Fertilizer Price, Manure Value and Farm Sustainability - Pt. 2 - Dr. Alfredo DiCostanzo, University of Minnesota, from the 2014 Iowa Cattle Industry Convention, December 8 - 10, 2014, Des Moines IA, USA More presentations at http://www.trufflemedia.com/agmedia/conference/2014-iowa-cattle-industry-convention

1. Alfredo DiCostanzo1 , Nicole M. Kenney-Rambo1 , and Andrew Nesseth 2
1 University of Minnesota, St. Paul and 2 Extended Ag Services, Inc.
Iowa Cattle Industry Convention
Des Moines, IA 2014

4. $14
$17 $19
$23
$44
$48
$32
$41 $44
$39
$23
$27
$31
$35
$68
$76
$51
$65
$68
$62
$44
$52
$60
$66
$119
$127
$87
$114
$120
$114
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Open lot
Manure pack
Slats on pit

5. Energy
Roughage
Beef
N P K
Micro
OM
Nutrients
Structure

6.  Cattle feeders who own cropland and cattle facilities
(sometimes even some cows)
 Are young and looking to be in the business for > 30 years
 Have upgraded their facilities
 Are interested in the entire system
 Crops, Cattle, Nutrient recycling
 Gross return to corn land—differential between gross income
and non-corn land expenses
 Yardage
 Purchased feeds
 Hay or non-corn roughage
 Veterinary
 Cattle
 Implants

7. $0
$1
$2
$3
$4
$5
$6
$7
$8
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Market Feeder No Land Base Feeder with Land Base

8.  During high corn price
years and lower or
unstable cattle prices,
feedlot is at lower
capacity
 During low corn price
years, regardless of
cattle prices, feedlot is
at full capacity
 This process permits
financial sustainability

9. Corn Price
Forage Price
Bedding Price
Fed Price
Feeder Price
Fertilizer Price
Design

10.  8 occasions during last decade where feeding
corn grain through cattle enhanced price of
corn
 Average = $0.77/bu
 Drivers
 Corn price, fed steer to corn ratio Avg = 32
 Roughage price, Average = $132/ton
 Fed price, fed to feeder ratio = -15
 Fertilizer price, DAP to corn grain price = 142
 Fertilizer price, DAP to corn yield = 0.91

11.  2 occasions during last decade where feeding
corn grain through cattle decreased price of
corn
 Average = -$0.71/bu
 Drivers
 Corn price, fed steer to corn ratio Avg = 29
 Roughage price, Average = $149/ton
 Fed price, fed to feeder ratio = -26
 Fertilizer price, DAP to corn grain price = 108
 Fertilizer price, DAP to corn yield = 0.80

12. Driver Value enhanced Value decreased Effective
Fed steer to corn grain price 32 29 Yes
Roughage price 132 149 Yes
Fed to feeder price -15 -26 No
DAP to corn grain price 142 108 Yes
DAP to corn yield price 0.91 0.80 Yes

13.  Greater fertilizer prices starting in 2008 served as incentives to build feedlots with
greater capacity to capture the value of manure as fertilizer.
 The value of manure as fertilizer has contributed to making cattle feeding
operations competitive with corn farming only operations in the past decade.
 Corn grain, feeder and fed cattle prices, fertilizer prices and corn grain yield interact
to determine profit from feeding corn grain to cattle vs selling corn grain at market
price.
 High fed cattle prices relative to corn grain prices with greater than average corn
grain yields at current high fertilizer prices favor feeding corn grain to cattle rather
than selling in the market place.
 Main drivers of sustainability in cattle feeding-farming operations are:
 Fed steer to corn grain price—value of cattle against corn grain
 Roughage price—high roughage price makes cattle feeding expensive
 Fertilizer to corn grain price—areas of low corn grain yield benefit from cattle feeding
 Fertilizer to corn yield price—low value of corn grain relative to fertilizer price