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2 High Yield Cereal Silage. “Staying at the Silage Hotel” A Super 8 or the Fairmont? Don Green1 and John Patterson2 1Forage Specialist, Soils & Crops Branch - Carman, MB 2Agricultural Representative - Hamiota, MB Introduction Recently there has been considerable interest expressed in the use of cereal silages as a means of increasing crop returns to cereal production in Manitoba. While cereal silages are traditionally a crop produced primarily by cattle producers interested in adding value to cattle through backgrounding or finishing operations, there are opportunities for value adding cereal production through feeding cattle. In recent times, cattle and grain markets have developed into profitable times for those involved in feeding cattle. An Alberta expression passed along by an extension manager from Alberta is that feeding beef cattle is like “Staying at the Silage Hotel”. That being an interesting expression and there being different types of hotels to stay at, it begs the question: Is the silage hotel a Super 8 or a Fairmont? There are several factors that have developed in Manitoba that produced these economic conditions. The cattle cycle is a well acknowledged biologically driven price cycle that occurs on an 8 – 10 year interval between price peaks. When discussing cattle price cycles in relation to marketing of cereal silages it is important to make the distinction between live cattle prices, or the prices for finished animals, and feeder prices, or shortkeep cattle prices. Typically the live cattle prices (1200 – 1400 lb animals) will peak prior to the feeder cattle prices (800 – 900 lb animals, which will peak either at the same time or just prior to the peak in calf prices (500 – 600 lb animals). This is due to a lag effect in the market. Chicago Mercantile Exchange (CME) live cattle prices and CME feeder prices from 1992 – 2001 are shown in Figures 1 and 2. Figure 1. CME Live Cattle Prices Figure 2. CME Feeder Prices 1992-2001 1992-2001 Another important factor influencing the profitability of feeding operations is the price of feedgrains. Through the period of 1989 to 2001, Chicago Board of Trade (CBOT) corn futures prices have been at relatively low levels contributing to lower feed costs for feedlots buying grains since North American feedgrain prices are largely influenced by the CBOT corn market (Figure 3). Although the influence of the CBOT corn contract price on Winnipeg Commodity Exchange (WCE) barley prices can be seen in Figure 4, further explanation for the somewhat elevated prices from 1998 – 2001 are likely related to Figure 6, which will be discussed later. 3 Figure 3. CBOT Corn Futures Figure 4. WCE Barley Futures 1992-2001 1992-2001 Figure 5 is a chart of the Manitoba Grade A Steer (roughly equivalent to US Prime grade) price from 1981 – 2001 developed by Manitoba Agriculture and Food Marketing and Statistics Branch. Although the influence of the cattle cycle is visible in this graph (peaks in early-mid 1980’s, 1993-94, and again in 2000-01) there has been an overall uptrend in the per cwt. prices received by Manitoba producers for finished animals. Part of the reason for this uptrend in finished cattle prices can certainly be attributed to an overlying market trend that has occurred through the last decade (Figure 6). The Canadian dollar has weakened relative to the US dollar over the last 10 years. A strengthening US dollar results in increased prices paid for Canadian cattle since the North American price for cattle is largely set in US dollars. These economic conditions have resulted in reasonably profitable times for Manitoba feedlots as demonstrated in Figure 7. With the exception of periods between 1994 and 1996 and a brief period in 1998, feeding cattle to finished weight has been profitable considering purchased feed and calves, with a Nebraska point of sale for the finished animals. Figure 5. Manitoba Grade A Steer Figure 6. Exchange Rates 1992-2001 Prices by Month, 1981-2001E Reasons for unprofitable times in the mid 90s probably relate to higher feedgrain prices in the mid 90s (Figure 7). Depending on how selling prices were calculated, the RCALF countervail duty implemented in the mid to late 90s may be a factor contributing to reduced returns in 1997 - 98. Manitoba is also producing more calves available to be fed (Figure 8). Cattle cycle theory would suggest that productive female (cow) numbers should decline in the low years of feeder prices as cow-calf producers sell off cows to replace lost income due to price declines. Over the last 10 years, this has not occurred in Manitoba. With low prices in the 95 – 96 period, the number of beef cows on Manitoba farms would be expected to decline. Statistics indicate that