Livestock Insurance - straightshotsales.comstraightshotsales.com/gibsoninsurancegroup/newsletters/livestock... · worse creating pastures that looked like parking lots and he was

that we experienced this year is why he is glad he has a PRF plan in place.

This producer has 750 (625 open) acres that he rotates his cattle over, haying some fields in the spring then us-ing the regrowth for pasture for the rest of the year. Wanting to protect his for-age production and his in-vestment in fertilizer for those acres he chose a PRF pasture plan that would cov-er the open 625 acres over the 3 available insurable in-tervals from May 1 thru Oc-tober 31. He split his acres equally over those 3 inter-vals. Some acres were in-sured as grazing ground and some were insured as hay ground. Why those months? Because that is when he needed enough precipitation to ensure that he would have adequate forage pro-duction from both his hay fields and his pastures. What does it cost him? He pays about $4.50 per acre or about 7 ½ cents per day for each 2 month index interval!

Early summer came and like most other producers, he had stockpiled enough hay to last the normal 120-150 day period during the winter. Then the drought grew

continued on page 2

Crop and livestock producers all know that the best laid plans for a successful year all hinges on Mother Nature cooperating by providing the weather conditions needed to allow it to happen. Unfor-tunately this year she decid-ed not to cooperate, throw-ing everything and every-body into chaos.

We started the year with a warmer and drier than nor-mal winter, (would you really call that a winter?), which seemed to pull the wheat harvest, hay harvest, and corn and soybean plantings about a month earlier than normal. Most producers try to store a minimum amount of forage for a 120-150 day period through the winter and early spring while ex-pecting that rainfall will keep existing pastures productive enough for grazing till late November. This spring area hay production was ade-quate with some areas better than others but it was enough for a normal winter. Then the hot and dry weath-er set in causing severe de-pletion of available forage for livestock. By late July area producers had to sup-plement their pastures by feeding the hay harvested just a month or so earlier,

which is nearly 4 months before they usually do. This early start to feeding and the expectation that the amount of rainfall needed to restore enough pasture growth for fall grazing was unlikely cre-ated a massive demand for additional forage. It also cre-ated significant additional costs for livestock producers as they had to locate, har-vest, transport and store this additional forage.

HOW A PRF PLAN WORKS FOR AN AREA PRODUCER

In the past livestock produc-ers were the forgotten seg-ment of the agriculture in-dustry but the 2008 Farm Bill sought to address that by creating the Pasture, Range-land, and Forage (PRF) pro-gram. It is a single peril (lack of rainfall), grid based (approximately a 11 x 17 mile area), group risk index program that protects the producer(s) acreage located in each grid for the lack of rainfall that will reduce his hay and pasture production.

The lack of precipitation is the largest factor that affects the amount of tonnage that a farm can produce.

For an area livestock produc-er, the long protracted hot and dry spring and summer

DROUGHT 2012 - Pasture Coverage Saves the Day

Special Livestock Edition 2014

Inside this issue:

Protection for

Hay and Pasture

Fields

2

Web Tools for the

Livestock Producer 3

Corn Silage

The Ins and Outs

5

Profitability of

Cover Crops

6

The Cover Crop

Plot Project

7

Cover Crop

Analysis

11

Cover Crops in

the Field

12

LRP - LGM Tools for the

Livestock Producer

14

Our Website and

the LRP Calculator

15

Gibson Insurance Group

“The Risk Management

Specialists”

Livestock InsuranceLivestock InsuranceLivestock Insurance

GIBSON

INSURANCE

GROUP

337 Highway 50 East P.O. Box 795

Tipton, MO 65081

Phone: 660-433-6300 Fax: 660-433-6315

gibsoninsurancegroup.com


worse creating pastures that looked like parking lots and he was forced to start feed-ing hay 4 months before he had planned. This early start to feeding his hay forced him to look for other for-age sources to replace his forage supply so that he could make it though the rest of the summer and fall creating additional costs for his livestock operation.

With the PRF plan that he had purchased, he had 200+ of his 625 acres covered from May 1 thru June 30 for the lack of precipitation. The difference between the interval’s rainfall index and the amount of rain that his grid, which contained his fields, received was such that his plan paid him over $11,000 for the claim which he didn’t have to apply for since all claims are paid au-tomatically. He gladly used

this money to help him pur-chase silage to help supple-ment his forage supply.

As July turned into August, he had started to feed his hay production but he was not as worried as some be-cause he knew that he still had 200+ acres covered from July 1 thru August 31 and 200+ acres covered from September 1 thru Oc-tober 31. If the index value for the months of July and

crop producers and left the livestock operations unpro-tected.

I know as a livestock pro-ducer the cheapest source of feed for my livestock is an ample supply of good quality forage grown on my own land. If we were to have dry periods during this important time of forage production several different things could happen.

I would have to buy feed to replace the for-

I have been involved the in the crop insurance industry for the last 35 years. During that time I have seen nu-merous changes to the pro-gram and most times it has been for the better. During this same time, I have been a farmer as well and have learned to use the programs to add to the profitability of my farming operation. In the beginning the risk man-agement programs were mainly directed towards the

age that I usually de-pend on to raise live-stock. This is an added expense that I would have not normally oc-curred.

My gains would suffer due to a dry spell be-cause of the adverse effects that the dry weather had on my pasture and hay ground.

Liquidating my breeding herd becomes a possi-

2012 Drought - Pasture Coverage Saves the Day (continued)

August is like that for May and June he is planning on using the indemnity to help him recoup his fertilizer costs and to help restore damaged pastures.

He is really hoping that he won’t have a claim for the September and October period since that will mean that we will be getting rain, but if he does then he will be able to help defray the additional costs that the

Protection for Hay and Pasture Fields

Page 2 Livestock Insurance

extended drought creates.

