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Is the Expense Justified? Part 2 of Fencing Costs and Effectiveness for Unusual Challenges

By   /  May 25, 2020  /  No Comments

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Last week Jim described the benefits of fencing out kangaroos and elk and shared costs and effectiveness for different kinds of fencing. This week, he follows up with the answers to an equally important question: “Will this kind of fencing result in more profit?” Read this even if you don’t have to fence out ‘roos and elk. It will help you think about potential profit from your own fencing projects.

One of the more profound revelations after living and running a grazing operation in Idaho for 15 years is the greater obstacle to year-around grazing here is not the weather. It is the grazing pressure of our local wild elk population.

All of the following photos are from our grazing unit or immediately nearby. We do not have as many elk on our unit as there are down on the main ranch. On the main ranch, 200-300 elk are often present in the fall and winter. Some of our client ranches experience number approaching 1,000 elk in a single herd in fall and winter.

It is not our ability to grow feed nor graze in the winter conditions here that limits kicking the hay habit. It is the presence of large elk herds on private land in fall and winter.

We frequently have elk on our pastures in early spring. They do enjoy the early start of irrigated pastures when much of the feed up on the mountain is still brown residual from last year.

We had to train the elk to the idea of movable fences on the landscape in the first few weeks we were on the ranch. We have a policy of never turning off a segment of fence and never having polywire fences set up without power on.

Many times we have watched a running herd of elk stop for a single polywire and then, one by one, jump the fence. We have no issues at all with fence maintenance due to elk damage on any of our electrified fences.

In the past 15 years, I’m not sure if I have had even 10 incidents of elk knocking down a polywire fence.

There is plenty of feed up on the mountains in the growing season. It is fall and winter when the elk really become an economic issue. They do enjoy the easy living of grazing on residual forage on irrigated land.

We can grow tremendous stockpiled forage on the pivots. We can grow annual forage crops for swath grazing. We can produce a lot of feed to have available in the winter. The problem is the elk love to have their share of that feed. Sometimes they can take it all before the cattle ever get to it.

All that expanse you see beyond the pivot is public land. Our county is about 95% public land. There is plenty of space and feed to support the large elk population that we have in many parts of the Intermountain West. They have just become lazy with the easy feed of hay fields and irrigated pasture.

Note the barb-wire fence in the foreground. When I do spring fence maintenance to get ready for our grazing season, I will spend more time on this 1.25 miles of 4-strand barb-wire than I do on our 9 miles of permanent electric fence. The elk moving from the desert to the pivot ground over the course of winter trash this non-electrified fence every year.

Elk are beautiful animals & we enjoy having them around. They are an important part of our culture and an important piece of local economy when it comes to wildlife viewing & the hunting season.

They are hard on conventional fences and they do eat a lot of feed at the expense of local ranches and farmers in other areas.

There is plenty of space to support these herds on public land.

It raises the question of cost effectiveness of excluding elk from productive irrigated land. Tomorrow’s post will explore the economics of elk exclusion for winter grazing.

What would be the cost and benefits be of elk exclusion fencing for winter grazing?

We have talked about what kind of fence it would take to exclude elk from winter grazing areas on a farm or ranch. We have assessed what the cost per acre would be for different types of fence and how size of the enclosed area affects cost per acre.

Now let’s think about what those elk are really costing us. Here are two ways to view those costs.

If the annual income from a cow unit is $900, we simply divide that by 365 days in the year and find the revenue value of a ‘cow-calf’ day is $2.47. Adjust for animal unit equivalence based on cow weight & we might find a cow-day equals 1.5 AUD. Thus, the foregone revenue for a lost AUD would be about $1.50

If elk are consuming 80 AUD/acre, that is a straight up loss in cattle or sheep carrying capacity and about $120/acre revenue loss. On a standard 125-acre 1/4-section pivot that is $15,000 lost revenue on a single pivot. That is a substantial amount.

Rather than looking at total revenue loss, we could look at gross margin/AUD. When we compare winter grazing to hay feeding, that is where we see the gross margin advantage of grazing through reduced costs. This table looks at the gross margin/acre relationship to additional AUDs harvested.

The greater the grazing loss to elk or other feral grazers, the greater the benefit from an exclusion fence.

Another consideration is the greater the value of your product, the more you can afford to pay for an exclusion fence.

The table tells us if the loss is relatively small and you gross margin is small, an exclusion fence would take a long, long time to ever pay for. If you’re only losing 40 AUD/acre and your gross margin value is just 25 cents per AUD, the annual benefit to the exclusion fence is only $30/acre.

If, on the other hand, you are losing 100 AUD/acre to elk grazing (which is not at all uncommon in our area) and you have a higher value product with a gross margin of $2/AUD (premium grassfed beef for example), then the annual benefit of the exclusion fence is $200/acre.

In the cattle sector, cow-calf operations typically have the lowest gross margins per AUD. It takes a well-run outfit to generate $1/AUD gross margin in today’s market.

Grassfed / pasture-finished beef can generate the highest gross margin/AUD in the beef sector today. Gross margin/AUD are often in excess of $2. I have seen GM/AUD as high as $6 for exceptionally run premium pasture-finished beef operations.

 

Spend 30 Minutes With Jim Gerrish!

Jim is putting on a series of grazing webinars with Foothills Forage Association and Maia Grazing. On Wednesday, May 27, 2020, Jim will be talking about how to design a planned grazing system and covering:

• Making a smart evaluation of your existing resources
• Key role of stock water development
• Enriching grazing data with defined units of record
• Understanding of how to leverage MaiaGrazing to support paddock design

Click here for more information and to register for the webinar.

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About the author

Jim Gerrish is the author of "Management-Intensive Grazing: The Grassroots of Grass Farming" and "Kick the Hay Habit: A Practical Guide to Year-around Grazing" and is a popular speaker at conferences around the world. His company, American GrazingLands Services LLC is dedicated to improving the health and sustainable productivity of grazing lands around the world through the use of Management-intensive Grazing practices. They work with small farms, large ranches, government agencies and NGO's to promote economically and environmentally sustainable grazing operations and believe healthy farms and ranches are the basis of healthy communities and healthy consumers. Visit their website to find out more about their consulting services and grazing management tools, including electric fencing, stock water systems, forage seed, and other management tools.

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