Wheat graze-out decision during the 2017-18 growing season
The development of the Kansas wheat crop is behind this year as compared to historical values due to a delayed sowing, colder-than-average winter and spring seasons, and the extreme drought conditions experienced. Thus, there are parts of the state in which the crop is still approaching first hollow stem, such as northwest, west central, parts of southwest, and into north central Kansas. 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. The dry conditions has resulted in little cool-season native pasture growth prompting producers to consider grazing out poor wheat and delaying grazing of native pasture. Furthermore, 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 made 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 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 paragraphs below offer 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 4, can be used with a certain degree of confidence to estimate wheat yield potential. Given the dry conditions 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. Some fields may be eligible to file an insurance claim now if yield potential is very poor, receiving a crop insurance payment and still having grazing opportunities. This becomes complicated however if not all fields in the crop insurance unit are looking poor (such as enterprise units on a large farm). Before making any decision, it is very important to talk to your crop insurance agent.
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. Dry early springs (like we are currently experiencing), or hot temperatures, 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 2018 spring have been below normal for the majority of the state, delaying crop development. Most varieties have already reached first hollow stem at several parts of the state, such as south-central into central Kansas, and many varieties are approaching this stage in southwest Kansas. Most likely, producers interested in harvesting the crop for grain will have to remove cattle by mid-April in western Kansas, which is later than other years on record. 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. These 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.
In the example shown in Figure 1, three different grain yield scenarios are explored: 15, 30, or 45 bushels per acre, with low, average, and high forage yield respectively. All factors remain constant 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. The default scenario assumes it is too dry to top dress wheat, so “Additional Fertilizer” is set to “No”. If used, the formula assumes 30 pounds of additional nitrogen for every 100 pounds of beef per acre. In this scenario, the producer is anticipating one of the three yield categories and is changing management decisions to match expectations.
Wheat grain income given up by graze-out is currently valued at $4.50 a bushel, multiplied by 15, 30, and 45-bushel yield scenarios. Assuming a producer insured this wheat crop at 75%, a 15-bushel yield scenario would produce a crop insurance payment. If the field is not released at the time of the graze-out decision, the producer will also be giving up this potential payment so it is deducted from potential income. If the field is already released and the crop insurance payment will be received regardless of graze-out, then use the dropdown menu to select “Field Released” (see Figure 2).
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 and herbicide, if they were planning to apply it for the grain crop. Using default values in the spreadsheet, this adds up to a per acre savings of $75.00. Additional fertilizer is recommended to improve forage yields; however, because of the dry conditions many farmers are not considering it a worthwhile investment so the default scenario is set at “No”.
Summing up all of these changes to a normal wheat grain budget, the producer is giving up $31.13, $60.00, and $127.50 per acre, respectively, on the 15, 30, and 45-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. An example of partial budget analysis using different grain/forage yield level scenarios (low, average, and high forage yield).
To bring in the potential cattle income and costs, if the stockers are sold today at 750 pounds, they could receive around $144 per cwt. By grazing them on wheat pasture until the end of May, they could gain 90 pounds (2 pound ADG) and be potentially sold for $140 per cwt (a favorable price slide given the current market). Assuming a 1% death loss on their current value, this gives a potential income of $85.20 per animal by grazing them until the end of 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 $66.95 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 as an average yield scenario with low being set at .7 animals/acre and high being 1.3 animals/acre. The default values in the spreadsheet show that for the low yielding scenario, this producer would be better off grazing-out the wheat than pulling the cattle now and carrying the crop out for grain, even assuming they are giving up their crop insurance payment by doing so. They will bring in $15.74 per acre more than if they carried the crop to harvest and it only yielded 15 bushels. If the field is released and the crop insurance payment will be received, this would increase to $54.37 per acre (see Figure 2). This producer would be saving $7.50 an acre by not harvesting in addition to income gained by grazing.
The average yield scenario only slightly favors grazing the wheat out but is close to breakeven at $6.95 per acre. Even a couple bushels more than average would make this scenario favor a grain crop, so it will be a hard scenario to make a decision on. The high-yielding scenario would decisively pencil out better as a grain crop, showing over $40 per acre loss by grazing it out.
Figure 2. Partial budget analysis when low grain/forage yield has crop insurance release.
Planting a summer crop after wheat graze-out
Another key item to consider is that by grazing out wheat, a summer 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). Depending on moisture conditions, this might even make the high-yielding scenario attractive to graze-out 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 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