Friday, March 29, 2024

PULPIT: Target high-end foods customers

Avatar photo
New Zealand food production’s contribution to world supply needs to be targeted at the value-added market for naturally produced foods versus laboratory-to-factory produced food.
Reading Time: 3 minutes

There is a need for recently developed alternative food supply created in a test tube to meet projected demand because the world is unlikely to produce enough food for future demand and poorer civilisations need to be fed.

That gives NZ the opportunity to be at the high-end of value with naturally produced, trustworthy, added-value products using our inherently competitive advantages. 

With the focus on trusted, natural foods we can inherently keep the cost of production low compared to most of the world by not needing to use as much machinery or animal housing while having the potential to enhance a much larger profit margin.

NZ’s main competitive advantages with stock farming come from the free-range ability of our system using electric fences to allocate feed, with our complementary climate of excess water supply and great soils.

Having a reliably sustainable use of resources including land, water, stock and people is a resilient system resulting in profit and security for NZ. 

Maximising more home-grown resource use before export sales keeps as much added-value from the beginning of production all the way to the sales. 

The profitability and best use of resources must consider whether the inputs are strategic or tactical.

The underlying cost of strategic feed is larger than tactical decision feed costs. 

Essentially, strategy involves planning a business’s next move and tactics involve physically carrying out the plan. The difference between the two concepts can be remembered with the phrase: strategic is doing the right things, tactical is doing things right. Tactical decisions are remade in a shorter time frame to help ensure the strategic plan and results.

Tactical decisions on whether to grow or buy feed in a shortage require considerations of the level of current and expected pasture shortage, ie the level of pasture residual if extra feed was not fed and the flow-on effect of that on pasture regrowth and the length of milk-producing days left before drying off for calving again.

But pasture substitution can be a waste if not used.

Alternatively, pasture substitution can be positive by extending the grazing rotation length, rebuilding the farm’s average pasture cover and lifting growth rates, raising the pasture resource to allow extension of days in milk or weight gain for the season, reduce the risk of animal condition score falling and reduce the chance of over-grazing pasture. 

Pasture is the largest crop in a pasture-based system and must be managed well to maximise yield. 

Over-grazing is very expensive to the pasture’s yield as ryegrass tillers die and whole plants are lost then require replacement. 

Research has shown in severe pasture deficits (eg, unsupplemented post-grazing residual of ≤1200kg DM/ha for a milking cow) as much milk is produced after the period of supplementation as during the feed deficit when the supplements are offered.

When cows are relatively well fed (eg, unsupplemented post-grazing residual of ≥1600kg DM/ha) the deferred milk production is only about 10% of the immediate response.

Nutritional properties of the supplementary feed to consider inlcude energy, protein, non-structural-carbohydrate (NSC), fibre, minerals and drymatter percentage as well as the most limiting nutritional factors to counter and the likely results of proportionately more protein or fat production.

Cost of the supplementary feed relative to product sales and the level of use of the supplementary feed by the way it is harvested, bought, transported, stored and fed must also be considered.

The cheapest form of feeding is an electric fence reel. Contracted sales can help secure margins.

The timing of feeding supplementary feed can affect the level of peak production, maintain production, affect mating results when in energy deficit and the length of total days in milk for dairy and animals partitioning the feed nutrients into milk production or liveweight gain.

For dairy a larger percentage of the extra energy is likely to go into liveweight gain in late lactation than in early lactation and for dry stock maintaining target growth rates or better.

Strategic decisions on whether to grow or buy feed for an extra stocking rate require the list of tactical considerations above and strategic cost considerations.

They are:

• Annual animal health and reproduction costs of the extra stock;

• Capital costs for larger infrastructure and machinery to farm the extra stock and supplementary feed;

• Opportunity cost of alternative choices;

• Changes in other costs of less pasture silage costs, pasture fertiliser, crop yield risk and;

• Extra labour if the numbers are much higher and the improved infrastructure or technology doesn’t cater for it.

The extra strategic costs have a longer term of payback return than the tactical cost decisions.

Choosing the correct stocking rate to help maximise pasture growth and use can strategically provide a more effective and efficient system as long as the strategic costs are profitable in a period of low commodity prices. If most of the supplementary feed is being home-grown the cost remains stable during the period of high commodity prices.

A supplementary feed reserve held as inventory can provide a degree of resilience in variations of weather conditions.

Total
0
Shares
People are also reading