Land-use diversification can aid profitability of southeastern cattle producers
By By Dave Edmark
U of A System Division of Agriculture
Dec. 11, 2015
- Producers in Southeast work smaller acreage, numbers of cattle
- Localized industry marked by slaughter facilities
- Ecosystems services can provide producers additional income
FAYETTEVILLE, Ark. – It’s not unusual to find cattle grazing on farms across southeastern states. It would be more unusual to find farmers in the region who have large cattle operations by national standards or who earn significantly large segments of their income from cattle.
“There is still quite a bit of difference economically when you look at livestock agriculture in the southeastern U.S. compared with the western U.S.,” said Dirk Philipp, associate professor animal science at the University of Arkansas System Division of Agriculture. “Net income from cow-calf-dominated farms is an average of $15,000 in the southeastern U.S. while in the western U.S. it’s $40,000 from cattle sales where farm land area is larger.”
Diversifying land use
To keep beef cattle operations sustainable in the Southeast, producers may need to consider taking on additional economic purposes of their land, such as marketing ecosystem services available from grasslands. Philipp cited a program from the past in Florida in which state agencies pays cattle ranchers near the Everglades to retain water for purposes such as wetland maintenance.
The challenges that cattle producers face in the southeast were summarized in an article for Animal Frontiers journal with Philipp as the lead author. Four other Division of Agriculture researchers were contributing authors: Michael Popp, professor of agricultural economics and agribusiness; Elizabeth Rumley, attorney with the National Agricultural Law Center, Mary Savin, professor of crop, soil, and environmental sciences; and Ken Coffey, professor of animal science.
With larger average cattle farms in the western states – 530 acres versus 200 acres in the Southeast – producing an average 155 cattle per year as opposed to 59 in the Southeast, cattle producers seeking to market their product face more hurdles in the Southeast. Consumers generally prefer to buy beef from grain-fed cattle, and the cattle production outside the Southeast largely relies upon feedlot operations that aim toward an end-market weight.
In the Southeast, the market is more local. Philipp said that corn-growing regions in the Midwest are in a position to host the feedlots where cattle are fed large amounts of corn to get then to desired weight levels of around 1,200 pounds. “They ship the cattle to the corn and not the other way around,” he said. “Everything is tailored toward getting the cattle in at a higher weight, slaughtering them and packing them at very defined sizes and units. With grass-fed systems, you don’t have that infrastructure to rely on.”
With few large packing plants available, cattle producers in the Southeast instead raise and finish their smaller-sized, grass-fed stock to small slaughtering facilities. One federally inspected facility available to producers in western Arkansas is Garner Abattoir in Van Buren. Philipp once visited with a cattle producer in nearby Winslow who uses the Van Buren facility but who finishes his cattle at 850 pounds rather than 1,200 pounds; he wouldn’t be able to keep up with the demands of getting cattle to a higher weight on a grass-fed diet, Philipp said.
These producers handle more details than their Midwestern counterparts who turn their cattle over to the feedlots for finishing on a grain diet. Referring to the producer who uses the Van Buren slaughter facility, Philipp said, “He has to work closely with the butcher in that facility to proportion the animal to ground beef, steaks and so forth because every animal is different. They don’t do what they would in a feedlot where thousands of them are shipped to a packing plant where they are slaughtered.”
Moving to the next level
Small producers might not have the flexibility to take some steps that would earn them more money. Philipp noted that production costs have risen enough in recent years to cause the profit per animal to be much less predictable—exacerbated by drought and volatile oil prices—in spite of higher beef prices at retail stores.
The situation prevents small producers from making large investments. And even though they might benefit financially by switching to a regimen such as limiting calving season to one six-week period during the year, the farmers tell Philipp they can’t do so because they want to receive an income every month.
“It’s difficult to change because they have good reason to operate the way they operate,” he said. “Many families make enough money to keep it operating but I doubt that they make so much money that they would take the risk to move it to another level.”
The Florida Everglades program can serve as a model. The research team’s Animal Frontiers article called for an effort among researchers, educators, legislators and producers to find ways to keep beef cattle production viable in the Southeast. “The valuation of ecosystems services derived from grasslands can potentially supplement beef farmers’ income while providing environmental services that reach far beyond the immediate rural communities,” the authors said.
For more information on livestock and forage production, contact your county extension office or visit www.uaex.edu.
The University of Arkansas System Division of Agriculture offers all its Extension and Research programs and services without regard to race, color, sex, gender identity, sexual orientation, national origin, religion, age, disability, marital or veteran status, genetic information, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.
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