FEEDING ADJUSTMENT appogmmnss ON. sqummu meme FARMS

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1 FEEDING ADJUSTMENT appogmmnss ON. sqummu meme FARMS The : for flu Doqru 0 M. S. MICHIGAN STATE UNIVERSE hale: E1. Muhv'amy 1959

2 LIB R A R Y Michigan State University

3 FEEDING ADJUSTMENT OPPORTUNITIES ON SOUTHERN MICHIGAN FARMS BY JAMES E. MULVANY AN ABSTRACT Submitted to the College of Agriculture of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 1959 Approved [8,33, fit/1aa

4 ABSTRACT The objective of this study was to examine management adjustments which will permit southern Michigan farmers to economize in their use of feed. Specifically, the study examined the hypothesis that southern Michigan farmers can use feed more economically and, thus, rates, improve net income by (l) adjusting grain and protein feeding (2) specializing in fewer livestock enterprises while adjusting feeding rates, and (3) adjusting forage programs. An intensive study of management possibilities on eight actual case farms constituted the analysis of the study. These farms provide a realistic setting in which to test promising management opportunities. Comparative budgeting was used to estimate the financial outcome of various management alternatives proposed on each farm. advance. The planning was for a period of five to ten years in Particular emphasis was placed on deriving a set of forwardlooking prices which would provide valid comparisons among the financial outcomes of various management alternatives. Prices were projected for the 1960's on the basis of various price determinining factors. The case farms were selected from among a group of 40 farms whose operators had kept records for nearly two years on livestock feeding rates and crop inventories. This provided a good deal of background data needed for the comparative budgeting procedures. The choice of case farms represents a variety of farm situations commonly found in southern Michigan with respect to size,

5 number of operators and family goals. Furthermore, they were selected to represent three important livestock farm types appearing in a 1957 preliminary survey of 500 Washtenaw and Lenawee County farms. The three types were specialized beef farms, dairy-hog farms and diversified farms with combinations of beef, sheep, swine and dairy enterprises. Management changes which repeatedly prove profitable on a range of individual farm situations would probably prove profitable on other similar farms in the area. Thus, conclusions reached in the analysis of the eight case farms contribute a great deal toward the understanding of adjustment opportunities in southern Michigan. The analysis first revealed that all eight farms have opportunities for adjusting grain and protein feeding rates. Feeding rates were adjusted in several different ways for different kinds of livestock. Net income was increased on one farm by an estimated $1, 000 by substituting corn and soybean oilmeal for bran and other expensive feeds in the dairy cow ration. Some of the farms, however, showed even greater opportunities for specializing in fewer livestock enterprises while adjusting feeding rates. Estimated increases in net incomes for these farms ranged from $2, 000 to $5, 000. Several of the farms studied were shown to have opportunities for improving forage programs by investing in forage harvesting, storing and feeding equipment. This opportunity was found particularly profitable on a specialized beef farm and a farm with a 20 cow dairy herd. Three other case farms also were found to have some opportunities for adjusting

6 forage programs profitably. Eliminating physical feed waste also offered promising adjustment opportunities. This could save as much as 10 percent of the feed inputs used on some of the case farms. Livestock or livestock products account for 50 percent or more of the total value of products sold on nearly 10, 000 farms in southeastern Michigan, according to the 1954 Census of Agriculture. Since the case farms are similar to many of these Census farms, the above opportunities can be expected to apply to numerous farms in southern Michigan.

7 FEEDING ADJUSTMENT OPPORTUNITIES ON SOUTHERN MICHIGAN FARMS BY JAMES E. MULVANY A THESIS Submitted to the College of Agriculture of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of MASTER OF SCIENCE Department of Agricultural Economics 1959

8 ACKNOWLEDGMENTS I wish to express my appreciation to Dr. Richard G. Wheeler for his careful and patient guidance during the preparation of this thesis. My association with Dr. Wheeler has been one of the most rewarding experiences.of my graduate training. I wish to thank Dr. George H. Axinn, Department of Cooperative Extension, and Mr. Hugh E. Henderson, Department of Animal Husbandry, for making constructive suggestions and careful reading of the manuscript. I also wish to thank Dr. Lawrence L. Boger and the Department: of Agriculture Economics for the financ1al assistance making my graduate training possible. Credit is extended to Mr. and Mrs. Allen Wonch for typing and duplicating the final copies and offering suggestions regarding style of the manuscript. Finally, I wish to mention gratitude to my wife, Valerie, and family. They have provided encouragement. and enjoyment. which has helped make my graduate work a pleasurable experience.

9 ii TABLE OF CONTENTS Chapte r I. INTRODUCTION... Objectives of the Study Method of Analysis Price-Cost Data II. ADJUSTING CONCENTRATE FEEDING RATES... III. IV. VI. Analysis of Farm A Analysis of Farm B Analysis of Farm C Conclusions SPECIALIZATION IN FEWER LIVESTOCK ENTERPRISES Analysis of Farm D Analysis of Farm E Analysis of Farm B--Continued Conclusions IMPROVING FORAGE PROGRAMS... Analysis of Farm F Analysis of Farm G Conclusions OTHER OPPORTUNITIES FOR ECONOMIZING IN THE USE OF FEED... SUMMARY AND CONCLUSIONS APPENDIX... BIBLIOGRAPHY

10 iii LIST OF TABLES Table Page Summary of Net Incomes for Variable Levels of Concentrate Feeding per Dairy Cow on Farm B Comparative Financial Summary for Alternative Plans Budgeted on Farms A, B and C Distribution of 265 Sample Farms in Washtenaw and Lenawee Counties by Number of Livestock Enterprises... Distribution of 265 Sample Farms in Washtenaw and Lenawee Counties by Number of Livestock Classes Comparative Investments, Livestock Numbers, Livestock Production Rates, Feed Production and Feed Purchases for Alternative Management Plans on Farm D... Comparative Financial Summary for Alternatives on Farm D Comparative Investments, Livestock Numbers, Livestock Production Rates, Feed Production, and Feed Purchases for Alternative Management Plans on Farm E... 4O Comparative Financial Summary for Alternatives on Farm E ll Comparative Investments, Livestock Numbers, Cropping Programs, Feed Production, and Feed Purchases for Alternative Plans on Farm B Comparative Financial Summary for Two Alternative Management Plans Emphasizing Livestock Specialization on Farm B... Comparative Financial Summary on Farm F oooooooo Comparative Investments, Steers Fed, Crop Production, and Purchased Feeds in Alternative Plans for Farm G... 67

11 iv Table Page 13 Comparative Financial Summary on Farm G Appendix Table I. Feeding Rates and Liveweight Gains per Head for Meat Animals on Sample Farms, II. III IV. Annual Feeding Rates per Head for Dairy and Breeding Stock on Sample Farms, Michigan Farm Product Prices Projected for the 1960's Projected Cost of Items Used in Michigan Farm Production

12 CHAPTER I INTRODUCTION Feed is a highly important input on southern Michigan farms. The value of feed which a Michigan farmer raises or buys for his livestock is likely to equal or exceed half of his gross income. Feed cost makes up nearly half of the total cost of producing milk and as much as 85 percent of the cost of producing hogs. Thus, farmers will do well to consider ways of improving the use of their feed supplies. An analysis by Allen in 1950 concluded that farmers keep approximately 25 percent less livestock on a given amount of feed than feed budgeting data suggest. I This conclusion was further confirmed with feeding records kept by a sample of Lenawee and Washtenaw County farmers. 2 During the summer of 1957, 40 farmers were asked to cooperate by mailing monthly reports on feeding rates and other feeding information. Estimates of feed inventories were made during visits on the cooperators' farms. Disappearance of feed from inventories served as a check against the accuracy of the reported feeding rates. Tables I and II in the appendix show the actual feeding rates for various L. A. Allen, Feed Requirements and Returns on Michigan Farms, unpublished master's thesis, Michigan State University, 1950, p J. E. Mulvany and R. G. Wheeler, Feed Use on South eastern Michigan Grain-Livestock Farms, " Michigan Experiment Station Quarterly Bulletin, 41: 4 (May, 1959). Pp

13 kinds of livestock on this sample of southern Michigan farms. These feeding rates give evidence of a gap which exists between farmers' actual feeding rates and optimal consumption rates suggested by experimental results. This gap suggests that farmers can improve their economy of feed use. Prevailing low prices for livestock and livestock products provide a strong incentive for farmers to make more effective use of feed supplies. Even lower prices are anticipated for the future. This means that farmers will be seeking ways to maintain their incomes. One means by which they can do this is to economize in the use of feed. Thus, an important problem is to help farmers determine management changes which will enable them to use feed more economically. Objectives of the Study The general objective of this study was to examine management adjustments that could improve the economy of feed utilization by livestock on southern Michigan farms with livestock other than dairy. The specific objectives were as follows: 1. To examine the hypothesis that adjusting feeding rates of grain and protein will improve net income on southern Michigan farms. 2. To examine the hypothesis that specialization in fewer live- - stock enterprises in combination with adjustments in feeding rates will improve net income on southern Michigan farms.

14 3. To examine the hypothesis that additional forage harvesting, storing, and feeding equipment will improve net income on southern Michigan farms. Method of Analysis Comparative budgeting on actual case farms was chosen as the method of analysis. The case study and comparative budgeting approach to farm management analysis is referred to by Wheeler and Black as the "operating-unit approach. "3 Salter discusses the statistical reliability of a comparable method of analysis termed the "case-grouping technique. "4 Salter suggests that studying a few individual cases can often be more helpful in revealing the key to problems under study than the analysis of a bulk of data removed from its functional structure. In this study, the analysis will consist of an intensive study of eight case farms. These cases will privide a realistic setting in," which to study the effectiveness of management adjustments to improve net income. The farms have been carefully chosen to represent a variety of farm situations. The operators of all eight case farms kept records of livestock feeding rates for nearly two years. They were a part of a group of 40 farmers asked to cooperate by keeping feed records. These 40 3Richard G. Wheeler and John D. Black, Planning for Successful Dairying in New England (CambridgezHarvard University Press), 1955, p. 5. AILeonard A. Salter, "Cross-sectional and Case-grouping Procedures in Research Analysis, " 1942, pp Journal of Farm Economics, February,

15 farmers were chosen at random from a group of 500 farmers included 4 in a preliminary survey of Washtenaw and Lenawee Counties. The farms keeping records all had livestock. enterprises other than dairy. The preliminary survey revealed six important groups of farms, but specialized dairy farms, cash grain farms and dairy farms with cash grain were excluded from the group that kept feed records. The remaining three groups include specialized beef feeding farms, dairy-hog farms and diversified farms with various combinations of beef, sheep, swine and dairy enterprises. Each of these three groups is represented by two or more of the case farms. Therefore, the eight case farms represent important types of livestock farms found in the area. They also represent situations commonly found in the area with respect to size of farm, soils, number of operators, and family goals. All of the operators were individuals willing to cooperate by keeping feed records and by participating in the management study. However, as far as is known, the choice of farms did not introduce any bias that would invalidate the conclusions of the study. Because all farms are unique in some respects, optimum adjustments will vary among farms. However, if certain kinds of adjustments show opportunities for a range of individual case farm situations, it is reasonable to expect that the study of other similar farms will reveal similar opportunities. For example, if adjustments in concentrate feeding rates appear promising repeatedly throughout the study of eight case farms, one can reasonably expect that adjustments

16 in concentrate feeding rates on other similar farms will also show promise. Thus, analysis of a few selected case farms can suggest a great deal about adjustment opportunities for a farming area. Price-Cost Data Price-cost data are an important part of the information needed for budgeting. The most important problem in determining prices for budgeting is to establish proper price relationships. 5 If the proper relationships among prices are used, correct conclusions can be drawn regarding the relative profitability of alternative plans, even though the general level of prices proves inaccurate. However, the general level of prices is also important in determining the level of income and debt repayment capacity estimated for each alternative. These factors are important to the farmer in choosing among various alternatives. For this study, product price relationships were projected for a period five to ten years ahead. These price relationships were projected on the basis of {1) average historical price relationships over the past eight to ten years, (2) the analysis of production trends, (3) the analysis of government programs, and (4) the analysis of trends in the demand for various farm products. For example, the price of corn (a yearly average price for number 3 yellow corn at Chicago) was projected at $1. 00 per bushel after 5 J. M. Nielson, "Application of the Budget Method in Farm Planning, Unpublished Ph. D. thesis, Harvard University, Cambridge, Massachusetts, 1953, p. 79.

17 considering the following factors: 1. The farm price of corn in the United States has averaged $1. 46 per bushel over the past ten years. During this period, corn prices have shown a pronounced downward trend. During the past five years, the price has decreased from $1. 60 per bushel (1953) to $1. 20 {1959) Corn production in the United States during the past ten years has shown a pronounced upward trend. This is largely due to increased yields. In 1957 the corn acreage was the. smallest in 70 years. 3. The government support price for corn has been steadily decreasing since The minimum national average support price for corn was $1. 58 per bushel for producers complying with acreage allotments in 1955, and has decreased to $1.12. for all producers in Because these trends are expected to continue during the 1960's, a figure of $1. 00 per bushel was considered a reasonable expected price. Hog prices were projected partly on the basis of $1. 00 per 6 U. S. Department of Agriculture, Agriculture Outlook Charts 1958, Washington, D. C., 1957, p Ibid., p. 49.