Another feature that he likes about the PRF plan is that it will help him qualify for programs offered by the Farm Service Agency that require a RMPR (Risk Man-agement Purchase Require-ment), such as the SURE program, Livestock Forage Disaster Program (which is now permanently funded by the 2014 Farm Bill), and the Farm Storage Facility Loan Program.

bility because I did not have the forage to maintain the herd and the economics of pur-chasing feed for long periods make it cost prohibitive.

In the case of extreme drought, such as the sum-mer of 2012, a “perfect storm” of sorts is created where you have rapidly ris-ing feed costs and rapidly declining cattle prices.

Today that has all been


continued on page 3

changed, there are now several programs that take considerable risk out of live-stock operations. I use two of these programs on a reg-ular basis on my operation. One is the Pasture, Range-land, and Forage program (PRF).

This program is very simple and has worked extremely well for producers. The Pas-ture, Rangeland, and Forage program is based on a calcu-lated index of the average amount of rainfall, using data from the National Oce-anic and Atmospheric Agen-cy (NOAA), for specific peri-ods of time over specific land areas or grid. The pro-gram has divided the whole state into a series of grids in which the rainfall data for each is calculated individual-ly. Each grid is essentially an 11 x 17 mile box. Your cov-erage will only use the rain-fall data collected for the grid(s) in which your cov-ered acres reside in. PRF allows a producer to pur-chase coverage that will guarantee 90% of this index (or average rainfall) for his grid in multiple 60 day peri-ods throughout the year for

when the producer has cho-sen that he needs precipita-tion to produce forage. If the program has deter-mined that you have suffered a loss, a payment will be automatically gener-ated and sent on to you. You will not have to do any-thing.

PRF uses an index value for the average amount of rain-fall. Why? The index value allows the program to “smooth” out abnormal rainfall events, such as the large amounts of rain that fell over areas of southwest Missouri during the summer

of 2013. These areas had as much as 10 – 14” of rain during a 24-36 hour period. Could all this rain be used by the existing forage? No, a lot of it ran off into streams, rivers, and ponds. What happens if for the majority of my covered period there was little or no rain and then at the very end we have rain? These rains would have little effect on the 60 day period in ques-tion therefore smoothing would again take place. The program estimates what can be used, what ran off, how much of the rain was usable

decisions. The internet has a variety of places where pro-ducers can go for infor-mation but here are a few that we think producers will find really helpful.

The PRF program is a really good program for the live-

The right information is the producer’s best friend for making sound management decisions whether it be for equipment purchases, live-stock purchases, financial decisions, marketing deci-sions, or risk management

stock and forage producer. Is it a perfect program? No. No because there was al-ways the question of; what is the normal amount of rainfall for my area or grid for any specific period of time?

Protection for Hay and Pasture Fields (continued)

Web Tools for the Livestock Producer

Page 3 Special Livestock Edition 2014

for the whole period and uses that figure to help cre-ate the index.

I am a farmer and not a gambler. I only want this coverage for when rainfall will produce forage. Per-sonally I hope it is dry in December and January as I don’t care to feed stock in the mud or snow. I would never insure this period on my operation as rainfall during this time has little to no effect on my spring for-age. The 60 day periods that I personally cover are al-ways within the months of May through November.

Finally as a farmer some-times I feel like I’m insur-ance poor. As a producer, I look at this as a normal ex-pense as I would fertilizer, feed, fuel, or electricity. If dry weather were to hit I will have extra income to pay the extra expenses that I will occur getting through the year. I know that com-panies have to make money off of what I pay in in pre-miums. For the PRF insur-ance this is not the case. This is a USDA program that pays 51% of the farmer’s premium to make the pro-gram sound.

continued on page 4

With the way PRF program has the grid system laid out and how the rainfall data is collected and calculated for each individual grid, “normal” will never be ex-actly what is listed on the TV weathercasts. Why? The


Continued on page 5

particular grid where your fields lay may be 30 miles from the weather station that your me-dia outlet uses. As farmers know, rainfall can be a fickle thing. It could be raining in town but dry as a bone at your fields which may be only a cou-ple miles away.

The Pasture, Rangeland, and Forage program is based on a calculated index of the average amount of rainfall for specific periods of time over specific land areas. Until recently, the only way for any producer to find out what percentage of the index (or average rainfall) that fell over a specific area for a specific time period was to wait till they were released by USDA’s Risk Management Agen-cy. This usually took from 45 to 70 days.

That has now changed. The Risk Management Agency has tasked the University of Mis-souri Extension to design a pro-gram that will track daily rainfall amounts for specific grids in the state of Missouri. After signing up a producer will be emailed reports that track the rainfall amounts for his particular grid(s). Here is the link to their web-site to get your account signed up: http://agebb.missouri.edu/horizonpoint/begin.htm. You will need an email address, street address, and the latitude and longitude of your farm (MU Extension is working on an up-date that will allow you to enter your grid ID(s) instead). You can also go to the University of Mis-souri’s Extension website http://crops.missouri.edu/insurance/prfinsurance.htm or contact Ray Massey or John

Web Tools for the Livestock Producer (continued)



http://agebb.missouri.edu/horizonpoint/begin.htm

http://agebb.missouri.edu/horizonpoint/begin.htm

http://crops.missouri.edu/insurance/prfinsurance.htm

http://crops.missouri.edu/insurance/prfinsurance.htm

Travlos of Extension, two of the leaders of the project, to get more information on how it works and what your reports will look like.

For the stocker and feeder producers we have found a couple of websites that we think producers will find very helpful with their mar-keting decisions.

Both sites were developed by among others, Kansas State University. The first

one is www.beefbasis.com.

