• TABLE OF CONTENTS
HIDE
 Title Page
 Table of Contents
 Acknowledgement
 Introduction
 Objectives of study
 Study methods
 Economic considerations in determining...
 Concentration of fertilizer on...
 Economic considerations in determining...
 Effects of alternative fertilization...
 Conclusion














Group Title: Bulletin - University of Florida. Agricultural Experiment Station ; no. 585
Title: Pangolagrass pastures for beef production in central Florida
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027239/00001
 Material Information
Title: Pangolagrass pastures for beef production in central Florida a method of determining the economics of establishing and fertilizing them
Series Title: Bulletin University of Florida. Agricultural Experiment Station
Physical Description: 36 p. : ill. ; 23 cm.
Language: English
Creator: Reuss, Lawrence Adkins, 1907-
Roberts, N. Keith ( Norman Keith )
Greene, R. E. L ( Robert Edward Lee ), 1910-
Publisher: University of Florida Agricultural Experiment Station
Place of Publication: Gainesville Fla
Publication Date: 1957
 Subjects
Subject: Pangolagrass -- Florida   ( lcsh )
Pastures -- Florida   ( lcsh )
Cattle -- Feeding and feeds -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: L.A. Reuss, N.K. Roberts, and R.E.L. Greene.
General Note: Cover title.
Funding: Bulletin (University of Florida. Agricultural Experiment Station)
 Record Information
Bibliographic ID: UF00027239
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: aleph - 000926793
oclc - 18282832
notis - AEN7493

Table of Contents
    Title Page
        Page 1
    Table of Contents
        Page 2
    Acknowledgement
        Page 2
    Introduction
        Page 3
    Objectives of study
        Page 3
    Study methods
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
    Economic considerations in determining the quantity of fertilizer to apply per acre of improved pasture
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
    Concentration of fertilizer on part of the acreage of improved pasture
        Page 22
    Economic considerations in determining the proportion of the ranch area to be converted from native rangeland to improved pastures
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
    Effects of alternative fertilization and improvement plans on capital used in the ranch business
        Page 33
        Page 34
    Conclusion
        Page 35
        Page 36
Full Text


Bulletin 585


UNIVERSITY OF FLORIDA
AGRICULTURAL EXPERIMENT STATIONS
J. R. BECKENBACH, Director
GAINESVILLE, FLORIDA
(In cooperation with Farm Economics Research Division,
Agricultural Research Service, USDA)









Pangolagrass Pastures for Beef Produc-

tion in Central Florida -A Method of
Determining the Economics of Estab-
lishing and Fertilizing Them



L. A. REUSS, N. K. ROBERTS, and R. E. L. GREENE













Single copies free to Florida residents upon request to
AGRICULTURAL EXPERIMENT STATION
GAINESVILLE, FLORIDA


May 1957














CONTENTS
Page

INTRODUCTION ... ....... -. ...-...... ...--- ..............--. ------ 3
OBJECTIVE OF STUDY ..... ..-... -.................... ........ 3
STUDY M ETHODS ......... ... ... ........... ..... ......... ....... 4
The Illustrative Ranch Defined ...... ....-....-. .......-- -. ..... ....... 4
Data Needed and Available ...-......... ...........---- .--. ------ --.. 5
Determining Beef-Fertilizer Response Curve .................................. 6
Data for Inventory Values and Annual Operating Costs ................... -----11
Qualifications -......-.. --..- .. ...-- ............... ......... 13
ECONOMIC CONSIDERATIONS IN DETERMINING THE QUANTITY OF
FERTILIZER TO APPLY PER ACRE OF IMPROVED PASTURE ................ ...... 14
Optimum Fertilization Rates Vary with Cost-Price Situation ............. 14
Risk and Uncertainties Must Be Considered .................-----........--...... 20
Management Is Important ..---.....-............................. ... .. 20
CONCENTRATION OF FERTILIZER ON A PART OF THE ACREAGE OF
IMPROVED PASTURE ........ -----------....-----.....--- ... .--.....- 22
ECONOMIC CONSIDERATIONS IN DETERMINING THE PROPORTION OF THE
RANCH AREA TO BE CONVERTED FROM NATIVE RANGELAND TO
IMPROVED PASTURE .--....--.....-.............- ....-........... 23
EFFECTS OF ALTERNATIVE FERTILIZATION AND IMPROVEMENT PLANS
ON CAPITAL USED IN THE RANCH BUSINESS .................... ............. 33
CONCLUSIONS ... .--...-..-... .......... .... .. 35









ACKNOWLEDGMENTS

The authors wish to express their appreciation to the many ranchers
in central Florida who supplied information for this project and to County
Agents J. F. Higgins (Pasco County), the late Marcel Boudet (Indian River
County), Charles D. Kime (St. Lucie County) and W. L. Woods (DeSoto
County) for valuable assistance in arranging field interviews. Numerous
staff members of the cooperating agencies made valuable suggestions.
Those of Professor W. K. McPherson, University of Florida, were most
helpful during the early stages of the project.
Special acknowledgment is made to Professor H. G. Hamilton, Head,
Department of Agricultural Economics, University of Florida, and to
Mr. H. H. Wooten, Farm Economics Research Division, Agricultural Re-
search Service, U. S. D. A., for direction and guidance of this project.














CONTENTS
Page

INTRODUCTION ... ....... -. ...-...... ...--- ..............--. ------ 3
OBJECTIVE OF STUDY ..... ..-... -.................... ........ 3
STUDY M ETHODS ......... ... ... ........... ..... ......... ....... 4
The Illustrative Ranch Defined ...... ....-....-. .......-- -. ..... ....... 4
Data Needed and Available ...-......... ...........---- .--. ------ --.. 5
Determining Beef-Fertilizer Response Curve .................................. 6
Data for Inventory Values and Annual Operating Costs ................... -----11
Qualifications -......-.. --..- .. ...-- ............... ......... 13
ECONOMIC CONSIDERATIONS IN DETERMINING THE QUANTITY OF
FERTILIZER TO APPLY PER ACRE OF IMPROVED PASTURE ................ ...... 14
Optimum Fertilization Rates Vary with Cost-Price Situation ............. 14
Risk and Uncertainties Must Be Considered .................-----........--...... 20
Management Is Important ..---.....-............................. ... .. 20
CONCENTRATION OF FERTILIZER ON A PART OF THE ACREAGE OF
IMPROVED PASTURE ........ -----------....-----.....--- ... .--.....- 22
ECONOMIC CONSIDERATIONS IN DETERMINING THE PROPORTION OF THE
RANCH AREA TO BE CONVERTED FROM NATIVE RANGELAND TO
IMPROVED PASTURE .--....--.....-.............- ....-........... 23
EFFECTS OF ALTERNATIVE FERTILIZATION AND IMPROVEMENT PLANS
ON CAPITAL USED IN THE RANCH BUSINESS .................... ............. 33
CONCLUSIONS ... .--...-..-... .......... .... .. 35









ACKNOWLEDGMENTS

The authors wish to express their appreciation to the many ranchers
in central Florida who supplied information for this project and to County
Agents J. F. Higgins (Pasco County), the late Marcel Boudet (Indian River
County), Charles D. Kime (St. Lucie County) and W. L. Woods (DeSoto
County) for valuable assistance in arranging field interviews. Numerous
staff members of the cooperating agencies made valuable suggestions.
Those of Professor W. K. McPherson, University of Florida, were most
helpful during the early stages of the project.
Special acknowledgment is made to Professor H. G. Hamilton, Head,
Department of Agricultural Economics, University of Florida, and to
Mr. H. H. Wooten, Farm Economics Research Division, Agricultural Re-
search Service, U. S. D. A., for direction and guidance of this project.









Pangolagrass Pastures for Beef Production in Central
Florida-A Method of Determining the Economics
of Establishing and Fertilizing Them'

BY L. A. REUSS, N. K. ROBERTS, and R. E. L. GREENE2

INTRODUCTION
From 1940 to 1955 production of beef in Florida increased
nearly 450 percent. Contributing to the increase in number of
pounds of beef produced annually was the increase in produc-
tion of forage as a result of application of fertilizer and use of
improved grasses or legumes, or both.
Production of beef on most Florida ranches can probably be
increased in the future in a number of ways. However, as most
ranchers do not have unlimited capital for investment they must
decide what they believe to be the best use of available re-
sources. They must decide whether it would be more profitable
to use available capital to apply more fertilizers on existing im-
proved pastures, develop additional acres of improved pastures,
buy better quality livestock, or make other improvements. They
must answer questions such as this: If funds are available for
only, say, 100 tons of fertilizer, would total returns be larger if
400 acres of existing improved pastures were covered with 500
pounds of fertilizer per acre, or if 800 acres were covered with
250 pounds per acre?
An individual rancher must answer questions of this kind
on the basis of conditions on his own ranch. However, research
workers can analyze the economic relationships involved in these
questions and can contribute technical information concerning
the problems of producing beef.

OBJECTIVES OF STUDY
The chief objectives of the study reported here were: (1) To
illustrate, by use of ranch budgets the types of information and

1This report is a result of land utilization studies being conducted co-
operatively by the Department of Agricultural Economics, Florida Agricul-
tural Experiment Stations, and the Farm Economics Research Division,
Agricultural Research Service, U. S. Department of Agriculture.
2 Respectively, Agricultural Economist, Farm Economics Research Di-
vision, Agricultural Research Service, U. S. Dept. of Agriculture; Assist-
ant Economist; and Agricultural Economist, Florida Agricultural Experi-
ment Station.









