Efficiency in feeding systems for subtropical dairy production

Abstract

Animal Production in Australia 1998 Vol. 22 EFFICIENCY IN FEEDING SYSTEMS FOR SUBTROPICAL DAIRY PRODUCTION R.T. COWANA, R.J. MOSSB, P.G. GOODWINA and W.J. FULKERSON A C B C Australian Tropical Dairy Institute, Department of Animal Production, University of Queensland, Gatton, Qld 4345 Australian Tropical Dairy Institute, Mutdapilly Research Station, QDPI, MS 825, Peak Crossing, Qld 4306 Wollongbar Agricultural Research Institute, NSWA, Wollongbar, NSW 2477 SUMMARY Over the past 20 years dairy cow feeding systems in northern Australia have changed substantially, from an emphasis on utilising pasture to an emphasis on cow productivity. Reasons for this change include the importance of continuity of supply, the adoption of higher cost inputs in order to reduce variability of supply, and the inability of farm resources alone to support a required level of total farm productivity. The resultant system has enhanced high quality pasture development on farms, and this pasture is integrated with grains, maize silage and an array of crop byproducts through ration formulation exercises. Cow productivity has increased two fold, and total farm productivity three fold. Future increases in productivity are likely through further development of farm irrigation and greater use of conserved fodder, particularly maize silage. Keywords: dairy production, pastures, subtropical INTRODUCTION At present over half of the milk produced in northern Australia is sold fresh, and this contrasts sharply with the traditional basis for milk production in the region, which was for butter sales to Europe. Not surprisingly the massive shift in market orientation of the product has affected the way farms are managed, and in particular the feeding systems used. Dryland, native pastures (Heteropogon contortus, Themeda australis, Erichloa spp., Dicanthium spp.) were the traditional feed source for cows on farms, and these still occupy an average of half the farm area (Kerr et al. 1996). It has been necessary to replace the remaining area with more productive forages, in particular introduced tropical grasses (Chloris gayana, Pennisetum clandestinum, Setaria spp., Panicum spp.). Though average farm area is relatively high at 220 ha, carrying capacity is low at 0.42 cows/ha (Kerr et al. 1996). A primary limitation is water supply for plant growth (Minson et al. 1993), and on the 56% of farms which have developed irrigation an average area of 24 ha is irrigated. The ratio of price received for milk to feed cost has fallen from 2.5 to approximately 2.0 over 20 years, and the proportion of gross income available for labour and return to operator from 60 to 34% (Busby and Lake 1996). There has been a three fold increase in total farm milk output (NSWA 1997). FEED SYSTEMS While the adage all farms are different remains true, there have been major common developments on farms. The fresh milk market demands continuity of supply, and to achieve a low seasonality index (ratio of milk intake in months of highest and lowest production) of 1.1 to 1, farmers have adopted increasingly complex interventionist feeding systems. There has been a cumulative adoption of technology. Winter forage cropping was added to the perennial pasture base, with the subsequent adoption of concentrate feeding, irrigation, annual winter pastures, cropping for silage production, silage feeding, and incorporation of various byproducts. Kerr et al. (1995), cited by Cowan (1997), showed that 75% of the variation between Queensland farms in annual milk production is explained by differences in feeding and breeding inputs. The significant feeding variables were levels of concentrate, nitrogen fertiliser, irrigation and conserved forage. The effects of technology adoption on farm production are shown in Figure 1, together with projections as to changes over the next 7 years (Cowan 1997). The values are calculated from production and input values for a farm with 0.4 ha/cow of irrigated creek flats. Perennial dryland pastures, such as Chloris spp, accounted for 40% of milk production in 1975 compared with 20% now. The role of these pastures has also changed from being a primary source of forage to a support role, enabling cows to be pastured in wet weather or heavily concentrated while annual pastures are being established, and providing a source of fibre while cows are grazing very high quality winter pastures. These grasses are high in neutral detergent fibre (NDF, 60 to 125 Animal Production in Australia 1998 Vol. 22 80%DM) and calculations suggest a maximum level of inclusion in the diet at 50% for a milk production level of 18L/cow daily, decreasing to zero at 30L/cow. In practice, herds producing over 25L/cow use very little or none of these grasses. Though the amount of cereal grain based concentrate given to cows has increased to 1.4 