The other site is agmanag-er.info . Both sites are load-ed with financial calculators, feed ration calculators, budget calculators, histori-cal market data, current market data, and all the market news. These sites contain the information needed to allow the live-stock producer to make informed management deci-sions.

Web Tools for the Livestock Producer (continued)

Corn Silage - The Ins and Outs

should be selling for $60 per ton. In our area, Central Missouri, $40 - 50 per ton seems to be the going rate. Ultimately prices will be determined by geographic location and the demand from the dairy and beef industry.

If you are trying to guess the tonnage of silage for your fields, try this unscientific method. For every foot of plant height of barren (no ears) stalks figure 1 ton per acre. If your corn has little or no ears and is on average

6 foot tall then it should make 6 ton of silage per acre. The more ears and the more grain will increase tonnage considerably.

Nutrient Loss from Silage Harvesting

One of the concerns produc-ers have when harvesting silage is how many nutrients are being taken from the land. According to a recent meeting regarding drought silage the following figures were presented.

For each ton of silage re-moved the following nutri-ents will be removed:

Nitrogen - 9.4 lbs

Potash - 3.6 lbs

Potassium - 9 lbs

With the assumption that 0-46-0 is $630 per ton and 0-0-60 is $650 per ton and the corn produces 6 ton of si-lage per acre, $44.05 of fer-tilizer will be removed from the field. In other words, at

According to an article written by Lester Vough, an extension forage crop spe-cialist from Maryland, the value of drought stressed corn silage is nearly the same as well eared silage due to its higher protein and slightly lower TDN.

Iowa State and South Dako-ta Universities both have done research that shows the value of silage per ton should be 10 times the bushel price of corn. In oth-er words if corn is selling for $6 per bushel then silage


these prices $7.33 of fertiliz-er must be replaced for eve-ry ton of silage taken off of your field.

Many producers worry about the amount of nitro-gen that is being taken off. To me this is not an issue because nitrogen does not attach to soil particles and is very leachable. Even if we did not take the material off as silage we would still lose most of our nitrogen under normal winter conditions.

The best way to save this carry-over nitrogen is to plant a cover crop and tie it up in the plant over the win-ter. This can be done with various crops, including win-ter rye. If you are interested in cover crops there is a lot of material available and a lot of good research being done on this topic. I believe that in the near future, cov-er crops will be an integral part of most farms nutrient

management plans.


The drought of 2012 brought to light the im-portance and the economic benefits of using cover crops. Many producers in July of 2012 found them-selves with bare fields as their crops had already been removed for silage. Some of these individuals planted cover crops to sup-plement their farm income or to provide an emergency livestock feed for their oper-ations. In interviewing pro-ducers throughout the state, I got very positive feedback in general about the use of cover crops . Everyone seemed to have a different “cocktail” mix that they used but the most common was to use some form of cereal rye or wheat along with forage turnips or tillage radishes. These crops can provide a great deal of fall and spring grazing for the diversified operation. More experienced produc-ers may use a crop like snow peas, hairy vetch, Italian rye, or winter oats. These crops seem to work better if the cover crop is going to be ensiled or hayed rather than grazed as livestock seem to damage a high percentage of the crop during grazing. Over the past year I have tried to compile some eco-nomic data from these pro-ducers and from various university extension sys-tems. I want to use their experiences with cover crops to see if this crop does have economic significance or is it just another passing

fad . My limited research of this practice definitely shows that this crop has a lot of economic potential and I have decided to start this practice on my farm this fall. When a producer starts planting cover crops he must decide what the pur-pose of this crop is and what benefits does he want to achieve. This will vary from producer to producer. The crop only operator may want to capture nitrogen and other nutrients in the top layer of the soil while planting some type of tuber crop to enhance soil struc-ture. The diversified produc-er may want these benefits as well, but is also interest-ed in providing fall and win-ter forage. The system that is most compatible with my opera-tion is one where livestock are used to graze the cover crops. This system has the fastest and most measure-able returns for the produc-er. A client in South Central Missouri shared his experi-ences with me. July 20, 2012 his corn harvest was completed by cutting his total corn acreage for silage. With the ground bare and dry he decided to plant cov-er crops to help hold the soil and to provide fall grazing for the calves that he would wean that fall. His choice of cover crop “cocktail” mix was 4 pounds of forage tur-nips, 1 pound of tillage rad-ishes, and a bushel of cereal

rye per acre. He drilled the rye in the stubble and then came over the top and spread the tur-nips and radishes with a grass seeder right on top of the ground. Within a couple of weeks enough rain was received to germinate this

Profitability of Cover Crops


Continued on page 7

seed mix. By October 15 enough growth had been established to place his weaned calves on this ground. The calves weighed an average of 500 pounds and were stocked at a rate of 1 head per acre.

To start with, this client

Pasture, Rangeland and Forage

PRFPRF

YOU CAN’T CONTROL THE WEATHER

BUT ….

YOU CAN BE PREPARED FOR IT!

Drought Coverage

Hay and Pasture Ground

Sign up ends

Sign up ends

Sign up ends

November 15

November 15

November 15


tried to divide the fields into 4 parts with electric fences to do some rotational graz-ing. This, he said, was a great idea in theory but took a lot of labor. Soon he abandoned this idea and let the cattle run over the en-tire area. The forage growth stayed ahead of the calves and he grazed them on these cover crops until the 20th of January.

When the cattle were sold he had put on 244 pounds per head in the 90 day graz-ing period. The rye, he thought, provided the most forage but he was im-pressed with the forage turnips as well. He stated that after the first killing freeze the cattle really went after the turnips, even rooting the bulbs out of the ground and eating them. This producer tried to hand feed the calves a couple of pounds of grain or cattle cubes a day in the feed bunks to keep them coming

up where he could look at them. When the cattle start-ed eating the turnips, they quit coming up and just kept grazing the cover crops.

