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  5. June 2018

Economics of No-Tilling Cereal Rye Pastures

By Jon T. Biermacher, Ph.D., Senior Economist,
Narayan Nyaupane, Ph.D., Postdoctoral Fellow
and James Rogers, Ph.D., Associate Professor

Posted Jun. 1, 2018

The economics of no-till versus clean-till establishment of a winter small grain crops (e.g., wheat, rye, oats) in the Southern Great Plains has been evaluated extensively using grain data collected from small plot agronomic studies at experiment stations throughout the region. However, little attention has been given to the relative economics of no-till versus clean-till establishment of small grain pasture used solely for growing beef cattle.

Between 2 and 3 million acres of small grain pasture is established using clean-till establishment methods (i.e., some combination of plowing, discing, cultivating and planting with a conventional small-grain drill) each year in the Southern Great Plains. Production expenses associated with clean-till methods are steadily increasing, especially for fuel and owner’s labor for the field operations (tillage, cultivation, planting) used to establish small grain pasture. In addition, there are increasing environmental concerns associated with continuous, annual clean-till establishment of small grain pasture on these acres, including an overall loss of soil health and soil carbon, nitrogen leaching into watersheds, and soil erosion.

Despite the lack of economic information, production scientists, environmental groups and beef consumers have been advocating and promoting no-till establishment practices to farmers and ranchers in the Southern Great Plains. In response to these concerns, the Noble Research Institute conducted an on-farm research study to compare the production and economics of clean-till and no-till methods for establishing cereal rye pasture for grazing.

Grazing study

Animal performance data representing beginning and ending body weights and dates, average daily gain (ADG), stocking rate, and steer grazing days were collected from a four-year (2010-2014) stocker cattle grazing trial in south-central Oklahoma. The grazing trial was set up as a completely randomized design with five, 10-acre replicates of the two establishment methods, clean-till and no-till. In each study year, a set of mostly black-hided sale-barn cattle (four-year average body weight = 450 ± 103 pounds) typical for the region were purchased on or near Oct. 1 and preconditioned for at least 45 days prior to grazing initiation. Enterprise budgeting techniques were used to calculate expected revenue; variable and fixed costs; and net return to land, management and overhead for each establishment system, assuming a 500-acre farm size. Analysis of variance was used to determine the presence of statistically significant differences in measures of animal and economic performance between the two methods.

Table 1. Four-Year Pooled Average Animal and Economic Performance Measures by Forage Establishment SystemDownload Infographic

Animal and Economic Performance

Measures of animal and economic performance are reported in Table 1. Due to an average delay of 17 days in the placement of steers on the no-till pastures, the average placement weight differed by 22.7 pounds per head. Even though steers were placed on clean-till pastures before no-till pastures, grazing on clean-till pastures was terminated on average eight days before no-till pastures. As a result, the average termination weight between systems was not statistically different. ADG for clean-till and no-till systems (2.44 versus 2.50 pounds per head per day) was not different, but the clean-till system had 10.7 more grazing days. Using grazing days and ADG measured in the study, the clean-till system realized 14 more total pounds of gain per acre (463 pounds per acre versus 449 pounds per acre) than the no-till establishment system.

Relative Cost

Even though total gain favored the clean-till system, the relative cost of production between the two systems was a much different story. Costs for seed, fertilizers, and broadleaf weed and insect (armyworm) control were the same for both systems. However, costs associated with establishment of pasture were lower with the no-till system. Specifically, the variable costs associated with labor as well as fuel, lubrication and repairs for tractors and equipment used to establish pasture were collectively $19.70 per acre lower for the no-till system than for clean-till. Labor savings alone was equal to $6.30 per acre, which, at $10 per hour, is equivalent to a savings of 37.8 minutes per acre. For a 500-acre farm, this equals a savings of 39.4 eight-hour days of labor compared to the clean-till system. Also, fixed costs associated with capital recovery (depreciation and interest) as well as taxes, insurance and shelter for the establishment equipment for the no-till system were $16.20 per acre lower than those for the clean-till system. The use of glyphosate to chemically burn back weeds and annual grasses prior to the no-till establishment of cereal rye seed was $8.60 per acre, but the total cost difference between no-till and clean till was $29 per acre in favor of the no-till system.

Net Return

In our base-case scenario, it was assumed that each pound of gain produced by cattle in each system was worth 80 cents. Based on this assumption, the net return between the two systems favored no-till by $17.60 per acre. The difference in net returns between the two systems was most sensitive to assumptions about value of gain (VOG). A reduction in the base-case VOG from 80 cents to 50 cents eroded net return of the clean-till system down to $0 per acre and widened the net value per acre of no-till from $17.70 to $21.87. Conversely, we found that a VOG of $2.05 was required to erode the difference in net return between the two systems down to $0 per acre (i.e., at a VOG of $2.05, net return for both systems was equal to $718.30 per acre).

Clean-Till System

Payback Period of No-Till Drill

We anticipated that many producers would be interested in knowing what the payback period would be for the purchase of a new no-till drill. Our estimates for fixed costs for the no-till establishment system evaluated in this study assumes the purchase of a new 15-foot no-till drill at a price of $50,000. Based on our assumption of the 500-acre farm and a base-case expected net return of $17.60 per acre, the payback period would be 5.65 years.

Concluding Thoughts

The results from this study provides some economic evidence and support for the adoption of the environment-friendly and labor-friendly no-till system to establish small grain pasture for growing beef cattle in the Southern Great Plains. Because no-till practices are quite different from traditional clean-till methods and requires liquid applications of glyphosate and the use of a no-till drill or air seeder, we expect that producers will realize challenges as they adopt the system. In fact, producers who have successfully adopted no-tilling in the region report that it took, on average, three production seasons to fully learn and implement the no-till system. However, those who have learned the ways of no-tilling tell us they will never return back to a conventional tillage program.

At the Noble Research Institute, we recommend that producers who are interested in switching to a no-till system for their small grain pastures start by working with an agricultural soils and crop consultant, extension forage specialist, or experienced no-till farmers in their farming community.

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