Economic cost analysis of continuous-season-long versus rotational systems

Authors: WINDH, JESSICA - University Of Wyoming; RITTEN, JOHN - University Of Wyoming; Derner, Justin; PAISLEY, STEVEN - University Of Wyoming; LEE, BRIAN - University Of Wyoming

Submitted to: Western Agricultural Economics Association
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 9/7/2018
Publication Date: 6/24/2019
Citation: Windh, J.L., Ritten, J.P., Derner, J.D., Paisley, S.L., Lee, B.P. 2019. Economic cost analysis of continuous-season-long versus rotational systems. Western Agricultural Economics Association. 17(1):62-72.

Interpretive Summary: Rotational grazing is widely used by ranchers in the western US. However, economic costs of additional infrastructure (water for livestock, fence to subdivide large pasture into smaller ones), and comparisons in having lands all contiguous (adjacent) or not (dispersed) are lacking. Here, we determined fencing infrastructure, water infrastructure, and labor costs for five scenarios, all with the same total acreage (3200 acres): 1) season-long continuous grazing with one large pasture; 2) rotational grazing with the one large pasture cross-fenced into 10 pastures with permanent barbed-wire fencing or 3) with temporary electric fence; 4) season-long continuous grazing with 10 pastures that are non-contiguous; and 5) rotational grazing again with the 10 non-contiguous pastures. These scenarios represent a gradient of grazing strategies that is representative of what ranchers are using in the western US. Annualized costs for the five scenarios range from $17,300 to $57,300, with fencing costs as the largest cost for all five scenarios (69% to 83% of total costs), whereas water infrastructure and labor costs account for 30% or less of total costs. Compared to baseline scenario (1 - one large pasture), scenario 2 - ten permanently fenced contiguous pastures - increased the annual cost by $15,300. Cross-fencing with temporary fencing (scenario 3), however, results in an annual cost increase of only $1,500 over the costs of scenario 1. Annual costs of having non-contiguous pastures and season-long grazing (scenario 4) are $38,500 more than scenario 1 (due to additional fencing, more water infrastructure and labor), or $23,200 more annually than if the pastures were contiguous (scenario 2). Adding a rotational component to the 10, non-contiguous pastures (scenario 5), increases annual costs by $500 compared to scenario 4.

Technical Abstract: A majority of ranchers in the western US employ rotational grazing (movement of livestock among multiple pastures over the duration of the grazing season), despite decades of scientific evidence clearly suggesting that this grazing strategy does not convey ecological or production advantages over season-long continuous grazing (livestock graze the same pasture from the start to the end of the grazing season). Implementation of a rotational grazing system requires additional infrastructure which can result in 1) one-time capital expenses, 2) opportunity costs in terms of time-value of the money expended on the infrastructure, and 3) re-occurring maintenance costs. Here, we determined fencing infrastructure, water infrastructure, and labor costs for five scenarios, all with the same total acreage (3200 acres): 1) season-long continuous grazing with one large pasture; 2) rotational grazing with the one large pasture cross-fenced into 10 pastures with permanent barbed-wire fencing or 3) with temporary electric fence; 4) season-long continuous grazing with 10 pastures that are non-contiguous; and 5) rotational grazing again with the 10 non-contiguous pastures. These scenarios represent a gradient of grazing strategies that is representative of what ranchers are using in the western US. Annualized costs for the five scenarios range from $17,300 to $57,300. The cost of cross-fencing our single pasture (scenario 1) into ten permanently fenced pastures (scenario 2) doubles the cost of infrastructure, however the weekly labor requirement is halved. The additional infrastructure required for this conversion increases the annual cost by $15,300 over scenario 1, despite the savings created by the decreased labor requirement. Cross-fencing scenario 1 with the temporary fencing (scenario 3), however, only increases infrastructure costs by 18%, while still halving the weekly labor requirement. This results in an annual cost increase of $1,500 over the costs of scenario 1. The non-contiguous multi-pasture scenarios (scenarios 4 and 5) require significantly more infrastructure than the contiguous scenarios (scenarios 1, 2, and 3), and therefore have significantly higher costs. Fencing infrastructure is increased from 8.9 miles (scenario 1) to 28.3 miles (scenario 4), over a three-fold difference. Water infrastructure increases differently between the scenarios; water costs for scenario 4 are about three times more expensive than scenario 1, despite having five times the number of water sources, due to the smaller acceptable tank size. Weekly labor costs doubled due to the need to check ten separate herds in smaller pastures rather than the single large pasture; additionally, scenario 4 had the added labor cost associated with moving the ten herds from the central sorting location to their individual pastures. Ultimately, the cost of having a non-contiguous pasture system with a season-long continuous grazing system increases the costs of infrastructure and labor by $38,500 annually. Fencing costs are the largest cost for all five scenarios, and account for 69% to 83% of total costs, whereas water infrastructure and labor costs account for 30% or less of total costs.