The economics of his experi-ence is what caught my attention. This producer removed a crop of silage and then invested only about $30 per acre in cover crops. The return was that he was able to capture 244 pounds of gain per acre at a sale price of $1.53/lb.

This producer marketed $373.32 worth of gain from an investment of $30 per acre. When these calves were sold the cover crop was still there and was ac-tively growing through the spring. In April this produc-er considered baling the spring regrowth of rye but the wetter than normal spring made him choose to kill this crop chemically and plant into the stubble.

Not only did this producer

capture the gain in the live-stock from the cover crop, but he also captured a lot of nutrients that could have leached from the soil and deposited them back on top in the form of manure.

Even with all this positive information one must ask themselves: What is the down side?

In this producers situation the crop was harvested ear-ly in the form of silage. If this crop was taken to grain the cover crop would have been established a lot later and would not have pro-duced nearly the amount of forage.

If the cover crops were seeded by an airplane over the existing crop of corn an increased seeding rate would have to be used to achieve the same stand as a percentage of the seed would lay on top of the ground and not germinate without ideal conditions.

left soil conditions with un-used nutrients that needed to be captured.

All this emphasis on cover crops got us to thinking and there are a lot of questions that we wanted answers to. In order to find these an-swers we decided to create our own cover crop plot here at the office.

THE PLOT

The plot consists of 12

Cover crops have become the hot issue these days in the ag world and rightfully so. It seems like you can’t pick up an ag-related maga-zine or newspaper that there isn’t an article about cover crops. With the se-vere drought in our area last year that forced producers to harvest the corn crop for silage, it left very little or-ganic matter on fields and

different types of cover crops that you might find planted in Missouri. The seeds were obtained from Doug Hartman of Missouri Southern Seeds Corp. in Rolla, Missouri. They were planted on ground that was stripped of the existing grass and then lightly tilled. We did add some additional soil from a compost pile from a barn lot since the

Profitability of Cover Crops (continued)

The Cover Crop Plot Project


Another question is com-paction. How much compac-tion would these cattle cause in a crop field under normal conditions? How much more would this in-crease under the conditions of a wet winter?

Regardless of these chal-lenges, I think the econom-ics of this practice merits exploration at least. This year on my operation I have decided to drill some cereal rye and turnips on one field, no-till the same combina-tion into some existing pas-ture, and fly a similar com-bination over standing corn to see what kind of results can be achieved. Over the next several newsletters we are going to follow the pro-gress of these fields and put some actual numbers to the cost of establishing these crops and from the returns achieved from this practice. Keep reading and together we will see how this pans out.

ground around the office is quite hard and we were not sure of the fertility.

The Crops

Cereal Rye - hardiest of the cereal grains. Quicker grow-ing than wheat and absorbs more N than wheat.

Hairy Vetch - a winter an-nual legume. Produces such a large amount of N that it can partially replace fertiliz-


continued on page 8

er for spring. It will improve topsoil tilth and is also a P scavenger.

Annual Rye - a very eco-nomic choice for cover crop. It has a very dense and deep root system

Ground Hog Radish - Its deep root system allows it to pull nitrogen and other nutrients deep within the soil back to the surface. Can be used as a forage crop.

Jerry Spring Oats - produces more forage than winter oats but are not as winter hardy.

Purple Top Turnips - not only edible, but also great for alleviating soil compac-tion. They are great for wa-ter infiltration.

Winter Oats - a quick grow-ing cover crop. Will collect excess N and small amounts of other nutrients when

planted early enough. Not as winter hardy as rye, wheat, or barley.

Austrian Winter Peas - a legume that is an excellent N source. Produces a large amount of biomass. Can withstand cold tempera-tures but doesn’t always winter over.

Buckwheat - great short season cover crop. Matures in about 10-12 weeks. Helps

The Cover Crop Plot Project (continued)


Continued on page 9

suppress weeds and collect P. Also attracts beneficial insects and pollinators.

Rape - most often used for forage but can also be used as a cover crop. Due to its rapid fall growth, it can cap-ture a significant amount of N. Also a great weed sup-pressor

Winter Wheat - a cash crop that in some areas is used for grazing as well.

continued on page 9

The Test Plot - 4 days after initial planting (initial plant date was August 23)

The Test Plot - 10 days after initial planting (September 2)

Clover Wheat Rape Seed

Buckwheat

Austrian

Peas

Winter Oats

Turnips

Spring Oats

Radishes

Annual

Rye

Hairy

Vetch


Crimson Clover - a winter annual that can provide N for your next crop. Creates a good amount of biomass and has been found to grow well when combined with a companion crop.

What are we looking for?

We know what these crops can do for the grain produc-er. What we want to know is; how can we maximize the earning potential of acreage during a time when it is normally idle? With these crops, we have a se-lection of grasses and leg-umes, all of which can be grazed for forage in a live-stock producer’s back-grounding operation. In our

next newsletters we will track the progress of the plot. We will document the rate of growth, how it han-dles what winter brings, and we will have analysis done on the nutritional value of each cover crop and report these findings. Even though we are not using the proper guidelines for a test plot, we are nevertheless very inter-ested in what our findings will be.

Observations after 10 days

Starting at the far left we have planted (the stakes mark the rows): Cereal Rye (next to the pile of white chat), Hairy Vetch, Annual Rye, Ground Hog Radishes,

Spring Oats, Purple Top Tur-nips, Winter Oats, Austrian Winter Peas, Buckwheat, Rape Seed, Winter Wheat, and Crimson Clover.