18 bushel corn by the use of the hog-corn price ratio. 8 The procedure used was to multiply the average hog-corn price ratio of , for the period , by $1-00 corn. Thus, the average price derived for all grades of hogs at Chicago was $ This price was used to derive the price of specific grades. Slaughter steer prices were more difficult to project. The price of corn is less important in determining the price of slaughter steers than in determining the price of hogs. Feeder calf prices are also important in determining slaughter steer prices. Therefore, the projected price of slaughter steers was derived by considering expected feeder calf prices as well as the price of corn. Other product prices were projected by procedures similar to the ones discussed for corn, hogs and steers. This procedure does not permit a great deal of preci51on in projecting prices, but the resulting price levels and relationships should be superior to current or historical price date. Table III in the appendix shows the projected product prices. Prices paid for feed, equipment, building materials and field machinery were set at the level of 1958 and 1959 prices. Experiment station bulletins, machinery dealers and price lists fr om various companies The hog-corn ratio used here is defined as the bushels of number 3 yellow corn at Chicago equal in value to 100 pounds of hog at. Chicago. The beef steer-corn price ratio used is defined as the bushels of number 3 yellow corn equal in value to 100 pounds of steer, at Chicago. all grades,

19 8 were helpful in deriving a set of prices. Table IV in the appendix shows the list of "prices paid" that were used in the analysis. prices used on some farms varied from those in the list, The actual because "used" equipment seemed adequate and available.

20 CHAPTER II ADJUSTING CONCENTRATE FEEDING RATES The analysis of this chapter examines the hypothesis that adjusting feeding rates of grain and protein supplements fed livestock can improve the economy of feed use and increase net income on southern Michigan far-ms. Adjustments made in feeding rates involve a wide variety of management changes. For example, adjusting the feeding rates for hogs may involve feeding them to lighter weights; consequently more hogs can be fattened with the same amount of feed. If the farmer chooses to feed additional hogs, other adjustments will be called for such as farr-owing more sows and providing more housing space. The original feeding adjustment has now involved other parts of the farm organization. Therefore, feeding adjustments must be considered as they interrelate with other parts of the farm business. Studies of management possibilities on three case farms will be discussed in this chapter. All three farms have renumerative opportunities for adjusting feeding rates. Feeding adjustments on Farm A will be made by simply substituting home grown grains and soybean oilmeal as a protein supplement for more expensive concentrates that are now being fed. The results of the budgeting on Farm A indicate that farmers will do well to reconsider the sources of feed nutrients used to make up their concentrate ration. Budgeting on Farm B indicates that the rate of grain

21 10 feeding for dairy cows can be adjusted to a more profitable level. Finally, budgeting on Farm C shows the results of adjusting feeding rates for fattening hogs. Analysis of Farm A Dairy is the major source of income on Farm A. Under the benchmark plan, based upon information about the farm business for the past three years, the 20 cow dairy herd produced an average of nearly 11,000 pounds of milk testing 4. 1 percent butterfat. The operator is a D. H. I... A. member and takes a great deal of pride in maintaining this relatively high level of milk production. In addition to the dairy enterprise, the operator keeps seven sows and fattens about 90 hogs each year. The sows are farrowed in 5 ft. x 7 ft. portable farrowing houses. Heat lamps are used during cold weather. The operator has managed to wean about eight pigs per litter with these facilities. The limited area of owned land includes 70 acres, of which only 55 acres are tillable. An additional 60 acres are cash rented and 70 acres. are share-cropped. In total, 185 acres are worked. A yearto-year lease is held on both cash-rented and share-cropped land. Land values in the area are high and no land is available for purchase at the present time. Labor consists of the full-time operator, his wife, and a high school boy who is hired to work weekends and during the summer

22 11 months. The operatorls Wife takes an unusually large part in the farming work; she helps with feeding chores, tractor driving, and does all of the farm bookkeeping. Grain consumption by the milking cows includes 41 bushels of corn equivalent, 370 pounds of wheat bran, 320 pounds of a purchased 18 percent protein dairy feed, and 430 pounds of a 32 percent protein supplement. In addition, an estimated 4. 7 tons of hay equivalent are consumed per cow annually. Fat hogs appear to consume feed economically. One lot of hogs consumed only 8. 6 bushels of corn equivalent and 68 pounds of protein supplement. per hog. These hogs were weaned at about 40 pounds and sold at about 220 pounds. Alternative Management Possibilities Expanding the dairy herd on this farm might prove profitable especially with the high level of milk production and the dairy management ability of the operator. However, there are definite problems involved. First, the operator is not particularly interested in taking on the milking responsibilities of a larger herd. Next, the herd can not be expanded without building more housing and possibly remodeling the milk house. Additional investment in dairying might be somewhat risky in view of the lack of crop land for feed production. The discussion of the present chapter is focused upon the possibilities of purchasing less commercial feed for the dairy herd and feeding in its place more home grown corn with soybean oilmeal as a source of protein supplement. Another promising feeding adjustment

23 12 would be to improve the forage program. This alternative is discussed in Chapter III for another farm which is somewhat similar to Farm A. P] an I Under this plan. each cow will be fed 53 bushels of corn equivalent, annually. 400 pounds of soybean oilmeal and 4. 7 tons of hay equivalent Thus, 690 pounds of purchased feed fed per cow is being replaced by 12 bushels of corn and 400 pounds of soybean oilmeal. Since the estimated level of total digestible nutrients (TDN) and protein in the ration have not changed, milk production can also be expected to remain unchanged. If milk fever should become a more serious problem due to the removal of wheat bran as a source of phosphorus, mineral supplements will be added to the ration. The purchased feed expense is expected to decrease by $1, 252. On the other hand, $255 less corn will be sold. Net income will increase by an estimated $997 as a result of these changes. One of the reasons the operator has failed to consider this plan is probably that salesmen have encouraged him to feed expensive commercial feeds. In addition, the operator is willing to purchase expensive feed if it will help keep the cattle more refined in their appearance. However, the operator may be willing to sacrifice the appearance of the cattle if he realizes the gains possible through these feeding adjustments.

24 13 Analysis of Farm B This 270 acre farm is owned and operated by two brothers in partnership. The farm is divided between two tracts, and the two farmsteads provide separate homes for each family. The 2.70 acres of land include 176 acres of cropland, 11 acres of permanent pasture, 69 acres of woodland, and 14 acres in building sites and lanes. The tillable land supports a crop rotation of corn, oats, wheat, hay and pasture. The topography of the land ranges from slightly rolling to slopes which are too steep for row crop production. Thus, a good crop rotation should include a high percentage of small grains and sod crops. Also, a complementary livestock program must provide for use of a large quantity of roughage. The livestock program, during the benchmark years, included 20 milking cows, young stock for herd. replacements, 20 steers fattened yearly, 55 hogs fattened yearly, 30 ewes, 8O lambs fed out yearly, and a BOO-bird laying flock. The milking herd is housed in a 36 ft. x 72 ft. basement barn. Within this barn is a 6-stall milking parlor. A 10 ft. x 30 ft. concrete stave silo and a trench silo provide about 120 tons of silage capacity for the dairy cows. Livestock is also housed at the other farmstead located about one-half mile from the dairy barn. Machinery includes three tractors, tillage equipment, a 2. 5 ton truck, a baler, a 10 ft. self-propelled combine, a corn picker, and other smaller items. A neighbor is hired to do the forage chopping. Labor is provided by the two full-time operators and their elderly father.

25 Feed records indicate that the dairy cows consume a large 14' amount of concentrates. This is partly explained by the fact that the cows are unusually large. Many of the cull cows weigh as much as 1, 400 pounds when sold. Cows consume grain at the rate of 81 bushels of corn equivalent, 600 pounds of wheat bran and 415 pounds of protein supplement per cow. The 81 bushels of corn equivalent includes both ground ear corn and oats. In total, grain is fed at the level of 5, 600 pounds per cow yearly. During the first year that feed records were kept on the farm, roughage disappearance was estimated at nearly 8 tons per cow. After the operator added some wood slates in the selffeeder, disappearance of roughage per cow dropped to about 6 tons for the second year. There was a noticeable decrease in the amount of hay wasted in the barn yard. The 6 ton figure was used in the benchmark plan. Feed disappearance for various other classes of livestock is also high. For example, one lot of hogs was found to have consumed nearly 18 bushels of corn equivalent and 60 pounds of protein per hog, for a net gain of 180 pounds. In this case again, noticeable feed wastage occurred in the mud around the self-feeder. Alternative Po 8 sibilitie s Adjusting feeding rates appears as a simple and promising opportunity for improving the net income on this farm. Simply decreasing the intensity of concentrate feeding for dairy cows can result in increasing

26 15 net. income by $141. Budgets for five different levels of concentrate feeding indicate that cows should be fed about 2,000 pounds less concentrates per head annually. Table I shows the resulting net income for all five levels of concentrate feeding budgeted. Note that as concentrate feeding is decreased milk production is expected to decrease and roughage consumption to increas e. Table 1 Summary of Net Incomes for Variable Levels of Concentrate Feeding per Dairy Cow on Farm B Pounds of concentrate fed per cow annually Tons of hay Pounds of milk Net equivalent fed produced per income per cow annually cow annually 5, 600 (benchmark plan) 6. O 9, 600 $5, 692 4, ,440 5,815 4, 000 (plan I) 6 6 9, 300 5, 820 3, 500 (plan 11) 6.7 9,120 5, 853 3,000 (plan 1:11.) , 880 5, 805 2, ,610 5,739 Theoretically, the most profitable level of grain feeding is reached when the cost of the last input of grain just equals the value of additional milk produced plus the value of roughage saved. On Farm B, this level of feeding appears to be located between 4,000 and 3,000 pounds of grain per cow. However, this level may change over time due to changing price relationships, production capabilities of cows, and roughage quality. The estimates of milk production response and changes in consumption of roughage when grain feeding levels are varied are based

27 16 on input-output data compiled by C. R. Hoglund. 9 In these data, a milk production response curve for good quality cows fed medium quality roughage and variable quantities of grain appears to best indicate the milk production response and increased roughage consumption which might be expected on Farm B. However, the actual level of production on Farm B is below the level of production shown by this curve. The following three budgets show in detail how grain feeding rates might be adjusted to lower, more profitable levels. Specialization in dairying is another promising possibility for improving net income on this farm. This possibility is examined in Chapter 111. Plan I Plan I proposes to decrease the rate of grain feeding to the 4, 000 pound level, shown in Table l. The concentrate ration will include 58 bushels of corn equivalent plus 440 pounds of bran and 290 pounds of soybean oilmeal. The protein percentage of the ration will remain unchanged. Roughage consumption is expected to increase by 0. 6 tons per cow as concentrate feeding falls from 5, 600 to 4, 000 pounds. Milk production will decrease to 9, 300 pounds per cow. In addition, the cows will be expected to lose about 50 pounds in average body-weight per cow. 9C. R. Hoglund, Budget Guide in Estimating Feed Inputs and Milk Production When 1, 200 Pound Holstein Cows Are Fed Variable Quantities of Grain and Three Qualities of Roughage, Agricultural Economics Department Mimeograph No. 670, Michigan State University, 1956, pp. 1-4.

28 17 The upright $110 will be filled with corn instead of alfalfabrome grass. This adjustment will permit harvesting more dry hay and will supply an additional 14 tons of roughage. The 156 bushels of corn saved will be sold. Net income will increase to $5, 820, or $128 over the benchmark plan. PlanE Grain consumption will decrease still further to the 3, 500 pound level. The concentrate ration will consist of 51 bushels of corn equivalent plus 386 pounds of wheat bran and 260 pounds of soybean oilmeal. As in the previous plan, the protein percentage of the ration will not change. Hay consumption is estimated to increase by 0. 1 tons over the level consumed in plan 1. Milk production will decrease to 9, 120 pounds per cow. The additional roughage required for this plan over plan I can be supplied by ensiling an additional acre of corn silage in the trench silo. Net income will increase to $5, 853. Using the grain that is saved to feed additional cows could improve net income even more. This will be demonstrated in Chapter II. Plan III Plan III proposes feeding grain at the level of 3, 000 pounds per cow. The concentrate ration will consist of 41 bushels of corn equivalent plus 330 pounds of wheat bran and 2.20 pounds of protein supplement. Roughage consumption will increase to 7 tons per cow.

29 18 The pasture program will be improved by seeding five acres of either sudan grass or rye for temporary pasture. This pasture crop will be worked into the rotation in place of alfalfa-brome grass pasture. in addition, the operator will extend the length of the trench silo and ensile one more acre of corn than proposed under plan II. Milk production is expected to decrease to 8, 880 pounds. the level estimated in plan 11 to $4, 805. Net income will decrease from This suggests that the most profitable level of concentrate feeding is between the levels of 4,000 and 3,000 pounds as represented by plan.11. Analysis of Farm C Analysis on Farm C illustrates adjusting the rate of grain feeding for a hog feeding program. The livestock program includes 20 steers fattened yearly, 7 sows farrowed twice each year, and 160 hogs marketed yearly. Sows are farrowed in temporary pens constructed in one end of a 36 ft. x 40 ft. barn. A 20 ft. x44 ft. tool shed with a concrete floor provides possibilities for additional housing if needed. The operator owns 40 acres of land, cash-rents 125 acres belonging to his father, and cash-rents another 35 acres from a neighbor. The 200 acres include 179 acres in cropland, 15 acres in woodland, and 6 acres in building sites. In addition to raising feed in sufficient quantity for the livestock, the operator raises 50 acres of soybeans and 19 acres 0f Wheat as cash crops and sells 2, 600 bushels of corn yearly. A simple, yet profitable, feeding adjustment involves feeding

30 19 hogs to lighter weights and feeding additional hogs with the feed that is saved. According to the operator, hogs can be fed to 246 pounds weight and still provide a favorable return for corn compared to the cash market; however, the opportunity cost of marketing this corn through additional hogs renders 246 pound selling weights uneconomical. Plan I Seventy additional weaning pigs will be purchased, making a total of 230 hogs marketed yearly. No changes will be made in either the sow herd or the steer feeding program. Either the father's barn or the tool shed can easily provide additional housing. An additional $200 will be used for purchasing needed feeding equipment. Research indicates that the equivalent of 4. 5 bushels of corn is consumed to put an additional 50 pound gain on a 200 pound hog. 10 Thirty pounds of 32 percent protein supplement are required with this amount of grain to make a 12 percent protein ration. Thus, if the hogs on Farm C are marketed at 200 pounds, instead of 246 pounds, approximately 30 pounds of protein supplement and 4 bushels of corn per hog will be saved. Hogs will now consume only 8. 5 bushels of corn equivalent and 50 pounds of protein supplement per head. 10 L. J. Atkinson and J. W. Klein, Feed Consumption and Marketing Weight of Hogs, U. S. Department of Agriculture, Technical Bulletin 894, February, 1956, Table 1; and Earl O. Heady, et al., New Procedures in Estimating Feed Substitution Rates and in Determining Economic Efficiency in Pork Production, Agriculture Experiment Station Research Bulletin 409, Ames, Iowa, May, 1954.