Pangolagrass Pastures for Beef Production in Central
Florida-A Method of Determining the Economics
of Establishing and Fertilizing Them'

BY L. A. REUSS, N. K. ROBERTS, and R. E. L. GREENE2

INTRODUCTION
From 1940 to 1955 production of beef in Florida increased
nearly 450 percent. Contributing to the increase in number of
pounds of beef produced annually was the increase in produc-
tion of forage as a result of application of fertilizer and use of
improved grasses or legumes, or both.
Production of beef on most Florida ranches can probably be
increased in the future in a number of ways. However, as most
ranchers do not have unlimited capital for investment they must
decide what they believe to be the best use of available re-
sources. They must decide whether it would be more profitable
to use available capital to apply more fertilizers on existing im-
proved pastures, develop additional acres of improved pastures,
buy better quality livestock, or make other improvements. They
must answer questions such as this: If funds are available for
only, say, 100 tons of fertilizer, would total returns be larger if
400 acres of existing improved pastures were covered with 500
pounds of fertilizer per acre, or if 800 acres were covered with
250 pounds per acre?
An individual rancher must answer questions of this kind
on the basis of conditions on his own ranch. However, research
workers can analyze the economic relationships involved in these
questions and can contribute technical information concerning
the problems of producing beef.

OBJECTIVES OF STUDY
The chief objectives of the study reported here were: (1) To
illustrate, by use of ranch budgets the types of information and

1This report is a result of land utilization studies being conducted co-
operatively by the Department of Agricultural Economics, Florida Agricul-
tural Experiment Stations, and the Farm Economics Research Division,
Agricultural Research Service, U. S. Department of Agriculture.
2 Respectively, Agricultural Economist, Farm Economics Research Di-
vision, Agricultural Research Service, U. S. Dept. of Agriculture; Assist-
ant Economist; and Agricultural Economist, Florida Agricultural Experi-
ment Station.







Florida Agricultural Experiment Stations


analyses that will help ranchers answer some of these questions
as they apply to their own ranches; and (2) for the situations
represented by the budgets, to illustrate the economic relation-
ships involved and the effects of selected combinations of con-
ditions on net returns. In addition, brief attention is given to
some aspects of the proposal that ranchers concentrate ferti-
lizer on a part of the improved pasture acreage; and, the effects
of alternative fertilization and improvement plans on capital
required in the ranch business.

STUDY METHODS
In this exploratory study, a number of budgets were pre-
pared for an illustrative ranch. Each budget represents a par-
ticular alternative plan of production or operation under a
prescribed set of conditions. Results of the different budgets
indicate the effects of designated changes on beef production,
capital used in the ranch business, expenditures, receipts, and net
returns to the operator. Among the prescribed changes in the
plan of operation are step-by-step changes in the number of
pounds of fertilizer applied per acre of improved pasture and
step-by-step changes in the proportion of the illustrative ranch
in improved pastures. Among the changes in the prescribed set
of conditions under which the ranch operates are changes in the
price per pound of beef and the cost per ton of fertilizer.
In this report the problem of the economic considerations in
determining the quantity of fertilizer to apply per acre of im-
proved pasture is considered first. This is followed by a discus-
sion of effects on net returns of concentrating fertilizer on a por-
tion of the improved pasture acreage. Next, an analysis is made
of the step-by-step increase in the proportion of the ranch in
improved pasture. Finally, the effects of alternative fertiliza-
tion and improvement plans on the amount of capital used in
the ranch business is presented.

THE ILLUSTRATIVE RANCH DEFINED
The illustrative ranch used in the study reported here is as-
sumed to contain 5,000 acres, located on mineral soils in central
Florida. Concentrating the analysis on a ranch of fixed total
acreage helps to focus attention on the economic considerations
involved in establishing and fertilizing improved pastures. A
ranch located on mineral soils in central Florida was assumed







Pangolagrass Pastures for Beef Production


because available ranch records and experimental data used in
making the analysis related mainly to operations conducted on
the sandy or mineral soils of that area, rather than on organic
soils found most extensively in the Everglades area.
All plans of operation developed for the illustrative ranch
were based on the system of ranch operation commonly called
cow-and-calf ranching. This system has considerable stability
and is not affected so much by changes in cattle prices as are
systems based on the buying of a large number of animals each
year. Also, this stability and relative freedom from the influence
of price helps to focus attention more sharply on the major points
of interest in the study.

DATA NEEDED AND AVAILABLE
Beef is usually produced on native range and improved pas-
tures. An economic evaluation of alternative plans for establish-
ing and fertilizing improved pastures for beef production on an
individual ranch means that the rancher must have information
as to the productivity of his improved pastures and native ranges,
the responses of the pastures to different levels of fertilizer,
the structure of the ranch operating costs, and the organization
of the ranch for forage utilization and beef production. Ideally,
in developing budgets to illustrate the results of alternative
method of operation, data are needed concerning production costs
and returns for each combination of resources on ranches of
different sizes for each level of fertilization, each combination
of native and improved forages, and various levels of manage-
ment.
Since we did not have ideal data, we made use of such ex-
perimental information as was available on the production of
beef on pastures fertilized at different rates and survey records
obtained from ranchers on capital investment and operating
costs. Estimates of the per acre yields of beef from native
range and from improved pasture were developed from prelim-
inary results of grazing experiments in the Experiment Station.
These experiments included the application of fertilizer at differ-
ent rates per acre of improved pasture. Estimates with respect
to inventory values and operating costs were based on data ob-
tained from ranches. The details of developing these data are
discussed below.







Florida Agricultural Experiment Stations


DETERMINING BEEF-FERTILIZER RESPONSE CURVE
Historically, seasonal production of forage on Florida pasture
and rangelands has been highest during late spring and early
summer. Fertilization of improved pastures has tended mainly
to increase the supply of high-quality forage during these sea-
sons. In fact, many ranchers have considered that spring ap-
plications of fertilizer produce the most forage growth during
the year.
There have been definite limitations on quantity and quality
of forage during fall and winter. Grass tends to mature by fall
and as it matures the protein content declines. Dried grasses
cure poorly and leach rapidly. Also, low temperatures and dry
weather tend to retard growth. However, it is possible to pro-
long the season during which a larger supply of high-quality
forage is available, by rotational and deferred grazing and by
fertilization of some pastures in summer or early fall. An ad-
ditional method of augmenting the supply of feed available for
fall and winter, that of providing substantial quantities of hay,
silage or other supplemental feeds, has been adopted by some
ranchers.
Most ranchers try to adjust livestock numbers to better fit
the seasonal pattern of available supply and quality of forage.
Some buy animals, usually steers, in advance of the flush pasture
season and sell animals when forage declines in the fall. Others
sell calves in summer and fall, thus retaining only the more ma-
ture breeding herd during fall and winter. Each of these meth-
ods of adjusting numbers presumes the substantial adoption
of a particular type of ranch organization. The first system is
referred to here as "steer ranching" and the second as "cow-
and-calf ranching."3 Thus the problems of ranch organization
and operation and the relative profitableness of adopting im-
proved practices encompass both the problems of "forage pro-
duction" and "forage utilization" (that is, production of forage
and the number and type of livestock available for efficient con-
version of the feed into salable beef).

SThe term "steer ranching" is defined as a ranching system in which
young beef animals (usually steers, but including some heifers) are grazed
one or more seasons and sold in the summer or fall. It is recognized that
this is an oversimplification of a basic operating plan and that most steer
ranches have some animals of all ages and graze some animals at all sea-
sons of the year. However, the definition helps to demonstrate the basic
problem of ranch organization for efficient forage utilization. "Cow-and-
calf ranches" are defined here as those which keep mainly breeding animals
yearlong and sell calves at about weaning age.







Pangolagrass Pastures for Beef Production


Beef Yields with Alternate Levels of Fertilization of Pas-
tures.-From 1946 to 1954 the effects of fertilization of Pangola-
grass were studied at the Range Cattle Experiment Station at
Ona, Florida. Experimental fields were located on cutover flat-
woods of Immokalee soil type. Commercial fertilizers were ap-
plied to different fields at different rates. Beef animals were
placed on the pastures in the spring and removed in the fall.
Pastures fertilized at rates of either 300 pounds of 9-6-6 or 500
pounds of 6-6-6 received only one application each year and were
grazed continuously in most seasons. Heavier rates of fertilizer



Number of Applications of Fertilizer

(1,000 XI) (3)(7) (8) (5) (7) (7)(8) (8) (7)
1, 000 I I I
02


800 -

2

S600

S/ Estimated relationship
/ used in budget analysis
-S /
0 400 .
4 / /



200 .
*
2
lr Approximate formula 9-8-7


g 'rs ZZ 0) 0

Pounds of Nitrogen per Acre Applied in Commercial Fertilizer with
Formula of 6-6-6 or 9-6-6 Unless Otherwise Indicated

Animals were placed on the pastures in the spring and removed in the fall.



Fig. 1.-Results of fertilization and grazing trials on pangolagrass pas-
tures, Range Cattle Experiment Station, 1946-54, with estimated line of
relationship between nitrogen applied in the form of 9-6-6 fertilizer and
yield of beef.









TABLE 1.-RESULTS OF FERTILIZATION AND GRAZING TRIALS ON PANGOLAGRASS PASTURE AT THE RANGE CATTLE EXPERIMENT
STATION, ONA, FLORIDA, 1946-54 INCLUSIVE.*


Year


1946

1947

1948

1949

1950

1951
1951

1951

1952
1952
1952
1952

1953
1953
1953
1953

1954
1954
1954
1954


Fertilization Rate
and Formula
(Equivalent Basis)

500 Ibs., 6-6-6

500 lbs., 6-6-6

500 lbs., 6-6-6

500 lbs., 6-6-6

500 lbs., 6-6-6

500 Ibs., 6-6-6
1,500 lbs., 9-8-7 (135# N;
119# P.O.; 103# K0O)
2,100 lbs., 9-8-7 (189# N;
173# P2O.; 157# K2O)

300 lbs., 9-6-6
900 lbs., 9-6-6
1,700 lbs., 9-6-6
3,000 lbs., 9-6-6

300 lbs. 9-6-6
900 lbs., 9-6-6
1,000 lbs., 9-6-6
2,000 lbs., 9-6-6

300 Ibs., 9-6-6
900 lbs., 9-6-6
1,270 lbs., 9-6-6
2,540 lbs., 9-6-6


Number
of
Applications

1

1

1

1

1

1
5

8

1
3
7
7

1
3
7
7

1
3
8
8


Annual Reports Florida Agricultural Experiment Stations, except: All data for the year 1950; types of animal indicated under column headed
"Livestock" for years 1946, 1949 and 1951; and, seasonal grazing practice for the year 1949, which data were supplied by Dr. E. M. Hodges.
** Animals were placed on the pastures in the spring and removed in the fall.


