Profitability Analysis of Forage Based Beef Systems in Appalachia

Abstract

The largest agricultural enterprise in the Appalachia region of Virginia is livestock production, particularly beef cow calf operations. However; topography and land holding patterns have resulted in a majority of small farms operating part time on less than 150 acres. These farms, while abundant, are not necessarily profitable. Management intensive grazing has been suggested as an alternative to traditional production practices to increase profitability. A profitability analysis was conducted by comparing a traditional style of cow-calf management where hay was produced on farm with a full machinery complement to a management intensive grazing farm where forages are stockpiled and all hay was purchased on farm, requiring minimal machinery investment.

Four farms were simulated using Finpack Farm Management software by utilizing production data from the Virginia Tech Shenandoah Valley Agriculture Research and Extension Center and secondary financial data. The first two farms were listed as having a traditional style of management with hay production and two different stocking rates, 1.75 acres per cow-calf unit and 2.25 acres per cow-calf unit, respectively. Farm 3 and Farm 4 were simulated utilizing management intensive grazing and the two socking rates. It was found that while none of the farms actually show a profit the management intensive farms did outperform the traditional style farms. Farm 3 with the 1.75 acre per cow-calf unit stocking rate was the best performing farm financially. With these findings, beef cow producers will be able to make better management decisions and explore more profitable alternatives.