Economic Analysis of Replacing Endophyte-Infected with Endophyte-Free Tall Fescue Pastures

lengthened gestation terms (Waller and Fribourg, 2002; Hemken et al., 1979). The U.S. economic loss in beef Cattle (Bos taurus) consuming tall fescue pastures infected with the associated with this endophyte was estimated at over endophyte Neotyphodium coenophialum often suffer physiological disorders that reduce animal performance. One solution is to replace $600 million annually (Hoveland, 1993), which demonendophyte-infected tall fescue pastures with an endophyte-free mixstrates the relevance of this research to farmers. ture. A benefit-cost analysis was conducted to determine the profitEconomic losses from animals consuming tall fescue ability of pasture restoration. The profitability of this action depends have led to the introduction of endophyte-free tall feson the percentage of endophyte in existing pastures, the discount rate, cue varieties to replace the stands containing the endostand life of the endophyte-free tall fescue variety, pasture stocking phyte (Ball, 1992). Stands of endophyte-infected tall fesrates, product price, baseline calving rates, and the initial investment cue persist for many years. The endophyte has no means of replacement. In our benefit-cost analysis, assuming the stand life to spread horizontally. Once the endophyte-free stand is of endophyte-free tall fescue is 12 yr and the stocking rate is 1.20 established it should remain endophyte-free unless enhead ha 1, we determined a critical infestation level of 74%. Thus, dophyte-infected seeds are introduced (Ball et al., 2003). under these conditions pasture replacement should be profitable if, in the existing pastures, 74% of the fescue plants are infected with However, endophyte-free tall fescue is not as tolertoxic endophyte. In sensitivity analyses, realistic variations in the ant to overgrazing, drought, and other stresses as endodiscount rate, pasture stand life, stocking rate, product price, baseline phyte-infected tall fescue (Malinowski and Belesky 2000; calving rate, and initial investment of replacement generated new West et al., 1988). Greenhouse studies confirm the ennet present values and critical infestation levels. The most influential hanced drought tolerance of endophyte-infected tall fesvariable was the stocking rate. The critical infestation level decreased cue due to the presence of the endophyte (Arachevaleta dramatically to 25% at a stocking rate of 4.0 head ha 1 and increased et al., 1989). Also, endophyte-free varieties are more susdramatically to 93% at a stocking rate of 0.82 head ha 1. Since infestaceptible to certain herbivorous insects, parasitic nemation levels are often 70%, these results imply that for many livestock todes, and pathogenic fungi (Jeger, 1999). Researchers producers pasture replacement might be profitable compared with have experienced difficulties establishing endophyte-free retaining endophyte-infected fescue stands. stands, particularly under conditions such as the drought of 1988 (Chestnut et al., 1991). Also, endophyte-infected tall fescue plants tend to yield greater forage dry matter T fescue [Lolium arundinaceum (Schreb.) Darcompared to endophyte-free controls (Bouton et al., bysh Festuca arundinacea (Schreb.)] is commonly 2002). Thus, although endophyte-free tall fescue is betused for beef cow/calf production (Hoveland et al., ter for the health and performance of grazing animals, 1997), occupying nearly 10 million ha in the southeastern endophyte-free tall fescue is not as hardy, persistent, or and east-central regions of the USA (Hannaway et al., productive as endophyte-infected tall fescue. 1999). Although tall fescue is a well-adapted pasture grass In recent years novel, nontoxic endophytes have been in the USA, it has a reputation for causing poor perforintroduced into tall fescue breeding stock, and the remance by grazing livestock because of the presence of the sulting cultivars have appeared benign to grazing cattle fungal endophyte Neotyphodium coenophialum (Lomas (Bouton et al., 2002). Initial performance assessments of et al., 1999), originally identified as a seedborne symbiont these materials appear promising but variable (Bouton in cultivar Kentucky-31 and its derivatives (Bacon et al., et al., 2002), so additional studies are needed to fully 1977). Animals grazing on tall fescue infected with this address the economics of these new cultivars. Then, the endophyte often develop physiological disorders that relative economic benefits of nontoxic endophytes can reduce animal performance and profitability. Poor catbe compared with those of endophyte-free cultivars as tle performance is exemplified by reduced weight gains, analyzed in this study. lower milk production, poorer conception rates, and Published benefit-cost analysis does not take into account endophyte effects on animal fertility. There is inJ. Zhuang, Dep. of Industrial and Systems Engineering, 456B Mechancreasingly strong evidence that the presence of the endoical Engineering Bldg., 1513 University Ave., Univ. of Wisconsin, phyte in tall fescue pastures adversely affects pregnancy Madison, WI 53706-1572; M.A. Marchant, Dep. of Agricultural Economics, Univ. of Kentucky, Lexington, KY 40546-0276; C.L. Schardl, rates in cattle and other livestock. For example, concepDep. of Plant Pathology, Univ. of Kentucky, Lexington, KY 40546tion rates of 67% were reported for cows grazing on tall 0312; and C. Murrell Butler, Unified Foodservice Purchasing Coop., fescue pastures with a high concentration of endophyte 12000 West Hwy 42, Goshen, KY 40026. This is journal article no. infection, compared with 86% for pastures with low con04-04-187 of the Kentucky Agric. Exp. Stn. Received 23 Apr. 2004. centration (Gay et al., 1988). Danilson et al. (1986) reEconomic Analysis. *Corresponding author ([email protected]). ports a 43% increase in pregnancy rates of cattle consumPublished in Agron. J. 97:711–716 (2005). ing low vs. high endophyte-infected tall fescue pastures. doi:10.2134/agronj2004.0108 This research presents an investment analysis of reno© American Society of Agronomy 677 S. Segoe Rd., Madison, WI 53711 USA vating existing endophyte-infected pastures with an en711 Published online April 27, 2005