Livestock


Steers

Yearling and
two-year olds
Five steers

Steers

Steers

Steers
Three heifers

Four heifers

Heifers
Steers
Heifers
Heifers

Heifers
Steers
Heifers
Heifers

Heifers
Steers
Heifers
Heifers


Seasonal
Grazing
Practice **

Continuous

Continuous

Continuous
for 6 months
Rotational

Rotational

Continuous
Rotational

Rotational


Continuous
Rotational
Rotational
Rotational

Continuous
Rotational
Rotational
Rotational

Continuous
Rotational
Rotational
Rotational


Beef
Production
per Acre
pounds
116

160

223

199

168

238
670

970






Pangolagrass Pastures for Beef Production


were made in from three to eight applications and rotational
grazing was practiced. The grazing animals were yearling heif-
ers or yearling and two-year-old steers. The experimental fields
ranged in size from one to five acres. Results of these trials are
shown in Table 1.4
Basically the trials fall into three groups. Group One in-
cludes applications of either 500 pounds of 6-6-6 (30 pounds of
nitrogen) per acre or 300 pounds of 9-6-6 (27 pounds of nitro-
gen) per acre during the period 1946-54. Group Two includes
trials of 900 pounds of 9-6-6 in three applications each season
from 1952 to 1954 inclusive, grazed rotationally by steers. Group
Three includes heavier rates of fertilization ranging from 1,000
to 3,000 pounds of 9-6-6 per acre, usually in seven or eight ap-
plications per season, conducted during the period of 1951-54.
Figure 1 shows the pounds of nitrogen applied, pounds of beef
produced per acre and number of applications each season for
all trials. The estimated line of relationship developed for pur-
poses of this study between nitrogen applied per acre (in the
form of 9-6-6 fertilizer) and yield of beef has been super-imposed
on the chart.
Although the experimental data are preliminary, one funda-
mentally important principle stands out when the curve in Figure
1 is observed. Each 100-pound increase in fertilizer added less
to yield of beef per acre than did the preceding 100 pounds. This
principle has gained considerable national acceptance in studies
of yield response to fertilizer.5 6 An understanding of this prin-
ciple will help to guide ranchers in making decisions concerning
use of fertilizer. Also, it is important to note that the increases
in beef production associated with increases in fertilization rep-
resent net effects of changes in forage production and utiliza-
tion, including any changes in length of grazing season.
Beef Yields with Year-Round Grazing.-Under the plan of
operation that prevails on many Florida ranches, pastures such
as are used in the grazing experiment would have been grazed
mainly by brood cows that had been carried through the winter

See Annual Reports of the Florida Agricultural Experiment Stations,
1946-50 and 1952-55. These results were reported under Project 423, Range
Cattle Station, E. M. Hodges, W. G. Kirk and D. W. Jones.
SSee Ibach, D. B., and S. W. Mendum, "Determining Profitable Use of
Fertilizer," USDA, F.M., 105, Washington, D. C., June 1953, p. 3.
In Figure 1 it is assumed that over the relevant portion of the curve,
each increment in yield from successive units of fertilizer of equal size,
represents a constant percentage of the preceding increment. The range
over which the decreasing increments occur, and the rate at which they
occur would depend on field conditions.







Florida Agricultural Experiment Stations


and by their calves. Not only would the rate of stocking have
been lower but the weight gain of cows is also normally slower
than that of young stock. Furthermore, gains made by cows
in summer often are lost during the winter maintenance period.
Thus, per-acre yields of beef attained under steer ranching sys-
tems tend to exceed those attained under cow-and-calf plans of
operation.



600



500




S 400




g 300
-u
8 Poangologross on average flatwoods
land, fertilized with 9-6-6 in
a / several applications, grazed year-
200 long by a cow-and-calf herd.
200 -




100-




) 03 0 C 0 0 C8
O- C'

Fertilizer Applied per Acre, Pounds


Fig. 2.-Assumed relationship between fertilizer application and beef yield
per acre under specified "yearlong-grazing" conditions.*

Beef yields under year-round grazing also have been studied
at the Range Cattle Station.7 From 1947 to 1951 65 cows and

Jones, D. W., Hodges, E. M., and W. G. Kirk, "Year-Round Grazing on
a Comhinat'on of Native and Improved Pasture," Fla. Agr. Expt. Sta. Bul.
554, Nov. 1954.








Pangolagrass Pastures for Beef Production


two-year-old heifers were kept year-round on 80 acres of im-
proved pastures and 320 acres of native range.8 Average calf
crop was 80 percent and the calves weighed 425 pounds when
weaned. In the experiment "it was estimated that the cattle
obtained 30 to 40 percent of their feed from the native range
." 9 This would attribute 60 to 70 percent of the calf weight
to the improved pasture. On this basis, indicated beef yields
fall between extremes as follows: Between 20 and 28 pounds per
acre from native range and between 165 and 195 pounds per
acre from the improved pastures. Total beef production and
yields would have been somewhat higher if some cows had been
sold from the herd each year and replaced with lighter, younger
stock.
It is assumed that the "fertilizer response curve for cow-
and-calf ranching" (year-round grazing) is similar in shape to
the "fertilizer response for steer ranching" (animals put on
pasture in the spring and removed in the fall) and at a level of
60 percent of seasonal grazing yields (Figure 2).10 More refined
experimental data developed in future years may alter the level
of the curve but will not alter the fundamental shape of the
curve.

DATA FOR INVENTORY VALUES AND ANNUAL OPERATING COSTS
As a contribution to this and other reports, approximately
80 ranchers in central Florida were interviewed, mainly in 1953.
Information obtained concerned such things as size and type of
ranch, acreage and type of improved pasture and native range,
and methods and costs of establishing and maintaining improved
pastures.
The data concerning methods and costs of establishing im-
proved pastures are to be presented in a separate report. Data

SThe 80 acres of improved pastures included 20 acres of Pangolagrass,
20 acres of Coastal Bermuda, 20 acres of Pensacola Bahia-Hubam Clover,
and 20 acres of Common and Pensacola Bahia-Carpet Grass-Hairy Indigo.
The Pangolagrass and Coastal Bermuda pastures received annual fertili-
zations of 340 pounds of 9-6-6 and 25-30 pounds of nitrogen. The Bahia-
Carpet-Indigo pasture received 500 pounds of 0-14-14. The Pensacola
Bahia-Hubam Clover pasture received 500 pounds of 0-14-14 and 250 pounds
of 0-8-24.
SFla. Agr. Expt. Sta. Bul. 554, p. 11.
There appears to be some basis in logic for assuming that the degree
of utilization of available forage yearlong decreases as the supply of forage
increases. This would substitute a variable percentage for the constant 60
percent used. This would result in a flatter curve. However, without sub-
stantial change in general level, it would show less economic reward from
increases in rate of fertilization.









Florida Agricultural Experiment Stations


TABLE 2.-WORKING ASSUMPTIONS CONCERNING INVENTORY VALUES AND
ANNUAL OPERATING CHARGES FOR 5,000 ACRE ILLUSTRATIVE
RANCH, CENTRAL FLORIDA.* **


Fixed
Charge
Item per
Ranch

Dollars

1. Inventory values:
Land ...----...... .........
Buildings .................... 7,700
Fences ..................-- ....... -
Farm machinery .......... 500
Livestock equipment .. 2,400
Livestock ..................-

Subtotals......- ....... 10,600

2. Selected annual
operating charges:
Labor .....-....... .....-.. 1,500
Fuel, gas, oil,


and grease ...........
Limestone ............ ...
Feed, salt,
and minerals ......
Veterinary, medicines
and sprays ........
Bull replacements -....-
Taxes on livestock ......

Subtotals ..............


1,500


Additions
Per Acre I
of
Improved
Pasture
Dollars

100.00
1.50
1.25
3.00


105.75


1.50

1.20
1.50


4.20


Variable Charges


Per Acre
of
Unimproved
Pasture
Dollars

30.00
0.50



30.50




0.05







0.05


Per
Animal
Unit
Dollars





4.00
100.00

104.00


2.00

1.00

1.50

0.30
0.75
0.20

5.75
I


3. Schedule of annual depreciation, maintenance and repair charges:


Inventory value of:


Buildings .................-.......
Fences ...---. ...............
Farm machinery ...........
Livestock equipment ....


Maintenance
and Repair
Percent

2
5
5
3


Depreciation
Percent

4
5
10
7


Total
Percent

6
10
15
10


4. Other annual operating charges:
Fertilizer: $50.00 per ton, including spreading.
Real estate taxes: % percent of inventory value of land, buildings,
and fences.
Interest: 4 percent of total inventory value.
6 percent of annual operating charges before interest and
depreciation, for 6 months.

Ranchers should modify this table to fit local conditions. For purposes of the study
reported here, the importance of any errors in estimates that exist, tends to be mini-
mized because, if an estimate is too high in one budget, it is also too high in budgets
with which it is compared.
** As estimates of many cost items are keyed to acreages or numbers of animal units,
or both, the resultant budgets reflect chances in proportions of several types of inputs
and, therefore, are not true studies in proportionality or scale.