31 20 Part of the advantage of marketing hogs at lighter weights is the premium price paid for 200 and 220 pound hogs over 240 and 270 pound hogs. ll Projected price relationships suggest that a price gain of $. 50 per cwt.can be expected. Holding hogs to heavier weights in an effort to market hogs during seasonally high price periods will not be necessary if a well planned breeding program is followed. Shorter feeding periods will offset the additional labor needs of more hogs; hence, no additional labor will be needed. The financial summary in Table 2 shows that net income under this plan is estimated to increase by $485. Conclusions The budgets in this chapter have shown how adjusting rates of feeding grain and protein to livestock can increase net incomes on three individual farms. Moreover, alternatives budgeted on five other case farms indicate that similar feeding adjustments are applicable to a variety of farm situations. For example, substituting a 44 percent protein supplement such as soybean oilmeal for a 32 percent protein supplement fed beef heifers resulted in $1, 000 increased net income on a specialized beef feeding farm. Farm G, another specialized beef farm, also was found to have opportunities for substituting soybean oilmeal for a 32 percent protein supplement (see plan I in the analysis of Farm G, Chapter IV). Farm F, a specialized dairy farm, was found to have 11Harold Riley, What Is the Most Profitable Weight To Market Hogs? Michigan State University Extension Bulletin 321, August, 1953, p. l.

32 Item Mis c ellaneous supplie l, 710 Gas and oil Repairs and maintenance Equipment replacement Net Income 21 Comparative Financial Summary for Alternative Plans Budgeted on Farms A, B and C Table 2 --Farm C-- - -Farm A-- h Farm B Plan 1 Benchmark PlanI Benchmark PlanI Plan 11 Plan III Benchmark plan plan plan 6, ,100 l, 430 5, 355 2, , 525 6, ,100 l, 430 5, 355 2, , 656 6, , 100 l, , , 595 7, ,100 1,430 5, 355 1, , , l, , l, l, l, l, , l, l, , Receipts Milk Dairy cattle and calves Poultry and eggs Hogs Steers, sheep and wool Cash crops Other Custom work Total receipts Expenses Hired labor Feed Seed Machine hire Fertilizer and lime Livestock expense Building replacement Property taxes Property insurance Electricity and phone Auto, farm share Purchased livestock Cash rent Interest on debt Total expenses

33 22 opportunities for adjusting grain feeding rates for cows by increasing the quantity of grain fed per cow (see plan 111 in the analysis of Farm F, Chapter IV). Farms D and E both have opportunities for adjusting feeding rates of grain and protein for livestock, as shown in plan IV for each farm in the following chapter. However, greater opportunities are present on these farms for specialization in fewer livestock enterprises. The 1954 Census of Agriculture enumerated about 3, 500 farms in Washtenaw and Lenawee Counties that derived 50 percent or more of the value of farm products sold from livestock or livestock products. The case farms were chosen from this group. The case farms are comparable to many of the Census farms in such factors as size, kind of livestock raised and number of operators. There is no reason to believe that the feeding rates on the case farms are unusual or different from those found on many of the Census farms. Therefore, it is likely that many southern Michigan farmers will do well to consider adjustments in concentrate feeding rates on their farms.

34 23 CHAPTER III SPECIALIZA TION IN FEWER LIVESTOCK ENTERPRISES Diver srfied livestock programs are common on farms in southern Michigan. A 1957 survey, made by the Agricultural Economics Department of Michigan State University, provides livestock information on a sample of Economic Class I through IV farms in Washtenaw and Lenawee Counties. Of 511 farms sampled in the two counties, 265 had operators or potential operators under 55 years of age. These 265 farms are important to this study because operators under 55 years of age are most likely to undertake management changes; also, they apparently tend to keep more livestock than older operators. Table 3 shows a distribution of these farms by number of livestock enterprises. Table 3 Distribution of 265 Sample Farms in Washtenaw and Lenawee Counties by Number of Livestock Enterprises Number of Livestock Washtenaw County farms Lenawee County farms enterprises Number Percentage Number Percentage ll ~- Total

35 24 Table 3 indicates that 53 and 11 percent, respectively, of the 265 sample farms in Washtenaw and Lenawee Counties have three or more livestock enterprises. These livestock enterprises often include two or more age or sex groups which require individual feeding attention. For example, a dairy enterprise may include the milking herd plus yearling heifers and small calves. Likewise, a swine enterprise may include both brood sows and market hogs. Table 4 shows the same sample of 265 farms classified by number of groups or classes of livestock Table 4 Distribution of 265 Sample Farms in Washtenaw and Lenawee Counties by Number of Livestock Classesa Number of livestock Washtenaw County Lenawee County classes farms farms 0 T l l O 35 5 ll _1 _'_ _ Total farms a'a livestock class refers to any group of livestock requiring individual feeding attention. The 1954 Census of Agriculture for Michigan indicates that Washtenaw County has about 1, 200 Economic Class I to IV farms with livestock enterprises. About 300 of these farms-have operators or potential operators under 55 and have three or more livestock enterprises,

36 25 judging from the farms included in the 1957 survey. How can these diversified livestock farmers make more economical use of their valuable feed inputs? The analysis of this chapter examines the hypothesis that specialization in fewer classes of livestock will bring about more economical use of feed inputs and increase net incomes on these diversified livestock farms. Analysis of Farm D Farm D has a highly diversified livestock program. The benchmark plan includes a lz-cow dairy herd, 5 replacement heifers, 4 sows, 50 hogs marketed yearly, 8 steers marketed yearly and a 120- bird laying flock. A small ewe flock was discontinued only a few years ago. The average yearly milk production per cow is about 8, 600 pounds. Concentrates fed to obtain this production average about 40 bushels of corn equivalent and 200 pounds of protein supplement per cow. The total amount of roughage fed per cow yearly is estimated at 6. 1 tons. This includes 2. 2 tons of corn silage, 2. 8 tons of dry hay and about 2. 5 tons of hay equivalent from pasture. Feeding rates for other classes of livestock are considerably above allowances normally believed adequate. Nearly 18 months of feed records were kept by the operator and analyzed to provide feed use information. Two lots of hogs, marketed at 220 pounds, consumed about 15 bushels of corn equivalent and 50 pounds of protein supplement per hog. The steers consumed about 53 bushels of corn equivalent, 33 pounds of protein supplement, and 0. 4 tons of dry hay in gaining 244 pounds; hence, concentrates were consumed at the rate of of TDN per pound

37 26 of steer gained, a relatively low feed conversion rate. Sows consumed about 48 bushels of corn equivalent and 65 pounds of protein supplement annually. The operator owns 130 acres of cropland, 4 acres of permanent pasture, 20 acres of hardwood timber and about 2 acres in the building site. The land is level to slightly rolling, and soils, although not mapped and classified by the Soil Conservation Service, appear well drained and somewhat light in texture. The crop rotation, with some variation, has been corn, oats, wheat, hay and pasture. Normal yields of these crops, in the same order, have averaged 50 bushels, 40 bushels, 27 bushels, 3. 5 tons, and an estimated 1. 5 tons per acre. Annual mixed fertilizer purchases have included only about 1. 5 tons of for 44 acres of corn and one tonafor 18 acres of wheat. Total applications of plant nutrients per acre, including nutrients from barnyard manures, have averaged only 17 pounds of nitrogen, 19 pounds of phosphoric acid (P205) and 19 pounds of potash (K20). Relative to other farms studied, this level of application appears low. The buildings include two 36 ft. x 40 ft. basement barns, a 10 ft. x 30 ft. wood silo, a small hog house, a 30 ft. x 40 ft. tool shed, and other smaller buildings. Although the dairy barn has met the requirements for marketing grade A milk, it is unlikely to do so for long, expecially if the dairy herd is expanded. The milk house, located at a level nearly 8 ft. above the milking stable, is inconvenient for milk handling. From the standpoint of building facilities, any expansion in

38 27 the dairy herd is severely limited, unless buildings are extensively remodeled or new buildings are constructed. Machinery includes a tractor, tillage equipment, a corn picker, a baler, and other smaller items. Silo filling has been hired in the past to avoid purchasing chopping equipment. The full-time operator and a few days of hired labor constitute the labor on this farm. The operator s four sons, ages ten and under, may take part in expanded farming operations in the future. Since the operator is particularily skillful in carpentry work, he may want to undertake building remodeling programs by himself. Alternative Po s s ibiliti e s This farm has several alternatives for more specialization in the livestock program. These alternatives all involve making additional investment in buildings, equipment, and livestock. Although the operator is not debt free, he seems financially qualified to borrow the additional capital needed. Since the land is fairly well suited for corn production and the operator has had experience with feeding beef cattle, plan I explores the possibilities of specializing in a beef feeding program. Adjustments in the cropping program which will provide feed for 145 steers each year are considered. The operator also seems interested in expanding the dairy herd. This can not be done without making considerable investment in dairying facilities. Plan 11 proposes a 35-cow herd with facilities which

39 28 will permit further expansion if one of the sons should decide to enter the dairy business with his father. Plan 111 proposes a combination of dairy and swine. However, this plan does not appear as attractive for increasing net income as plans I and 11. Finally, one budget is presented to show what results could be expected if the operator were able to attain the same feeding adjustments in the present livestock program as attained with more livestock specialization under plans I, II, and 111. Table 5 shows a comparison of investments, livestock numbers, feed production and feed purchases for the various plans budgeted. Table 6 shows a comparative financial summary of the various plans. Plan I Specialization in a 145 head steer feeding program designed to use feed more economically can increase net income on Farm D. This livestock program will consist of buying 145 steer calves at about 450 pounds and feeding them to l, 000 pounds. Each steer will consume 45 bushels of corn equivalent, 420 pounds of protein supplement, 1. 5 tons of combined grass and corn silage, and 0. 4 tons of dry hay. This ration will provide about 6 pounds of TDN per pound of gain, which is comparable to the feed consumption allowance suggested by USDA research work in for beef steers gaining 2 pounds per day. 12 The operator will attempt to attain this level of feeding proficiency by using the following 12 C. F. Winchester and W. A. Hendricks. Energy Requirements of Beef Calves for Maintenance and Growth, U. S. Department of Agriculture, Technical Bulletin No. 1071, July, 1953, p. 15.

40 29 Table 5 Comparative Investments, Livestock Numbers, Livestock Production Rates, Feed Production, and Feed Purchases for Alternative Management Plans on Farm D Item Unit Bemhmark Plan I Plan 11 Plan III Plan IV Added Investments Dairy housing Dollars , 640 1, Swine housing " , Silos " 1, 600 2, 320 l, Paving " l, Machinery " 475 8, 700 3, Livestock " 11, 000 4, 450 2, Total additional investments " 14, , , 730 1, 700 Livestock Dairy cows Number Heifers raised yearly " Steers " Sows " Market hogs " Laying hens " Weaning pigs sold " Livestock Production Milk production per cow Pounds 8, , , , 000 Butterfat test Percent Pigs weaned per litter Number Net gain per steer Pounds Av. daily gain per steer " Cropland Use, Corn for grain Acres Corn for silage " Oats " Hay " O Grass silage " Rotational pasture " l Wheat " Alfalfa green chopped " Tillable acres " Feed Produced Corn equivalent Bushels 2, 370 5, 100 1, 875 3, 300 2, 370 Hay equivalent Tons Feed Purchased Protein supplement Tons Corn equivalent Bushels , Hay equivalent Tons Straw Tons

41 30 Table 6 Comparative Financial Summary for Alternatives on Farm D Receipts Benchmark Item plan Plan I Plan II Plan III Plan IV Milk $3,811 $13,072 $ 7,410 $ 4,408 Dairy cattle and calves 290 1, Poultry and eggs Swine 1, , 050 1, 380 Steers l, 848 $32, , 760 Cash crops 1, ,694 Dividends Total receipts 9,192 32, , , , 257 Expenses Labor , Feed 620 4, , 462 1,193 Seed Machine hire Fertilizer and lime 255 2,130 2, 091 1, 410 1, 075 Straw Livestock expense Miscellaneous supplies Gas and oil Repairs and maintenance Equipment replacement 1, 000 1, 007 1, 416 1, 000 1, 080 Building replacement Property taxes Property insurance _ Electricity and phone Steers purchased 1, , 00b Interest on debt Interest on additional investments Total expenses 6, , 841 9, , 299 7, 477 Net Income $2, 659 $4, 338 $5, 307 $ 4, 011 $ 2, 780

42 31 practices: (1) purchase of cattle that are capable of making a high daily rate of gain; (2) elimination of feed wastage around bunkers by providing sufficient space; and (3) providing a well drained and clean feed lot which will help control disease problems. The two basement barns will provide a recommended 20 sq. ft. of housing per steer after calf pens and tie-stalls are cleared from the inside. A concrete or asphalt paved lot will be constructed to facilitate outside feeding. The best use of tillable cropland to complement the proposed livestock program involves more acres of corn in the rotation. Therefore, the proposed crop rotation will consist of corn for three years followed by oats seeded to a hay crop. Applications of mixed fertilizer on corn will be increased from 80 pounds per acre, under the benchmark plan, to 200 pounds per acre of a similar analysis plowed down plus 200 pounds at planting time. In addition, 60 pounds of actual nitrogen will be applied as a side dressing. Corn yields will increase from 50 to 60 bushels per acre and oats from 40 to'45 bushels per acre. In a recent study, C. R. Hoglund indicates that moderately productive soils under a similar crop rotation and fertilizer program can produce yields comparable to, 13.. those estimated. Conservation practices such as rye seedings in corn 13 C. R. Hoglund, Economics of Feed Production in South- Central Michig_al1, Michigan State University Agriculture Experiment Station Special Bulletin 420, September, 1958, Tables 2, 3 and 4.

