past century. The onslaught of the alfalfa weevil and increasing soil acidity severely curtailed that production.
New, more environmentally friendly and effective pest control chemicals made alfalfa production economically attractive. In East Texas and across the Coastal Plains states of the South, however, the acid soils still posed a hurdle to efficient production.
Haby warns that alfalfa production isn't for everyone. Success depends upon precise management, careful attention to site selection, proper liming, fertilizer application, and pest control. Initial high establishment costs — from $232 to $353 per acre — can also be an inhibiting factor.
Also, even with the best manager, not every field in East Texas is a candidate for alfalfa production. Soil pH is a factor, and for profitable production, subsoil pH becomes important.
As it is very difficult to change pH in depths below the top 6 inches of the soil, locating an existing site where the soil pH is 5.5 or above to four feet deep can make a big difference in alfalfa production. When the soil pH drops below 5.5, aluminum in the soil becomes a big factor. Concentrations of soluble aluminum at levels greater than one part per million can inhibit root growth and limit alfalfa yield, according to Haby.
An aluminum level above 1 ppm in the 6- to 12-inch or 12- to 24-inch soil depth is justification for rejection of a site for alfalfa production unless the site can be irrigated to maintain plant-available water in the surface depth, Haby observed.
Haby has detailed guidelines for site identification and establishment. The guidelines can be found on the Internet at http://soils.tamu.edu. Alfalfa production budgets, in the form of Excel spreadsheets, may be downloaded from Clary's rural business Web site at http://ruralbusiness.tamu.edu/forage/.
“I know of no other agronomic forage crop in East Texas where the return on investment can be as high as $300 to $400 per acre,” Haby said.