-
-







Pangolagrass Pastures for Beef Production


on livestock numbers, pounds of beef produced annually, and
costs of ranch operation were the types especially needed for
this report. However, because the ranches visited did not rep-
resent a random sample and not all items of information were
obtained for all ranches, these data were supplemented with
other information and used as guides in developing working as-
sumptions concerning physical production, income and costs.
Table 2 shows the data used in calculating inventory values and
annual costs.
QUALIFICATIONS
In the various budgets that are presented, type, quality and
care of animals were assumed to be constant throughout the
analysis, except as indicated. The level of herd management
assumed allowed an annual net production of beef of 350 pounds
per animal unit.11 Changes in numbers of animals and produc-
tion of beef, except as noted, were due to the effect of the vari-
able factor under study in each section.
This report is concerned principally with the economic rela-
tionships involved when production is increased by applying more
fertilizer per acre to existing improved pasture and by convert-
ing more native rangeland to improved pasture. As has been
noted, the heavier rates of fertilization involve more numerous
applications in more months of the year. The budget forms and
the essential information recorded herein should be modified by
ranchers to fit local conditions. Ranchers should not assume
that estimates of production, costs and returns used here apply
to their own ranches without modification. The best operating
plan differs from one ranch to another, depending on size and
quality of the ranch, managerial skill, available finances, atti-
tude of the operator concerning risk and uncertainty and many
other factors.

1 Production estimates are based on an 80 percent calf crop and weaning
calf weight of approximately 425 pounds. This follows the results of the
yearlong grazing experiment at the Range Cattle Experiment Station except
that provision was added for the retention of about 15 percent of calves
as replacement stock and sale of about 12 percent of the brood cows at
900 pounds weight. Production per animal unit of 350 pounds is approxi-
mately equal to production per brood cow of 400 pounds when the compo-
sition of the herd per 100 head consists of 78 to 79 brood cows, 2 to 3 bulls,
9 to 10 heifers and 9 to 10 calves. For convenience, the herd was reduced
to numbers of animal units on the basis of one unit per cow or bull, two-
thirds of 1 unit per heifer and one-half of 1 unit per calf. One exception
was made in order to show the effect of smaller calf crops and smaller
weights of animals. Thus in Table 5 net returns with a production of 275
pounds of beef per animal unit are also shown.







Florida Agricultural Experiment Stations


Preliminary experimental results and economic data utilized
in this exploratory study to illustrate the methods of analysis
and economic relationships to follow were based on the best
data available. Although more refined data are needed, the
interpretation of perfect data would involve the same types of
economic relationships and might use similar methods.

ECONOMIC CONSIDERATIONS IN DETERMINING
THE QUANTITY OF FERTILIZER TO APPLY
PER ACRE OF IMPROVED PASTURE
In studying the question of the quantity of fertilizer to apply
per acre of improved pasture it was considered, on the illustra-
tive ranch, that the improved pasture (Pangolagrass) was fixed
at 500 acres. The rest of the area (4,500 acres) was left in na-
tive range. Rates of fertilizer on improved pasture were varied
from 300 to 2,100 pounds per acre.
Budgets for the illustrative ranch were made, applying cer-
tain of the fertilizer-beef yield relationships and costs, inventory
values and management assumptions previously shown (Table
2 and Figure 2). Results are presented in Table 3.

OPTIMUM FERTILIZATION RATES VARY WITH
COST-PRICE SITUATION

With increased fertilization of existing improved pastures,
beginning at a low level, net returns would tend to increase up
to a point and then to decrease.12 Similarly, average costs per
unit would tend to decrease up to a point and then to increase
(Figure 3). However, the rate of fertilization for the highest
level of net returns would vary with changes in costs and in the
price of beef. The optimum fertilization rate would tend to in-
crease as the price of beef increased and again as fertilizer or
other costs decreased. Conversely, the optimum fertilization rate
would decrease as the price of beef declined and again as ferti-
lizer or other costs increased.
From the above, it is evident that cost-price relationships are
important considerations in selecting a fertilizer rate. Manage-
ment must be ready to adjust the combinations of resources to
meet new price and cost situations. When operating costs de-
crease more than gross returns, net returns increase, and the
most economical rate of fertilizer application also increases.
12 Under some cost-price situations, net losses would tend to decrease up
to a point and then to increase.








Pangolagrass Pastures for Beef Production


The opposite is also true. When gross returns decrease more
than annual operating costs, net returns decrease and the eco-
nomically optimum rate of fertilization decreases.


3,000-


2, 000 -


1,000


0


-1,000-


-2,000 -


-3,000-


S i I i WI I


Pounds of Fertilizer
per Acre


16-


15-


14-


13


12


II -


10



0 0 0 0 0 0 0
M 0 01 N C0 -
800__:,


Pounds of Fertilizer
per Acre


Fig. 3.-Illustrations of the effects of increased fertilization on net re-
turns and average unit costs (based on budgets for illustrative ranch with
beef at 14( a pound and fertilizer at $50 a ton).

It has been observed that many ranchers apply the same rate
of fertilizer to their pastures year after year. Table 3 shows the
fallacy of such a practice in the face of shifting costs and beef
prices. The most rewarding fertilization rate would shift with
change in the cost-price situation:


Assumed Price-Cost Situation
Price of Beef Cost of Fertilizer
140 lb. $35 ton
140 lb. $50 ton
14 lb. $70 ton
21, lb. $50 ton


Optimum Fertilization
Rate13
1,500 lbs.
900 lbs.
300 lbs.
1,500 lbs.


" Optimum only as to the seven budgets contained in Table 3.








TABLE 3.-BUDGETS ILLUSTRATING EFFECTS OF CHANGING RATE OF FERTILIZATION ON RANCH CAPITAL REQUIREMENTS, COSTS
AND RETURNS. (ILLUSTRATIVE RANCH OF 5,000 ACRES INCLUDING 500 ACRES OF IMPROVED PASTURE.)


Item


Unit


1. Beef production: total .......................... pounds
Per acre of improved pasture ................ pounds
Per acre of unimproved pasture .......... pounds
Index of production (300 lbs. = 100)...... pounds

2. Animal units wintered .............................. number

3. Inventory values:
Land, buildings and fences* ............... dollars
Machinery and equipment ** ................. dollars
Livestock ...... ................................. dollars
Totals ........ ........................................... dollars
Value per acre ...............................-... dollars
Index (300 lbs. 100) ....................... -- |

4. Annual costs:
Labor ............................. ...... ............. dollars
Fuel, gas, oil and grease ......................... dollars
Limestone ..............-. .... ............ ...... dollars
Feed, salt, and minerals ........................ dollars
Veterinary, medicines and sprays ...-...... dollars
Bull replacement .... .......... .................... .. dollars
Taxes on livestock ................... ................ dollars
Taxes on real estate ................................ dollars
Maintenance and repairs .................... dollars
Depreciation .......................... ........ .... dollars
Subtotal ............................................ dollars
Fertilizer (@ $50 ton) ...................... dollars
Interest on inventory ............................... dollars
Interest on working capital ? .................... dollars
Total annual cost ..................................... dollars
Index of annual costs (300 lbs. = 100) ...... --


Fertilizer (9-6-6) per Acre of Improved Pasture, Pounds
300 600 900 1,200 I 1,500 1,800 6 2,100
With 350 Pounds of Beef Produced Per Animal Unit


177,500
130
25
100

507

196,325
6,428
50,700
253,453
51
100

3,264
1,332
750
760
152
380
101
982
546
992
9,259
3,750
10,138
361
23,508
100


225,000
225
25
127
643

196,325
6,972
64,300
267,597
54
106

3,536
1,468
750
964
193
482
129
982
562
1,030
10,096
7,500
10,704
497
28,797
122


262,500
300
25
148

750

196,325
7,400
75,000
278,725
56
110

3,750
1,575
750
1,125
225
562
150
982
575
1,060
10,754
11,250
11,149
628
33,781
144


292,500
360
25
165

836

196,325
7,744
83,600
287,669
58
113

3,922
1,661
750
1,254
251
627
167
982
585
1,084
11,283
15,000
11,507
756
38,546
164


317,500
410
25
179

907

196,325
8,028
90,700
295,053
59
116

4,064
1,732
750
1,360
272
680
181
982
594
1,104
11,719
18,750
11,802
881
43,152
184


337,500
450
25
190

964

196,325
8,256
96,400
300,981
60
119

4,178
1,789
750
1,446
289
723
193
982
601
1,120
12,071
22,500
12,039
1,004
47,614
203


352,500
480
25
199

1,007

196,325
8,428
100,700
305,453
61
121

4,264
1,832
750
1,510
302
755
201
982
606
1,132
12,334
26,250
12,218
1,124
51,926
221





TABLE 3.-BUDGETS ILLUSTRATING EFFECTS OF CHANGING RATE OF FERTILIZATION ON RANCH CAPITAL REQUIREMENTS, COSTS
AND RETURNS. (ILLUSTRATIVE RANCH OF 5,000 ACRES INCLUDING 500 ACRES OF IMPROVED PASTuRE.)-Continued.


Item


5. Annual costs (with fertilizer at $35 ton)....

6. Annual costs (with fertilizer at $70 ton)....

7. Gross income: With beef @ 14 lb .............
With beef @ 210 lb............-
S. Net returns: t
With 144 beef and $35 fertilizer .........
With 140 beef and $50 fertilizer .........
With 140 beef and $70 fertilizer ...........
With 210 beef and $50 fertilizer ...........
D. Rate earned on investment in inventory:
With 140 beef and $35 fertilizer .........
With 14 beef and $50 fertilizer .......
With 14 beef and $70 fertilizer ...........
With 214 beef and $50 fertilizer .........

