The average cost of production for New Zealand dairy farmers has crept up and many farmers struggle to breakeven at $5.25/kg milksolids (MS).
The industry has hidden under a security blanket with previous high milk prices, but the reality is farmers are now facing a $3.90/kg MS milk price.
There is nothing like serious hardship to focus the mind and focus on precision, DairyNZ general manager research and development David McCall says.
DairyNZ’s stance is farmers should strive to feed cows pasture-only for at least six months of the year and maybe longer.
The levy-funded organisation is recommending farmers set their stocking rate appropriately to achieve that target so they maximise pasture and have less reliance on bought-in feed.
DairyNZ discussion groups are running Pasture First Workshops to help farmers alter their system. Being pasture-first was about utilising the feed already paid for and grown onfarm and maximising the return from that, McCall said.
“A lot of people would say they were pasture-first, but that is open to conjecture.”
It wasn’t about going back to old farming styles, but using proven principles to maximise return with minimal cost, he said.
“Just pulling back is not the right thing. It’s about getting more precision in dairy farming.
“At the moment having a high reliance on bought-in feed is too risky with low milk prices, it’s a risky strategy.”
Spring and early summer were the money season and if farmers lost the opportunity in spring they lost pasture quality and future milk production in late summer and autumn.
The potential loss of pasture growth later in the season was 0.5-1 tonne kg DM/ha or the equivalent of 30-40 cents/kg MS.
It became clear in spring if farmers were pasture-first or not, with the first indicator being farmers feeding supplement while making silage or topping paddocks to control quality, McCall said.
“You’re adding cost on top of cost on top of cost.
“There should be no need to feed supplements during spring when pasture growth is greater than animal demand. That’s one area where we have run off the rails.”
Farmers had fallen into this trap because of commercial interest in selling products to farmers based on increasing milk production, McCall said.
“Farmers are being sold these things on not all of the facts and not a full system understanding of the effects. They might see the short-term response but they’re not seeing the underlying effect on their farm.”
While some products could increase production, the marginal production increase was costing farmers more through the inefficiencies they caused in the system.
Two trials DairyNZ completed last season in Waikato and Taranaki showed feeding palm kernel during spring increased milk production, but that was cancelled out by poor production in autumn.
The challenge for DairyNZ was to do more comparative trials to show farmers the results, McCall said.
Margin cost was a very hard thing for farmers to calculate. It came unstuck when they weren’t factoring in the milk production penalty in late summer and autumn because of lost pasture quality or the penalty of paying to make extra grass silage in spring and pay for bought-in feed.
“When you feed supplements in spring when you have surplus pasture, you’re not allowing for the negatives that are occurring.”
Once farmers were achieving a pasture-first operation they could look at their other strategies, McCall said.
The system or strategy farmers decided on should be based on how much reliance they wanted on bought-in feed.
Farmers should not feel trapped into a higher system because they had invested capital in meal feeders or feedpads.
“Just because you have the infrastructure it doesn’t mean you have to use it.
“It’s cheaper not to use it than be losing money above and beyond the interest cost by using it. That’s where people get into the mental trap, I built this thing I better use it.”
The Pasture First Workshops running through DairyNZ discussion groups are helping farmers achieve maximum pasture utilisation.
