Friday, March 29, 2024

Supplement or substitute?

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More than once I have questioned the sense of the increasing trend away from our reliance on cheaply produced pasture to a much greater dependence on bought-in feeds – notably palm kernel. The current trial at the Stratford Demonstration Farm is, of course, looking at aspects of this in its comparison of a high-cost, high-input intensive system, with a moderately stocked low-input, low-cost system. These systems are being evaluated on both economic performance and environmental impacts.
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There can be little doubt that the trend towards intensification is being driven largely by the high prices experienced in the dairy industry in recent years. This includes product prices obviously, but also land prices and farm costs. The sensibility of this trend would appear to be validated by an analysis of the Demonstration Farm trial results from the last season, which showed that a significantly higher economic farm surplus was obtained from the intensively farmed system. However, as I reported in issue, this result was obtained with a payout of $8.40, and if the payout was to fall to $6 the result would swing heavily in favour of the low cost traditional system. So fast forward to the present and – hullo – the chooks are rapidly returning to the domesticity of their perches – and if the impact of a $6 payout is not considered significant, try $5.

The low payout must now call into question the role palm kernel is playing in our farming systems. Calculations done in the past have shown that over the year, on the average dairy farm, there will be about 25kg drymatter (DM) of feed consumed for every kg MS produced. Twenty-five kg DM at the $0.30/kg DM average price for palm kernel gives $7.50 – still a bit of a profitable feeding for a gain of 1kg milksolids (MS) at an $8.40 payout but definitely not so at $5-$6. What this means is that at the lower payout palm kernel will have to be used much more judiciously if it is to be fed profitably. It will have to be used as a complementary feed rather than a supplementary one. This means its use will be justified by only feeding it to further enhance the production being obtained from pasture.

The best example is the question that is currently exercising quite a few minds at present – is it profitable to carry on supplementing with palm kernel in the spring, or for the whole season, when there is more than an adequate supply of quality pasture available?

At an $8-plus payout the question is not critical, because even if it doesn’t add to production and just substitutes for pasture the palm kernel can still give a slight profit in its own right. However this is not the case with a $6 payout. If the palm kernel is being supplemented to pasture-fed animals and is not adding to daily production then the animal must be substituting pasture for palm kernel. This will create surplus feed which will be wasted. The palm kernel exponent will say the astute operator will turn the surplus pasture into silage. In this case the so-called astute operator is bloody stupid because what he or she is doing is taking one high-priced supplementary feed and using it to create a surplus from which to make, at some considerable cost, another high-priced feed, when the whole doubled-up operation could have been avoided.

The question has to be two parts – first, will feeding palm kernel when ad-lib quality pasture is available add to production, and second, if so, will it add enough production to pay for the palm kernel required? In other words, what is the economic viability of the whole proposition?

Some of the data from the demonstration farm might help to answer these questions, although it’s far from definitive.

From late September to the time of writing (October 16) there ad-lib pasture has been available to both herds. The intensive herd has been continually supplemented with palm kernel since calving. Both herds were condition scored on September 30 and both had lost condition since calving, with the low input herd at 4.6 and the intensive herd at 4.9. Liveweights were 387kg and 404kg respectively (Jersey cows)

On September 29 the low-input herd was producing 2kg MS/cow and consuming 17.5kg DM pasture. The intensive herd was producing 2.1kg MS/cow, and consuming 15kg DM pasture and 3.7kg DM palm kernel. Clearly the small amount of milksolids gained by the intensive herd would not pay for the palm kernel used to obtain it.

On October 6 the figures changed. Production was 1.93 kg MS/cow and 2.14 kg MS/cow. Consumption was 17kg DM/cow pasture, and 15kg DM/cow pasture and 2.7kg DM/cow palm kernel. 

On October 13 production was 1.91kg MS/cow and 2.18kg MS/cow. Consumption was 17kg DM/cow pasture, and 16kg DM/cow pasture and 2.7 kg DM/cow palm kernel.

The conclusion is that feeding palm kernel did slightly increase total drymatter intake, and that substitution for pasture occurred. It would be reasonable to conclude that the increased drymatter intake resulted in some production increase.

If we average these figures for the three weeks that ad-lib pasture was available, we get an extra 0.19kg MS produced daily from 3.03kg palm kernel. Valuing the milk at $5.30/kgMS and the palm kernel at $0.30/kgDM, we get 91 cents worth of palm kernel giving 57 cents of milk.

On this basis it would appear that a farmer feeding palm kernel and achieving a high level of production could, because the margins are so small, cut out the palm kernel feeding and accept a marginal drop in production as a result. While this may lose a few bragging rights the result would be a few extra dollars in the bank. Obviously these figures are not enough to give a definitive indication of the effect on production. However I have always maintained that the dairy farmer has a major advantage in management tools in that he or she has a daily record of production that is perfect for monitoring changes in terms of causes and effects. For anyone questioning the financial viability of supplementing with palm kernel the solution is simple – suck it and see. Give it a few days to settle and then do the sums. If the drop in production, if any, is less than the value of palm kernel saved, then the answer is obvious.

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