10. Average cost per pound of beef:
With fertilizer @ $35 per ton ................
With fertilizer @ $50 per ton ...............
With fertilizer @ $70 per ton ..............
11. Added cost per added pound of beef,
compared with next preceding plan:
With fertilizer @ $35 per ton .---
With fertilizer @ $50 per ton .............
With fertilizer @ $70 per ton ...........


Unit



dollars

dollars

Dollars
dollars

dollars
dollars
dollars
dollars


percent
percent
percent
percent


cents
cents
cents


cents
cents
Scents


Fertilizer (9-6-6) per Acre of Improved Pasture, Pounds
300 j 600 I 900 1 1,200 1 1,500 I 1,800 1 2,100


22,34

25,05

24,85
37,27

2,50
1,34
-20
13,76

5
4
3
9


With 350 Pounds of

9 26,479 30,305

53 31,887 38,416

0 31,500 36,750
'5 47,250 55,125

1 5,021 6,445
12 2,703 2,969
)3 -387 -1,666
67 18,453 21,344

.0 5.9 6.3
.5 5.0 5.1
.9 3.9 3.4
.4 10.9 11.7

.6 11.8 11.5
.2 12.8 12.9
.1 14.2 14.6


* Includes land valued at $185,000; buildings at $8,450; and fences at $2,875.
** Includes $2,000 value of farm equipment, the balance being livestock equipment.
t Six percent interest for a, period of 6 months on all annual operating costs, except depreciation
: Returns above 4 percent dn capital invested in the ranch inventory.


Beef Produced Per Anim
I I


33,911

44,726

40,950
61,425

7,039
2,404
-3,776
22,879

6.4
4.8
2.7
12.0

11.6
13.2
15.3


12.0
15.9
21.0


37,358

50,877

44,450
66,675

7,092
1,298
-6,427
23,523

6.4
4.4
1.8
12.0

11.8
13.6
16.0


13.8
18.4
24.6


40

56

47
70

6
-9
23


and interest on investment in inventory.


.al Unit

,661 43,814
,884 62,741

,250 49,350 9
,875 74,025

,589 5,536
-364 -2,576
,634 -13,391
,261 22,099

6.2 5.8
3.9 3.2
0.8 -0.4
11.7 11.2

12.0 12.4
14.1 14.7
16.9 17.8


16.5 21.0
22.3 28.7
30.0 39.0







Florida Agricultural Experiment Stations


The effects on beef production and on costs and investment
of increasing per acre rates of fertilizer are important (Fig. 4
and Table 3). Production of beef would increase as fertilization
increased. However, the production per additional 100 pounds
of fertilizer would decrease. As has been indicated, this illus-
trates the decreasing marginal productivity of fertilizer. Also,
if the first units of fertilizer were applied at the most favorable
time of year, subsequent applications in the same season must
meet less favorable conditions of temperature, moisture and
stage of growth.



250


Annual operating costs with ."
200 fertilizer at $50 per ton ,
S200
E
Z -' P reduction '

150

j "* Value of inventory .

100 I I
300 600 900 1,200 1,500 1,800 2,100
Fertilization Rate (Pounds)

SThe same as the index of gross returns and of numbers of animal units.


Fig. 4.-Indexes of production, annual operating costs and value of
inventory under budgeted fertilization rate. (300 lbs. = 100)

As fertilizer increased, capital investment would increase.
Again, the additional investment required per additional unit
of fertilizer would decrease in the seven plans budgeted.
Under the cost assumptions that underlie the budgets, the
lowest average cost per pound of beef would be at fertilization
rates of 900, 600 or 300 pounds per acre, depending on the cost
per ton of fertilizer. This points out the often common miscon-
ception that it is most profitable to produce at the lowest cost per
unit. If the market price for beef were above the lowest aver-
age unit cost, it would pay to expand fertilizer use beyond the
point of least cost per unit. As illustrated in Table 3, when the






TABLE 4.-ILLUSTRATION OF THE EFFECTS OF INCREASING THE RATE OF FERTILIZATION UPON THE COMPONENT PARTS OF THE
BUDGETS, THE POUNDS OF BEEF, AND THE RATE EARNED ON ADDITIONAL FUNDS USED IN THE RANCH INVENTORY.*


Fertilization




Pounds Pe


300 ..
600
900 ..
1,200 ..
1,500
1,800 ..
2,100 ..


Additional amo
rates from on
next:
From T
Rate
of

300 lbs. 6
600 lbs. 9
900 lbs. 1,2
1,200 lbs. 1,5
1,500 lbs. 1,8
1,800 lbs. 2,1


In Rate Beef
Production


1,000
r Acre pounds

.................... 177.5
.............-... 225.0
..... ...... 262.5
.... ............. 292.5
......... ...... 317.5
..................... 337.5
.................... 352.5


unts and
re plan to

'o
Rate
of

00 lbs. ...... 47.5
00 lbs. ...... 37.5
00 Ibs ...... 30.0
00 lbs. ...... 25.0
00 lbs. ...... 20.0
00 lbs. ...... 15.0


Value
of
Inventory


1,000
dollars

253
268
279
288
295
301
305








15
11
9
7
6
4


S Annual
Interest
on
Inventory I

1,000
dollars

10.1
10.7
11.1
11.5
11.8
12.0
12.2








0.6
0.4
0.4
0.3
0.2
0.2


Operating Costs

Other Total I


1,000 1,000
dollars dollars

13.4 23.5
18.1 28.8
22.7 33.8
27.0 38.5
31.4 43.2
35.6 47.6
39.7 51.9








4.7 5.3
4.6 5.0
4.3 4.7
4.4 4.7
4.2 4.4
4.1 4.3


Net **
Returns


1,000
dollars

1.3
2.7
3.0
2.4
1.3
-0.4
-2.6








1.4
0.3
-0.6
-1.2
-1.7
-2.2


Average
Total
Cost per
Pound


Cents

13.2
12.8
12.9
13.2
13.6
14.1
14.7








11.1
13.3
15.9
18.4
22.3
28.7


Rate Earned
on
Investment C
in Inventory
0
Percent

4.5
5.0
5.1
4.8
4.4 4
3.9
3.2




:1:i



13.6 0
6.4
-2.3
-11.0 .
-24.0
-45.5


* Based on budgets in Table 3, with beef priced at 14 cents a pound and fertilizer at $50 a ton.
** Returns above 4 percent interest on capital invested in the ranch inventory.
SCost per additional pound of bee'.
Additional "net returns" plus additional "Interest on Inventory" as a percentage of the additional


"Value of Inventory".







Florida Agricultural Experiment Stations


price of beef was 14 cents and fertilizer was $50 a ton, 900 pounds
of fertilizer would yield the maximum net returns but with 600
pounds of fertilizer, the average cost per pound would be lowest.
If the market price of beef were 21 cents a pound, 1,500 pounds
of fertilizer would produce the maximum net returns; yet, the
lowest average unit cost still would be with 600 pounds of ferti-
lizer per acre.
An additional point regarding the examples in Table 3 is im-
portant. With high prices for beef, for example $21.00 per cwt.,
all the budgeted alternatives would result in substantial positive
returns to management. Some such relationship existed between
prices and costs during the late 1940's and early 1950's. Only
the very inefficient producers lost money. However, after the
break in beef prices in late 1951 and 1952 some ranchers found
themselves losing money. When the price drops to $12.00 per
cwt. for beef, only a few of the alternatives would show positive
management returns on the illustrative ranch. Then, especially,
must the rancher watch costs and improve his management.
For an individual rancher, an improvement that reduces costs
has the same general effect, temporarily at least, as a rise in
price of product.

RISK AND UNCERTAINTIES MUST BE CONSIDERED
Operators should remember that budgets are based on aver-
age weather conditions and that large expenditures for fertilizers
are accompanied by certain risks and uncertainties. For ex-
ample, fertilizers might be quickly leached and lost from the
soil, if fertilization was followed by a heavy rain which pro-
duced flooding of pastures. Damages from drought, disease and
insects also are uncertainties. Thus, some ranchers may prefer
to adopt plans that involve less risk and uncertainty, even
though it may mean earning less than maximum profits. An
operator should experiment on a small scale and know that he
can efficiently and economically produce and utilize the expected
quantity and quality of feed before he tries a maximum fertili-
zation plan on a large scale.

MANAGEMENT IS IMPORTANT
The importance of management may be seen in Table 5.
For illustrative purposes, a smaller calf crop and lower weaning
weights are represented by production of 275 pounds of salable
beef per animal unit, and other things are held constant. Under











TABLE 5.-NET RETURNS SHOWN IN BUDGETS ILLUSTRATING EFFECTS OF CHANGING RATE OF FERTILIZATION AND THE EFFECT
OF REDUCING ESTIMATED PRODUCTION PER ANIMAL UNIT FROM A LEVEL OF 350 POUNDS TO A LEVEL OF 275 POUNDS
OF BEEF (ILLUSTRATIVE RANCH OF 5,000 ACRES INCLUDING 500 ACRES OF IMPROVED PASTURE;).*


Item


Net returns: **

With 140 beef and
With 14 beef and
With 144 beef and
With 21 beef and


Net returns: **

With 140 beef and
With 14. beef and
With 14 beef and
With 21 beef and


Unit




fertilizer ..... dollars
fertilizer ..... dollars
fertilizer ..... dollars
fertilizer ...... dollars




fertilizer ..... dollars
fertilizer ...... dollars
fertilizer ...... dollars
fertilizer ...... dollars
J -


fertilizer (9-o-o) per
300 600 I 900
With 350 Pounds o:


2,501 5,021 6,445
1,342 2,703 2,969
203 387 -1,666
13,767 18,453 21,344

With 275 Pounds o


-2,829 -1,723 -1,430
--3,988 -4,041 -4,906
-5,533 -7,131 -9,541
5,771 8,336 9,531


Acre of Improved Pasture, Pounds
I 1,200 1,500 I 1,800 I2,100


f Beef Produced per Animal Unit


7,039 7,092 6,589
2,404 1,298 364
-3,776 -6,427 -9,634
22,879 23,523 23,261

f Beef Produced per Animal Unit


5,536
-2,576
-13,391
22,099


-1,725 -2,438 -3,547 -5,044
-6,360 -8,232 -10,500 -13,156
-12,540 -15,957 -19,770 -23,971
9,733 9,227 8,057 6,228


*In order to show the effect of smaller calf crops and smaller weaning weights, inventory values and annual operating costs were allowed to
remain the same as in the budgets above while total beef production, gross income and net returns were recalculated on the basis of production of 275
pounds of bee. per animal unit.
** Returns above 4 percent on capital invested in the ranch inventory.