43 32 will help maintain soils and prevent erosion. In addition to the feed produced from this cropping program 12, 000 bushels of corn, 20 tons of hay, and 10 tons of straw will be purchased. 1 No additional labor will be needed for this plan. Adoption of labor saving devices and equipment for use in feeding and manure handling will help the operator to handle any additional labor load. Net income from this plan will show an increase of about $1, 680 over the benchmark plan, after allowing for depreciation and interest on the additional investment. If all ofuthe added net income, plus depreciation and interest charges on building structures and machinery are used to repay these investments, the added debt and interest can be repaid in one year. Plan II On several occasions the operator has expressed an interest in expanding the dairy operation. Therefore, plan 11 proposes to discontinue all other enterprises and expand the dairy herd to 35 cows, plus replacement heifers. The building and remodeling program proposed will permit further expansion of the herd if one of the sons should desire to enter the dairy business. The operator will purchase 15 heifers, bred for fall freshening. These heifers will be artificially bred and should provide improved quality replacement stock for the future herd. Much of the profitability of a larger dairy herd depends on the seasonality of milk production. Maintaining milk production during the fall months when the milk-base is

44 33 established will result in a higher milk price. This can be done if the operator concentrates on breeding heifers to freshen in the fall months. No adjustments will be made in the level of concentrate feeding. However, the quality of roughage fed will be improved due to the use of a stem crusher in harvesting hay and the increased level of silage feeding. Since cows will tend to waste less of the higher quality roughage, the consumption of roughage is expected to decrease to 5. 7 tons of hay per cow annually. This is a savings of 0. 4 tons per cow. A green chopping program, in which forage is chopped and hauled to the herd each day during the pasture season, will replace the present pasture grazing program. This program has several advantages over grazing pasture, including greater forage production per acre, less fluctuation in milk flow during the year, and less fence upkeep. Due to the improved roughage quality and increased production capability of the expanded dairy herd, milk production will be boosted by 1, 400 pounds per cow. The proposed crop rotation will consist of corn, oats, and three years of hay. Hay stands will be maintained only three years to help assure a large proportion of legumes in the harvested roughage. First and second year hay stands will receive 150 pounds of per acre. Three-year-old stands will not be fertilized. The fertilizer program on corn will be similar to that described under plan I. The building program proposes the construction of a doublefour herringbone milking parlor and milkroom. The operator can do

45 34 much of this construction work himself and probably get by with less investment in dairy structures than usually necessary for a 35-cow herd. Dairy equipment investment includes a 700 gallon bunk tank and pipeline milker. A 20 ft. x 40 ft. concrete stave silo will provide additional silage capacity. The following machinery will be purchased: a forage chopper, a used blower, chopping wagons, and a small used tractor. Investment in a silo unloader can be avoided temporarily by using a small aluminum elevator in the silo and hand pitching silage into it. The chopping equipment will be used for both silage harvesting and green chopping. About two months of seasonal labor will be hired during peak labor months. The operator s father can provide most of this hired labor. This plan will earn an estimated net income of $2, 650 over that of the benchmark plan, after allowing for depreciation and 5 percent interest on the additional investment. This increase will be less during the transition period necessary to bring the herd to 35 cows. Added earnings could repay the $18, 570;_additional investment with interest in a little more than four years after completion of the transition. Plan III In plan III, a dairying and sow farrowing combination is proposed. Additional investments in the dairying facilities will be held to a minimum, but will still provide facilities to meet grade A milk specifications.

46 35 Eight additional heifers will be purchased to bring the herd to 20 cows. As in plan 11, milk production will increase to 10, 000 pounds per cow due to the improved production capability of the cows and the improved forage quality. The feeding program will be identical to the one described in plan 11 except for grazing pasture in place of the green chopping program. A l70-ton silo will be constructed to provide additional silage capacity and will be located in a convenient place for self-feeding. Since 20 cows can not be milked in the present dairy barn, construction of a milking parlor and milkroom are necessary. A walkthrough milking parlor will best serve this size herd at a relatively low investment. The $3, 700 investment in dairy equipment includes a 400 gallon bulk tank. new milking equipment and a pipeline milking system. In addition to the dairy enterprise, 24 sows will be farrowed twice each year. If eight pigs are weaned per litter, about 380 feeder pigs will be supplied yearly. Feed supplies are sufficient to fatten only 140 of these pigs to market weight; the rest will be sold. With a carefully planned breeding program it will be possible for 24 sows to farrow in 12 farrowing stalls. 14 After some experience, farrowing will be timed to avoid peak labor seasons, to permit selling fat hogs during seasons of high prices, and to permit the selection of replacement gilts during periods of low market value. l 4E. C. Miller, Animal Husbandry Extension Specialist, Michigan State University, was consulted for details of such a breeding program.

47 A $3, 700 investment will provide a 30 ft. x 60 ft. pole-type building equipped with modern feeding and watering equipment and heated 36 farrowing stalls. Small pigs will remain in the farrowing stalls with the sow for about two weeks and then both sow and pigs will be moved to a 5 ft. x 7 ft. pen. Exercise will be provided in an outside paved lot connected to each pen. A 20 ft. x 30 ft. finishing house will be constructed to provide finishing shelter for fattening hogs at the rate of 10 sq. ft. per hog. The proposed crop rotation consists of corn, oats, and hay for two years. This cropping program will provide all of the grain and roughage for the livestock program. This plan will earn an additional net income of only $1, 350 over that of the benchmark plan after allowing for depreciation and 5 percent interest on investment. Thus, plan 111 does not appear as profitable as do the first two plans discussed. Added earnings will repay the additional investment with interest in about 5 years. Plan IV This plan proposes that the operator adjust feeding rates. but make no attempt to specialize in fewer livestock enterprises. The operator, however, will probably have difficulty in controlling the use of feed by several classes of livestock to the extent necessary for attaining the proposed feeding adjustments. Moreover, income will not be increased by as much as estimated under the plans proposing fewer livestock enterprises. Thus, the results of the plan indicate that for some farm

48 farm situations adjusting feeding rates in combination with specializing 37 in fewer livestock enterprises is much more profitable than simply adjusting feeding rates. Roughage quality will be improved for the dairy herd by purchasing a stem crusher for use in harvesting hay. The consumption of roughage per cow will be reduced to 5. 7 tons annually, as expected in plan 11, due to reduced hay wastage. Purchase of four bred heifers from proven stock will provide four cows to replace poorer producing cows in the herd. Due to these changes, milk production will be boosted to 10, 000 pounds per cow. Feeding rates for fattening hogs will be lowered to 10 bushels of corn equivalent and 100 pounds of protein by eliminating all feed wastage around the self-feeders and giving more attention to disease and parasite problems. Feeding rates for steers will be equated with the level proposed in plan I. Just as in plan I, the operator will purchase light calves and feed them to an average weight of l, 000 pounds. Net income will increase to $2, 780 or $121 over the benchmark plan. Additional investment includes $800 in a hay conditioner and $900 in more productive milking cows. This investment and interest could be repaid from additional earnings in about 6 years. Analysis of Farm E At this point, an analysis of Farm E will illustrate how liyestock specialization is applicable to other farm situations. Although Farm E is similar to Farm D in many respects, it differs from the standpoint of

49 38 operator tenure, soils, buildings, management and other resources. However, budgeting has demonstrated that Farm E also has opportunities for adjusting feeding rates in combination with specialization in fewer livestock enterprises. The operator has held a livestock-crop operating agreement with his mother since the death of his father. Although the operator and his wife have wanted to purchase the farm, the mother has never agreed to sell. The operator will inherit only a share of the property in the event of his mother's death. These facts bring out the uncertainty of the tenure situation. Therefore, it is not surprising that the operator has not undertaken any major adjustments in the farm organization. The diverse livestock program under the benchmark plan consists of 15 milking cows, replacement heifers, 3 brood sows, 30 market hogs, 80 ewes, 125 lambs, 15 steers and a small laying flock. Fifty of the 125 lambs are purchased as feeders. In t Otal, eight classes of livestock are fed. Milk cows consume 39 bushels of corn equivalent and 400 pounds of protein supplement. Estimated disappearance of roughage totals 8. 7 tons of hay equivalent per cow yearly. Milk production per cow has averaged about 8, 900 pounds and is sold on the Detroit grade A market. Feed consumption by other classes of livestock indicates particularly low feed efficiency. Two lots of hogs, sold at 220 pounds, consumed 17 bushels of corn equivalent and 32 pounds of protein supplement

50 39 per head. annually. Sows consumed 50 bushels of corn and 204 pounds of protein Steers made 287 pounds gain on 40 bushels of corn equivalent, 169 pounds of protein supplement and 0. 4 tons of dry hay. Ewes consumed about 4. 5 bushels of corn equivalent and 590 pounds of hay per ewe during the winter months. Fattening lambs, after being taken off pasture at 60 pounds weight, required 4. 3 bushels of corn equivalent to reach 81 pounds market weight. The 210 acres of land include 146 acres of cropland, 22 acres of permanent pasture, 35 acres of woodland and about 10 acres at the building site. The crop rotation is corn, oats, wheat and three years of hay. However, some of the lowland soils support more than two years of corn. Drainage is a definite problem on much of the land. propos ed alternative 5. Tables 7 and 8 show comparative information about the Plan I Plan I proposes to expand the steer feeding program to 100 head. The 15 cow dairy herd and replacements will remain, but all other livestock enterprises will be discontinued. Additional investments include a hay conditioner, a concrete or asphalt paved feed lot, and additional steers. The steers will be financed by short term loans. Although an investment in a large silo might well prove profitable, it will not be considered until the operator is more certain about the ownership of the farm. Steer calves will be purchased at about 400 pounds weight in

51 Table 7 Comparative Investments, Livestock Numbers, Livestock Production Rates, Feed Production, and Feed Purchases for Alternative Management Plans on Farm E 40 Item Unit Benchmark Plan I Plan 11 Plan 111 Plan IV Added Investments Dairy housing Dollars Swine housing " 1, 393 Dairy equipment " Silos Paving " Field machinery " Livestock " 3, Total added investment " 4, 375 1, 635 2, Livestock Dairy cows Number Heifers raised yearly Steers Sows " Market hogs " Ewes " Lambs " Laying hens " Livestock Production Milk produced per cow Pounds 8, 900 9, , 500 9, 500 Butterfat test Percent Pigs weaned per litter Number Lambs saved per ewe " l l Cropland Use Corn for grain Acres '40 Corn for silage Oats " Hay " Grass silage " l Rotational pasture " Wheat " Total tillable acres " Feed Production Corn equivalent Bushels 3, 830 4, 310 3, 830 4, 310 3, 830 Hay equivalent Tons Feed Purchased Protein supplement Tons Corn equivalent Bushels l,

52 41 Table 8 Comparative Financial Summary for Alternatives on Farm E Benchmark Item plan Plan I Plan II Plan III Plan IV Receipts Milk $4,900 $ 5, 200 $ 7, 000 $ 5, 225 $ 5,187 Dairy cattle and calves Poultry and eggs Swine , Steers 3, , 960 3, 300 Cash crops 2,124 1, 044 1, 930 1, 544 2, 944 Sheep and wool 2, 492 3, 124 2, 492 Custom work Total receipts 14, , , , , 761 Expenses ' Labor Feed 330 l, , Seed Machine hire Fertilizer and lime Straw Livestock expense Miscellaneous supplies Gas and oil Repairs and maintenance Equipment replacement 1, 700 1, 720 1, 780 1, 780 1, 780 Building replacement Property taxes Property insurance Electricity and phone Steers purchased 2, 632 6,440 2, 632 Lambs purchased Interest on debt Interest on added investment Total expenses 8, , 327 5, , 994 8, 997 Net Income $6, 397 $7, 498 $7, 408 $6, 714 $6, 764

53 42 the fall and fed to about 1, 000 pounds market weight. of these steers includes 48 bushels of corn equivalent, The feeding program 450 pounds of soybean oilmeal or other oilmeal, and one ton of dry hay per steer. Although the operator has only had experience with feeding heavier steers, he appears to have the management ability to attain this level of feeding efficiency. 1 The present sheep barn will provide ample housing for the larger beef herd. A stem crusher or hay conditioner will be purchased to help in harvesting earlier hay cuttings which should result in improving the roughage quality. Since the cows will tend to waste less of the higher quality roughage, hay consumed or wasted will decrease by an estimated 2. 9 tons per cow. Also the operator will need to exert an effort to make the cows clean up theghay in the manger before throwing it out for bedding. The rate of grain feeding will be adjusted from 39 bushels of corn equivalent to 45 bushels per cow which appears more profitable. The level of protein feeding will remain the same. These feeding adjustments, plus purchasing three better quality cows and selling three poorer quality cows, now in the herd, will result in an estimated increase in milk production of 600 pounds per cow. The only change in the cropping program will be ensiling grass in place of corn silage and harvesting four additional acres of corn as grain. The cropping program will supply all of the grain and roughage needed by the adjusted livestock program. Net income will increase by an estimated $1, 100 over the benchmark plan, after allowing for depreciation and interest on the

54 43 additional investment. The increased earnings will be sufficient to repay the added investment with interest in 3. 5 years. This is a relatively short repayment period and indicates that the investments are economically feasible. Plan II Expanding the dairy herd to 20 cows and the ewe flock to lsohtewes appears to be an attractive means of increasing net income. All other livestock enterprises will be discontinued. This alternative, like plan I, will require little added investment. The expansion in the dairy herd will take place by purchasing five cows. Five wood-tie stanchions and more gutter will be constructed in the present dairy barn, in space vacated by the steer enterprise. Other dairy facilities such as the milk house and milking equipment will be sufficient for the larger herd unless milk marketing regulations should change. The feeding adjustments for the dairy cows will be the same as described in plan 1. Five bred heifers will be purchased from proven stock and added to the herd. Due to this adjustment and the improved roughage quality, milk production will increase by an estimated 900 pounds per cow. The expansion in the ewe flock will take place by either purchasing additional ewes or adding to the flock by taking additional replacement ewes from the lamb crop. The former method will have an advantage over the latter because improved foundation stock can be added to the herd for breeding purposes.

