Cowboy Math: Does Converting Pasture to Diverse Native Grassland Pencil Out?

The benefits of converting an endophyte infected tall fescue pasture are many; it not only benefits the livestock but also the wildlife and soil health.  However, pasture conversions are expensive.  So it is a fair question, “How does the conversion to a diverse native grasslands pencil out?  Does it pay for itself?”  In an attempt to evaluate that, we have done a bit of cowboy math.  This math is done for an imaginary cowboy, Ponder N. Pete’s, operation.  He has 300 acres and runs 100 cows on this land.

The costs...

Spraying  Our cowboy goes down to the local co-op, buys the chemical there and hires
them to come spray his field; it will need sprayed 3 times during the establishment phase.  This is probably $25-27/acre each time. So, there goes ...
$75  
Cover Crops  Mr. Pete wants to plant cover crops in the “kill out” phase, because he
realizes that these plants will act as a smother crop and also provide very high quality
forage for his livestock.  There will be expenses such as the cover crop seed and
seeding, but there is also an income stream from this in the form of pasture for his
livestock. For simplicity’s sake, he decides to call the expenses and income from
this equal...
$0
Diverse Native Grassland Seed  Carefully weighing seed price and value, Ponder N.
Pete has decided that the best option is the  Cadillac mix.  He will plant a balanced mix
of 4 different functional diversity groups (native warm season grasses + native cool
season grasses + native legumes + native forbs). Mr. Pete grits his teeth and pencils
in $250-300/acre.
$275
Planting  Now, the seed must be spread.  Again, the co-op is hired. Here goes another $12-15/acre of hard-earned money... $15
Total Expenses (per acre):    $365

The monetary benefits...  

More calves  The figures on the effect of fescue on conception rates of cows vary wildly
from an absolute wreck to only a small difference.  Ponder N. Pete choses to use a modest difference of 6%.  On 100 cows, this would be an extra 6 calves.  If the gross margin (income minus direct costs e.g. mineral, vet costs, freight)1 on a calf is $500/head, these five calves would add $3000/year for the farm.  When this extra money is divided by 300 acres, each acre is contributing an extra $10 (or in more extreme cases maybe $50) to the bottom line through the increase in conception rates...
$10
More forage  Many times over, Mr. Pete has heard that a diversity of plants will outproduce the forage of a monoculture.  A diverse native grassland in south-central Missouri is producing nearly twice as much forage as fescue pastures; a research project in Minnesota showed that diverse native grasslands produced more than 3 times as much forage as a monoculture2. After a bit on pondering, Mr. Pete realizes that, production-wise, this is like turning his 300 acres into 600 or 900 acres!  Instead of running 100 cows on his land, he could have 200 or 300!  He chooses to go with the more conservative option, and he pencils in 100 additional head.  With the improved conception rates, he pencils in 90 calves out of these cows.  With the gross margin of $500/head, this is an extra $45,000 for his operation or $150/acre from the extra forage production... $150
Heavier calves  Calves raised on fescue are 112 pounds lighter at weaning3, and Mr. Pete realizes that there has to be some money to capture here.  He takes 112 pounds at $1.50/pound on 180 calves (that is 90% conception on 200 head of cows), and realizes
that by getting rid of the fescue, he could bring in another $30,240, which is $100/acre,
due to the heavier calves at weaning...
$100
Total Extra Income (per acre):     $260


 
The wind up...

It looks like the extra expenses to Ponder N. Pete’s operation to establish a very nice, diverse native grassland will be $365/acre; this is a one-time cost.  The extra income in the years to follow will be $260/acre; this is extra income for every year.  By this math, the planting will pay for itself in 1.4 years (and this is all without cost-share).  Every year thereafter, the ranch will continue to bring in the extra $260/acre (or $78,000).  Mr. Pete can’t help but ponder that after 1.4 years of grazing, the seeding project will be paid off and he can spend the extra income on other improvements for the operation, but it also doesn’t escape his mind that he could probably buy another 40 acres every year with that money.  Oh, and there is the thought of a trip to Hawaii.  This is where the decisions really get hard!
 
See it for yourself...
If you want to experience a diverse native grassland that is being grazed, join us on June 28th for a pasture walk.  More details can be found on our webpage.  Or, watch the video that we made with various partners about grazing a diverse native grassland.  Also, more information can be found about establishment and other topics here.
 
Footnotes...
1 The overheads (land and labor expenses) are not considered in these calculations because they should not change with the proposed conversion.  In other words, other than the extra expenses listed above for the conversion itself, Mr. Xxxx will not have additional labor or land expenses.    
2 Rex and Amy Hamilton established a diverse native grassland in 2012, and found that during growing seasons 3-7, they averaged 194% more forage than their fescue pastures.  During the year of establishment, forage production was forfeited on these acres, and during the second growing season, the production was very similar to the fescue pasture.  The Minnesota research was done by David Tilman and others and published in an article titled "Carbon-Negative Biofuels from Low-Input High-Diversity Grassland Biomass", which is found in Science Volume 314 from 2006.
3 Craig Roberts from the University of Missouri wrote an article in the April 2016 Drover’s Journal that attributed fescue pastures in Missouri to 112 pound lighter calves.

 




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