Florida Agricultural Experiment Stations


these conditions, only one budgeted price-cost situation (beef @
210 a pound and fertilizer at $50 a ton) would result in positive
management returns. At this lower level of management and
efficiency, less fertilization of pastures would be justified than in
budgets based on the production of 350 pounds of beef per animal
unit.
Rates of fertilizer applied on 60 Florida ranches in 1952 were
observed to vary from 200 to 1,000 pounds per acre fertilized.
However, the majority fell between 350 and 500 pounds per acre
fertilized, with the average rate at about 450 pounds. In a sense
this is misleading, for many acres of improved pastures went
unfertilized in 1952. The average rate may have been as low
as 250 pounds per improved acre. Under the assumptions used
in the set of budgets presented in Table 3 (including an assumed
production of 350 pounds of beef per animal unit), the most
profitable level of fertilization in at least 3 out of 4 price-cost
situations was indicated to be considerably higher than that
prevailing on many ranches in the State today.14

CONCENTRATION OF FERTILIZER ON PART OF THE
ACREAGE OF IMPROVED PASTURE
In the last two to three years, when prices of cattle and calves
have been substantially below the levels attained in 1950-52,
ranchers have been searching for means of reducing out-of-
pocket costs and increasing earnings. The two goals may not
be compatible. Reducing the quantity of fertilizer used on a
ranch is an obvious method of reducing out-of-pocket costs.
However, the effect on earnings is less direct and less easily
measured. Heretofore, little experience has been had and little
or no research conducted to indicate what happens to the pro-
ductivity of improved pastures when the annual fertilization is
omitted or greatly reduced.
In their search for methods to increase economic efficiency,
ranchers sometimes propose the practice of concentrating ferti-
lizers on a limited portion of the acreage of improved pastures.
In connection with this proposal the rancher will want to consider
relationships such as the following: Does the increase in beef
production on the fertilized improved pasture (that is, the in-
Research in the problem of soil fertility had indicated the existence of
opportunities for increasing production of beef through heavier fertilization
of improved pastures and provided much useful information concerning fer-
tilization methods and results. See Fla. Agr. Expt. Sta. Bul. 515, Main-
taining Fertility in Mineral Soils Under Permanent Pasture, Gainesville,
Fla., March 1953.







Pangolagrass Pastures for Beef Production


crease attributable to area concentration of fertilizer) exceed
the decline in beef production on the unfertilized improved pas-
tures? Does area concentration of fertilizer permit economies
in operation and reductions in costs sufficient to more than offset
any reductions in value of beef produced? Does area concen-
tration of fertilizer result in beef of improved quality and higher
value per pound? Positive answers to such questions may in-
dicate the existence of opportunities for added profit through
concentration of fertilizers on parts of the acreage of improved
pasture.
The budgets presented in this report throw some light on
the economies of this proposal. However, the reader must bear
in mind the assumptions basic to the budgets, including those
concerning production, prices and costs.
The budgetary data shown in Tables 3 and 4 reveal that in-
creased fertilization would tend to be accompanied at first by
increased net returns, reduced average cost per pound and in-
creased rate earned on capital used in the ranch inventory. How-
ever, net returns and the rate earned on investment would in-
crease less and less from one fertilization plan to the next. Also,
the cost per additional pound of beef would increase as fertiliza-
tion increased.
Under budgeted conditions, the rate earned on investment
would be reduced if fertilizer were concentrated on one part of
the improved pasture instead of being spread uniformly over
the entire improved pasture area. However, a reduction in net
returns per additional 100 pounds of fertilizer, associated with
area concentration of fertilizer, was inherent in the assumptions
concerning the shape of the fertilizer-beef yield curve (Fig. 2),
the yield of native rangeland, and the cost-investment structure
(Table 2). This does not say that area concentration of ferti-
lizer might not be rewarding under other conditions, especially if
it made possible a substantial improvement in seasonal distri-
bution of production of forage.

ECONOMIC CONSIDERATIONS IN DETERMINING
THE PROPORTION OF THE RANCH AREA TO BE
CONVERTED FROM NATIVE RANGELAND
TO IMPROVED PASTURES
In the analysis in Table 3 only the rate of fertilizer applied
per improved acre was permitted to vary on the illustrative
ranch. The acres improved (500) and the acreage of native






Florida Agricultural Experiment Stations


range (4,500) were held constant. The economically optimum
rate of fertilization was determined for each of several price-
cost situations, within the limits of the seven-fertilizer plans
for which budgets were prepared. No consideration was given
to the economics of increasing the percentage of improved pas-
ture (that is, changing the "land" factor or "land characteristics"
of the ranch).
To focus attention on the economics of pasture reorganiza-
tion, budgets were made with 10, 20, 30, 40 and 50 percent of
the illustrative ranch in improved pasture. The complete budget
with 14-cent beef and $50 fertilizer and summaries of the budgets
for other price-cost situations are presented in Tables 6 to 9.
The budgets visualize changes over a period of a year rather
than year-to-year changes in stocking and fertilization rates to
fit the level of prices per pound of beef and per ton of fertilizer.
The assumptions in Table 2 and Figure 2 continued to hold.
The rates of fertilization used were the economically optimum
rates for the various price-cost situations (see page 15 and
Table 3). This is not entirely satisfactory because the optimum
fertilization rates established in Table 3 were based on utiliza-
tion of a combination of 500 acres of improved pasture and 4,500
acres of native range. Operation of such a ranch probably would
not pose as great a management problem as the operation of a
ranch composed of 2,500 acres of improved pastures and 2,500
acres of native range. If management difficulties caused pro-
duction increases to tend to fall off as the area of improved pas-
ture increased, it follows that the optimum rate of fertilization
likewise would fall off. It is possible that small ranches might
be operated more and more efficiently as the percentage of area
in improved pasture was increased. However, as size of ranch
increases, there must come a time when the limitations of man-
agerial ability would cause production increases to fall off. Per-
haps they would also cause costs to increase as the percentage
of the ranch area in improved pasture increased.
Under the assumptions adopted in preparing these budgets,
the improvement of additional pastureland was shown to be a
type of improvement which would increase average unit costs,
even though under certain conditions net returns would also
increase (Table 10). It is probable that there are many ranches
in Florida today that do not have a price-cost situation favorable
to profitable expansion of the acreage of improved pastures, dis-
regarding any effects from companion changes in rate of fertili-
zation.








TABLE 6.-BUDGETS ILLUSTRATING EFFECTS OF CHANGING PROPORTION OF RANCH AREA IN IMPROVED PASTURES ON CAPITAL
REQUIREMENTS, COSTS AND RETURNS ON ILLUSTRATIVE RANCH.


Item Unit


1. Assumptions:
Beef price ......... ................ .....- .. .... pound
Fertilizer price ................. ............. ton
Pasture yield:
Im proved ....................................... pounds
Unimproved .....-.................... .. pounds

2. Beef production, total ........................... pounds
Index of total beef production ....... -

3. Animal units wintered .......................... number

4. Inventory values: *
Land ........ .......---...................... dollars
Buildings ........... ................... ... .......I dollars
Fences .-............................. ......... dollars
Subtotal ........................... ............ dollars
Machinery and equipment ...............I. dollars
Livestock ........................... ................ dollars
Total inventory value ...................... ...... dollars
Inventory value per acre ...................... dollars
Index (Plan No. 1-100) ...................... ---

5. Annual costs: *
Labor ...........-... -- ..................... ........... dollars
Fuel, gas, oil, and grease ................. dollars
Limestone ...-..-.................. ....... ..... dollars


10
(Plan A)


$0.14
$50.00
300
25

262,500
100

750

185,000
8,450
2,875
196,325
7,400
75,000
278,725
56
100

3,750
1,575
750


Percentage
20
(Plan B)


$0.14
$50.00
300
25

400,000
152

1,143

220,000
9,200
3,250
232,450
10,472
114,300
357,222
71
128

5,286
2,543
1,500


of Area in Improved Pasture
30 40
(Plan C) (Plan D)


$0.14
$50.00
300
25

537,500
205

1,536

255,000
9,950
3,625
268,575
13,544
153,600
435,719
87
156

6,822
3,511
2,250


$0.14
$50.00
300
25

675,000
257

1,929

290,000
10,700
4,000
304,700
16,616
192,900
514,216
103
184


8,358
4,479
3,000


50
(Plan E)


$0.14
$50.00
300
25

812,500
310

2,321

325,000
11,450
4,375
340,875
19,684
232,100
592,609
118
213

9,892
5,446
3,750











TABLE 6.-BUDGETS ILLUSTRATING EFFECTS OF CHANGING PROPORTION OF RANCH AREA IN IMPROVED PASTURES ON CAPITAL
REQUIREMENTS, COSTS AND RETURNS ON ILLUSTRATIVE RANCH.-Continued.


