Think you need more feed? Act quickly
Last year's crops -- both grain and hay -- were in most locations fried by the drought. Then, along came a wet, cool spring that's cut planted acres for row crops and continues to challenge forage crops that already need to make up a lot of ground.
It adds up to a short supply situation for livestock producers who, if they haven't already, should start planning for a feed supply that could tighten further and send prices higher, says Iowa State University Extension farm management specialist Kristen Schulte in a university report. That may mean taking some fairly quick action.
"As of the first week of July, over 70% of corn, hay, and pasture acres are in fair to good condition; however, crop progress in much of northeast and north-central Iowa is behind the other regions of the state," she says. "Although it is unknown what the rest of the growing season will bring, livestock producers can start to plan if they anticipate limited feed inventories. Livestock producers should evaluate feed inventory, feed required, and financial position."
She recommends first taking stock of what you've got on hand, its feed value once it reaches the feed bunk, and whether that supply means you'll come up short. IF that's the case, make your purchase decisions soon to avoid a local shortage of spike in price.
"If there is a shortage, one should plan for purchase of additional feed and/or evaluate alternative feedstuffs with their nutritionist or livestock specialist," Schulte adds. "Although producers may want to save money when purchasing additional feed, it is important to keep in mind quality, feed efficiency, and adequate nutrition for long-term viability."
But obviously, this has a substantial effect on your farm's bottom line and leaves a lot of questions to be answered before you write that check for more feed now. Schulte recommends answering the following questions for your specific operation and circumstances before pulling the trigger on more feed:
Is purchasing feed a financially feasible solution based on projected breakeven and profitability?
What funds are available to purchase additional feed?
How do crop insurance proceeds from prevented-planting acres correlate with purchased feed at market prices?
What ration alternatives can be made to accommodate feed costs or limited feed availability, and what are the associated costs?
How do these changes affect feed cost per head and how does that compare to your desired feed cost benchmark?