All of the seeds were plant-ed by hand. The grass seeds were broadcast and then lightly covered with soil by raking. The legumes and Winter Wheat were planted in actual rows and then cov-ered, except for the Crim-son Clover and Turnips, which were broadcast.

As you can see, we did wa-ter the plot to help germina-tion since the temperatures were in the high 90’s and there had been no measura-ble rain for a few weeks

bed heavily to make sure that there was enough ground moisture for all the planted crops. We contin-ued to water occasionally as the hot and dry conditions

The plot was planted on August 23 during an extend-ed hot and dry period. To make sure that we would get good germination of our seeds, we watered the seed

remained in place through mid-September.

We had 4 crops, cereal rye, radishes, turnips, and crim-son clover, sprouted in 4 days. The rest of the crops

The Cover Crop Plot Project (continued)

The Cover Crop Plot Observations


here. We did not add any type of fertilizer to the plot.

After 4 days the Cereal Rye, Radishes, Turnips, and Crim-son Clover had already sprouted. Over the next 6 days all of the other crops had sprouted with the ex-ception of the Spring Oats and Annual Rye.

Since the added soil was taken out of a compost pile in a cattle lot, there are more than a few rocks strewn about. We are also seeing some weeds that have germinated in this soil. It will be interesting to see how the cover crops will do in suppressing these weeds.

continued on page 10

were sprouted by the 7th day with the exception of the Spring Oats and Annual Rye. 10 days after our initial planting we replanted the Spring Oats and Annual Rye.

THE STATEMENTS CONTAINED IN THIS PAMPHLET ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE AN INTERPRETATION OF THE TERMS AND CONDITIONS OF ANY INSURANCE POLICY. NOTHING CONTAINED HEREIN WAIVES, VARIES OR ALTERS ANY

TERM OR CONDITION OF ANY INSURANCE POLICY. ELIGIBILITY FOR COVERAGE, ENTITLEMENT TO AN INDEMNITY AND LIABILITY FOR PREMIUM MAY VARY. PLEASE REVIEW YOUR INSURANCE POLICY TO DETERMINE WHICH TERMS AND CONDITIONS ARE APPLICABLE TO YOU.


November we were starting to see impressive sizes of radishes with diameters of 2-3 inches at the ground level

Spring Oats – This is the other crop that we had to replant. After replanting, the crop sprouted within 6 days. The biggest problem was getting enough sunlight to help with its growth. The oats were bordered by the radishes on one side and the turnips on the other side. Their growth was such that the leaves from both were covering area where the oats were planted. What oat plants that did manage to grow above these leaves grew quickly.

Purple Top Turnips – Anoth-er crop that we were im-pressed by the growth rate and how fast they covered the seed bed. We planted them at a rate that was ex-cessive but they still germi-nated and created a thick cover and the bulbs were still pretty big. The first frost in mid-November seemed to have little effect on the

plants, evidenced by a little wilting of the leaves.

Winter Oats – We were really impressed by the growth of these plants. It took about 6 days for the plants to emerge. When they finally did they seemed to “pop” out of the ground to a height of about 2 inches overnight and didn’t stop growing till they had ma-tured. Since there was no competition from the near-by plantings the row came up thick and lush.

Austrian Peas – They too sprouted at about 6-7 days. Growth was slow and steady. It was hard to tell how tall they got before the frosts came. The plants seemed to gravitate toward the plants next to them, winter oats and buckwheat, which they used as support to get higher off the seed bed. Much like a soybean plant there was not much organic matter with the plant.

Buckwheat – Germinated at 6-7 days and growth was rapid. It grew to height of about 3 foot in 2 months and by then had begun to flower. By early November the plant had already ma-tured and went to seed. The plants reminded us a of soy-bean plant only not nearly as many leaves nor as bushy. The peas loved it. They used the stalk for sup-port so they could grow higher.

Rape – Germinated at 6-7 days and growth was

steady. In the family of tur-nips and radishes, it grew large leaves that completely covered the seed bed. The plant reminded me of a cab-bage plant without the cab-bage head. This was the only plant that we had a bug problem with. We noticed that the leaves were loaded with green worms that ate the leaves and devastated the forage capacity of the plants. We did not attempt to eradicate the worms be-cause we wanted to see if any other plants would be affected. They weren’t.

Winter Wheat – The plant grew much like we expected using bin run wheat seed. It will be interesting to see how it winters and grows this spring.

Crimson Clover – This was one of the first plants to come up. Growth was slow and steady which kind of surprised us since it was located at the edge of the plot where the soil was not nearly as good as in the middle of the plot. We did have some flowering of the plants in early November and the frost did “burn” it a bit on the outer leaves.

The Cover Crop Plot Observations (continued)


We assume that we did not get enough seed depth to facilitate germination in our first planting. The replanted crops came up within 5 days.

Growth Observations for Each Crop

Cereal Rye – one of our first crops to sprout. We had a really good thick stand. Growth reached about 6 inches by late October. The frosts of November and December seem to have had no real impact to the stand.

Hairy Vetch – We planted this in 2 rows and growth was slow and steady. The two rows of growth eventu-ally merged into one thick mat of growth that com-pletely covered the soil. We did notice that the vetch would “climb” on any weed growth taller than it and begin to pull it down.

Annual Rye – As stated ear-lier, we had problems with germination and by the time that we finally got a stand established weeds had started to take over the row even with occasional weed removal by us. The late start also hampered its growth but the frosts don’t seem to have affected it too much.