Item Unit 10
(Plan A)

Feed, salt, and minerals .................... Dollars 1,125
Veterinary, medicines, and sprays ... I dollars 225
Bull replacement .--..-...-..-..-. .-------------. Dollars 562
Taxes on livestock ..-..-................----- ... I dollars 150
Taxes on real estate ..--..................--.. dollars 982
Maintenance and repairs ................ dollars 575
Depreciation------. --..-..... dollars 1,060
Subtotal .-------... -.......-.....--- I-dollars 10,754
Fertilizer (@ $50 ton) .--..........-..-- .. dollars 11,250
Interest on inventory ........................ dollars 11,149
Interest on working capital ** -...... dollars 628
Totals .... -------..-..---...-...-.. ----- I dollars 33,781
Index of annual operating costs -... I--- 100
6. Gross returns (beef @ 14) ................ dollars 36,750

7. Net returns .............. .............-- ....... dollars 2,969
8. Rate earned on investment ...-...........-- .... percent 5.1

9. Average cost per pound ......................-- i cents 12.9

10. Added cost per added lb. of beef .......... cents
I


Percentage
20
(Plan B)

1,714
343
857
229
1,162
730
1,368
15,732
22,500
14,289
1,106
53,627
159
56,000

2,373
4.7

13.4

14.4


of Area in Improved Pasture


30
(Plan C)

2,304
461
1,152
307
1,343
.886
1,677
20,713
33,750
17,429
1,584
73,476
218

75,250

1,774

4.4

13.7
14.4


40
(Plan D)

2,894
579
1,447
386
1,524
1,044
1,990
25,701
45,000
20,569
2,061
93,331
276

94,500

1,169

4.2

13.8

14.4


* Associated with a fertilization rate of 900 pounds per acre, and 350 pounds of salable beef produced per animal unit.
** Six percent interest for a period of 6 months on all annual operating costs except depreciation and interest on investment in inventory.
? Returns above 4 percent interest on capital invested in the ranch inventory.


50
(Plan E)

3,482
696
1,741
464
1,704
1,199
2,295
30,669
56,250
23,704
2,539
113,162
335

113,750
588

4.1

13.9

14.4









TABLE 7.-SUMMARY OF BUDGETARY EFFECTS OF CHANGING PROPORTION OF RANCH AREA IN IMPROVED PASTURES ON CAPITAL
REQUIREMENTS, COSTS AND RETURNS, WITH BEEF AT 14, A POUND AND FERTILIZER AT $35 A TON, ILLUSTRATIVE RANCH.


Item


1. Assumptions:
Beef price ................................
Fertilizer price .......................
Pasture yield:
Improved ................ ....
Unimproved .............. ..

2. Beef production, total ..............

4. Inventory values, total ................

5. Annual costs, total .....................

6. Gross returns ..............

7. Net returns ** -...- ..................

8. Rate earned on investment .......-

9. Average cost per pound ..............

10. Added cost per added lb. of beef .


Unit


pound
ton

pounds
pounds

pounds

dollars

dollars

dollars

dollars

percent

cents

cents


10
(Plan A)


$0.14
$35.00

410
25

317,500

295,053

37,359

44,450

7,091

6.4

11.8
__ 1


Percentage of
20
(Plan B)


$0.14
$35.00

410
25

510,000

389,878

60,783

71,400

10,617

6.7

11.9

12.2


Area in Improved Pastu:
30 40
(Plan C) (Plan D)


$0.14
$35.00

410
25

702,500

484,703

84,208

98,350

14,142

6.9

12.0

12.2


$0.14
$35.00

410
25

895,000

579,528

107,635

125,300

17,665

7.0

12.0

12.2


re
50
(Plan E)


$0.14
$35.00

410
25

1,087,500

674,353

131,059

152,250

21,191

7.1

12.1

12.2


* Associated with a fertilization rate of 1,500 pounds per acre and 350 pounds of salable beef produced per animal unit.
** Returns above 4 percent interest on capital invested in the ranch inventory.












TABLE 8.-SUMMARY OF BUDGETARY EFFECTS OF CHANGING PROPORTION OF RANCH AREA IN IMPROVED PASTURES ON CAPITAL
REQUIREMENTS, COSTS AND RETURNS, WITH BEEF AT 14 A POUND AND FERTILIZER AT $70 A TON, ILLUSTRATIVE RANCH.

I Percentage of Area in Improved Pasture
Item Unit 10 20 30 40 50
(Plan A) (Plan B) (Plan C) (Plan D) (Plan E) .

1. Assumptions:
Beef price ........................- ....... pound $0.14 $0.14 $0.14 $0.14 $0.14
Fertilizer price --..---......... -----------...... ton $70.00 $70.00 $70.00 $70.00 $70.00
Pasture yield:
Improved .............................. ...... pounds 130 130 130 130 130
Unimproved .................................... pounds 25 25 25 25
2. Beef production, total ........................... pounds 177,500 230,000 282,500 335,000 387,500
4. Inventory values, total --..-.......-.......... dollars 253,453 306,678 359,903 413,128 466,153
5. Annual costs, total .. ....- ....... dollars 25,054 36,171 47,291 58,412 69,523
6. Gross returns ...---....--...--..--............... dollars 24,850 32,200 39,550 46,900 54,250
7. Net returns ** -...-.......---................. dollars 204 -3,971 -7,741 -11,512 -15,273
8. Rate earned on investment .................... percent 3.9 2.7 1.8 1.2 0.7
9. Average cost per pound .......................... cents 14.1 15.7 16.7 17.4 17.9 .
10. Added cost per added lb. of beef ........... cents 21.2 21.2 21.2 21.2

Associated with a fertilization rate of 300 pounds per acre and 350 pounds of salable beef produced per animal unit.
** Returns above 4 percent interest on capital invested in the ranch inventory.








TABLE 9.-SUMMARY OF BUDGETARY EFFECTS OF CHANGING PROPORTION OF RANCH AREA IN IMPROVED PASTURES ON CAPITAL
REQUIREMENTS, COSTS AND RETURNS, WITH BEEF AT 210 A POUND AND FERTILIZER AT $50 A TON, ILLUSTRATIVE RANCH.


Item Unit 10
(Plan A)

1. Assumptions:
Beef price ....................... ..... ......... pound $0.21
Fertilizer price ..................... ........ ton $50.00
Pasture yield:
Improved* --........................... .. I.. pounds 410
Unimproved ................. ...... .. ......... pounds 25

2. Beef production, total ............................. pounds 317,500

4. Inventory values, total ........................ dollars 295,053

5. Annual costs, total ................................ dollars 43,153

6. Gross returns ............... ....-- ........... dollars 66,675

7. Net returns ** -................ ... ...- ...... dollars 23,522

8. Rate earned on investment ................. percent 12.0

9. Average cost per pound .............. ... i cents 13.6

0. Added cost per added lb. of beef ... .... I cents

Associated with a fertilization rate of 1,500 pounds per acre and 350 pounds o
** Returns above 4 percent interest on capital invested in the ranch inventory.


Percentage of
20
(Plan B)


$0.21
$50.00
410
25

510,000

389,878

72,370

107,100

34,730

12.9

14.2

15.2
____ -


Area in Improved Pasture
30 40
(Plan C) (Plan D)


$0.21
$50.00

410
25

702,500

484,703

101,590

147,525

45,935

13.5

14.5

15.2


$0.21
$50.00
410
25

895,000

579,528

130,810

187,950

57,140

13.9

14.6

15.2


salable beef produced per animal unit.


50
(Plan E)


$0.21
$50.00

410
25

1,087,500

674,353

160,028

228,375

68,347

14.1

14.7

15.2
















TABLE 10.-THE RELATIONSHIP OF AVERAGE UNIT COSTS AND NET RETURNS TO PERCENTAGE OF RANCH AREA IN IMPROVED
PASTURES FOR BUDGETED PRICE-COST SITUATIONS ON ILLUSTRATIVE RANCH.


Fertilization
Rate *




0 lbs..........
0 lbs. ..-.. .. -..
0 lbs. .......... ......
0 lbs. ........-



0 Ibs ....- .....
0 Ibs. ........ ......
0 lbs ................
0 lbs....... ...


Price

Beef



140 lb.
141 lb.
14c lb.
21 lb.


Assumptions

Fertilizer



$35 ton
$50 ton
$70 ton
$50 ton


Percentage of Area in Improved Pastures
10 20 30 I 40 50
(Plan A) (Plan B) I (Plan C) / (Plan D) (Plan E)
Average Unit Costs, Cents


tll.8
t12.9
t14.1
113.6



7,091
12,969
-- 204
23,522


11.9
13.4
15.7
14.2


12.0
13.7
16.7
14.5


12.0
13.8
17.4
14.6


Net Returns, Dollars **


10,617
2,373
-3,971
34,730


14,142
1,774
-7,741
45,935


17,665
1,169
-11,512
57,140


21,1911
588
-15,273
68,347t


* Optimum for each price-cost situation, with 10 percent of the ranch in improved pasture.
** Returns above 4 percent interest on capital invested in the ranch inventory.
t Denotes minimum average unit cost only as to 5 improvement plans shown.
$ Denotes optimum net returns only as to 5 improvement plans shown.


