– Rory Lewandowski, Extension Educator, Athens County

Unless they have been off vacationing on some remote tropical island the past 3 to 4 months, beef producers realize that they are operating with a whole new set of economic realities. Of course, that vacation scheme implies a different set of economic realities as well. Back to beef production economics. Surplus hay supplies are limited to non-existent; $120/ton sounded like a bargain this past winter and now into early spring. I guess it might be if some of the prices I have heard for small square hay bales are correct at $6-$9 /bale. If bales are 50 pounds, that figures out to $240 – $360 per ton! The cost of mineral, particularly phosphorus is also climbing rapidly. Remember $2.00/bushel corn? It’s fluctuating around the $5.00/bushel mark now. Are you ready to fertilize hay and pasture fields? How does $0.75 + per pound nitrogen sound? Phosphorus (P₂O₅) costs are similar and continuing to increase, potassium (K₂O) is around $0.50 per pound. I had better date this (3-26-08) because prices are likely to be higher by time you read this. As if high feed and fertilizer costs were not enough of a challenge, fuel continues its climb into the record books. An important question to ask in the face of these high input costs is: Are these high prices an aberration, a temporary fluctuation, or are they here to stay? If the answer is that these prices reflect a new “normal” or “business as usual” model, then beef producers need to make some management adjustments to stay in step with these new economic realities. Continue reading Adjusting to a New Economic Reality →