Ground Hog Radish – We were very impressed by the growth of the radishes. By 5 weeks the plants had com-pletely covered their row and was beginning to cover the crops planted on either side of them (Annual Rye and Spring Oats) By mid-


Examine the tables that we have included on the bottom of this page. These tables compare each of the cover crops together based on five important catego-ries. However, we must re-member that this is the feed’s chemical composi-tion. It doesn’t mean that cattle will eat it nor does it tell us if there are any ad-verse side effects that we might see by giving this feed to cattle.

There are certain cover crops in our test that we will never use in our operation. The first is hairy vetch. The analysis of this crop looks very good on paper, but actual tests show that hairy vetch is not very palatable

to cattle. Hairy vetch also produces about 20% hard seed that may lay in the ground for more than two years before it germinates. Essentially this plant be-comes a weed and could be a continuous problem to control when used in a cov-er crop system.

Another crop than has ad-verse side effects is buck-wheat. Even though this plant’s nutritional levels rivals some of the other crops, it has a side effect of causing a rash in light col-ored cattle and in fair skinned people.

The final crop that I would eliminate from considera-tion is crimson clover. This crop would be great for

spring application, however in the fall if this plant is lush and growing at the time of a frost it will cause extreme bloating and could kill cattle very quickly in the right con-ditions.

No individual plant is per-fect by itself, all these crops have good points. It is up to us to mix a “cocktail” of these plants to get the best benefit. The crops that I would consider for fall graz-ing are the ryes, wheat, oats, radishes, turnips and rape. Most of these cover crops contain 2-2.5 times the protein needs of a feed-er calf. They also contain more energy and TDN than the calf needs as well. This is the beauty of planting

Cover Crop Analysis


these crops into corn stover. In this system the calf will gets its needs met and will consume corn stover to really balance it’s nutritional needs by itself.

Here is what we have to remember. A 600 pound calf that is expected to gain 2.5 lbs/hd per day will re-quire a diet on the dry matter basis that contains 12.76% protein, have an NEG of .525 mcal/lb., and a TDN of 75 for its total diet.

The better the forage we can produce from cover crops just means that we can feed that much less supplement from another source. The advantage of getting the majority of this

Corn Grnd Hog Hairy Austrian Crimson

Silage Radish Vetch Turnips Rape Peas Clover

Analysis Results (Dry)

Crude Protein % 9.01 30.20 26.10 30.20 20.40 21.90 15.40

Neutral Detergent Fiber, % NDF 46.26 20.50 30.80 17.40 20.40 26.80 33.50

Total Digestable Nutrients, %

TDN 67.89 81.20 72.20 84.80 81.20 76.70 74.00

Net Energy, Gain, Mcal/lb 0.44 0.60 0.49 0.65 0.60 0.55 0.52

Relative Feed Value, (RFV) 138 338 204 408 339 247 191

Corn Cereal Spring Annual Winter Winter

Silage Rye Oats Rye Wheat Oats Buckwheat

Analysis Results (Dry)

Crude Protein % 9.01 25.90 21.10 30.60 26.50 25.20 17.30

Neutral Detergent Fiber, % NDF 46.26 38.00 38.70 33.20 35.30 37.00 21.00

Total Digestable Nutrients, %

TDN 67.89 78.50 73.10 78.50 75.80 77.60 83.90

Net Energy, Gain, Mcal/lb 0.44 0.57 0.51 0.57 0.54 0.56 0.63

Relative Feed Value, (RFV) 138 177 165 202 186 180 337



years crop.

I see in my operation that we cannot solely depend on cover crops due to weather conditions and growing sea-son variables. However, this has been the most nutri-tious feed that we have fed based on nutrients per dol-lar spent. We achieved our goals by producing livestock with the lowest cost per lb. of gain and still made these animals perform at an ac-ceptable level, finishing with the correct body condition.

acres of standing corn. The weather at this time was hot and dry and the corn was suffering from the lack of moisture. Regardless, the time was here when we had to apply this seed or aban-don the plans of this pro-ject. The seed was flown on and we waited another cou-ple of weeks before we re-ceived any rainfall.

Within a few days after the first bit of rain we noticed that indeed we had cover crops emerging from be-tween the rows. Over the next several weeks we were impressed on how thick of a stand we actually had. By mid to late October the corn was harvested testing in the 17% range and the cover crops had completely cov-ered the ground between the rows. We knew that now time was critical to put

ing corn? Would we have enough sunlight penetrating the canopy to make these crops grow? Could we pro-duce enough forage in a normal year to justify the cost of this operation? What kind of stocking rate will these crops support? This fall we are attempting to answer all of these ques-tions .

The last week of August we flew on 5 pounds of turnips and another 5 pounds of rape seed over the top of 36

cattle on this ground and take advantage of both the corn stalks and the cover crops while they were both at there best. We contacted Toby Thacker of United Producers and placed an order for 5 wt. steers. The cattle market at this time for this weight of feeders seemed very high, in the $1.80’s, but we real-ized that we had a good corn crop nationwide and expected the corn price to fall though the rest of the year. I was looking to mar-ket these calves in late Janu-ary early February. I was estimating putting about 200-250 pounds of gain on them. At this time futures prices for January-February time frame were running around $166-8 per cwt. Us-ing the Livestock Risk Pro-tection program, I was able

Cover Crop Analysis (continued)

Cover Crops in the Field


nutrition from our standing forage is that this is our least expensive feed. With cover crops we do not have the expenses of mechanical harvest, transportation, or preparation and handling of this feed. As you can see in the charts, most nutrients for this gain can be achieved from the cover crops. With these crops there is no har-vest expense and the nutri-ents that the animal ingests from its diet is laid right back down on the soil in a more usable form for next

This summer we decided to run a project on our own farm to evaluate the profita-bility of using cover crops to background cattle right here in central Missouri. We had seen and heard the success stories of 2012 when these crops were planted early after silage was removed. What we didn’t know is how these crops would do in a normal year when the crops came off at the usual time. Would we get a stand flying these crops on stand-



to place a floor price for my feeders at $166 per cwt. giving me bottom side price protection while not limiting my upside pricing potential.

