Cattle producers face competition for land
Cow-calf producers have to make forage pay for itself, according to John Lawrence, director of the Iowa Beef Center.
Lawrence discussed the issue with producers during the Iowa Forage and Grassland conference held recently in Des Moines.
"Land costs have increased but, fortunately, cows have become more efficient and producers have become better managers, which has led to fewer acres per cow needed to raise cattle economically," said Lawrence.
Acres needed per cow in Iowa is 3.3. Those numbers are increased to 5.1 acres per cow needed in Missouri, 11.7 acres per cow in Kansas, 12.6 acres per cow in Nebraska and 14.9 acres per cow in South Dakota.
While it takes fewer acres in Iowa and Missouri, there are also fewer pasture acres as compared to Kansas, Nebraska and South Dakota.
Lawrence said producers need to be sure to lower their fixed costs by using good management skills.
"Land prices have increased and will remain higher as long as grain prices stay high, so cattle producers have to learn how to work with lowering their fixed costs and managing the land they have available," he said. "Land prices have actually doubled since 2003. That, along with high input costs, has made profits hard to come by for cattle producers."
Management through grazing systems such as rotational grazing can increase the number of cow units per acre. Being aware of variable costs is important in good management, as well.
"Getting performance out of the cattle is the most important thing for the bottom line," he said. "Higher prices increase land returns because every pound is more valuable."
Lawrence said the continual downsizing of the cowherd should help boost the cattle market and, while input costs continue to be high, higher cattle prices should be the relief cattle producers need.
The Renewable Fuels Standard has continued the push for ethanol--both grain-based and cellulosic. This has also kept the corn prices higher and has put some pressure on cattle producers to decide what kind of grain to feed their animals.
"While ethanol has pushed the corn prices up, the next energy to watch will be the carbon market, which will be in place of or in addition to the oil market," he said.
With the increased demand for carbon, more trees will be planted--an estimated 50 to 70 million acres of trees.
"This demand will also compete for pastureland. Cattle producers should prepare for that push, as well," he added.
According to Lawrence, cattle producers will have to continue to be better managers of the land and become more efficient in their ways of raising cattle, since there will be so much competition for land.
Jennifer Bremer can be reached by phone at 515-833-2120, or by e-mail at email@example.com.