Texas A&M’s digital Beef Cattle Short Course is live tomorrow. Register here. Join us in the business section tomorrow from 12:30 – 3:00 pm, where several economists will discuss the market for beef cattle and several decision aids as you plan for next year.
Upcoming Dates and Opportunities:
Beef Cattle Short Course – Virtual Meeting August 3-5
Upcoming Reports
August 6th – Land Values
Each year economists from Texas A&M AgriLife Extension present a series of talks at the Beef Cattle Short Course. Due to the pandemic, the meeting has been moved online. However you can still expect the same in depth programming as every year. This year Pancho Abello, Economist AgriLife District 3, and I will be demonstrating several decision aids. Today we’ll discuss a similar decision using the same principles as tomorrow’s talks. The question for today; does pest management pay off?
Pests suck. Some pests literally so. They are an eyesore, they cause unpleasant conditions for you and your herd, and they can cost you money. However, it can be difficult to determine whether or not the steps we take to eliminate pests are profitable. Once you’ve controlled for a pest you never really see what the outcome would be had you not treated, and if you never treat you don’t see the flip side of potential returns from treatment. So how do we know that what we are doing to prevent high pest levels is working?
Cost/Benefit
The method we have to use when evaluating the financial returns from pest control is a comparison of the value of estimated additional gain realized against the cost of our pest management strategy. This requires us to develop two estimates; the cost of a pest management strategy and the implied gains from eliminated pest pressure. Since horn flies are widely distributed across the U.S. and recognized as a financially significant pest, we’ll use them in an example of this comparison.
First, we can estimate the cost of a fly population management strategy. Based on standard practices in an area experiencing moderate to heavy horn fly pressure we’ll evaluate the use of a pour-on insecticide, an ear tag, and a feed-thru insecticide used at manufacturer-recommended doses simultaneously. Table 1 presents the estimated cost in $/head of each pesticide used. I found each of these costs online for several different products of each type and came up with an average price per dose.
Costs
We’ll compare costs and returns for this pest management treatment on calves sold at weaning, about 205 days, stockers that we own for about 4 months, and cows that we own year-round. These ownership periods are important for determining the number of each treatment we are paying for. We’ll assume that all animals are tagged once a year and that each animal is provided with feed through insecticide continually via inclusion in a mineral feeding. Finally, I’ve adjusted the cost of pour-on insecticide based on the volume required per head per year. Cows will require to pour-on treatments twice while we’re only using the pour-on once in calves and stockers, each because we own them for a shorter period. You can consider different prices and strategies than those in Table 1 depending on pest pressure in your area, and product choice and price.
Benefits (Deferred Losses)
Using research conducted at New Mexico State University, we know that there is significant unrealized (or lost) gain in the presence of uncontrolled horn fly populations. An excessive number of flies causes changes in behavior and the physiological state of cattle, and both result in decreased average daily gain (ADG).
We’ll consider two examples; a stocker enterprise and a cow+calf enterprise. In calves, heavy horn fly infestation leads to ADG loss of 0.2 lbs./day. In stockers, the same infestation leads to ADG loss of 0.09 lbs./day. In cows, the difference in weight between infested and treated herds was approximately 14.5 lbs./head in the data from New Mexico State. Using these changes in weight we can estimate total value lost in the presence of heavy fly pressure.
For our examples we’ll assume a weaning date of 205 days for calves. With a decrease of 0.2 lbs./day in ADG, total unrealized gain per calf due to horn flies prior to weaning is approximately 29.4 lbs. Total lost gain for stockers over 4 months is approximately 23.8 lbs.
Does it pay?
Both the stocker and cow+calf enterprise realize a positive net return from implementing pest management practices. To put the total amount in perspective, if you run a 50-pair herd, your total net return from fly management under these conditions would be a gain of approximately $1,700; that is the same as selling 2.5 more 400-pound weaned calves. In a herd of 50 stockers your total net return from fly management under these conditions would be approximately $1,200, the same as selling an additional stocker.
Table 2 only presents the net return for the total value per head from our theoretical fly management strategy, i.e. what you would see on a balance sheet. The cow+calf return changes a bit when viewed from a cash flow standpoint. While increased cow weight is positive for total net worth that value is only realized when cows are sold. If we adjust the figures in Table 2 to incorporate a 10% culling rate each year, our net return/head to the cow+calf enterprise from fly management decreases from $34.71/pair to $27.53/pair; still a positive net return. Whether you view the choice from a balance sheet or cash-flow standpoint, management for horn flies tends to pay under the management strategy we’ve presented.
If you are choosing to treat either your calves OR your cows under fly pressure, a cash flow analysis would likely show higher ending cash from treating the calves in a herd rather than cows. We’re paid on calf weight each year and only paid for cows when they are culled. Achieving more pounds of gain on calves by keeping flies off of them will be more positive for annual cash flow than keeping pests off of cows.
Chart Challenge
This week’s unlabeled mystery chart is pretty straightforward if you use your imagination!
