Many farmers and advisers quote the cost of growing a kilogram of pasture drymatter at anywhere between 5 and 15 cents. However, they ignore the true cost and when the capital value per hectare is included at today’s value a totally different picture emerges, as can be seen in Table 1.
By applying nitrogen fertiliser and feeding off-farm supplements, more cows producing more milksolids per hectare means a lower total cost per kilogram of milksolids, even though the total cost per kilogram of drymatter is higher. Conversely, reducing cow numbers and bought-in supplements, resulting in lower production, increases the total costs per kilogram of milksolids.
Many farmers are making knee-jerk decisions because of the lowered payout, but in many situations, if those decisions aren’t backed up by a close scrutiny of the results of the actions and a look at the options, they could be throwing the baby out with the bathwater.
A reduction in cow numbers and a total elimination of imported supplements could be the worst thing to do. In most circumstances, by continuing to apply nitrogen and feeding supplements at strategic times of the year, returns will outweigh the costs even at a low payout especially as supplement prices become lower.
The key to optimum supplement feeding is identifying when to introduce supplements and when continuing feeding will result in wasting pasture through substitution. By using tools like DairyNZs’ Supplement Price Calculator an estimate of the returns per tonne of feed can be calculated based on post-grazing residuals, kilograms of feed offered, feed cost and milksolids payout.
It is always well to remember the words of Keith Woodford, Professor of Agri-Food Systems at Lincoln University: “hungry cows always punish the farmer”.
- Tony Waugh is a semi-retired Kimbolton dairy farmer who questioned Brian Hockings’ Demo Farm column claim that the cost of producing a kilogram of pasture drymatter was less than 5 cents (Dairy Exporter, October p100). Tony was a dairy farmer for 30 years in Apiti and Kimbolton, and developed a 750-cow conversion farm in the 1990s. He now works part-time for a spraying contractor and is working towards certification in Sustainable Nutrient Management and use of the Farmax Farm System programme with the aim of consultancy work around nutrient management planning. He has two children involved in farm consultancy in Waikato and Canterbury.