55 44 Since the livestock program will be more specialized, more attention can be given to the ewes at lambing time. This should help boost the lamb crop to at least 105 percent. Wool production will remain at eight pounds per ewe, yielding a total of l, 360 pounds of wool from the ewes and replacement lambs. The fat lambs will be sold before shearing. Feed consumption will be lowered for both the ewes and lambs by providing an improved pasture program and improving the flock management. Permanent pasture acres will be reworked during the summer dry season and reseeded to reed canary grass. Some additional rotational pasture will be made available for the sheep by eliminating wheat from the rotation and increasing the acreage of alfalfabrome grass by 18 acres. The rotation will be corn, corn, oats, hay, hay, and pasture. Ewes and lambs will be provided with 22 acres of improved permanent pasture and 18 acres of rotational pasture. Flock management will emphasize breeding for an early lamb crop to provide larger lambs capable of making good gains on pasture. Supplementing pasture with 2 bushels of corn equivalent per lamb, as a creep ration, should result in 85 pound lambs for market in late August. Lambs sold in August will still be marketed before the end of seasonally high lamb prices. Ewes will be wintered on 2 bushels of corn equivalent and 0. 3 tons of dry hay per ewe. Winter housing will only be required by the ewes. The present sheep barn, after removal of the sows from the east end, will provide 12 sq. ft. of shelter per ewe. Some additional hay feeders and feed bunks

56 45 will be needed, but no equipment involving high investments will be necessary. The present labor force on the farm will be sufficient for this plan. The additional labor needs of the expanded dairy herd and sheep flock will be offset by the discontinuation of the steer and hog enterprises from the livestock program. This reorganization will result in an estimated increase in net income of $1, 000 after allowing for depreciation and interest on additional investment. Increased earnings will repay the added investment with interest in about 2 years. Plan III '\ The efficiency with which hogs on Farm B utilize feed could best be improved by increasing the volume of the hog feeding program to the point where investments needed in feeding floors, watering devices, and adoption of other management practices become economical. In keeping with a one-man operation and the supply of feed raised, no more than about 380 hogs could be fed out. Thus, this plan proposes farrowing 24 sows and fattening all of the pigs raised. The 15 cow dairy herd will remain, being complementary in marketing the roughage produced. The 15 cow dairy herd will undergo the adjustments described in plan I. All other livestock including the steer, sheep, and poultry enterprises will be discontinued to facilitate the expansion of the hog enterprise. The 24 sows will be managed under a program similar to the

57 46 one explained as plan 111 in the analysis of Farm D. Sows will farrow in pens constructed in the present sheep barn. Added investments for this remodeling program will be about $1, 800. Feed consumption of hogs fattened to 200 pounds will decrease to 10 bushels of corn equivalent and 100 pounds of protein supplement. This rate of feeding is comparable to feed allowances suggested by Hoefer, Moxley and Rust. 15 Since there will only be two enterprises competing for the management attention of the operator, he will have more time to observe and attend to such problems sis feed wastage, diseases and parasites. More skepticism can be held for the realism of this budget than for the former budgets, since feeding records indicate greater past success in feeding steers, sheep, and dairy cows. Net income from this plan will be about $317 higher than under the benchmark plan. Increased earnings will repay the added investment with interest in 5 years. Plan IV Like plan IV for Farm D, this plan was budgeted to show the effectiveness of adjusting feeding rates for the present livestock program. An attempt will be made to improve the quality of roughage fed dairy cows by purchasing a stem crusher for use in hay harvesting. The productive capacity of the dairy herd will be improved by purchasing A. Hoefer. H. F. Moxley and R. E. Rust, Producing Pork in Michigan, Michigan State University Cooperative Extension Bulletin 335, June, 1955, Table 10.

58 four promising heifers to replace four low producing cows in the herd. Due to the improved productive capacity of the herd and roughage quality, 47 milk production will increase to 9, 500 pounds per cow. The feeding rates of steers, sheep, and hogs will be adjusted to the same levels as used in plans I, II, and 111. However, these adjustments will be much more difficult to attain in this plan than in the previously discussed plans where livestock enterprises were dropped. Net income will increase by about $367 compared to $1, 100 in plan I and $1, 000 in plan 11. This further confirms the profitability of adjusting feeding rates in combination with specialization in fewer livestock enterprises. Analysis of Farm B Continued Among the more promising management possibilities mentioned for Farm B, in Chapter I, was that of livestock specialization. Also mentioned in Chapter I was the fact that the farm is not well suited for corn production and should have a large percentage of the land in sod crops. Therefore, if the operators consider livestock specialization, it should be in an enterprise which will utilize a large proportion of its feed in the form of roughage. Since the management ability and interest of the operators seem best suited for dairying, two plans were budgeted for larger sized dairy herds. Plan IV presents the possibilities of discontinuing the hog feeding enterprise and expanding the dairy herd to 27 cows. Little additional investment will be needed to exploit this management change.

59 48 Although this alternative appears profitable, it is based on the somewhat uncertain assumption that the present milk marketing regulations will not require that the operators give up their shift-type milking parlor. Also as more milk markets change over to bulk milk handling, the operators may be forced to purchase a bulk tank which in turn will require that a larger milk house be built. If these changes in the milking facilities must be made, they will require high investments. Brown suggests that if high investments are to be made successfully in the dairy business, herds of at least 60 cows may be necessary. 16 Wheeler also urges caution in investing for large dairy herds. 17 In other words, high investments in dairy structures and equipment must be made carefully and used effectively in they are to pay for themselves. Thus, plan V proposes a 60 cow dairy herd with modern dairying facilities and much emphasis on how the cows can be fed most economically. Tables 9 and 10 show comparative information for the various plans on Farm B. Plan IV Under this plan, the dairy herd will be expanded by seven cows and one replacement heifer. No hogs will be fattened, but the steer, 16 L. H. Brown, "The Small Dairy Farm--How Can It Survive?" Michigan Farm Economics, No. 193, February, R. G. Wheeler, "If You Have 20 or 30 Cows, Will It Pay To Expand Herd Size? Michigan Farm Economics, No. 193, February, 1959.

60 49 Table 9 Comparative Investments, Livestock Numbers, Cropping Programs, Feed Production, and Feed Purchases for Alternative Plans on Farm B Item Unit Benchmark Plan IV Plan V Added Investment Dairy housing Dollars $ 5, 200 Dairy equipment " , 000 Silos " , 400 Field machinery " , 185 LiVGBtOCk H :.:_.._.._u_ L: 4, 800 Total added investment " $23, 585 Livestock Numbers Dairy cows Number Heifers raised yearly " Hogs " Steers " Ewes " Lambs " Laying bird s " Cropping Program Corn for grain Acres Corn for silage " Oats " Wheat H Hay " Grass silage " Rotational pasture Total tillable acres " Feed Produced Corn equivalent Bushels 4, 450 2, 757 3, 300 Hay equivalent Tons Feed Purchased Corn equivalent Bushels Protein supplement Tons

61 50 Table 10 Comparative Financial Summary for Two Alternative Management Plans Emphasizing Livestock Specialization on Farm B Item Benchmark Plan IV Plan V plan Receipts Milk $ 7, 068 $ $22, 420 Dairy cattle and calves , 250 Poultry and eggs 3, 100 3, Hogs l, Sheep and wool 1, 975 1, Steers or heifers 3, 380 3, Cash crops 1, 910 1, Other Custom work Total receipts 20, , , 470 Expenses Hired labor Feed 1, 845 2,108 1, 563 Bedding Seed Machine hire Fertilizer and lime Livestock expense Miscellaneous supplies Plastic silo cover Gas and oil 1, 500 1, 500 l, 500 Repairs and maintenance Equipment replacement 3, 000 3, 000 3, 800 Building replacement Property taxes Property insurance Electricity and phone Auto, farm share Purchased livestock 2,630 1, Interest on debt Interest on added investment Total expenses 15, ,816 15,388 Net Income $5, 692 $7, 575 $

62 51 sheep and poultry enterprises will continue without change. Adequate housing space for the larger dairy herd will still be provided by the present dairy barn. Exchanging the present four-can milk cooler for a used eight-can_cooler will provide enough additional cooling capacity. Although the milk house is large enough for this size of herd, further expansion will probably necessitate building a larger milk house. With a few adjustments, the cropping program will provide feed for the adjusted livestock program, except for 550 bushels of corn which will be purchased. This amount of corn can be purchased with little difficulty from nearby neighbors. The adjustments proposed in the cropping program include ensiling corn in place of hay or grass for silage and applying fertilizer on hay crops to increase yields. Since no hay or grass will be ensiled, additional acreage can be harvested as dry hay. Hay yields will increase to 3. 5 tons per acre after applying 200 pounds per acre of on seedlings made in oats and on first and second year hay stands. Third year hay stands will be pastured and will not receive fertilizer applications. Dairy cows will be fed the ration described under plan 111 (see Chapter II) which appeared as the most profitable level of feeding grain and roughage. With the use of artificial breeding and heavy culling of poor milk producers, milk production will increase to 10, 000 pounds by the time a 27-cow herd is reached. No additional labor will be hired. Net income will increase by about $1, 900.

63 52 Plan V In plan V, replacement heifers. the dairy herd will be expanded to 60 cows, plus All other enterprises will be discontinued to provide feed and labor for the larger herd. The drudgery of having to milk such a large number of cows will be lessened in this situation because both operators will be able to share in the milking responsibilities. A 30 ft. x 60 ft. pols-type building will be constructed to provide additional housing for the larger herd. Also a 20 ft. x 60 ft. silo will be constructed to provide additional silage capacity. A doublefour herringbone milking parlor will be built into the basement. of the present dairy barn. An additional investment of $7, 000 will provide for a 700 gallon bulk tank and milking equipment, including a pipeline milker. The 10 ft.self-propelled combine will be traded in on the purchase of a forage chopper, a forage blower, two self-unloading wagons, and a stem crusher. Since only 35 acres of small grain will be harvested, grain harvesting will be hired. The crop rotation will include corn, oats, and three years of hay. No wheat will be raised. Hay acreage will be fertilized in the manner described in the previous plan. Fifty-two acres of hay and four acres of corn will be ensiled. This amount of corn silage will be about sufficient to replenish the silos with silage after some grass silage has been fed during the summer months. A green-chopping program will replace the pasture grazing program for the dairy cows. Twelve acres of cropland rented under the benchmark plan will be dropped.

64 53 Dairy cows will again be fed at the rates indicated most profitable in Chapter I. Herd production is expected to average 10, 000 pounds once the 60 cow herd is reached. This expectation is based on the fact that the quality of the roughage will improve due to the increased use of silage and the stem crusher. A transitional period of three or four years will be needed to build the herd up to 60 cows. Once this size of herd is reached, net income2 will increase by about $4, 400, after allowing for interest and depreciation on the added investment. About four years will be required to repay the added investment with interest from the increased earnings of the 60 cow herd. Conclusions The budgets presented in this chapter indicate that specialization in livestock enterprises in combination with adjustments in feeding raths can improve net income on three case farms. Two of the other case farms also had promising opportunities for specialization. The three remaining case farms are already specialized in steer feeding. Adjusting feeding rates to more economical levels for all classes of livestock presently fed on Farms D and E resulted in increasing net incomes by $121 and $367 respectively. These gains are only modest compared to the increases of $2, 000 and more possible under plans emphasizing specialization. Moreover, similtaneously adjusting feeding rates for several classes of livestock appears difficult for the operators to undertake.

65 Relatively small added investments were needed to exploit 54 the alternatives examined. In cases where additional investments were proposed, the increased earnings were sufficient to repay the added investments in a period of less than 5 years. Since specialization in fewer livestock enterprises appeared profitable on six case farms, it is reasonable to expect that other farms in the area have similar opportunities. About 300 farmers in Washtenaw County have highly diversified livestock programs. In this respect they are similar to three of the case farmers actually shown to have opportunities for specialization in fewer livestock enterprises. Probably their farms are similar to the case farms in other respects as well. Therefore, the analysis suggests that numerous farmers in Washtenaw County, as well as in other counties, will do well to specialize in fewer livestock enterprises and to adjust feeding rates.

