Linda and Ron Grice

Grazing Green Lands Blue Waters Field Day, September 24^th 2005

At the field day, Linda presented several budgets for grass-based beef operations that represented reasonable economic alternatives.  For comparison, she also provided the high, middle, and low thirds from the ISU Extension 2004 Farm Business Summary for Southeast Iowa.

The Farm Business Summary columns are at the left of the sheet and show that livestock is an important part of the picture in Southeast Iowa, with the more profitable operations tending to get more of their income from livestock.  However, the Extension figures also show that the low third of reporting producers have a negative return to management, with management in the middle third earning only a little over $10,000 in 2004.

At the far right of Linda's sheet is a scenario based on a rotationally grazed 300-head cow herd, no row crops, and sale of the calves into the conventional commodity market.  Return to management is projected to be nearly $20,000.

Less profitable is the second column from the right, in which the calves are finished with grain grown on the farm.  Selling into the commodity market, this scenario results in a negative return to management.  (There are certainly things conventional beef producers can do to improve this outlook, as shown by Southwest Iowa’s Tri-County Steer Carcass Futurity.)

By far the most profitable option results when the finished cattle of the previous scenario are sold into an identity-preserved market like that for organic beef.  This is the third alternative offered on Linda’s sheet, and is closest to the situation on the Grice farm.  The value of farm production jumps, as does return to management.

But while organics is certainly a profitable alternative to the small and medium-sized producer, Linda Grice shows that there are additional profitable options that protect the landscape without requiring drastic change in farming practices.