Wheat grazeout decision during the 2016-17 growing season
As the Kansas wheat crop approaches first hollow stem during the spring (see eUpdate article on identifying first hollow stem), producers who currently have cattle grazing the crop are faced with the decision of whether to graze it out or to remove the cattle and harvest the grain. This decision will be especially important in areas where the crop currently is stressed by drought; infected by virus diseases, such as wheat streak mosaic; or has a very poor stand, which is the case with many fields in southwest Kansas. Producers in areas that have been affected by wildfires may also be looking to wheat pasture as an emergency forage source. It is important that this decision is taken prior to first hollow stem, as grazing past first hollow stem will decrease the wheat yield potential by as much as 5% per day.
Factors affecting the decision of whether to graze out or harvest for grain yield include estimates of future wheat grain yield, prices of wheat and beef, stocking rate and stocker gains, weather, and grazing length during the spring. Most of these factors are field-specific and need to be customized for each producer-field situation. The paragraph below offers some insight on some of the factors above.
Potential grain yield
Wheat grain yield cannot be estimated with complete accuracy at this early stage of growth. However, there are ways to make a good estimate. A good start is to look at the yield record from the last 5-10 years for each field. The long-term average yield can provide a good estimate of expected yield from a particular field, and the expectations for this year’s crop. If wheat has never been grazed during the last 5-10 years, producers should account for a 10-15% yield decrease if they plan to graze their crop and take it for grain this year. Another tool producers can use is a handheld active optical sensor that measures the crop’s NDVI, which is a method of quantifying the crop’s current condition.
Years of research at K-State demonstrated that an optical sensor measurement, when taken at spring greenup or Feekes GS 4, can be used with a certain degree of confidence to estimate wheat yield potential. Given the dry conditions and poor wheat stands in most of the western region of the state, the yield potential will most likely be below average. Producers will need to consider whether it would be better to graze these fields out or potentially receive a lower yield and potential crop insurance payment. Grazing past the insurance deadline will make the crop ineligible for an insurance claim.
Stocking rate and stocker gains
When planning to harvest the crop for grain, stocking rates should be conservative to preserve the crop’s yield potential, generally ranging from 250 to 500 pounds of live animal per acre. Producers who will graze out the crop can increase these rates during the spring, usually to as much as 1,000 pounds of live animal per acre. Average stocker gains range from 1.5 to 2.5 pounds per day, which in part depends on the amount of forage available.
The weather will be an important factor dictating the wheat’s recovery from grazing, when planning to harvest the crop. Growing seasons characterized by cool and moist early spring (following grazing termination) will favor crop recovery and help minimize any yield penalty from grazing. Hot and dry early springs (like we are currently experiencing) will increase the yield penalty associated with grazing as the crop will be less likely to recover the leaf area prior to jointing. Yield potential will be reduced under those circumstances.
Grazing length during the spring
Soil temperatures during the spring dictate how soon the crop reaches first hollow stem, the critical period for removing cattle from wheat fields that will be taken for grain. Air temperature during the 2017 spring have been above normal for the majority of the state (see eUpdate on that issue here). This has increased soil temperatures and as a consequence, sped up crop development. Most varieties have already reached first hollow stem at several Oklahoma locations, and many varieties are approaching this stage in Kansas (for an update on different varieties and first hollow stem, see eUpdate here). Most likely, producers interested in harvesting the crop for grain will have to remove cattle in early March for the majority of the state, which is earlier than other years on record. The early removal of cattle from wheat pastures this year will play an important role when comparing budgets for the dual-purpose versus grazeout system, as producers wanting to harvest the grain in a dual-purpose system will have less time to graze during the spring. Again, also follow your insurance deadline for removing cattle, which may occur prior to first hollow stem.
Producers are encouraged to perform a scenario analysis based on each field’s history. For instance, exploring low grain/forage yields, versus average grain/forage yields, versus high grain/forage yields, might be helpful. Two different scenarios are explored in the following paragraphs. These scenarios assume stocker cattle are already grazing on the field and the producer is trying to decide whether to graze out the wheat or to harvest it for grain (pulling the cattle off now). The partial budget below explores potential costs and income differences if making the graze-out decision. Producers can download the spreadsheet perform the analysis for their own system here. All inputs in blue should be adjusted to fit the producer’s own scenario.
- Average forage yield, and low, average, or high grain yield scenarios.