81 feeder steers were pur-chased, worked and deliv-ered to the farm. They were put on preconditioning re-ceiving ration with AS700 for two weeks then released into the cover crops. These cattle did very well adapting to the cover crops. They were hand fed daily a ration containing a mixture of by-products and an ADM feed called Amino Gain. This ra-tion was formulated by Bill Frank to compliment the cover crops that these cattle would be grazing. These cattle would always have dry hay in front of them and we would use their hay con-sumption to monitor their forage needs.

For the first 30 days we watched these cattle closely not knowing if we would have issues with bloating. Fortunately no problems were encountered. In fact the cattle, when they were turned out in the corn fields, seemed to prefer the freshly combined corn stalks to the lush forage of the turnips and rape that cov-ered the ground.

As soon as we had the first killing frost that preference seemed to change very quickly. What had hap-pened is that when we had a frost the cover crops be-came much more palatable as the sugars in the plant had changed. This also

seemed to attract all the deer in the country to come and graze in these fields as well.

By mid November the ma-jority of the cover crop foli-age had been consumed but in walking the fields we no-ticed that just the tops of the plants had been eaten and the bulbs of the turnips were still at the top of the ground. Within days we observed that the cattle had learned to root these bulbs out of the ground and this was providing a considera-ble amount of forage along with the corn stalks that they were still grazing. By Thanksgiving Day these 81 steers had not yet con-sumed 2 bales of grass hay.

To summarize: these cattle were intensely grazed on well-established cover crops at a stocking rate of 2.25 calves per acre. They were hand fed an Amino Gain forage balancer with 2 pounds of corn per day. They grazed these cover crops for a total of 78 days. During this time the 81 head consumed a total of 6 bales of grass hay. The remainder of the forage consumed was from the cover crops that were planted into the stand-ing 36 acre corn field prior to corn harvest. The purchase weight of this group was 535.12 pounds per head at a purchase price of $185.00/CWT. After the 78 days these cattle were sold on the farm to a cattle finisher and had a sale weight of 771.36 pounds


of cattle we were uneasy with the high purchase of this group. We looked at what was available in the LRP market and saw that we could lock in a minimum price of $166 per cwt. This price would allow us to have a net return after variable costs of $118 per head

per head. This group of steers gained 236 pounds per head over the 78 days that they were on the farm with a 3.0256 pound aver-age daily gain. The net sale price for this group of cattle on the farm was $173 per cwt. When we started this group

Cover Crops in the Field (continued)


Livestock Risk Protection

LRP is a very simple and cost effective way of locking in a minimum price floor for your live-

stock. Call us today so we can explain this program

and its benefits to you and your operation. 660-433-6300


based on a 2.5 average daily gain. We estimated our cost of gain at 62 cents per pound. We placed this cov-erage for 13 week time peri-od.

In the end we did not collect on our (LRP) price protec-tion insurance because the market was higher at the end of the period than when we purchased the coverage. The ending price of this group of cattle ex-ceeded our guaranteed min-imum price by $6.00 per hundred, therefore we did not have a loss on our LRP contract and we netted more dollars per head than we anticipated. I have no regrets in purchasing this coverage as it guaranteed me the opportunity to lock in a minimum profit of near-

ly $120 per head and still be able to take advantage of the cash market if it went higher.

On this group of steers eve-rything worked right. These cattle gained better than we expected thus reaching our desired sale weight 20 days earlier than we expected. We had no sickness and gave only 4 shots to individ-ual calves during this period. The cover crops worked exceeding well and we were amazed at the amount of quality forage this practice produced. I would encour-age you to go back to the articles that we have written on the nutritional analysis of these cover crops and re-view the TDN, relative feed values, and the protein lev-els of these different crops. I

was happy with these re-sults however next year I will incorporate cereal rye (not annual rye) in this mix-ture of cover crops for more added forage.

With land prices as high as they are I feel that I need to have this acre of ground

guaranteed by the federal government and the premi-ums are subsidized at a rate of 13%. Even though this program is relatively new, it is starting to get really good participation from all sizes of livestock operations. Lenders especially like this program as it allows produc-ers to guarantee themselves profits when placing live-stock on feed without the worries of margin calls or risk declining prices. It also encourages producers to understand and calculate what their actual costs of raising cattle are.

This product guarantees a

There are two different price protection products that are available for use to guarantee profitability of your livestock operation. LRP (Livestock Risk Protec-tion) is a product that guar-antees the producer against falling prices on the class and number of head of stocker cattle or fed cattle. LRP is the product that most of us will use on a regular basis. I use this product myself and have had noth-ing but good results.

This product is sold on spe-cific classes and weight ranges of livestock on a per head basis. LRP is sold and

minimum price for a specific length of time that coincides with the group of livestock that you are feeding. To use this product effectively a producer must have realistic goals. They will need to know what a realistic aver-age daily gain per head would be given the class of livestock based on the ra-tions being fed. Producers will also need to have a good estimation of their feed costs, both the feed forage (grazed and/or fed) that is on hand and the feed that will need to be pur-chased. Finally the producer needs to have an idea of the

Cover Crops in the Field (continued)

LRP - LGM Tools for the Livestock Producer


work for me all year rather than just to grow grain crops. This cover crop pro-ject proved that there is definitely a significant eco-nomic benefit to this prac-tice if a producer has the ability to take advantage of it.

Continued on page 15

finish weight of this class of livestock and how long it will take them to get to this target weight in order to get the correct number of weeks of coverage. Produc-ers, who are most success-ful with this program, pur-chase or raise good quality cattle. Trying to estimate gains on sick, overly stressed or poor quality livestock is exceedingly diffi-cult at best.

