Production and economic responses to intensification of pasture-based dairy production systems

Abstract

Production from pasture-based dairy farms can be increased through using N fertilizer to increase pasture grown, increasing stocking rate, importing feeds from off farm (i.e., supplementary feeds, such as cereal silages, grains, or co-product feeds), or through a combination of these strategies. Increased production can improve profitability, provided the marginal cost of the additional milk produced is less than the milk price received. A multiyear production system experiment was established to investigate the biological and economic responses to intensification on pasture-based dairy farms; 7 experimental farmlets were established and managed independently for 3 yr. Paddocks and cows were randomly allocated to farmlet, such that 3 farmlets had stocking rates of 3.35 cows/ha (LSR) and 4 farmlets had stocking rates of 4.41 cows/ha (HSR). Of the LSR farmlets, 1 treatment received no N fertilizer, whereas the other 2 received either 200 or 400 kg of N/ha per year (200N and 400N, respectively). No feed was imported from off-farm for the LSR farmlets. Of the 4 HSR farmlets, 3 treatments received 200N and the fourth treatment received 400N; cows on 2 of the HSR-200N farmlet treatments also received 1.3 or 1.1 t of DM/cow per year of either cracked corn grain or corn silage, respectively. Data were analyzed for consistency of farmlet response over years using mixed models, with year and farmlet as fixed effects and the interaction of farmlet with year as a random effect. The biological data and financial data extracted from a national economic database were used to model the statement of financial performance for the farmlets and determine the economic implications of increasing milk production/cow and per ha (i.e., farm intensification). Applying 200N or 400N increased pasture grown per hectare and milk production per cow and per hectare, whereas increasing stocking rate did not affect pasture grown or milk production per hectare, but reduced milk production per cow. Importing feed in the HSR farmlets increased milk production per cow and per hectare. Marginal milk production responses to additional feed (i.e., either pasture or imported supplementary feed) were between 0.8 and 1.2 kg of milk/kg of DM offered (73 to 97 g of fat and protein/kg of feed DM) and marginal response differences between feeds were explained by metabolizable energy content differences (0.08 kg of milk/MJ of metabolizable energy offered). The marginal milk production response to additional feed was quadratic, with the greatest milk production generated from the initial investment in feed; 119, 99, and 55 g of fat and protein were produced per kilogram of feed DM by reducing the annual feed deficit from 1.6 to 1.0, 1.0 to 0.5, and 0.5 to 0 t of DM, respectively. Economic modeling indicated that the marginal cost of milk produced from pasture resulting from applied N fertilizer was less than the milk price; therefore, strategic use of N fertilizer to increase pasture grown increased farm operating profit per hectare. In comparison, operating pro...

Some challenges and opportunities for grazing dairy cows on temperate pastures

“…Furthermore, milk price and supplemental feed price play a relevant role on the system's profit through their direct effects on income and variable costs (Baudracco et al, 2010;Ramsbottom et al, 2015). However, the best approach to follow may depend upon the relationship between milk price and supplemental feed price (Macdonald et al, 2017). In the United Kingdom and United States, fixed costs/cow are high due to the considerable commitment to housing, feed storage, manure handling and associated labour.…”

“…However, lower substitution rates were predicted by Delagarde et al (2011) who obtained values from the "GrazeIn" model varying between zero at a low daily herbage allowance (10 kg DM/day > 5 cm) to 0.6 at a high daily herbage allowance (24 kg DM/day > 5 cm) with an average substitution rate of 0.3 kg decrease in grazed herbage DMI/kg supplement DMI. The main factor determining the economic benefit of the supplement is the relationship between milk price and supplemental feed price (Macdonald et al, 2017).…”

“…The emphasis in many regions is on production per head, especially where grazing plays a central role in the sustenance of the family and local community or where nutritional status of the individual animal is a key aesthetic attribute (Coote, 1992). Therefore, production per hectare (ha) is often a more relevant factor than production per head (Macdonald et al, 2017). Therefore, production per hectare (ha) is often a more relevant factor than production per head (Macdonald et al, 2017).…”

“…Despite a lower average herd size, output of milk per herd was 51% higher in the United States than in New Zealand in 1986 and almost double in 2016, reflecting the large difference in average annual milk output per cow between the two countries. Level of pasture supplementation also has a significant effect on profit; increasing the amount of supplement, especially at lower milk prices, is reflected in decreased profitability (Macdonald et al, 2017;Patton, Shalloo, Pieerce, & Horan, 2012;Ramsbottom, Horan, Berry, & Roche, 2015). In contrast, Tozer, Bargo, and Muller (2003) reported that a TMR feeding system generated a higher net income than a grazing plus concentrate system.…”

“…On the other hand, in pasture-based production systems in temperate regions, the capital cost of land is a relevant component of the cost structure of the system and is fixed. Therefore, production per hectare (ha) is often a more relevant factor than production per head (Macdonald et al, 2017). One of the main challenges is to balance stocking rate (SR), that is livestock units/ha, so that high levels of milk production per cow are achieved while maintaining high levels of pasture utilization per ha (Macdonald, Penno, Lancaster, & Roche, 2008).…”