66 55 CHAPTER IV IMPROVING FORAGE PROGRAMS This chapter will examine the hypothesis that additional forage harvesting, storing, and feeding equipment will improve net income on southern Michigan farms. The importance of roughage for feeding ruminant livestock has been heavily stressed by extension workers in agriculture for many years. A recent Michigan dairy cost study suggests that feed cost in milk production can be reduced by 25 percent on the average Michigan dairy farm by improving roughage quality and feeding less concentrates. 18 Emphasis is also being placed on increasing the use of silage for fattening cattle and for beef cows. This chapter will discuss adjustments in the use of roughage which can supplement feeding adjustments discussed in the previous portion of the analysis. An improved forage program may involve feeding more roughage in pl ce of concentrates or, as is more likely the case in dairy herds, improving the quality of the forage harvested. In either case, the improved forage program is likely to require that added investments be made in machinery and equipment. Budgets are presented for both a dairy farm and a beef feeding farm showing the changes in expenses and returns which might be expected from improved forage programs. First, the analysis of a dairy farm explores the possibilities 18C. R. Hoglund, et. a1., "Forage Quality and Protein Feeding of Dairy Cows, " Michigan State University Agriculture Experiment Station Quarterly Bulletin, 38: 3 (February, 1956), p. 1.

67 56 of improving the quality of roughage for the dairy herd and making corollary adjustments in concentrate feeding rates. Next, several alternatives are presented on a beef farm to show the opportunities for using large quantities of silage. Analysis of Farm F The operator recently purchased this 180 acre farm from his father after working it for several years under a father-son partnership. The land includes 84 acres of cropland, 51 acres of permanent pasture, and 37 acres of woodland. Since the cropland is extremely hilly and not well suited for corn production, the cropping program includes a high percentage of sod crops. During the benchmark years, 53 acres of alfalfa-brome grass hay and 15 acres of wheat have been raised each year. All of the grain for the livestock program is purchased. The livestock consists of 20 purebred Holstein cows, 10 heifers and 5 bulls raised yearly, 55 ewes plus their lamb crop, 5 sows farrowed twice each year, and 68 hogs fattened yearly. Selling dairy calves, heifers and bulls for dairy breeding stock and 4-H club stock contributes to the income from the dairy enterprise. Milk production per cow averages about 12, 900 pounds of milk testing 3. 5 percent butterfat. Cows are housed in a stanchion barn equipped with a gutter cleaner, comfort stalls, and watering cups. These facilities permit the operator to give the cows a great deal of individual attention. A 540 gallon bulk milk tank is used for cooling.

68 57 Feed records kept on the dairy cows indicate that they consume grain at the rate of 1 pound of grain for every three pounds of milk, or 4, 200 pounds per cow annually. This grain consists of 50 bushels of ground corn and cob meal and 700 pounds of protein supplement. Roughage is fed at the rate of 4. 5 tons of hay equivalent per cow annually. The quality of this roughage is probably already somewhat superior to that fed on most other dairy farms, since a hay conditioner is used and high quality hay stands are maintained. Ewes are fed grain at the rate of about 100 pounds per ewe annually. The operator finds that this limited amount of grain feeding for the ewes results in less lambing difficulties and forces the ewes to make better use of reed canary grass pasture during the summer months. Lambs, after being taken off pasture at an estimated 60 pound weight, consume about 4. 2 bushels of corn equivalent and 300 pounds of hay per lamb. They are usually sold weighing between 85 and 90 pounds. Alternative Po 5 sibilitie s The operator is already maring progress toward eliminating the hog enterprise and expanding the ewe flock. In view of the fact that all of the grain is purchased for the livestock program, this appears as a profitable livestock adjustment. Pasture can probably be provided for 100 ewes and their lamb crop from the 51 acres of reed canary grass pasture and older hay stands not needed by the dairy herd. Plan I will project the financial results of these livestock adjustments as a benchmark for comparison with other promising management changes.

69 this plan is in operation will be about $6, In view of the relatively high level of milk production, the possibility of expanding the dairy herd should not be overlooked. However, the operator strongly rejected suggestions that a larger dairy herd could be profitable, since he is not interested in having to milk additional cows. Moreover, the problems of purchasing all of the grain and part of the roughage for a larger herd makes this possibility appear somewhat uneconomical. Renumerative opportunities do appear for improving the quality of roughage fed the dairy cows and making some corollary adjustments in the grain and protein feeding rates. Several alternative management plans are discussed to demonstrate the importance of high quality roughage as a means of increasing milk production. Plan I Plan I proposes to expand the sheep enterprise by 45 ewes and to discontinue the swine enterprise. Ewes will be bred to lamb early and provide large lambs capable of making good gains on pasture. Supplementing the pasture during the summer with l. 5 bushels of corn per lamb will result in 85 pound lambs ready for market in late August. Penning ewes up before they are about to lamb and using heat lamps during cold weather should help boost the lamb crop to the 125 percent level. The purchased feed expense will decrease from what it has normally been in the past by $1, 456, due to the feeding adjustments for the lambs and discontinuation of the swine enterprise. About eight tons of hay will be purchased yearly for the sheep flock. Net income after

70 59 Plan 11 Plan 11 proposes making additional investments in forage harvesting equipment and a silo which should increase the roughage quality fed cows from medium to excellent. 19 A 12 ft. x 40 ft. silo in addition to the present 10 ft. x 30 ft. silo will provide the cows with a medium level of silage feeding (50 pounds per day during the barn feeding season). A mow drier will be constructed in the dairy barn with ducts enough to cure 50 tons of dry hay. The drier will be powered by an electric motor and will cost about $1, 000 installed. Electricity cost per ton of hay dried from 40 percent moisture to 15 percent moisture usually averages $. 75 to $ In addition to the drier, a chopper, two chopping wagons, and a small used blower will be purchased to complete the equipment necessary for the improved forage program. Cows will continue to receive the same amount of concentrates as fed under plan 1. However, due to the improved quality of the roughage no protein will be fed and milk production is expected to increase by 445 pounds per cow, based on Hoglund s input-output data for "very good" cows. 21 Roughage consumption will decrease by an 19C. R. Hoglund, High Quality Roughage Reduces Dairy Costs, Michigan Experiment Station Special Bulletin 390, February, 1954, p. l W. H. Sheldon, et a1., Barn Hay Driers in Michigan, Michigan State University Experiment Station Bulletin 219, April, 1953, p C. R. Hoglund, op. cit., Mimeograph No. 670.

71 60 estimated 0. 4 tons per cow annually. Since the cows will be fed in the stanchion barn, roughage consumption can be controlled easily. Net income will increase to $6, 891, or $422 over net income in plan I. The increased earnings of this plan over plan I will be sufficient to repay the added investment with interest in about 5 years. Plan 111 Another alternative for the operator is to increase milk production by increasing the rate of grain feeding and leaving roughage quality unchanged. This plan proposes to increase the rate of grain feeding to 5, 500 pounds per cow or 1 pound of grain for every 2. 5 pounds of milk produced. Heavier grain feeding will bring about a decrease s in the consumption of roughage by 0. 5 tons per cow annually, but TDN's will still be increased to the level fed in plan II. Thus, milk production can be expected to equal the level suggested in plan 11. No additional investment is needed to exploit the proposals of this plan. Net income will increase to $6, 513. This is $498 less than the increase estimated in plan 11. high quality roughage to dairy cows. This reveals the value of feeding The increase in income from improved quality roughage might be even higher if the herd size were larger. Plan 1V Another alternative for the operator is to improve the quality of roughage and decrease the quantity of grain fed dairy cows. By substituting excellent for medium quality roughage, as was done in plan II,

72 61 the level of grain feeding per cow can be reduced to 3, 150 pounds per cow and still maintain milk production at 12, 900 pounds per cow as proposed under plan I. As in plan 11, added investment will be made in a hay drier, a silo, and chopping equipment. Excellent quality roughage will be harvested. Although the purchased feed expense will fall to $2, 765 or $670 less than under plan I, net income is estimated to increase to only $6, 803 or $88 less than under plan 11. Thus, this alternative is not as profitable as plan II. Plan V Plan V combines the improved forage program proposed in plan 11 with an increased level of grain feeding. Since grain fed at the level of 5, 500 pounds in plan 111 appeared profitable in comparison with plan I, plan V proposes feeding this amount of grain in combination with 4. 0 tons of excellent quality roughage per cow annually. Milk production is expected to increase to 13, 715 pounds per cow or an increase of 815 pounds per cow over the level produced under plan 1, due to additional grain and improved quality roughage. However, net income will fall back down to $6,693. This indicates that the most profitable level of grain feeding has been exceeded. Comparative Summary of Alternatives Budgeted Table 11 shows a comparative financial summary of the various plans budgeted. The highest level of net income was reached

73 62 Table 11 Comparative Financial Summary on Farm F Item Plan I Plan 11 Plan 111 Plan IV Plan V Receipts Milk $ 9,652 $ 9,990 $ 9,990 $ 9,652 $10,271 Cattle and calves 2,950 2,950 2,950 2,950 2,950 Poultry and eggs Hogs Sheep and wool 2,405 2,405 2,405 2,405 2,405 Wheat Total receipts 16, , , , ,172 Expenses Hired labor Feed 3,435 3,015 3,889 2,765 3,491 Hay Seed Machine hire Fertilizer and lime Livestock expense Miscellaneous supplies Gas and oil Repairs and maintenance 1, 000 l, 040 l, 000 l, 040 l, 040 Equipment replacement 1, 600 l, 850 1, 600 1, 850 1, 850 Building replacement Taxes and insurance Electricity and phone Auto, farm share Interest on debt Interest on added investment Total expenses 10, , , 378 9, , 479 Net Income $6, 469 $6, 891 $6,513 $6, 803 $6, 693

74 63 in plan II where the forage program was grifficiently improved to harvest excellent quality roughage. Plan III tests the economic feasibilityfikof attempting to get the same increase in milk production through a higher level of grain feeding instead of by improving roughage quality. This comparison shows that it is more economical to invest in additional forage harvesting equipment to attain the increased milk production than to feed more grain. Plans IV and V, respectively, compare feeding less grain in combination with excellent quality roughage and more grain in combination with excellent quality roughage. Both plans resulted in less net income than plan II. Analysis of Farm G A definite upward trend in the use of silage for feeding beef cattle has been noted throughout southern Michigan over the past several years. Reasons for this trend are evident in new developments which have made it more economical to harvest, store, and feed.silage. From a feed value standpoint, the corn silage crop produces more pounds of digestible nutrients per acre than other common feed crops when average Michigan yields for the crops are compared. This would indicate that farmers have an opportunity to use their cropland more intensively by harvesting corn for silage rather than for grain. However, the question arises as to whether or not the high. investments necessary for silos, harvesting equipment, and silage feeding equipment are economically feasible to make. A series of management alternatives budgeted on Farm G show that there are profitable opportunities for investing in silage

75 64 harvesting, storing, and feeding facilities for feeding beef steers. Farm G includes 376 acres of land now operated by a father and his son. The son purchased 194 acres of the land recently after returning from military service. The two farms are operated as one unit to take advantage of machinery owned by the father. Together, the two farms include 338 acres of cropland and 27 acres of woodland. The land is level, well drained, and well suited for rotations including a high percentage of row crops. The cropping program, under the benchmark plan, consists of 140 acres of corn for grain, 8 acres of corn for silage, 30 acres of oats, 40 acres of wheat, 60 acres of soybeans, and 60 acres of alfalfa hay raised each year. General cropping practices used on the farm include chemical wee-cl control, minimum tillage, and a well planned fertilizer program. About 125 head of beef steers are fed out each year. Only a limited amount of silage is fed. Feed records indicate that steers, fed from 420 pounds to 1, 050 pounds, have consumed 71 bushels of corn equivalent, 600 pounds of protein supplement, 0. 6 tons of silage, and 0. 5 tons of dry hay. This ration provides about 7 pounds of TDN per pound of grain. the steers. About 15 hogs are purchased each year to salvage feed from One barn measuring 36 ft. x 60 ft. provides housing for about 80 steers, while a 16 ft. x 35 ft. shed, located on the son's farm, houses the remaining 45 head. Feed bunkers are located inside the ltd..

76 65 barns, causing serious crowding when cattle reach heavy weights. A 10 ft. x 30 ft. silo provides a limited amount of corn silage for the steers. The operator is considering using this silo for shelled corn storage in the future. Machinery includes three tractors, tillage equipment, a small chopper, a baler, a four-row corn planter, a combine, and other smaller items. The father, his son, and a few days of hired labor during planting season constitute the labor force on the farm. Alternative Po 3 sibilitie s Feeding adjustments for the present beef feeding enterprise offer one opportunity for improving net income on Farm G. These adjustments are considered in plan 1. Other possible management changes include revising the cropping program to include more corn and to discontinue cash crops. Plans 11, III, and IV explore the possibilities of a crop rotation including corn, corn, corn, oats, and hay to complement a larger beef feeding enterprise. Recently developed research data regarding the value of corn silage for feeding beef cattle will be used as a guide in substituting corn silage for corn. Other serious problems involved in expanding the beef feeding enterprise are considered in the plans. For example, adjustments must be made in machinery to handle a larger tonnage of silage within a given silage harvesting season. Also, problems of farmstead layout for a larger feeding program are important and will be discussed.

