According to the US Census of Agriculture, cultivable pastureland in South Dakota decreased by 22% and grazing fees per head increased 50% between 2002 and 2012. Average 2016 South Dakota pasture rental rates range from $11/acre in the northwest to near $100/acre in the southeast corner of the state. Also, cropland rental rates in the state range from $28/acre in the northwest to $244/acre in the southeast (2016 SD Ag Land Market Trends). So how do we better utilize resources to reduce expenses for both crop and livestock producers?
Crop-livestock integration practices are one way to make better use of what cropland owners have (land), and match it with what livestock owners need (feed). Planting annual forages, such as cover crops, can provide grazing opportunities on crop ground after cash crops have been harvested, resulting in high quality forage for cattle, while also keeping the soil biologically active through the winter. Cover crop mixes can be planted for fall or spring grazing at a range of $30 - $90 per acre (including seed, planting and fertilizer expenses).
Benefits of Crop Livestock Integration
Benefits of cover crops include promoting soil heath, soil structure and building soil organic matter levels. Furthermore, it can suppress erosion and weed production, as well as reduce compaction. Research has shown that grazing cover crops can benefit subsequent yields (USDA, 2012) and reduce fertilizer expenses.
Benefits of livestock grazing cover crops include decreasing winter feed costs by extending the grazing season and decreasing the need for stored forage. Cover crops provide high quality feed during a time when pastures are starting to go dormant in the Upper Midwest, which can improve cattle performance and body condition score. Furthermore, livestock return valuable nutrients back to the cropland via manure which will reduce fertilizer and labor application expenses.
Rental Agreements & Pricing
Crop-livestock integration is also a potential source of revenue if rental agreements are set up between cropland and livestock owners. Although there is no “one size fits all” type of agreement, a University of Nebraska Lincoln Ag Econ Department factsheet outlines questions that should be asked for all parties to agree on how to manage soil and cattle for maximum profitability.
Management Areas to Address and Questions to Ask
- Crop Management: How, what and when will cover crops be planted and terminated? Who will pay for establishment and termination?
- Cattle Management: Who is responsible for fences, water and daily herd checks?
- Land Use Management: When will cattle start and end grazing? What is the stocking rate and harvest efficiency desired? If soil gets too moist, will grazing be restricted?
- Risk Management: Do cover crops fit in with crop insurance requirements? Is there compensation or insurance for poor grazing conditions or death losses?
Pricing lease agreements can also vary by arrangement from pricing per head per day or on a per acre basis. With both pricing arrangements, cropland assumes the risk of low forage production, and livestock owners assume the risk of finding alternative feed if grazing conditions are interrupted, and are in turn potentially paying for something they cannot use. Another option used primarily for growing cattle is pricing on a share of gains basis.
Crop-livestock integration with cover crops and residue grazing opportunities can be beneficial for both parties. This practice adds a source of income for cropland owners during the off season, while allowing livestock owners to extend their grazing season, delaying the need for them to start feeding more expensive stored forage. Although it’s too late to plant cover crops for grazing this fall, crop residues are another grazing option cow/calf producers can utilize as a cost effective forage supply. Yet, beginning the conversation between cropland and livestock owners this winter may be a good plan to set the stage for a potential crop-livestock grazing agreement next year.