tonnes/cow annually (Kerr et al. 1996) the proportion of milk attributed to this feed has tended to decrease, from 50 to 30 % of production (Figure 1). In the cited example, and farms with feed costs less than 14 cents/L, purchases of concentrates average 20% of gross milk income (Busby and Lake 1996). On farms with feed costs over 18 cents/L concentrate purchases account for 40% of gross milk income (Busby and Lake 1996). The byproduct whole cotton seed (WCS) is commonly used in feeding programs, and on selected farms byproducts such as brewers grains, pineapple skins, palm kernel extract and copra meal have been used effectively to reduce the cost of supplementary feeds. Annual pastures, based on temperate pasture species and intensive irrigation and fertilisation, have had a major impact on productivity. The proportion of milk output attributed to these pastures has increased from zero to 25% of total production. The productivity of these pastures is three to five times that of improved dryland pastures (Fulkerson et al. 1993) and in the order of 10 times that of native pastures. Though costs per hectare are high the operating cost per unit of utilised dry matter may be lower than for dryland pastures (Chopping and Walker 1995). On a whole farm basis these pastures enable the labour and capital costs to be spread over a greater volume of production (Cowan 1997). Within the northern dairy industry the experiences with tropical grass silages has often been negative. However this decade has seen the rapid acceptance of silage made from specialist crops, particularly maize. In 1995, 36% of farms were using crop based silages, up from 2% in 1986 (Kerr et al. 1996). Two thirds of this silage was home grown, producing silage at a cost of approximately 9 cents/kg DM in the pit, but often competing with annual pastures for irrigation water. Dryland farms, those with < 0.04 ha irrigation /cow, have particular problems in meeting a market which demands a continuous supply of milk. The absence of irrigation means production is more directly influenced by variations in rainfall, and results in a greater relative input of concentrates compared with irrigated farms (Chopping and Walker 1995). The lower farm productivity also means capital and labour costs per litre are relatively high. While a substantial input of silage would be of benefit on dryland farms, this is difficult to implement. In NSW maize can often be grown without irrigation, but not in Queensland. The farmer is faced with the choice of growing a dryland crop, normally forage sorghum, or purchasing maize 800 700 Milk output (L*1000/year) 600 500 400 300 200 100 0 1975 1985 Year Figure 1. Past estimates and projections of the milk output from feeds on a typical Queensland dairy farm Projected silage irrigated pasture byproduct concentrates dryland pasture 1995 2005 126 Animal Production in Australia 1998 Vol. 22 silage from neighbours. Present varieties of forage sorghum are similar in quality to tropical grass silage and the low digestibility means that the milk response to feeding is insufficient to meet the costs associated with the practice. The potential for profit in purchasing maize can also be questioned. The cost of the silage in the pit is high, often around 18 cents/kg DM. On feeding out it is usually not possible to integrate the silage with high protein pastures, and substantial quantities of purchased protein meal need to be incorporated in the ration (Moss et al. 1994). The result is a high feed cost, in the order of 25 cents/L. POTENTIAL OF FEED SYSTEMS Cowan (1997) estimated the potential to increase milk production on northern dairy farms, based on greater inputs of irrigation, silage and cereal concentrates (Table 1). The trends shown in Figure 1 are consistent with those in Table 1, and emphasise the role of irrigation in continued development of dairy systems. Though the intake of concentrates is projected to increase the proportion of concentrates in the diet is not expected to increase. It may even fall slightly. More recent modelling of feed systems has shown there is also substantial potential to increase productivity of farm paddocks (D Kerr, unpublished). In a survey of Queensland dairy farms it was demonstrated that irrigated and dryland pastures were each producing 60% of levels achieved by the top 10 percentile of farms, and approximately one third of levels consistently achieved in research. A small number of individual farms are achieving levels of production similar to those in research (C Findsen, pers. comm.). Developing the potential of these feed systems is likely to improve the ratio of productivity to capital and labour invested. To the surprise of dairy farmers the northern dairy industry has a high capital investment relative to the milk output. For example a comparison with United States farms, often considered by Australian farmers to be high