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Know your winter feed cost to boost cow-calf profits

Winter feed costs are the largest expense for a cow-calf operation.

Kenny Burdine, Economist

November 20, 2024

3 Min Read
Mindy Ward

By mid-November, most cow-calf operators are either feeding hay or will be starting to feed hay very soon. As a rule, winter feed costs are the largest expense for a cow-calf operation.

Hay supply was very tight coming out of 2022, but generally improved throughout the course of 2023 as production levels were higher. For estimation purposes, USDA groups hay into two categories: Alfalfa and Alfalfa Mixtures and All Other Hay.

Non-Alfalfa hay, referred to as All Other Hay, is likely most representative of hay that is typically fed to beef cows. In the October Crop Production report, USDA lowered their 2024 non-Alfalfa hay production estimates from August. While this is significant, the October estimate was still more than 5% higher than 2023. With greater hay production, higher hay stocks in the spring and a likely smaller cowherd, hay should be more readily available this winter across the U.S.

It is also interesting to look at hay production in different parts of the US. Table 1 shows 2024 non-Alfalfa hay production estimates, as compared to last year, for several states and the U.S. as a whole. Note that hay production is projected higher in most states shown with Tennessee and Oklahoma being two notable exceptions. The decrease in Oklahoma is driven by a sharp drop in harvested acres, while Tennessee is predominantly driven by lower yield.

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Hay values can be very different across regions and placing a value on hay is further complicated by the fact that the majority of hay fed to cows is produced on the farm. While hay value is an important starting point, winter feed costs are also impacted by how efficiently hay is stored and fed by the cow-calf operation.

For this reason, I often show Table 2 during Extension programs as a way to discuss winter feed costs across a range of hay values and hay storage and feeding loss rates. Costs are expressed on a daily basis with the assumption of a 1,300-pound cow consuming 2.25% of her body weight each day.

During the winter of 2022/2023, I felt like we had moved to the right half of table 2 in Kentucky. Grass hay was in short supply and what hay was moving was selling at pretty high prices. As I write this in November of 2024, we have likely moved back to the center of the table.

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Regardless, the point to be made is that both hay cost and storage/feeding efficiency significantly impact winter feed costs. For illustration, a $20 per ton decrease in hay production cost (or purchase price) leads to a decrease of $0.34 per day at the 15% loss level and $0.45 per day when losses are assumed to be 35%.

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Similarly, reducing storage and feeding losses from 25% to 15% can result in a savings of $0.14 per day when hay is valued at $60 per ton and $0.28 per day when hay is valued at $120 per ton. Having a feel for winter feeding costs can be a crucial first step in understanding cow-calf profitability and strategies to reduce winter feeding costs are likely worth consideration.

Burdine is a livestock economist with University of Kentucky Extension.

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About the Author

Kenny Burdine

Economist , University of Kentucky

Burdine grew up in Jessamine County, KY, where his family produced tobacco and raised cattle and sheep. He is an agricultural economist with the University of Kentucky Extension.

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