77 66 Table 12 shows comparative information for the various plans on Farm G. Table 13 shows a comparative financial summary. Plan I This plan proposes feeding the same number of steers, as under the benchmark plan, but silage capacity will be increased to provide 4. 4 tons of silage per steer. Steers will now be fed 47 bushels of corn equivalent, 320 pounds of soybean oilmeal, 0. 3 tons of dry hay and 4. 4 tons of corn silage per steer. Substituting soybean oilmeal for 32 percent protein supplement will permit decreasing the amount of protein supplement fed by 280 pounds per steer. Corn silage will be substituted for corn at the rate of 1 ton of corn silage for 7 bushels of corn. If more corn silage were included in the ration the daily intake of TDN would decrease and a satisfactory daily rate of gain could not be maintained. These adjustments will not change the level of energy or protein fed per pound of liveweight gained. Therefore, any gain in net income will be the result of feeding more corn silage and using soybean oilmeal as a source of protein. The ratio of feed per pound of gain used in this budget can probably be improved by the operators in the future. However, leaving this ratio unchanged from the benchmark plan will serve to isolate the results of the feed substitution outlined above. A 20 ft. x 60 ft. upright silo will be built to provide additional silage capacity. Feed bunks will be removed from within the barn to help relieve the crowded conditions, and a pole-type barn will be built

78 67 Table 12 Comparative Investments, Steers Fed, Crop Production, and Purchased Feeds in Alternative Plans for Farm G Item Unit Benchmark Plan I Plan II Plan III Investments Housing Dollars $ 1, 000 $ 3, 600 $ 1, 100 Corn storage , 500 Silos , 420 4, Feeding equipment , Paving " Grading Machinery , 600 6, 250 1, 300 Total added investment 10, , 350 5, 500 Steers Fed Number Crop Production Corn for grain Acres Corn for silage " Oats " Wheat " Soybeans " Alfalfa hay Grass silage " Total tillable acres " Feed Fed Livestock Corn equivalent Bushels 10, 100 7, , , 935 Hay equivalent Tons Feed Purchased Protein supplement Tons Feed Sold Corn Bushels 400 l, Wheat " 1, 460 1, Soybeans " 1,100 1, Hay Tons a... Tons of corn silage and grass silage were converted into tons of hay equivalent at the rate of 3 to l.

79 68 Table 13 Comparative Financial Summary on Farm G Item Benchmark Plan I Plan II Plan 111 plan EEC PIE. H083 $ 390 $ 390 $ $ Steers 27, , , , 580 Cash crops 5, 118 6, Hay 800 1, Total receipts 34,028 35, ,051 41,580 ' Expenses Hired labor Feed 2, 600 1, 600 Z, Straw or bedding Seed Machine hired Fertilizer and lime 3, 500 3, 500 3, 500 3, 500 Livestock expense Miscellaneous expense Gas and oil 1, 565 l, 565 1, 665 l, 665 Repairs and maintenance Equipment replacement 2, 400 2, 693 3, 025 2, 530 Building replacement Property taxes 1, 140 1, 200 l, 218 1, 188 Property insurance Electricity and phone Purchased livestock 12, , , , 064 Interest on debt 1, 250 l, 250 l, 250 l, 250 Interest on added investment , Total expenses 27, , , , 292 Net Income $6, 928 $8, 652 $10, 410 $9, 288

80 extending off the west end of the present 36 ft. x 60 ft. beef barn. Inside shelter will be provided at the rate of 20 sq. ft. per steer by making 69 these adjustments. The silo will be equipped with a silo unloader and an auger for transporting silage into a 125 ft. bunker. Additional machinery needed includes a new small capacity forage chopper, a new small capacity forage blower and one sliding endgate, unloading wagon. Estimates made on the capacity of various forage harvesting equipment, by White and McColly, suggest that the above machinery, in addition to that already on the farm, will complete a forage equipment system with capacity to harvest 700 tons of silage within a two week silage season. 22 Net income in this plan will increase by $1, 524. The purchased feed expense will decrease by $1, 000, due to the adjustment made in source of protein. Moreover, the operators will benefit from the increased labor efficiency which will result from mechanical silage feeding equipment. The increased net income, plus depreciation and interest on the added investment, will be sufficient to repay the $9, 370 added investment in housing, silos, and feeding equipment with interest in about 4 years. 22 R. G. White and H. F. McColly, "Methods, Equipment, Power and Investments for Harvesting and Storing Hay and Silage, " a paper from the Proceediigs of the Michigan State University Silfiags Conference (mimeograph), sponsored by the College of Agricultural Forage Committee in cooperation with the Agricultural Experiment Station and the Cooperative Extension Service, September lifi-is, 1959, pp '

81 70 Part II In this plan, the adjustments in feeding will be identical to those used in plan 1. However, some additional adjustments will be made in the cropping program, and the beef feeding program will be expanded to 230 steers. Total feed inputs estimated necessary for this size feeding operation will include 10, 800 bushels of corn, 37 tons of soybean oilmeal, 72 tons of dry hay and about 1, 000 tons of corn silage. A crop rotation of corn for three years followed by one year of oats seeded to alfalfa will provide all of the grain and roughage needed. Bedding for the expanded feeding program will be only partially supplied by oat straw. An additional 15 tons of wheat straw will be purchased and stored during the summer. Two 20 ft. x 60 ft. upright silos will provide sufficient silage capacity. One 20 ft. silo unloader will be used in the two silos. A 30 ft. x 60 ft. silo, aboiit the largest constructed at the present time, i might provide a little more storage capacity for approximately $1, 500 less additional investment, but if during hot weather only a few steers were on feed, silage would not be fed fast enough to prevent spoilage in the large diameter silo. The cattle will all be housed on the son's farmstead. This location provides ample space for further building expansion. A 40 ft. x 100 ft. pole-type building will be constructed for shelter. Since paved flooring for beef cattle is unnecessary with proper drainage, the building will be constructed with a dirt floor. However, the outside feed lot will

82 71 be paved with either concrete or asphalt. Usually asphalt paving is cheaper, if there is a firm and well drained base upon which to pave. Some grading will be necessary to build up the level of the building site. Most of the lumber for the building can be sawed from the farm woodlot. If the operators do part of the construction work themselves and hire some day help to work with them, the construction cost will probably be less than $1. 00 per sq. ft. The small barn already present on the building site will serve as a feed house and will also provide some straw storage. Hay will be stored in the present beef barn and hauled the short distance to the cattle for feeding. Figure 1 shows the proposed layout of buildings, feed lot, and silo. The feed bunk is located in such a manner that it will serve to separate the cattle into two lots. Separating cattle into lots of about 100 each helps to prevent excessive milling of the cattle, building damage and injury to animals. Drainage around the feed bunkers in the feed lot can be facilitated by having the slope of the feeding floor run parallel with the feed bunker. This building orientation gives the cattle protection from western and northern winds. Loading chutes will be constructed in one corner of the building. Future expansion can take place from either side of the building. 23F. J. Mielock and H. E. Henderson, Beef Feeder Cattle Requirements and Facilities, Michigan State University Agricultural Engineering Department mimeograph, July, 1959, p. 2.

83 Straw Silo 72 zo x 60 40' Ir V, \ Landing shute A Straw storage 10' x 40' Open Pole-type Building 1: [ LI aorage shed 16x 35' Feed storage (barn Zl x 100' Concrete or Asphalt Feed bunk Paved Feed Lot 30' x 35' Proposed Building Layout for 230 Beef Steers on Farm G Figure 1.

84 73 Larger capacity forage harvesting equipment will be needed for this plan than proposed in plan 1. Additional machinery purchased will include a medium capacity forage blower, a medium capacity forage harvestor, a side unloading wagon, and a 20 ft. silo unloader. The unloading wagon will be used for both silage harvesting and silage feeding. The estimated capacity of this medium capacity forage equipment is about 18 tons per hour. Only seven working days will be required to harvest the silage. Assuming weather permits working three days out of every four, silage can be harvested within a two-week silage season. Two months of hired labor will be used during peak labor seasons such as silage harvesting time. Net income will increase to an estimated $10, 410 after allowing for depreciation and interest on the added investment. Increased earnings will repay the added investment with interest in about 4 years. Plan III This plan proposes the same adjustments in the cropping program as outlined in plan 11, and will continue to feed cattle on a high concentrate ration. No additional investments will be made in forage harvesting equipment or added silage capacity. The cattle will be fed. the same level of TDN as under the previous plans, but silage will not be included in the ration. Steers will consume 80 bushels of corn equivalent, 114 pounds of protein supplement and 0. 7 tons of dry hay. per 2 ; 4R. White and H. F. McColly, op. cit., p

85 74 steer. Steers will be purchased at 400 pounds and fed to about 1, 000 pounds as under the benchmark plan. The cropping program will be identical to the one outlined in plan 11. Yet, feed for only 187 head will be produced. This point reveals the advantage of harvesting corn in the form of silage, since enough feed was produced for 230 head under plan 11. the cost of harvesting and storing silage will be saved. On the other hand, Approximately $9, 850 less investment will be needed to exploit this plan than plan 11. Net income will increase to $9, 288 after allowing for depreciation and interest on added investment. The added investment of $5, 500 can be repaid from the increased earnings of this plan in about 2 years. The labor load is distributed more evenly throughout the year in this plan than in plan II. Planting season will be the peak labor season. Corn picking can be spread out over more time if necessary to avoid hiring additional help. Comparative Summary of Alternative Plans Comparing plan I with the benchmark plan shows the profitability of using a cheaper source of protein supplement and, of feeding more silage. To further show the profitability of feeding an increased quantity of silage, a comparison of plan 11 and III can be made. In both plans the cropping program was revised to include equal acreages of corn, oats, and hay. In plan 11, where l, 000 tons of silage were harvested, 41 more steers were fed out than in plan 111 where no silage was harvested. Table 13 shows that the net income from plan 11 is $1, 122 more than under

86 75 plan 111. On the other hand, $9, 850 more investment is proposed in plan 11 than in plan III. The increased earnings of plan II over plan 111 are sufficient to repay this difference in investment with interest within 4 years. This comparison helps to show the advantage of feeding more silage to beef fattening cattle. Conclusions The results of the analysis in this chapter indicate that southern Michigan farmers have opportunities for investing in additional forage harvesting, storing, and feeding equipment. Analysis of Farm F reveals that dairy farmers may do well to consider investing in equipment and facilities which will permit them to produce top quality roughage. Analysis on Farm G reveals that farmers fattening beef cattle may do well to consider investing in silage harvesting, storing and feeding equipment which will permit them to feed increased quantities of silage. On another case farm studied, the operator was already feeding large quantities of silage to beef heifers. This farm Was found unable to improve by feeding a higher proportion of concentrates. Case farms A, B, D, and E, discussed in Chapters 11 and III, also were shown to have opportunities for improving forage programs. Budgets on seven of the case farms have shown that adjustments in forage programs can improve net incomes. Since this is true on the case farms, despite the variety of farm situations exhibited, one might expect to find numerous other farmers in southern Michigan who could

87 76 profit from improving their forage programs. However, the specific adjustments that were shown to be profitable on the case farms may prove entirely inappropriate for other farms. In the cases where additional investment was proposed in forage harvesting, storing and feeding equipment, budgeting showed that the increased earnings from this investment could repay itself with interest in less than five years. This length of debt repayment period renders making such investments relatively economical.

88 77 CHAPTER.V OTHER OPPORTUNITIES FOR ECONOMIZING IN THE USE OF FEED Feed Wastage Feed wastage gives one explanation for the wide difference between farmers' actual feeding rates and the feed budgeting data allowances. On the case farms studies, there was a noticeable amount of feed wasted around self-feeders, hay-racks and in storage. It would be difficult to measure the actual amount of feed lost in this way. Yet, in a number of cases, farmers could unquestionably save as much as 5 to 10 percent of their feed supplies by eliminating physical waste. In the case of Farm B, eliminating a good share of the feed wasted by hogs around the self-feeder is expected to reduce the feeding rates for fat hogs by 2 bushels of corn per head. If this is accomplished, 120 bushels of corn or about $120 worth of feed will be saved yearly. Such a savings seems conceivable if the operators improve their feeding practices in the following way: (1) by constructing a concrete feeding floor which will encourage hogs to eat feed dropped around the feeder and help the operators observe feed wastage; (2) by self-feeding shelled corn instead of ground corn, and feeding protein supplement separately; and (3) by increasing the amount of feeder space to relieve crowding around the feeders. Hogs were not the only livestock observed wasting feed. One farmer admitted having to move his hay feeder frequently because wasted

89 78 hay built up around it. On Farm B, the operators claimed they eliminated a great deal of feed being wasted by laying hens after nailing a wood-lip on the side of the mash feeders to prevent the birds from billing" feed into the litter. Feed is also wasted during storage. Rodents probably escape with a sizable amount of feed, especially from storage bins or corn cribs that are not designed to discourage them. Temporary corn cribs, without roofs in many cases, are known to result in feed losses from spoilage. Proper Watering Facilities If given an opportunity, hogs will consume about one quart of water per pound of feed consumed. 25 Beef cattle will consume as much as 12 gallons of water per day when they reach 1, 000 pounds weight. Supplying enough water for livestock is a particular problem on some farms during cold weather. On these farms electric-heated waterers will help to increase the response of livestock to feed. Disease control Disease control will provide a means of improving the use of feed supplies on a number of farms. Parasites, although more easily controlled today with improved worming chemicals, are still a problem in raising hogs. Insisting on a clean and sanitary feeding environment 2 5J. A. Hoefer, H. E. Moxley and R. E. Rust, op. cit., p P. J. Mielock and H. E. Henderson, op. cit., p. 1.

90 79 for all kinds of livestock will help much to lessen the threat of diseases which slow down livestock growth. One farmer s beef cattle were being forced to stand knee deep in mud and manure to eat from the silage bunker. This farmer also complained of much cattle sickness during the feeding period. In this case, improving the drainage and providing sufficient feed bunker space and room around the feeders may be the key to improved feed efficiency.

