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Acquire more land through lease, purchase, or exchange

Strategies to reduce excess soil test phosphorus buildup on livestock farms

Case study: dairy farm

The purpose of this case study is to demonstrate reduction of net phosphorus imports into a dairy farm by acquiring more crop land through lease, purchase, or exchange.

Farm description

The case subject dairy farm in Southern Minnesota has 120 head of Holstein cows with a DHIA Rolling Herd Average of 27,000 pounds. The milking cows, replacement heifers, and a few feedlot steers give them an average of 297 animal units (A.U.).

Housing for the lactating cows is sand bedded freestalls. The dry cows, heifers, and steers are on conventional bedding packs in the winter, and some of the dry cows and heifers are on pasture in the summer.

This dairy farm has 230 tilled acres and an additional 92 acres of pasture and harvested grassland for 322 dry-land acres with mostly silt loam type soils. They purchase a small portion of their forage and corn grain, and export some of their liquid manure.

The dairy has two to three months of cement storage for sand-laden manure. The farm monthly field- applies the bedding pack manure with timely incorporation, or stockpiles for later application, depending on the time of year.

Phosphorus import-export analysis

The farm purchases all feed protein and mineral supplements. The minimum level of phosphorus (P) in the lactation ration is 0.36%; however, most of the rations result in a P level from 0.40 to 0.44%. They do not purchase commercial fertilizer containing P. The farmer bases manure application on nitrogen needs. He exports 150,000 gallons of liquid manure pumped off the top of the pit. The farm’s soil tests are all higher than 30ppm Bray 1-P. Following is a table illustrating this existing farm’s P balance.

Phosphorus Balance

Phosphorus (lb.)

Ratios

P Source Imports Exports Excess Harvested Acres Animal Units Ratio
Animals 0 741 322 297 1.1
Forages 609 0      
Grains 564 0 Excess P (lb.) Harvested Acres Ratio
Protein/Minerals 6677 0 3066 322 9.5
Fertilizer 0 0
Milk 0 3636 Excess P (lb.) Animal Units Ratio
Manure 0 407 3066 297 10.3
Total P 7850 4784 3066

Acquiring additional cropland

One way to reduce excess P imports compared to exports on a farm is to acquire additional land by purchase or lease. This reduces the P import-export ratio by increasing on-farm crop production, which decreases feed imports, increases crop exports, or both. Assuming the number of livestock remains static, this would also result in more acres to apply the same amount of manure.

This dairy farm is presently operating 322 acres of harvested farmland with 297 animal units for a harvested land to animal unit ratio of 1:1. Corn grain yields are 187 bushels per acre and alfalfa yields 6 tons per acre. This dairy farm has an opportunity to lease 70 acres of tillable land nearby. This would increase the land-base by 30 percent to 392 harvested acres as displayed in the table below. We will assume that half of the additional acres will raise shelled corn and the other half will raise alfalfa at the same average yield as the original acres, all other activities remaining constant. The additional land enables the farm to supply all of its own forage and grain needs and creates a surplus of grain and hay to sell. This lowers ratio of excess P to harvested acres to 1.4 and the P to animal units ratio to 1.8.

Phosphorus Balance with Lease of 70 Acres of Cropland

Phosphorus (lb.)

Ratios

P Source Imports Exports Excess Harvested Acres Animal Units Ratio
Animals 0 741 392 297 1.3
Forages 0 928
Grains 0 429 Excess P (lb.) Harvested Acres Ratio
Protein/Minerals 6677 0 536 392 1.4
Fertilizer 0 0      
Milk 0 3636 Excess P (lb.) Animal Units Ratio
Manure 0 407 536 297 1.8
Total P 6677 6141 536      

The chart below illustrates the difference acquisition of the additional land has on this dairy operation's P balance. It reduces the P to harvested area ratio by 8.1 pounds per acre and the P to animal units ratio by 8.5 pounds per animal unit. Even after the acquisition of the additional 70 acres, the ratio of land to livestock is still tight at 1.3 harvested acres per animal unit. Prior to the land acquisition, this dairy farm already had discontinued use of phosphorus fertilizer including corn starter, was exporting some manure, and had decent crop yields, all which help the P balance of the farm.

