What is in this article?:
- Wheat pasture â€” grazing or grain
- Planning for grazing next fall
David Cleavinger likes his options with dryland and irrigated wheat and the possibility of $8 per bushel prices. And with added income from grazing stockers he’s banking on additional return from the crop.
The sky-high wheat price, plus lack of moisture across much of the winter wheat belt prevented many farmers from even considering a grazing option. But growers who have enjoyed reasonable snow or rainfall, or who have irrigation have run stockers over the winter. Cleavinger’s family is among that group.
Along with managing his family’s wheat, sorghum, sorghum silage, corn and sometimes cotton and cattle operation, Cleavinger, a Wildorado, Texas, producer, will be 2008 president of the National Association of Wheat Growers (NAWG). But crop management comes before tackling national wheat policy issues.
“When discussing whether to graze wheat or not, it’s a risk one way or another,” says Cleavinger, noting that growers could face hot, dry late spring weather that restricts wheat growth.
In the past his family bought stockers and took advantage of grazing opportunities from their wheat land. But with higher calf prices, they selected the leasing pasture route.
“In a normal year we lease pasture at $4 per hundredweight,” he says. Stockers are usually placed on irrigated wheat in the fall at about 400 pounds. The stocking rate is about one calf per acre. The 400-pound calves generate about $16 per month per head, solid cash flow over the winter.
But does he have the cattle pulled or let them remain on pasture for another month and a half? High feed grain prices mean feedyards want heavier cattle to reduce feed costs. So more cattlemen want that extra grazing time.
Derrell Peel, Oklahoma State University Extension economist, says farmers may give up four to five bushels of wheat in a full grazing program. That’s $32 per acre lost at an $8 price.
With the stout wheat price, Cleavinger is choosing the March 15 or sooner rule of pulling cattle off wheat to allow for full grain development. Because of rapid plant growth in the spring, stocking rates can usually be doubled in a graze-out program. But the wheat cannot be harvested.
Also, in a graze-out program, cattle would be larger, about 600 pounds, putting the lease rate at $4 times 6 hundredweight times 2 animals, says Steve Amosson, Texas A&M Extension economist. That pushes the leased return to $48 per month, or $96 for the two months. That’s a good return, but won’t fly with $8 wheat.
For Cleavinger, it still wouldn’t come close to covering what he would receive from producing a 50 to 60-bushel wheat crop, even if winter grazing reduces yields. However, he says there can be added risk in pulling them off early.
“Weather is the biggest factor, even with irrigation,” he says. “If the wheat heads out too early and we get a freeze, we can really be hurt. It goes back to the individual farmer. What type of risk is he willing to take?”
He likes the winter grazing for the boost in cash flow. “Plus, if we get hailed-out in the spring, we still have some income from the wheat,” says Cleavinger.
In a typical grazing program, stocking rates are usually one animal per 1 to 1.35 acres. If a producer owns the cattle and grazes them over winter, it’s often been a cattle-before-grain situation.
That’s different now, with the higher grain price. If the stocking rate is doubled to two head per acre and the anticipated gain is 2.3 pounds a day, then 60 extra days on pasture would produce an additional 276 pounds. If the value of the cattle is $1.08 per pound, that’s about an extra $298 of income per acre, or $149 per head.
Compare that to pulling the cattle the first week in March and harvesting wheat for grain. A 50-bushel crop at $8 would gross $400 per acre (excluding harvest cost and other input). “If you own the cattle it’s a little more interesting decision,” says Amosson, “but you would still be giving up significant revenues by grazing-out at current wheat prices.”
Of course, with the volatility in both wheat and cattle prices, there’s no guarantee of either $1.08 per pound price when cattle are pulled in early May or $8 when wheat is harvested in June or July. So early marketing to lock in a good price may be warranted, says Cleavinger.