|On farm feed supplies can make or break you in the livestock business. Developing forage is a never ending plan. How are you going to graze during the year? What are you going to feed in the winter? How can you cut your input costs and still achieve high yielding quality forage? We all know how our fixed inputs have changed. Land, equipment, seed, fertilizer, fuel, and chemicals have all increased in value. Fortunately, many of our cash receipts have increased; but let’s be honest- everything is relevant to our expenses.
With the volatility in today’s markets, it is crucial to become diversified. Diversification on your grain or livestock operation always allows you to capture a gain along the way, and hedge the outstanding fluctuations we’ve seen in the commodity markets. This becomes a difficult challenge in a society that has forced specialization within industries, but as a farmer or rancher it is crucial factor in developing a steady cash flow.
Obviously when we see trying times through Mother Nature we become well aware of where our shortages are in our business. How many pastures have you seen this fall that could be golfed on? How many bales of hay did you have to feed this summer to cows that normally would have been grazing?
Luckily, our mild winter last year left us in great shape with our on farm storage. With horrible hay yields this year and extra use of last year’s feed, is your storage still in good shape? If we have a normal winter, are you ready to buy $250/T hay?
We are all aware of how nicely corn pencils out. Let’s think about that economically, everybody is well aware of how well corn pencils out. We’ve seen forage acres continue to diminish and through the scale of economics, sellers of alfalfa and grass are happy. If there aren’t CRP acres to cut or drought stricken corn to chop, what could your feed bill look like next year?
If you want to remain a player in the livestock business, start planning for your forage acres next year. Diversifying your land use to grow more feed will be crucial in the next few years. Alfalfa is still the queen. Through better breeding programs and more technology, selecting the perfect variety for your land and livestock can easily be done. Developing that plan and locking in seed for those acres is always an economic benefit.
Submitted by Justin Fruechte. Contact Justin at 888-498-7333 or [email protected].