by Katie Navarra
Social distancing and a virtual meeting platform didn’t keep Capital Region farmers from attending the annual Spring Turnout Grazier Meeting in late May. The two-hour meeting offered tips for strategizing about spending money, considerations for feeding minerals to livestock and calculating costs for fencing and forage. The annual event is organized by Cornell Cooperative Extension’s (CCE) Capital Area Agriculture and Horticulture Program.
Farm Business Management Educator Dayton Maxwell kicked off the event, leading a discussion focused on capital spending in farm businesses. Maxwell said the first question farmers ask is “How much will my monthly payment be?” It’s often believed that lower monthly payments have less pressure on cash flow. However, when considering capital purchases, Maxwell encouraged farmers to think about the money gained through the investment.
Before making a capital investment, he recommends asking three questions:
- Will this help generate more income than what is already being made?
- Can the investment create efficiencies, which decrease operating costs?
- Will this help maintain an ability to produce income?
“If you’re going to spend money you have to think about what you’re going to get out of it,” said Aaron Gabriel Sr., Extension resource agronomy educator. “Will what you’re buying increase income and/or decrease costs?”
Expenses can add up quickly and it can feel like making a profit isn’t achievable. A strategic investment that improves processes may cost money, but over time will more than repay itself in additional profits earned.
“You have to figure out your goal and look at your expenses,” Gabriel said. “You have to be critical and look at all aspects of your business.”
Strategic fencing expenses
Fencing expenses are a necessity for livestock. Farms must invest in fencing. Using geometry to make fence line decisions can reduce costs, Gabriel said. For example, a 37-acre pasture fenced in a circular pattern can be accomplished with 121 feet of fence/acre, whereas a 29-acre area fenced in a square needs 155 feet of fence/acre.
“Look at how many feet of fencing you’re using per acre – circles are the most efficient,” he said.
Shopping around can uncover money-saving deals; however, it is important not to sacrifice quality. A good fence will last longer and require fewer repairs. Smooth high-tensile 12.5 gauge wire is standard and appropriate for most situations. However, Gabriel said well-rated high-tensile barbed wire may be appropriate for some situations.
“Round southern pine posts are easier and faster for building corners, but nothing will outlast black locust,” he said. “Line post spacing might be a tradeoff of post size and time to install more smaller posts. If land is uneven, closely spaced posts may be needed. Considering 3/8-inch fiberglass posts as spacers can save some cost.”
When planning for a new pasture or an expansion, Gabriel encourages farmers to think and design for:
- Minimizing maintenance – How do you minimize the fence and time to maintain it? Clip or use a broadleaf herbicide along fences to prevent brush from growing (not glyphosate)
- Labor efficiency of moving cattle and other animals in order to provide water, minerals and fly control
- Effectiveness for managing pastures so they can be properly grazed
USDA-Natural Resources Conservation Service (NRCS) funds may help offset fencing expenses when fencing addresses water or soil quality issues. NRCS pays by the foot and is based on a 75% cost-share.
“Farms must have a Prescribed Grazing Management Plan to be eligible; a whole-system approach and fence construction must follow the NRCS practice standard,” Gabriel explained. “The fencing can be installed by the farmer or a contractor.”
Applications are accepted year round, but awards are only given once a year, usually in July. Applications are ranked numerically and awarded as prioritized until the money is gone, according to Gabriel. Planning ahead is critical to get access to funding and avoid waiting up to two years to receive funding.
Forage equipment costs
Forage is essential to a livestock farm. The key for farmers, especially small and part-time farmers, is deciding if it’s more cost effective to produce themselves or purchase. To decide, Gabriel encouraged farmers to consider the fixed and variable costs of equipment, storage costs and crop production costs.
“It’s important to know what your taxes and insurance are for each building. Your assessor can provide the tax information. Read your insurance policy carefully to understand the cost per acre,” he said. “You have to look at all of the expenses critically.”
Three spreadsheets are available for free to help farmers calculate costs across these parameters. They can be found at blogs.cornell.edu.
Economically feeding minerals
Minerals support optimal performance in livestock. However, properly feeding them is important for maximizing the investment. Mineral supplements do not need to be complicated if forage quality is good.
Most nutrition issues are protein and energy, which come from feeds, especially pastures and forages, according to Ashley Pierce, the livestock educator for the Capital Area Agriculture and Horticulture Program. Required minerals depend on the type of animal, geography and whether the animal is lactating, growing or finishing.
“Buying ‘cheap’ minerals may mean low availability,” Pierce explained. “In some mixes only 10 – 20% are absorbable by the animal when compared to the sulfate, chloride, organic or chelated forms in more expensive mineral mixes.”