Comparison of Phosphorus Balance Ratios before and after Land Addition

Ratios before land addition

Ratios after land addition

Difference

Harvested Acres Animal Units Ratio Harvested Acres Animal Units Ratio  
322 297 1.1 392 297 1.3 0.2
           
Excess P (lb.) Harvested Acres Ratio Excess P (lb.) Harvested Acres Ratio  
3066 322 9.5 536 392 1.4 8.1
     
Excess P (lb.) Animal Units Ratio Excess P (lb.) Animal Units Ratio  
3066 297 10.3 536 297 1.8 8.5

Economic and logistic considerations

Farmers acquire additional land by purchase or lease. Short-term economic analysis will frequently tell us to lease and not purchase land. However, there is risk in building most farm forage and manure systems around leased land when those leases could be terminated. The need for a livestock enterprise to have a reliable land base is evident; however, there are considerations.

The economics of acquiring extra land through lease or purchase is different for every farm depending on the price to purchase or lease and the distance the new land is from the livestock site. As commodity market prices fluctuate, the economics of purchasing forages and grain versus acquiring land by purchase or lease to raise those feedstuffs also fluctuates. A link to numerous analyses of lease options is provided1.

We assume that all additional 70 acres will be 50/50 corn and alfalfa production. Assume this dairy farm has a 4-year rotation with corn and alfalfa. Like many dairy farms, we would not apply manure to standing alfalfa. We would not need to apply manure the year coming out of alfalfa due to alfalfa nitrogen credits. We would not apply manure the year going into alfalfa because alfalfa does not need the nitrogen. This system would leave us an average of 17.5 additional corn acres each year to apply manure on. The total NPK fertilizer value of the manure would be $182.57/acre or $3195 for the 17.5 acres. Subtract the cost of application and the net value of the manure becomes $82.57/acre or $1445 for the 17.5 acres2. If the dairy farmer in this case study were to acquire additional land beyond the proposed 70 acres, he would be able to cease exporting manure, apply all of his manure on his crop production area, and be in P balance.

An alternative to purchase or lease

Some livestock farmers enter into agreements with neighboring crop farmers in which the crop farmers agree to raise some or all of the crops for the livestock farmer. The livestock farmer can then apply some or all of his manure on the crop farmers land. Usually, they establish the price for corn silage compared to harvesting corn grain, less harvesting and drying expenses, then sold at harvest or some later pre-determined points in time. Fertilizer value of the manure should also factor into the price. The livestock farmer is free from the hassles of planting and managing the crop, has a source of forage, and has a place to apply manure. The crop farmer receives the equivalent of market price for corn and benefits from the organic matter and soil health benefits of manure. This system may economically favor the crop farmer or the livestock farmer depending on current market conditions and the details of the contract.

Summary

Acquiring additional land affects the phosphorus situation of a farm by allowing increased crop production, which should either decrease the need for feed imports, or permit an increase in crop sales or P exports. When a livestock farm has more phosphorus imports than exports and high soil test P, the goal could be to add enough acres to attain the manure management plan's requirements based on phosphorus needs. One option is adding land the livestock farmer controls through ownership or lease. Another option would be an arrangement with a neighboring crop farmer to apply manure from the livestock farm and produce forages or grain for the livestock farm.

Conclusions

  1. Acquiring additional land through lease or purchase on a livestock farm with more imports than exports will bring the farm closer to being in P balance.
  2. The number of acres it takes to get a farm back into P balance varies depending on yield potential of the newly acquired acres and management of those acres.
  3. Acquiring additional land through purchase or lease can present a number of challenges.
  4. Another option is applying manure to neighboring crop farmer’s fields. In exchange, the crop farmer raises forages and grain for the livestock farm.

References

  1. Farmland rental rates and land economics. University of Minnesota Extension
  2. Manure Application. University of Minnesota Extension
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