1,50
90
30
1,50



1,50
90
30
1,50







Pangolagrass Pastures for Beef Production


Improving additional land on the illustrative ranch would
tend to increase beef production, gross returns, annual operating
costs and capital investments (Tables 6-9). Two major assump-
tions were involved. First, that each acre was potentially as
productive as the next.15 Second, that gross income and costs
increased a constant amount with each 10 percent increase in
proportion of land in improved pasture. Because of the assump-
tions used, each 10 percent increase in improvement would re-
sult in a constant increase in each of these economic measures.
However, operating costs would tend to increase at a more rapid
rate than production and gross returns. Capital investment
would increase at a less rapid rate than the other economic
measures, although in absolute terms, it would increase substan-
tially more than either operating costs or gross income. Most of
the increased capital investment would be due to the cost of im-
proving the land and the growing size of the beef herd as the
percentage of improved pasture increased.
The relationship between added returns from beef and added
costs determines whether it would pay to improve more pas-
tures on a given ranch. When the cost per added pound of beef
resulting from pasture reorganization becomes higher than the
sales price of the beef, net returns fall. Expanding the improved
area under such conditions would not pay. However, when the
market price for beef rises above the per-pound cost of producing
the additional beef possible from increasing the improved area,
net returns increase and therefore it would pay to improve more
pastureland. The pattern of changes in rate earned on invest-
ment are similar to the pattern of changes in net returns.
These results, in part, explain why ranchers change their
attitudes toward pasture improvement practices. When prices
are high relative to costs, returns to improved pasture increase
and encourage further improvements. The reverse is also true.
When beef prices are low relative to costs of production, the
question is asked more frequently, "Will it pay to improve more
pasture?"
Here, again, management is important. Low calf crops and
low weaning calf weights decrease the incentive to improve pas-
tures. Also, one way to compensate for a discouraging price-cost

"" Assuming all else constant, if a rancher improved his best land first,
his beef yield per improved acre would decrease as he improved more land.
But if he improved his worst land first, he would realize an increase in beef
yield per improved acre as he improved more land.







Florida Agricultural Experiment Stations


situation may be to increase the grade of animals produced along
with the quality of the pasture. For example: The price-cost
combination of 14 cents a pound for beef and $50 a ton for ferti-
lizer may illustrate a type of situation in which it would not pay
to improve more pasture. Yet, if the rancher could, through
better management practices, produce a higher grade of beef
and thereby increase the price of his product enough to offset
the production cost per pound, it would pay him to improve
more pasture. Similar results can be achieved in other ways,
for instance, by adopting practices that reduce the level of aver-
age costs of production.
As indicated, more refined data are needed. Estimates of
increases in beef production that would result from increases
in percentage of area in improved pastures should fit the par-
ticular size of ranch. Also, estimates of the optimum rate of
fertilization should fit the proportion of the ranch in improved
pastures. Under budgeted conditions, costs per additional pound
of beef were constant. This is a "middle-of-the-road" position.
In the budgets, either the cost per additional pound of beef
is above the price of beef, suggesting that it would not pay to
improve more pasture, or the cost per additional pound of beef
is below the price of beef, suggesting that it would pay to im-
prove more pasture.
Data are not available to tell us under what ranch conditions
marginal costs (costs per additional pound of beef) would in-
crease or under what conditions they would decrease as more
land is improved for pasture. It is not likely that they would
remain constant more than momentarily. No doubt some Flor-
ida ranchers could not profit from expanding improved pas-
tures unless beef prices were at historic high levels. Others
would gain by adding improved pastures when beef prices were
above normal, but would lose by so doing when prices were below
normal. Fewer would profit from added acres of improved pas-
tures with low prices for beef. The relationship between added
returns and added costs will probably change as more improved
pasture is added to each ranch. Improved pasture should be
added as long as the gain in yield of beef just pays for itself,
provided the money cannot be used more profitably for other
purposes. Comparison of fertilizer budgets with improvement
budgets in this report suggests that money used for added ferti-
lization beginning at a low level would earn a larger return on
the added investment than money spent solely for adding more
acres of improved pasture.






Pangolagrass Pastures for Beef Production


EFFECTS OF ALTERNATIVE FERTILIZATION AND
IMPROVEMENT PLANS ON CAPITAL USED
IN THE RANCH BUSINESS
In the budgets previously presented to illustrate the effects
of changing the rate of fertilization and the percentage of land
in improved pasture, three major types of changes relating to
capital are to be noted, as follows: (1) Changes in the amount
and form of capital invested in the ranch inventory, particularly
changes in the investment in land and livestock, (2) changes in
the amount and form of capital required for annual operating
costs, particularly the funds required for the annual purchase
of fertilizer, and (3) changes in the rate of return earned on
capital invested in the ranch business.
Increased fertilization of existing improved pastures required
a larger amount of capital invested in livestock with the same
investment in land (Fig. 5). Although it takes years to build
up a quality breeding herd through selection of animals, an
investment in livestock could be liquidated rather rapidly should
the operator desire to do so, through the expedient of marketing
breeding stock for slaughter. It is to be remembered that the
budgets are for an illustrative ranch having 500 acres, or 10
percent of the land, in improved pastures. Increased fertilization
on ranches having a larger proportion of land area in improved
pastures would result in larger increases in capital invested in
livestock.
As has been stated, increased fertilization would increase
the amount of capital invested in the ranch inventory through-
out the range of the budgets presented. However, only the
early increases in fertilization were shown to be accompanied by
an increase in rate earned on capital investment. The more
favorable the beef price-fertilizer cost situation, the higher the
rate of fertilization before the rate earned would begin to de-
cline (Fig. 5).
Increasing the percentage of the ranch area in improved pas-
tures substantially would increase the capital investment in land
as well as in livestock. That portion invested in land would be-
come a "fixed" asset as compared with the more "liquid" invest-
ment in livestock. It would be too fixed to be readily reduced
with changing prices and costs. With favorable price-cost situ-
ations, the improvement of additional area for pasture would
represent a major method of profitably using large sums of capi-







Florida Agricultural Experiment Stations


tal in ranching. Thus ranchers might wish to improve more
pastures in order to use more capital in the ranch, as long as
the rate earned on the additional investment did not decline
below the rate of interest that could be earned on the money
if invested in some other way or perhaps in some other business.
Increased fertilization rates and increased improvement of
land for pastures would materially increase the amount of money
required for the annual purchase of fertilizers. In the illustrated
budgets, fertilizer costs would increase more rapidly than other
costs and more rapidly than the charge for interest on capital
used in the ranch inventory. Thus the annual cash outlay
risked in the operation of the ranch would be greatly increased.
In the budgeting process, capital charges for funds used for
annual operating costs were charged at 6 percent interest for six
months of the year and appeared as a charge for "interest on
working capital."



7 Other
SLivestock
SLand, buildings
and fences
400
14 Beef at 21 cents lb.
a and fertilizer at
12 ."***" ** $50 ton
| 300 12 t..
300


S- Beef at 14 cents Ib.
; 200 8 8 and fertilizer at
E $35 ton
a 6-
: o-/ --- Beef at 14 cents lb.
01 and fertilizer at
100 $50 ton
E
SBeef at 14 cents lb.
e and fertilizer at
$70 ton

so a.so s ~-2

Pounds of Fertilizer' -
per Improved Acre Pounds of Fertilizer
per Improved Acre


Fig. 5.-Illustration of relationships between fertilization rate and the
amount and earnings of capital employed in the ranch inventory. (See
Table 2.)







Pangolagrass Pastures for Beef Production


CONCLUSIONS
1. The problems of year-long ranch operation encompass the
two problems of "forage production" and "forage utilization."
The latter is especially affected by the plan of ranch organiza-
tion. Thus, per-acre beef yields from improved pastures tend
to be higher on "steer ranches" where "seasonal grazing" is
practiced than on "cow-and-calf" ranches where "year-long graz-
ing" is practiced.
2. Exploratory budgets, based on specified alternative plans
of production and selected combinations of beef prices and fer-
tilizer costs, for an "illustrative" cow-and-calf ranch, indicated
economic tendencies as follows:
A. With increased fertilization of existing improved pas-
tures, beginning at a low level, net returns would tend to in-
crease up to a point and then to decrease. Similarly, average
unit costs would tend to decrease up to a point and then to
increase. Differences between ranches in profit opportuni-
ties from increased fertilization can be expected to arise from
differences in: (1) The response of soils to fertilizers; (2)
the level of ranch management; (3) the quality of livestock;
and (4) other similar variations affecting production, costs
and returns. Where actual ranch conditions correspond with
conditions specified in the budgets and fertilizer is applied
at a relatively low rate, ranchers would have the opportunity
to increase ranch returns and reduce unit costs through in-
creased fertilization.
B. Large expenditures for fertilizers would be accom-
panied by certain risks and uncertainties not identified in
budgets based on average conditions of weather and prices.
Furthermore, operators should experiment on a small scale
and know that they can efficiently and economically produce
and utilize the expected quantity and quality of feed before
trying a maximum fertilization plan on a large scale.
C. The rate of fertilization required for the highest level
of net returns would vary with changes in costs and in the
price of beef.
D. In the grazing trials cited here and in the ranch
budgets, the increases in beef production associated with in-
creases in fertilization represent the net effects of changes
in forage production and utilization including any changes in
length of grazing season.







Florida Agricultural Experiment Stations


E. Under the assumed conditions, each step-by-step in-
crease in pounds of fertilizer from 300 to 2,100 pounds per
acre would result in smaller and smaller increases in beef
yields and gross returns. Thus, the marginal productivity
of fertilizer tends to decline. In part, it indicates that initial
fertilizer applications usually are made at the most favorable
time of year and subsequent applications meet less favor-
able conditions of temperature, moisture and stage of growth.
Under indicated conditions of decreasing marginal productiv-
ity, fertilizer should not be concentrated on a portion of
the improved pastures but rather should be spread uniformly
over the improved areas. However, concentration of ferti-
lizer might be rewarding under other circumstances, especial-
ly if it made possible a substantial improvement in seasonal
distribution of production of forage.
F. The profitableness of increasing the acreage of im-
proved pasture would depend on the price-cost situation.
When the price-cost situation was favorable, improving pas.
tures appeared to be a major method whereby large sums
of capital might be profitably used in ranching.
3. There is need to develop more precise economic data for
the various types of ranch situations in Florida. This would
require that numerous ranchers maintain accurate production
and cost records over a period of years and that research provide
the technical information concerning the problems of beef pro-
duction. Data are needed especially concerning changes in costs
and returns of beef production attributable to changes in the
length of the grazing season.




University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs