Wheat Options
Should you graze it out or go for grain?
If you planted wheat in the fall, January brings you close to a decision time on whether to graze it out or keep it for grain. This decision is based on many factors, including value of gain for livestock, grain prices, potential grain yield of the field and presence or absence of certain hard-to-control weeds if you decide to go for grain.
Two of these factors are primarily agronomic and two are primarily economic. We'll start with the two agronomic factors: potential grain yield of the field and presence or absence of certain weeds.
The potential grain yield of the field is probably the first consideration. The main thing to look at is the wheat stand. Is it uniform across the field? Do you have an adequate plant population?
The definition of an adequate plant population varies according to individual situations, but is usually a population of 20-25 plants per square foot. A field with a lower plant population may be worth saving for grain if the stand count is lower, but very uniform. If wheat is to be used for grain, cattle must be removed before the first hollow stem growth stage occurs. For help in determining first hollow stem, see the article at http://lubbock.tamu.edu/othercrops/pdf/wheat/wheathollowstemid.pdf.
Another major consideration is the presence or absence of certain weeds. For purposes of this discussion, the main problem weeds in wheat for grain are cereal rye, rescuegrass, wild oats and Italian ryegrass. None of these grasses are weeds in graze-out situations since cattle relish them, but they are major weeds in wheat for grain due to the high cost of controlling them.
If you have cereal rye in the wheat, it will likely be where pasture mixes have been planted in the past. The only labeled herbicide for cereal rye in wheat is Beyond®. Beyond® can only be used if a Clearfield® wheat variety is planted. Beyond® herbicide will kill conventional wheat varieties. Rescuegrass is difficult to control. If you have an abundance of cereal rye and/or rescuegrass, you will likely be better off grazing out the wheat.
Italian ryegrass and wild oats can be controlled in wheat for grain, but the cost is fairly high. Consider the effect of the control cost of these plants before making the decision to save the wheat for grain. For more information on weed control in wheat for grain, see "Weed Control in Wheat for Grain" by Jim Johnson in the July 2008 Ag News and Views (www.noble.org/Ag/Soils/WeedCtrl4Grain/).
The next things to consider are economic. If you go with wheat for grain, there will be additional costs that are not incurred in graze-out wheat. You may need a fungicide application and will have harvesting and hauling costs. You will also have to consider the possibility of late freezes and hail storms in the spring.
Traditionally, wheat-for-grain systems will produce a higher net return than a wheat graze-out system. This year's partial budget once again shows that dual-purpose is the more profitable system (Table 1). The revenues and costs discussed here are from first hollow stem forward. Costs incurred earlier are the same with either system. We will start with the revenue forecasts.
| Table 1: Partial budget comparing revenue of wheat acreage grazed or harvested for grain | |||
Grazeout $/acre |
Grain $/acre |
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| Revenue | |||
| Cattle | 196 |
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| Wheat Grain | 164 |
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196 |
164 |
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 |
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|
|||
| Expense | |||
| Pesticide | 20 |
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| Harvest and hauling | 35 |
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| Labor | 20 |
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| Vaccinations and processing | 25 |
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| Mineral | 12 |
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| Shipping | 22 |
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| Death Loss | 15 |
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| Interest on cattle | 16 |
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| Total operation expenses | 110 |
55 |
|
|
|||
|
|||
|
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| Net Return | 86 |
109 |
|
The production forecast for a wheat graze-out system is to run two steers per acre in the spring that will gain 2 pounds (lb.) each per day for 70 days. The value of each additional pound of gain is forecast to be 70¢ per lb. if a producer owns the cattle. This calculates to gross revenue of $196 per acre for the wheat graze-out system.
The production forecast for the wheat-for-grain system used the Oklahoma winter wheat 10-year state average yield of 31 bushels (bu.) per acre and projected cash price of $5.30 per bu. The wheat-for-grain system gross revenue calculates to $164 per acre.
While the revenues from first hollow stem forward show that the wheat graze-out system is the most profitable, the cash expenses from first hollow stem forward tell the opposite story.
Expense forecasts for each system are estimated as follows, assuming two calves per acre. We calculated grazing costs on a per-head basis and multiplied by two to get costs per acre. The cash cost for a wheat graze-out system begins with a vaccination program. This cost is expected to be $25 per acre and includes initial working of new calves, all chute charges and morbidity treatment. Mineral prices have come back down in the latter part of 2009, but are still estimated to be $12 per acre. The shipping of newly purchased cattle to the graze-out location and the additional costs of marketing and shipping of cattle at the end of the wheat graze-out system were figured at $22 per acre. Death loss is expected to be higher for new cattle coming in for the graze-out period than for cattle already on the property, but together will average 1.25%. The cost to own the cattle using borrowed money at 7% for an additional 70 days comes to $16 per acre. All of these costs totaled come to $110 per acre for the wheat graze-out system.
The cash costs for a wheat-for-grain system include use of a pesticide and an application cost of $20 per acre. This will be lower if you do not have hard-to-control weeds or need a fungicide application in the spring. The cost will be higher if either of the above situations applies. Harvest and hauling will vary with yield and location, and is forecast to be $35 per acre. The costs for the wheat-for-grain system total $55 per acre.
These figures show that the wheat graze-out system will provide a net return of $86 per acre, while the wheat-for-grain system will provide a net return of $109 per acre. This is an additional return of $23 per acre for the wheat-for-grain system.
While these figures are estimates for Oklahoma and the surrounding states, we encourage every producer to generate their own forecast to determine their particular net return for the decision that is faced at first hollow stem.
Editor's Note: Reprinted with permission from Ag News and Views, a newletter published by The Samuel Roberts Noble Foundation.
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