Optimizing Stocking Rate for Maximum Return to Wheat-cattle Enterprise Using Model Simulation and Economics

Authors: Zhang, Xunchang

Submitted to: Agronomy Journal
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 9/30/2009
Publication Date: 1/10/2010
Citation: Zhang, X.J. 2010. Optimizing stocking rate for maximum return to wheat-cattle enterprise using model simulation and cconomics. Agronomy Journal. 102(1):197-209.

Interpretive Summary: Winter wheat is commonly grown in southern Great Plains for winter grazing and grain harvest. Stocking rate and planting date are two key decision variables for managing such a dual system. The objective of this work was to develop guidelines that can help farmers boost profit margins by adapting stocking rate and planting date to particular production and market conditions in north central Oklahoma. A wheat grazing computer model was used to simulate grain and livestock production for seven stocking rates, five planting dates, two initial soil moisture levels at planting, and three climate scenarios. An enterprise budget approach was used to estimate net returns to the dual systems. Optimal stocking rate that maximizes net returns depends on the price ratio of wheat to cattle and forage availability that is affected by planting date, initial soil moisture, and climate. For the markets that overwhelmingly favor wheat production such as 2008, grain-only wheat is most profitable. However, the dual-systems are more profitable for the other markets. For wet soil profile at planting, sowing in early September and grazing at >2 head per hectare are most profitable despite climate scenarios. For dry soil profile at planting, a dual system is preferred for wet climate, grain-only for average climate, and fallow for dry climate. Had wheat been established in dry year under dry soil profile, moderate grazing would cut down net losses. In most cases grazing should be ceased at first hollow stem for more profit. Large differences between simulated net returns under optimized management and those under the business-as-usual management (survey) indicate great potentials to boost farmers’ profit margins if management decisions are optimized.

Technical Abstract: Managing dual-purpose wheat is complex because of the tradeoff relationship between cattle (Bos taurus) and wheat (Triticum aestivum L.) production. Stocking rate (SR) and planting date are the key decision variables of the dual systems. The objective was to develop decision support information that can help farmers boost profits by adapting SR and planting date to particular production and market conditions. A wheat grazing model was used to simulate the dual systems in Oklahoma for seven SR (ranging from 0 to 3 head/ha), five planting dates (1 September to 10 October), three climate scenarios (dry, average, and wet), and two initial soil moisture profiles (30 and 75% plant available water). Net returns were further estimated for three representative markets using an enterprise budget approach. Net returns under optimized management were much greater than those under the business-as-usual management, indicating great potentials to boost net returns with better management. Optimal SR is dictated by market prices and winter forage availability that is determined by planting date, initial soil water, and climate. For market that overwhelmingly favors grain production, grain-only wheat (best planted in early October and no grazing) should be used; whereas dual-purpose wheat (best planted in early September) is preferred for the other markets. For wet soil profile at planting, maximum returns are attained in early September planting and at high SR of > 2 head/ha despite climates; however, the high optimal SR should be adjusted down with delayed planting in wet and average but maintained in dry climate for water conservation. For dry profile at planting, optimal management is dual-purpose wheat with a high SR of 3 in wet, grain-only wheat in average, and fallow in dry climate. Had wheat been established in severely dry years, moderate grazing at 0.5-1.5 SR, compared with no grazing, could reduce net losses. Under most circumstances, grazing should not be allowed to pass first hollow stem to maximize returns.