The Value of Grazed Corn Residue for Crop and Cattle Producers

 

The Western Corn Belt has historically been corn and wheat cropping systems with cattle integrated on nearby grasslands. Recent agricultural production data ranked Nebraska, South Dakota, Kansas, and North Dakota in the top 10 states for both corn and beef cattle production in the United States. In 2017, these four states had about 20% of the beef cow inventory in the United States with Nebraska alone having 1.9 million beef cows (USDA National Agricultural Statistics Service, 2018). Forage-based livestock production is a fundamental component of these agricultural economies. However, a large quantity of grasslands in this region were converted into annual crops during the mid-2000s (Wright and Wimberly, 2013). To maintain the efficiencies of beef cattle production systems, synergistic use of forage resources in a sustainable manner is essential. In addition to grasslands, this includes the complementary use of corn residue for grazing during the winter months. In this article, we provide an economic assessment of current corn residue grazing in Nebraska as well as some comparisons to Kansas, South Dakota, and North Dakota.

 

 

Using $15 per acre as the most commonly reported corn residue grazing rental rate for Nebraska (Cox-O’Neill et al., 2017), we estimated the current value of grazed corn residue in Nebraska at greater than $74 million (Table 1) in returns to the crop sector. Rental rates for corn residue grazing in nearby states were much lower than in Nebraska. For comparison, regional estimates of average cash rent per acre for crop residue in 2017 averaged $7.50 per acre in Kansas. Rental rates for grazed corn residue in South Dakota and North Dakota were $12.00 and $5.00 per acre, respectively. A survey of Nebraska farmers indicated hat 40% of corn producers currently not grazing corn residue would not consider doing so regardless of potential revenue from the activity (Cox-O’Neill et al., 2017). As such, we estimated that a conservative increase in grazing utilization of 10% of the 4.3 million acres of corn residue available might add $6.4 million additional value to the bottom line of crop producers in Nebraska (Table 1).

 

 

 

 

Using a corn residue stocking rate of 3.0 acres per animal reported by Asem-Hiablie et al. (2016), we estimated that 88% of Nebraska beef cows graze corn residue. This implies the current excess of corn residue available in Nebraska is largely due to a lack of cows. Using a corn residue stocking rate of 3.0 acres per animal and 1.3 animal units per animal (Asem-Hiablie et al., 2016) along with 53 grazing days per animal (M. Schmer, unpublished data; 2010 ARMS Corn Phase II Version 23), we estimated a gross value of over $150 million ($16.72 per animal unit month (AUM) or $38.41 per head) for grazed corn residue based on grass rental rates per AUM for Nebraska livestock enterprises (Table 2). This value would need to cover all costs for the cattle producer associated with grazing the residue, including residue rental, fence, water, transportation, and any additional care expenses. We used residue rental rates on a per head per day basis full care to account for all costs associated with grazing corn residue except transportation of the cattle to and from the residue field. Any difference be-tween gross value and full care rental rates (fence, water, and additional care expenses) in Table 2 accrue to the cattle producer to cover transportation costs and return on investment for using a cheaper feed resource. Under the assumption that cattle are transported in full loads of 36 head and a shipping rate of $4.00 per loaded mile, we calculated a maximum break-even distance for Nebraska of 172 miles.