Manitoba cow numbers continued to increase through the lows of the price cycle (Figure 8). With a declining exchange rate through the lows of the last cattle cycle, Manitoba calf 4 prices were cushioned so that the Manitoba cow-calf producer did not feel the full extent of the price declines as was felt south of the border. Figure 7. Manitoba Feedlot Estimated Figure 8. Beef Cows on Farms in Costs and Returns Manitoba These economic conditions, coupled with the removal of the WGTA freight assistance and less profitable feedgrain production economics have resulted in the move toward value added production in Manitoba where cattle feeding operations have been reasonable profitable. Since cereal silage is a commonly used and cost effective ration component of cattle finishing rations much interest has been generated in cereal silage production. Cereal Silages: Growing the Crop First off, there are some conceptual differences between cereal production for grain and cereal production for silage. Since the end product that will be marketed is grain in the case of a crop harvested with a combine harvester and beef in the case of a crop harvested with a forage harvester, understanding this difference will influence the appropriate agronomic management of these crops. With cereal silage production the focus is on pounds of beef produced per acre rather than bushels per acre. High silage dry matter yields are desirable since the higher the dry matter yield, the more units of dry matter to cover per acre costs of production and the lower the unit cost of production per pound of dry matter. Forage quality also needs to be considered when discussing economic productivity of cereal silage due to the influence this has on animal performance on silage-based rations. Managing harvesting operations for silage quality will be discussed later in this paper. If we can assume that protein content of rations is at or above required levels, which is often the case due to relatively low cost protein sources (alfalfa hay, soybean meal, canola meal), then the energy content of the forage will be a primary factor influencing rate of gain. Since Total Digestible Nutrients (TDN) can be used as an estimate of the energy content of forages and a rough rule of thumb is that it takes 6 pounds of TDN to produce 1 pound of gain in a beef animal, an estimate of the beef gain from an acre of silage can be estimated. If a barley silage crop yielding 2.5 ton DM per acre with 65% TDN is considered, this equates to 3250 lbs. of TDN per acre. Using the 6:1 ratio (feed conversion of 9.23 lbs of DM:1 lb of beef gain), then this acre of cereal silage has the potential to produce 540 lbs. of beef gain per acre when cereal silage is fed as a complete ration. Of course this is a rule of thumb and rations are normally formulated with other components to meet the feed quality targets of the feedlot operator. Crop Selection Crop selection can be an important factor affecting the productivity of cereal silages. Crops discussed here will be barley, oats, triticale, peas, corn, and millet. Barley · Generally viewed as the highest yielding cereal silage, aside from corn. 5 · Barley silage harvested at the correct stage will have an energy content in the range of 60 – 65% TDN which is higher on average than oats or triticale, but is lower than corn · Average yield based on MCVET data is 3.1 tons DM/acre · Barley is better adapted to peaty soils and will perform better than barley under these conditions Oats · Oat silaqe will generally be more palatable than barley silage. Palatability is a relative term referring to an animal’s choice to consume a feed. · Oat silage harvested at the correct stage will have an energy content in the range of 55 – 60% TDN · Oats will usually be slightly lower yielding than barley with oats yielding about 95% of barley yields on average. This is somewhat variety specific with the varieties AC Assiniboia, AC Medallion, and Triple Crown yielding as high or higher than barley based on a two year study at two sites in Manitoba (Beever and Patterson, 2000). Triticale · Triticale is commonly grown in Alberta · Manitoba trials indicate variable results with the use of triticale as a forage crop. In many cases, triticale yields were shown to be lower than for barley (Beever and Patterson, 2000). · Triticale has a lower digestibility than barley Comparison of Feed Value of Cereal Silages Results comparing the average daily gain (ADG) and dry matter intake (DMI) of animals fed barley, oat and triticale silages are shown in Table 1. Animals fed barley silage showed the highest ADG and DMI. Animals fed oat silage had lower ADG with oat silage producing a similar DMI to barley silage. Triticale silage produced a lower ADG and DMI than oats and barley.