Saturday, April 20, 2024

Put the focus back on profit

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Here’s a curly question – are you making money from milk or milk from money?
Reading Time: 4 minutes

It’s the question DairyNZ principal scientist Dr John Roche posed to a group of 12 dairy farmers selected in the Agriseeds Grass into Gold programme aimed at helping farmers value, manage,

and use pasture more efficiently with a view to improving profitability.

Time and time again Roche said he had seen farmers focused on production not profit, with production coming as a result of additional supplementary feeding often assessed on the basis of marginal analysis.

He reviewed four years of physical and financial data from about 5000 Irish farmers while working at Moorepark Research Centre last year and found that net profit declined linearly with increasing supplement use.

That was because as feed costs went up so too did total costs but it wasn’t a one-for-one relationship.

“Total costs go up at a rate of 1.5 times that of the feed costs. It’s why marginal analysis on its own is so dangerous, especially when it comes to supplements,” he said.

In the Irish data depreciation and repairs and maintenance costs took a jump, with increasing supplement use adding to costs beyond the amount spent on supplements alone.

To use supplements profitably farmers must first understand what drives profit, he said.

Analysis of the Irish data showed operating profit was directly linked with pasture utilisation, with profit declining as pasture utilisation dropped.

As part of the same Irish study Roche found that as supplement use increased, pasture utilisation declined, with a substitution rate of 60%.

“So for every extra kg of concentrate equivalent added into the system pasture drymatter (DM) dropped by 60% and I have very similar data for Mid-Canterbury,” he said.

To make money from supplements you have to feed the wedge not the cow and put more focus on the pasture, he said.

When farmers graphically displayed their pasture covers, with paddocks listed from longest to shortest to produce a feed wedge, and overlaid it with the demand line, any feed deficit became apparent.

That was when supplements should be used to extend the grazing rotation length. The effect of extending the round was to delay grazing until the ryegrass plant had pushed on to the three- to four-leaf stage, which increased growth rates and the amount of DM and energy available to the cows.

But it meant moving past the “sweet spot” farmers usually aimed for, described in the three-leaf grazing principal, pioneered by Massey University professor of dairy production Danny Donaghy.

It’s based on the fact the ryegrass plant produces 10-15% of its growth during the first-leaf stage, 30-40% in the second-leaf stage and 45-55% in the third-leaf stage. Once the plant is growing its third leaf, usually between 20 and 25 days in mid-late spring in Canterbury, quality and quantity are at their optimum point.

“If we’re going to use supplements because we have a feed deficit we need to use them to delay grazing.”

The fear might be that this would lower the energy available to cows because beyond the third-leaf stage the earlier leaves begin to die and quality starts to decline.

But Roche said pasture quality analyses showed factors such acid detergent fibre, neutral detergent fibre, non fibre carbohydrates and even lignin don’t change greatly enough to create major negative effects on grass quality if grazing’s delayed until into the fourth leaf stage given the extra cover that will be available.

Increasing the rotation length by delaying grazing by five days or half a leaf stage could increase drymatter (DM) production by 1tDM/ha over the year or by about 5%, while metabolisable energy (ME) density was reduced by just 0.3 megajoules (MJ) ME/kg DM or 2.5%.

“So you’re actually winning in terms of energy yield,” he said.

Supplements were commonly used to increase pasture cover in autumn and as a tool at that time to profitably manage pasture it’s no less relevant today than it was 40 years ago when it was first advocated by Dr Arnold Bryant.

If average farm cover was 1500kg DM/ha and pasture was growing at 40 kg DM/day, but you could push that cover out to 1800kg DM/ha, you’d find you’d be growing far more grass.

“Grass grows grass – it’s true and that’s put to good use in the autumn but that phrase has been misused by nutritionists who say you should leave grass behind in a normal grazing round when there is no feed deficit.”

Bryant’s studies in Waikato found that for every 100kg DM/ha increase in farm cover, growth rate increased by 7.4 kg DM/day.

But there was an upper limit to this and a decline in pasture quality beyond the four leaf stage would start to compromise milk production.

The other place supplements could be used was to get the right residual.

 “We need to feed cows when they are hungry and the best way to determine if they’re hungry is to look at what they’re leaving in the paddock.”

Numerous studies had found the ideal post-grazing residual was about seven clicks on the rising platemeter. Anything less than that would reduce subsequent pasture growth, except going in to winter, where high residuals could limit tilling in the following spring.

Research showed that during the grazing season residuals of 1300-1500kgDM/ha or 6-8 clicks gave a response of 8-12g MS/ MJME of supplement. If the residual was 1500-1800, or 8-9.5 clicks, the response was 3-7.5g MS/MJME.

If residuals were greater than 1800kg DM, the response range could be negative because of the subsequent decline in pasture quality.

“In other words feed a hungry cow.”

“Of course everyone says they are grazing to 1500kg DM/ha but DairyNZ’s research shows otherwise.”

Survey studies showed that 50% of paddocks were outside the 7-9 click range and Roche estimated it was more likely about 20% would be grazed to 1500kg DM/ha.

His advice on feeding supplements was to first go back to the basics for your business and define the system you wanted to operate, then work on the finer details of how to maximise profitability out of that system.

Regardless of the choice of system though, learn how to grow and feed as much high-quality grass as possible.

“Then set a target range of supplement you will feed each year; that should be a key part of your business strategy. “Three to 500kg DM/cow to me is a very resilient system.

“It allows you to build cover in the autumn, put weight on cows, achieve profitable milk production and shields you from the risks of feed costs increasing.”

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