1. Thoughts on The Impact of Changing Commodity and Fertilizer Prices
Bill Burton
OSU Area Agricultural Economics Specialist
Cooperative Extension Service
Northeast District

2. Average US Fertilizer Prices

3. Nutrient Use vs Urea Price

4. CBT Monthly Corn Price

5. CBT Monthly Soybean Price

6. KCBOT Monthly Wheat Price

7. CME Monthly Feeder Cattle Price

8. 100 Bu
Corn
130 Bu
Returns over Operating Cost
$315.17
$442.56
Returns over All Costs
$130.15
$257.54

9. 30 Bu
Soybeans
50 Bu
Returns over Operating Cost
$274.64
$422.75
Returns over All Costs
$180.38
$249.09

10. Cow/Calf Returns $12 / acre $15 / acre
If we assume a return above all costs of $120 per cow.
10 acres / head
$12 / acre
8 acres / head
$15 / acre
6 acres / head
$20 / acre
4 acres / head
$30 / acre

11. Fertilizer for Hay or Pasture?

12. Nutrients Removed by Forage Crops
Alfalfa 5T/A
Bermudagrass 6T/A
Tall Fescue 3.5T/A
Sorghum/Sudan 4T/A N
280 lbs
$143/A
$29/T
258 lbs
$132/A
$22/T
135 lbs
$69/A
$20/T
160 lbs
$82/A
P2O5
75 lbs
$62/A
$12/T
60 lbs
$49/A
$8/T
65 lbs
$53/A
$15/T
61 lbs
$50/A
$13/T
K2O
300 lbs
$146/A
$29/T
288 lbs
$140/A
$23/T
185 lbs
$90/A
$26/T
233 lbs
$113/A
$28/T
Total $
Value
$351/A
$70/T
$321/A $53/T
$212/A
$61/T
$245/A
* Southern Forages

13. Nutrient & Baling Breakeven Hay Values
Alfalfa Cost $98/Ton $59/Bale
Bermudagrass $81/Ton $49/Bale
Sorghum/Sudan $88/Ton $53/Bale
Assumes a $16.46/bale baling cost.

14. Prospective Litter Buyer Deficient in both P and K
A/Cow
Forage T/A
N Req Lbs/A
NPK Total $ / Cow
Forage Expense Total $ / Cow
Value of Gain per Acre less forage $
Value of Gain/A including all costs 10 .6
.00
182 40 21 5
1.2 30
140
297 57 18 4
1.5 50
150
282 75 26 3 2 70
142
249
111 46
2 Tons litter
180
287 98 33
2.5 95
277
122 44
120
167
Based on Nov fertilizer and calf prices pound cow and bulls pounds sold per cow. Custom hay harvest and 60 day hay supply. 40 pounds P and K/A. For 3A and greater only ½ of the acres are fertilized and the N rate/a is doubled to gain efficiency. N = 48¢, P = 36¢, K = 32¢. 450 pounds of calf sales per cow unit at an average price of $1.20/lb. and 100 pounds of cull cow sales at $42 for $582 dollars gross income per cow. 40 pounds of p and k per acre. Custom harvest 2 round bales per cow, $32 per cow. Rent $15/A native and $25 per acre bermudagrass. Litter $30/ton 2ton per acre on the whole acreage. Cow calf enterprise selling all calves at weaning and <1100 pound cow.
To understand this table – At 10 acres per cow – you would expect to have $400 cover the remaining cow expenses not included in forage costs?
At 2 acres per cow, you expect to have $334 per cow remaining after forage costs to cover the remaining expenses. Will the added number of cows offset the increased cost per cow?
Achieving these stocking rates on the amount of nitrogen listed would require above average forage management that would include some limited access or rotational stocking (more than 1 or 2 pastures and closing gates). The fertilizer rates are based on amounts listed in the Forage Budgeting Fact Sheet #2584.
This is a duplication of the previous slide but with an added column for all those other costs associated with running a cow. $194 dollars per cow based on a native budget for Payne Co. provided by Bill Burton. This includes allowances for such items as supplementation, vet and med, minerals, depreciation, equipment etc. Divided the $194 by the number of acres and subtracted that amount from the value of gain per acre column

15. Implication
At current fertilizer prices – The income potential is about equal with 1 cow per 10 acres or 1 cow per 4 or 5 acres.
1 cow per 10 is less risk, less labor, less wear on equipment.
1 cow per 3 shows a return of $46 per acre. This could be improved with legumes but still less than potential of soybeans or corn.
Cropping could be an opportunity to transition pastures to friendly endophyte fescue.

16. Forage Expense Total $ / Cow Value of Gain per Acre less forage $
With Adequate P and K
A/Cow
Forage T/A
N Req Lbs/A
N Total $ / Cow
Forage Expense Total $ / Cow
Value of Gain per Acre less forage $ 10 .6
.00
190 39 5
1.2 30 72
242 68 4
1.5 50 96 85 3 2 70
101
202
126
2 Tons litter 42
157
141
Litter $7/T at the house

18. Implications Demand for litter increases
Desire to keep litter increases
Price paid to poultry grower should increase

19. What is going to be produced?
Return over all costs
$ / acre
Cow / Calf
10 to 4 acres / head
$12 to $30
Corn
100 bu / acre
$130
Soybeans
30 bu / acre
$180

20. So, what is going to
be produced?