In the example shown on Figure 1, three different grain yield scenarios are explored: 20, 30, or 40 bushels per acre, with average forage yield and all other factors maintained constant. In this example, the only scenario in which maintaining the crop for grain paid out was with a yield potential of 40 or more bushels per acre.
Wheat grain income given up by graze-out is currently valued at $4.00 a bushel, multiplied by 20, 30, and 40-bushel yield scenarios. Assuming a producer insured this wheat crop at 70%, a 20-bushel yield scenario would produce a small crop insurance payment. The producer will also be giving up this payment if grazing the wheat out, so it is deducted from potential income. By grazing the wheat out, some agronomic costs will be reduced. Obviously, there will not be harvesting, hauling, or drying costs. The producer could also save application and chemical costs of fungicide, if they were planning to apply a fungicide for the grain crop. Herbicides would not be needed, so the default budget takes out the chemical costs but leaves the application cost in since the herbicide is normally applied with fertilizer.
If choosing grazeout, the producer will also save 65% of the crop insurance premium (note that the agent must be notified by March 15th). Using default values in the spreadsheet, this adds up to a per acre savings of $72.80. Additional fertilizer is recommended to improve forage yields, however, so this additional cost is applied using the formula of 30 additional pounds of N per 100 pounds of beef being grazed per acre. Nitrogen is valued at $0.35 per pound.
Summing up all of these changes to a normal wheat grain budget, the producer is giving up $24.69, $59.80, and $99.80 per acre, respectively, on the 20, 30, and 40-bushel potential yield scenarios. As a side note, this would be the minimum the producer would want to charge to lease the field out for grazing, or they would be better off harvesting it for grain.
Figure 1. Partial budget analysis using different grain yield level scenarios, all else constant.
To bring in the potential cattle income and costs, if the stockers are sold today at 700 pounds, they could receive around $132 per cwt. By grazing them on wheat pasture until the middle of May, they could gain 120 pounds (2 pound ADG) and be potentially sold for $125 per cwt. Assuming a 2% death loss on their current value, this gives a potential income of $82.52 per animal by grazing them until May. Additional costs of mineral, labor/machinery, etc. should be applied if they differ from what would have been performed anyway. For example, hauling and marketing costs would be incurred whether the stockers are sold now or in May, so they are not applied. The default values show potential returns of $61.52 per animal after costs.
The number of stockers per acre ties the animal income and per acre costs together. Figure 1 uses one acre per stocker animal across all yield scenarios. The default values in the spreadsheet show that for both the low and normal yielding scenarios, this producer would be better off grazing-out the wheat than pulling the cattle now and carrying the crop out for grain. Only the high-yielding scenario would pencil out better as a grain crop.
- Low, average, or high forage and grain yields scenarios
As another scenario, Figure 2 shows an example to where the producer already has an indication that the wheat crop may be heading towards one of the three yield categories. This example is the same as Figure 1 except that stocking rate varies from 0.7 stockers per acre in the low-forage scenario to 1.3 stockers per acre in the high-forage scenario. This analysis also assumes changes in fertilizer recommendations to the wheat forage. In this scenario, the producer is anticipating one of the three yield categories and is changing management decisions to match expectations. The bottom line recommendations come out the same -- with the high yield scenario it would be better to carry the wheat out to harvest and with the other scenarios it would be more economical to grazeout.
Figure 2. Partial budget analysis using different grain yield level scenarios, varying stocking rates and fertilizer rates
Planting a spring crop after wheat grazeout
Another key item to consider is that by grazing out wheat, a spring crop could be planted, if desired and if herbicide carryover considerations allow. Crop insurance final planting dates for soybeans and grain sorghum both leave an adequate window to do this (again, the crop insurance agent needs to be notified by March 15th). Depending on moisture conditions, this might even make the high-yielding scenario attractive to grazeout instead of carrying the crop to grain yield, as the reduced income could be made up for with returns from another crop.
Download of partial budget spreadsheet
Producers are encouraged to download the spreadsheet used in the two examples above (here) and run their own numbers before they make this decision. Uncertainties exist in yield, wheat and cattle prices, cattle performance, etc., so those risks should be considered by being conservative on estimates or performing “what-if” scenarios. If any doubts exists on the use of this spreadsheet, don’t hesitate to contact one of the specialists listed below.
Romulo Lollato, Wheat and Forages Specialist
John Holman, Southwest Research-Extension Center Cropping Systems Agronomist
Robin Reid, Extension Associate, Agricultural Economics