Returning milk from forage to the levels seen about ten years ago offers real scope for increased margins according to Promar principal consultant Emma Thompson.
Since 2000, several trends have emerged in milk production and Mrs Thompson believes the current economic environment means dairy farmers must really focus on milk from forage and precise use of purchased feeds.
Admittedly, 2012-13 was a very difficult year, with feed rates having to increase to make up for atrocious grazing conditions and lower silage yields in many cases, but the overall trend of purchased feed displacing forage has been growing for many years.
She says when quotas were introduced the industry really focussed on reducing purchased feed use and controlling the dependence on purchased feed. But during the past 13 years or so different economic drivers have influenced how milk is produced.
• Milk from forage has declined as feed rates have increased
• The economics of marginal milk from purchased feeds has to be challenged
• Increasing milk from forage to the level achieved in 2000 will be worth more than £100/cow in increased margin
• Dairy farmers have shown they can adapt and produce more from forage
• Set targets and focus on delivering them.
“Around the turn of the century the milk price:feed price ratio – the fundamental determinant of dairy herd profitability – was at a 15-year high, with each litre of milk paying for about 1.65kg of feed (see graph 1). This, combined with the weakening effect of quotas, provided the encouragement to push for higher yields, which many farmers did.
“This led to a steady increase in the feed rate a litre, which rose from an average of 0.29kg/litre in 2000 to 0.38kg/litre in the year ending March 2013. This last result is an increase from 0.36kg/litre in 2012, a reflection of the bad season, although it is noticeable that feed rate a litre was actually higher in 2010-11 than 2012-13. Nevertheless, feed rate continues upwards.”
Mrs Thompson is quick to acknowledge that the extra feed has supported higher yields. She says during the past 13 years:
• yield for every cow has risen from 6,700 litres to 7,350 litres (graph 2)
• concentrate fed has increased from 1,940kg a cow to 2,790kg
• the extra 650 litres have been produced from an additional 850kg of concentrate and yield from forage has fallen as a consequence
• in 2000 the average farmer produced 2,275 litres a cow from forage (34% of all production)
• by 2012 this had fallen to 1,275 litres a cow (17.5% of production).
Mrs Thompson suggests that while the approach to drive higher yields based on increased purchased feeds might have been economic when the milk price:feed price ratio was favourable, the situation is different now. With the ratio returning close to 1985 levels and with feed prices remaining volatile, it will be essential to drive production from forage and ensure concentrates deliver additional production, rather than substituting milk from forage.
“With feed accounting for about 40% of the cash cost of dairying, it is vital purchased feed does not displace forage in the diet. It is about making the best use of the resources available to maximise home-grown production.”
Mrs Thompson says the good news is dairy farmers have shown themselves capable of producing more milk from forage. Returning to earlier levels of performance is not only achievable, but will be profitable. She also stresses that high yields a cow and high yields from forage are not mutually exclusive.
She says if the average dairy farmer could return to producing 2,275 litres from forage – the level achieved in 2000 – they would save 450kg concentrates a cow – about £110 a cow at current prices, or £16,500 for a 150-cow unit.
“This would mean producing 31% of all milk from forage, still below the percentage achieved in the past. This is a huge opportunity and every dairy farmer should be looking to grasp it.
“A whole range of factors will lead to more milk from forage, including focusing on both forage quality and quantity for grazed as well as conserved forages, tight control over feeding and ensuring a well-balanced diet is fed. Other factors such as cow health, fertility, accurate feed allocation, cow environment and genetics will also have an effect.
“The most crucial thing is to challenge the cows to produce from forage and to monitor performance. If the TMR is formulated for M+30 litres, are the cows giving M+30? Are parlour feeders accurate and properly programmed? Setting targets and focusing on achieving them will allow an increase in milk from forage and improved margins.”
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