91 80 CHAPTER VI SUMMARY AND CONCLUSIONS Feed records kept by a small number of Washtenaw and Lenawee County farmers confirmed indications that there is a sizable gap between farmers' actual feeding rates and expected consumption rates suggested by feed budgeting data. An even wider gap exists if actual feeding rates are compared with optimal feed consumption rates, suggested by experimental feeding trials. These gaps suggest that southern Michigan farmers can benefit from making management changes designed to improve the economy of feed use. Therefore, the objective of this study was to examine specific management changes which will permit southern Michigan farmers to economize in their use of feed supplies. The 1954 Census of Agriculture of Michigan shows that in Washtenaw and Lenawee Counties, respectively, there are 1, 700 and l, 850 "commercial" farms deriving 50 percent or more of the value of farm products sold from livestock or livestock products. Five neighboring counties have a total of over 6, 000 farms in the same classification. These farms vary in size, resources and kinds of livestock raised. This heterogeneity of farms constitutes a problem in attempting to find management opportunities applicable to a number of farms. An intensive study of management possibilities on eight actual case farms constituted the analysis of the study. The farms were

92 selected to include a variety of farm situations with livestock other than 81 dairy. They differ in respect to size, number of operators, kinds of livestock raised and family goals. As far as is known the choice of farms should not bias the results of the study. These farms provided a realistic setting in which to examine management possibilities, and how management possibilities are apt to vary among individual farms. Comparative budgeting was used to reveal the effectiveness of alternative management changes for improving net income on each case farm. Despite the variety of farm situations studied, the analysis revealed patterns of management changes which were profitable on all eight case farms. It is logical to conclude that management opportunities applicable to eight different case farms suggest opportunities for many other southern Michigan farms. Thus, if the analysis is used with an understanding of its limitations, many of the Census farms mentioned above can benefit from the results. The analysis first revealed that adjusting grain and protein supplement feeding rates can improve the economy of feed use and increase net income on southern Michigan farms. These feeding rates were adjusted in a variety of ways. For dairy cows, the intensity of concentrate feeding was adjusted to more profitable levels. For fattening hogs, selling weights were adjusted to more profitable levels which consequently improved the economy with which hogs use feed. In other cases, simply substituting cheaper sources of feed nutrients in the concentrate ration economized the use of feed. All eight of the farms

93 82 studied revealed opportunities for improving net income by making adjustments in grain and protein feeding rates. Some farms showed more promising opportunities for combining specialization in fewer livestock enterprises with adjusted feeding rates. This was especially true for those farms with three or more livestock enterprises. Budgets on these highly diversified livestock farms proposed specializing in dairying, steer feeding, a dairy and sheep enterprise combination, and a dairy and hog enterprise combination. The livestock programs appearing most attractive for the various farms depended on the physical characteristics of the farm and the operators' ability to feed various kinds of livestock. Budgets proposing only adjustments in feeding rates for all classes of livestock appeared less profitable than the above budgets. Moreover, simultaneously adjusting feeding rates for several classes of livestock appeared difficult to attain. Next the analysis concluded that a variety of southern Michigan farms have opportunities for investing in improved forage programs. It appears that dairy farmers can profitably invest in added facilities and equipment which will permit them to harvest a higher quality roughage. Farmers fattening beef cattle appear to have opportunities for investing in silos and additional equipment for harvesting and feeding increased quantities of silage. The analysis revealed that the opportunities for improving forage programs were appropriate for dairy farms with 20 cow herds as well as with 60 cow herds. Improved forage programs on beef farms

94 83 appeared profitable for 100 head feeding operations as well as 200 head feeding operations. Thus, the opportunities for improving forage programs are appropriate for dairy and beef herds of various sizes. The specific methods used to improve roughage quality will vary among different dairy farms. Similarly, not all beef farms will find the same forage program most profitable. Some dairy farmers can probably produce top quality roughage by investing only in a hay conditioner. Some beef farmers will find bunker silos more profitable than upright silos. In any case, the analysis reveals that there are opportunities for numerous farmers to improve forage programs. In all situations where additional investments were proposed in forage programs, the increased earnings were sufficient to repay the investments with interest within four years, or less. Most farmers will consider a four or five year debt recovery period favorable for making investments. In the final stage of the analysis, a discussion exposed several opportunities for improving feed use by eliminating physical feed waste, improving watering facilities, and controlling diseases. It is difficult to measure the amount of feed that can be saved by giving added attention to such factors. However, observation of feed use on the sample of farms keeping feeding records led to the conclusion that some farmers can save as much as 10 percent of their feed supplies by eliminating physical waste.

95 APPENDIX

96 84 Appendix Table l Feeding Rates and Liveweight Gains per Head for Meat Animals on Sample Farms, * Item Steers Tons Lambs Number of Records Concentrates Fed Bushels Bushels Bushels Corn Pounds Pounds Pounds Protein supplement Other concentrates Total concentratesa 3, 100 l, Harve sted Roughages Fed Hay 1, Silage 1, Total (hay equivalent) 1, Average Liveweiglflis Final 1, Starting b Gain b a Includes corn figures at 56 pounds per bushel. bthe lambs probably averaged between 50 and 60 pounds per head when the feeding period began in the fall, after the pasture season. *Source: J. Mulvany and R. G. Wheeler, "Feed Use on Grain- Livestock Farms in Southeastern Michigan, " Michigan Agricultural Experiment Station Quarterly Bulletin, 41:4:926

97 85 Appendix Table II Annual Feeding Rates per Head for Dairy and Breeding Stock on Sample Farms, l957-58* Kind of feed Milk cows Dairy young Ewes Sows and gilts stock Number of Records Concentrates Fed Pounds Pounds Pounds Pounds Farm grains 3, , 130 Other concentrates Total 3, , 540 Roughages Fed Tons Tons Tons Tons Hay 3. 1 l Silage _- Sub-total (hay equivalent) 4. 1 l Pasture (estimated hay equivalent) Total (hay equivalent) 6. l l * Source: J. Mulvany and R. G. Wheeler, "Feed Use on Grain- Livestock Farms in Southeastern Michigan, " Agricultural Experiment Station Quarterly Bulletin, 41:4:928.

98 86 Appendix Table 111 Michigan Farm Product Prices Projected for the 1960's* Projected Item Unit average 1958 price for price price the 1960's Crops Corn (No. 3 yellow)a bu. $ $ $ Oats bu Barley bu. l Soybeans bu l. 95 l. 80 Wheat bu l. 75 l. 70 Dry beans bu Hay Alfalfa (good) ton All hay baled ton Sugar beets ton ll (Sugar act payment) ton Livestock Barrows and giltsa lbs. cwt lbs. cwt lbs. cwt lbs. cwt Sowsa lbs. cwt lbs. cwt Weaning pigs lbs. (range) head lbs. head Slaughter cattle Steers (Choice) cwt C Steers (Good) cwt Cull dairy cows (Commercial) cwt Milk cows All cows head Fall fresh, 10, 000 capacity head Veal calves (all grades) cwt d Deacon calves Slaughter lambsa(all grades) cwt Slaughter sheep cwt Wool 1b b Poultry e Eggs doz

99 87 Appendix Table III--Continued Projected Item Unit average 1958 price for price price the 1960's Cull birds (light breeds) each. 50 Dairy Products Milk (blend price, Detroit) cwt (Manufacturing) cwt a'chicago prices are quoted for these items because they provide detail by class and weights. They appear representative of Michigan prices. byearly averages of daily high and daily low quotations for feeder pigs sold at Michigan Livestock Exchange during in Battle Creek, Michigan. CHistorical price quotations are an average for the years which includes a complete cycle in cattle numbers from a low in 1949 to a low in d Yearly average of daily high and daily low quotations for all deacon calves sold at Michigan Livestock Exchange during 1959 in Battle Creek, Michigan. 6Price will range from $. 30 to $. 35 depending on how rapidly expansion takes place in U. S. poultry flocks. Sources: Field crops and eggs, Michigan Agricultural Statistics, Michigan Department of Agriculture, July, 1959, steers, swine and sheep, Livestock and Meats Statistics, U. S. Department of Agriculture, AMS, June, 1958 and Supplement June, 1959; milk prices were obtained from records kept by Glynn McBride, Agriculture Economics Department, Michigan State University; weekly auction reports of the Michigan Livestock Exchange, Battle Creek, Michigan.

100 88 Appendix Table IV Projected Cost of Items Used in Michigan Farm Production* Feeds I." «1,958.. '1' Projected Item Unit average price price for price the 1960's Corn bu. $ 1.20 $ 1.10 Bran ton Soybean oilmeal ton Commercial beef supplement 32% protein ton Commercial hog supplement 32% protein ton With anti-biotic ton Commercial dairy supplement 32% protein ton Laying mash 34% protein ton % protein ton Fertilizer (Anhydrous ammonia) ton ton ton ton ton ton ton Livestock Steer calves (Good and Choice)13 cwt C Feeder lambs, Omaha d 60 lbs. average weight cwt Housing and Related Equipment Pole-type buildings materials sq. ft.. 75 construction sq. ft Concrete flooring sq. ft.. 30 Concrete paving sq. ft.. 25 Electrical heating cable and controls for farrowing stalls and pens each pen

101 89 Appendix Table IV--Continued Projected Item Unit average price price for price the 1960's Heated waterers For steers 150 gal For hogs 80 gal Feed bunk augur linear ft Maypole electrical service and heavy amperage boxes (installed) per farm Bunker silo with floor per ton capacity Upright silo without roof 12 x 40 ft. (110 tons cap. ) each 1, x 40 ft. (135 "I " 1, x 40 ft.(230 " " 2, x 40 ft. (290 " " 2, x 50 ft. (390 " " 2, x 60 ft. (500 " " 3, x 60 ft. (730 " " 4, x 60 ft. (1,120 " " 5, Silo unloader 14 ft. each 1, ft. 1, ft. 1, ft. 2, Bulk tanks 400 gal. each 2, gal. 3, gal. 4, Forage Harvesting Machinery, Hay drier per dry ton cap Baler each Small capacity 1, Large capacity 2, Hay conditioner or crusher each Flat wagon without rack each Side-delivery unloading wagon each 1, Forage harvester each Small 1, Large 3, Forage blower each Small Large 1,

102 90 Appendix Table IV Continued a'chicago prices are quoted for these items because they provide detail by class and weights. They appear representative of Michigan prices. bkansas City price is quoted for steer calves. Freight rates from Kansas City to Michigan will approximate $1. 00 per cwt. C,. 0 Historical price quotations are an averages for the years , which includes a complete cycle in cattle numbers from a low in 1949 to a low in domaha price was quoted for feeder lambs. approximate $1. 00 per cwt. Freight rates will *Sources: Livestock and Meat Statistics, U. S. Department of Agriculture, AMS, June, 1958 and Supplement; June, 1959; Michigan Agricultural State; data from Michigan dealers in farm buildings and machinery.

103 91 BIBLIOGRAPHY Allen, L. A. Feed Requirements and Returns on Michigan Farms," unpublished master's thesis, Michigan State University, Atkinson, L. J. and Klein, J. W. Feed Consurmtion and Marketing Weight of Hogs, U. S. Department of Agriculture, Technical Bulletin 894, Blakeslee, L. H., Blank, G. and Rust, R. E. Lamb Feeding in Michigan, Michigan State University Cooperative Extension Service, Extension Bulletin 334, Botts, Ralph R. Amortization of Loans--Its Application to Farm Problems, U. S. Department of Agriculture, ARS, Washington, D. C., Heady, Earl O., et al. New Procedures in EstimatingFeed Substitution Rates and in Determining Economic Efficiency in Pork Production, Iowa State University, Agriculture Experiment Station, Research Bulletin 409, Hoefer, J. A., Moxley, H. F. and Rust, R. E. Producing Pork in Michigan, Michigan State University Cooperative Extension Service, Extension Bulletin 335, Hoglund, C. R., et a1. Forage Quality and Protein Feeding of Dairy Cows, " Michigan Agricultural Experiment Station anrterly Bulletin, Volume 38, No. 3, February, Economics of Feed Production in South-Central Michigan, Michigan State University Agriculture Experiment Station, Special Bulletin 420, September, 1958., et a1. "Economics of Tower and Bunker Silos, " Michigan Agricultural Experiment Station Quarterly Bulletin, Volume 41, No. 3, November, 1958., et a1. "Herringbone and Other Milking Systems, " Michigan State University Experiment Station gu_arterly Bulletin, Volume 41, No. 3, February, High Quality Roughage Reduces Dairy Cost}. Michigan State University Agriculture Experiment Station, Special Bulletin 390, February, 1954.

104 Budget Guide in Estimating Feed Inputs and Milk Production When 1, 200 Pound Holstein Cows Are Fed Variable Quantities of Grain and Three Qualities of Roughage, Michigan State University Agricultural Economics Department Mimeograph 670, January, Michigan Department of Agriculture, Michigan Agricultural Statistics, July, Mielock, P. J. and Henderson, H. E. Beef Feeder Cattle Requirements and Facilities, Michigan State University Agriculture Engineering Department Mimeograph, July, Mulvany, J. and Wheeler, R. G.- "Feed Use on Grain-Livestock Farms in Southeastern Michigan, " Michigan State University Experiment Station Quarterly Bulletin, Volume 41, No. 4, May, Nelson, A. Relation of Feed Consumed to Food Products Produced by Fattening Cattle, U. S. Department of Agriculture, Technical Bulletin 900, Nielson, J. M. Application of the Budget Method in Farm Plannm, unpublished Ph. D. thesis, Harvard University, Massachusetts, March, Cambridge, Riley, H. What Is the Most Profitable WeiLht to Market H035? Michigan Agriculture Experiment Station, Extension Bulletin 321, August, Sheldon, W. H., et a1. Barn Hay Driers in Michigan, Michigan Agriculture Experiment Station, Special Bulletin 219, April, United States Department of Agriculture. Agriculture Outlook Charts '60, November, Livestock and Meat Statistics , Statistical Bulletin No. 230, July, 1958 and Supplement, July, Wheeler, R. G. and Black, J. D. Planniig for Successful Dairying in New Eflland, Cambridge, Massachusetts: Harvard University Press, Winchester, C. F. and Hendricks, W. A. Energy Requirements of Beef Calves for Maintenance and Growth, U. S. Department of Agriculture, Technical Bulletin 1071, July, 1953.

105 I d, / R USE on.y

106 R IES {