Pasture or cows - an alternative perspective of a dairy farming enterprise
The need to critically assess the performance of farm businesses has given us the opportunity to view the dairy farm from the perspective of its core enterprises.
There are three aspects of dairy farming that can be treated as mutually exclusive.
They are:
- Feeding and milking the herd
- Rearing replacements
- Growing pastures and crops
The ultimate end products are fat, protein and lactose for human consumption. To produce these we convert either home grown or purchased feeds to milk by utilising the cow. To be dairy farmers, it is not essential to grow pastures as many feedlot dairies in the world can prove. Nor is it necessary to rear replacements if they are available in the market place.
In Victoria we have focused on dairy farming as being a combination of all three of these activities. At times, the temptation to treat them as one causes us to compromise one for the sake of another. For example, yearlings may be given pasture in priority to milkers. Cows may be used to harvest poor quality late spring pastures at the expense of production instead of using machinery. In the winter cows may be grazed on wet paddocks causing severe pugging to the detriment of the pasture.
It is more common now for farmers to view these enterprises as separate operations with the advantage that they are less likely to make compromising decisions to the detriment of each enterprise.
From a broad perspective, such a farmer will approach a season as follows:
- 200 cows, 250kg fat target
- 120 hectares 25% replacements
Feed required will be approximately 1100 tonnes for milkers and 250 tonnes for replacements
The feed requirements for milkers, of 1100 tonnes, will then be sourced as:
- Home grown pasture
- Crops
- Home grown silage and hay
- Purchased concentrates
- Purchased hay
- Agistment
It could be assumed that in a normal year a pasture utilisation rate of 7 tonnes per hectare would supply this feed 840 tonnes.
When the farmer focuses on the individual enterprises of feeding cows and harvesting milk, he/she will recognise that a shortfall of 260 tonnes is imminent. In a poor season this could increase by another 200 tonnes such as has been the case this season. The farmer has the option of taking no action and allowing production to drop below target, or purchase feeds can be purchased to fill the shortfall. Where there is a focus on production, the shortfall will be met in a planned strategy that involves purchasing grain throughout the year and having a reliable source of forage or agistment. In a better than average season production either increases above target or purchased feed inputs are decreased.
What is the end result of a focused strategy?
Once farmers become accustomed to feeding cows according to target production requirements rather than whatever the season offers, they are taking control of the production system.
In a tough season such as this one, production focused farmers will still achieve the target of 250kg of fat per cow (50,000kg). Given that the season may probably cost 2 tonnes/hectare in annual growth, the shortfall is 2 tonnes x 120 hectares or 240 tonnes. To purchase this feed at a cost of $200/tonne, being average dry matter cost of crushed grain or legume hay, it will cost $48,000.
If the focus is on pastures alone and production drops, the fall in production will be reflected in
- lighter condition score of cows
- lower value of cull cows
- less milk production
Recent studies of the cost of removing a tonne of feed per cow from the diet evenly over the whole year, show a drop in yield of 40 - 60 kg of fat per cow. In the above example, a 1 tonne shortfall in feed inputs will reduce the production by say 50 kg of fat. At $6.00 / kg this is equivalent to $300 / cow or $60,000. The gains are the flow on effects of better condition score and the difference of $12,000 between feed costs and greater milk income.
In practice, there are many farmers who lack the confidence to fill the feed gaps adequately. They find themselves in years such as this with poor cash flow in summer and autumn and a poor start to the next lactation through lower herd body condition score. The decision to focus on feed requirements rather than pasture availability needs to be made early in the year when spring feed begins to deteriorate. Production targets need to be adhered to and feed inputs increased as pasture feed becomes limiting.
The profitability of the farm enterprise will be a function of both the ability to produce milk and the cost of the feed required. It is important not to be confused with average cost of feeds versus the marginal returns. These marginal returns are difficult to measure since there is the need to consider the effect over the whole lactation. For example, inputs prior to availability of crops, in early summer or inputs in late winter in a wet year are situations where comparing input and output costs is an inaccurate measure of the true value of such inputs. In the short term these input costs will show little profit. However, they allow greater profit to be made further into the lactation.
In summary, the farm which shows most profit will be combining a highly efficient pasture/crop enterprise with a highly effective cow feeding and milk harvesting program. It is becoming more evident through bench marking observations, that in this region, a focus purely on pastures will limit the ability to generate profits from the farm business compared with a combined focus on pastures and production.
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