With this information pro-ducers and lenders can get a good handle on whether a group of livestock will be profitable or not. If accepta-ble profit potential exists


after these calculations the producer will have the op-portunity to lock in this min-imum profit using the LRP program.

This program is price pro-tection only. It does not cover death loss, poor per-forming cattle or any other peril, just decline in price. Coverage price and premi-um calculations are based on the corresponding fu-tures contract on the CME and the volatility of those contracts. All calculations are done by the Risk Man-agement Agency (RMA) of the USDA and offered for purchase after the markets close each day until 9 AM the following morning. The cost of this coverage is then subsidized by the federal government by a rate of 13% to make it affordable to all producers.

When a contract ends, this established minimum price is compared to the feeder cattle index on the day the

contract expires. There is no requirement to sell calves protected as feeder cattle at the end of the contract peri-od. If the contracted cover-age price is higher than the feeder cattle index then an indemnity will be paid.

It is important to remember

what the feeder cattle index is. This index, simply ex-plained, is the average price that feeder cattle sold on a given day in 22 sale barns over a 10 state area. The goal of a producer is always to have at least average quality cattle that will meet that index. Having higher quality cattle would be like selling into a positive basis thus increasing the produc-er’s profits. Remember, this

product settles to the feed-er cattle index and it is not what you sell your cattle for. This is an advantage for the producer who sells cattle at a price above the feeder cattle index.

The second product is called LGM (Livestock Gross Mar-

gin). This product is not as versatile as LRP as it is pri-marily used for finishing cattle but still has a place in our risk management tool box. LGM is designed to guarantee a margin be-tween the price of corn and the feeder cattle market. This product would work best when the corn market is low and is trending higher and the cattle market is high and trending lower.

cluding Multi-peril crop, Crop Hail, PRF, and LRP.

We have budget worksheets for the grain producer and numerous links of interest for both livestock and grain producers.

As we find other sites that we think our clients and visitors will find helpful we will add them to our list.

We will continue to update

We have updated our web-site In an effort to provide better service and infor-mation for our clients and anyone else who visits the website.

On the site you will find links to all of the news-letters that we have pub-lished since September 2012. In addition, you will find information on all the products that we sell, in-

continued on back page

the information on the site as needed so please check the site often for any chang-es.

The newest feature and one we are most proud of is the LRP calculator. Located on the front page of the site, it is useable to all who visit the site. We have included a print button to allow you to print a copy of your quote off of your printer at home

LRP - LGM Tools for the Livestock Producer (continued)

Our Website and the LRP calculator


Our goal with these prod-ucts is to help producers remain in a profitable situa-tion at all times. Using these tools a producer may choose not to feed a group of cattle if profit potential is not available. On the other hand, it maybe the tool that is the deciding factor as to when profits can be locked in. For our producers we have developed an LRP cal-culator tool that is available on our website to help pro-ducers decide whether a group of cattle is profitable or not, based on infor-mation supplied by the pro-ducer.

We have all been in the situ-ation where we are uneasy about buying a group of cattle because we afraid of falling prices. This tool helps protect against falling prices and takes the price risk out of the cattle feeding opera-tion leaving us to do what we do best, raising cattle.


Phone: 660-433-6300 Fax: 660-433-6315


or office.

Below is a screenshot of the calculator off of the website and explanations of what each entry is and how you can use it in doing your own quote. We hope that this tool will help give you the information you need to evaluate the potential of a group of cattle to make a profit.

Our Website and the LRP Calculator (continued)

Business Tagline or Motto

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1. This is a drop down box in which the producer will need to choose the weight class in which they should weigh when you will possibly market them.

2. The number of head in the group that you wish to make the quote for.

3. The weight per head at the start of the potential contract period.

4. The price per CWT paid per head or the value per CWT per head of retained livestock.

5. The estimated pounds of daily gain that you are trying to achieve based on the amount of feed and forage that you will make available per each animal.

6. The estimated cost of gain per pound based on the costs of your feed ration.

7. A drop down box in which you select the length of the available coverage contract that is available for that day. (Note: Availability of contract lengths will vary daily due to market conditions)

8. A calculation using the entered Target Daily gain times the length of the selected Contract Coverage plus the entered starting weight to give you the estimated weight of each animal unit.

9. The dollars you have invested in each animal unit at the end of the contract coverage peri-od.

10. The total amount of dollars invested for the quoted group.

11. The dollars invested per CWT per each head.

12. The highest coverage price available for that day for the selected length of coverage. (There may be other levels available for the selected coverage length. Contact your agent)

13. The calculated difference between your break even cost per head (Line 9) and the total dollars per head of coverage ( Line 12 times Line 8).

14. Estimated producer premium per CWT of target weight. (Total premium per head = Line 14 times producer’s targeted ending weight: ex. $5.39 x 7.4 cwt = $39.99 per head premium)

15. Date coverage will end

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Gibson Insurance Group

“The Risk Management

Specialists”

Agents

Main Office

Dean Gibson Brian Huhmann

Matt Rowell

660-433-6300

Boonville

Steve Timm

660-621-1212

St. Elizabeth

Bob Oligschlaeger

573-680-7794

Conway

Davey Perryman

417-719-8659

Montrose

Brandon Jurgensmeyer

660-351-2475

West Plains

Shane Rhoads

417-293-0661

Non-Discrimination Statement

Non-Discrimination Policy The U.S. Department of Agriculture (USDA)

prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability,

sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of

an individual's income is derived from any public assistance program, or protected genetic infor-

mation in employment or in any program or activity

conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or

employment activities.)

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