capital investment operations, shows Queensland farmers to have $5.20 invested in capital for each $1.00 of annual income, compared with $2.93 for Wisconsin and Oregon dairy farmers (T Cowan, 1994 unpublished). Similarly total labour costs, putting a value on paid and unpaid labour, represent 40% of gross income on Queensland farms (Ashwood et al. 1993; Boston Consulting 1993) compared with 33% in New Zealand and 15% in California). It must be assumed that the productivity levels will increase in order to reduce the labour and capital ratios. It is difficult to withdraw labour from farms, as the present input is just 2.4 units (Kerr et al. 1996) and the variation from the lowest producing category (250,000 L milk annually) to the highest (above 750,000 L) is just one unit. Similarly the capital value of farms is unlikely to fall significantly as the price of land and infrastructure is set through sources of demand other than dairy farming. The capital value of quota is less secure, but the farmers consider an orderly marketing system, and thus quotas, will continue. Table 1. Estimates of the major input change associated with future productivity gains fro m subtropical dairy farms (fro m Ashwood et al. 1993; updated by Cowan 1997) Category of farm Present Restricted irrigation Irrigation (ha) Concentrates (t/cow/year) Number of milking cows Conserved forage purchased (tDM) Unrestricted irrigation Irrigation (ha) Concentrates (t/cow/year) Number of milking cows Conserved forage homegrown (tDM) Cropping (Darling Downs) Concentrates (t/cow/year) Number of milking cows Conserved forage homegrown (ha) Hay - purchased (tDM) 5 1.2 77 4 0 (estimate) 2 0 7 5 4 .8 0 0 (estimate) Input level Potential (year 2002) 2 2 1 1 8 1 1 1 3 1 2 1 5 .5 40 40 0 .3 50 50 .0 20 5 50 1.2 90 5 25 127 Animal Production in Australia 1998 Vol. 22 MEASURES OF EFFICIENCY Despite the large variation in feeding systems among subtropical dairy farms the key aspects of efficiency would appear to be consistent across farms. As shown in Table 2 there is a need to generate sufficient money to meet living expenses, pay labour and service capital. With increasing intensification there has been a trend towards a more consistent percentage of gross income being available to meet these costs, with the mean value being 34%. (Busby and Lake 1996). If it is assumed that a third of this is needed to service borrowings, then 22% can be used to pay labour and for living expenses. No return to assets is included. Taking the mean figure of 2.4 labour units per farm, then a gross income of the order of $280,000 annually is required. Our analysis of the trends in production suggest the harnessing and efficient use of water is a major factor impacting on the efficiency of dairy farms. It is an extremely scarce resource on most farms, and the production responses to an increased water supply are high. High quality pasture and silage crops can be grown with irrigation, and these complement concentrates and perennial tropical pastures to enable an efficient, low cost feeding system. In dryland herds efficiency may be optimal with a lower production system based on the utilisation of tropical grasses, though this does not fit with the payment system for milk. Table 2. Some key ef ficiency parameters r elevant to subtropical dairy farms Category Financial Components Living expenses Labour Service capital Water supply Water efficiency Cow production Farm component area Seasonality (irrigated farms) Applicability (dryland farms) Benchmark efficiency ratio or comment 32% of gross income 3 ML per cow 2,500 L milk/ML 7,500 L milk/cow/year 5,000 L milk/ha from dryland pasture 12,000 L milk/ha from irrigated pasture 60 t/ha from irrigated maize silage maintain quota/ take advantage of winter incentive bias to autumn calving (40% of cows) quota system imposes a high cost structure Production Marketing CONCLUSION Major increases in efficiency of subtropical dairy feeding systems are likely to be gained through expansion of the harnessing of water for irrigation on farms, improvements in the efficiency of water use, and planned integration of irrigated pasture, silage, concentrates and perennial pastures in feeding programs. The measures of efficiency are markedly different for farms without irrigation and a more flexible payment system may be the key to realising efficiency on those farms. REFERENCES ASHWOOD, A., KERR, D., CHATAWAY, R. and COWAN, T. (1993). Trop. Grasslds 27, 212-228. BOSTON CONSULTING (1993) International Competitiveness. Report to DRDC, Melbourne. BUSBY, G. and LAKE, M. (1996). Queensland Dairy Accounting Scheme Handbook. (DPI Brisbane). CHOPPING, G.D. and WALKER, R.G. (1993). Profitable Milk Production Seminar, DPI, Brisbane. COWAN, R. T. (1997). Future Feeding Today Dairy Seminar. (Ridley Agriproducts: Toowoomba). FULKERSON, W. J., LOWE, K. K., AYRES, J. F. and LAUNDERS, T. (1993). Trop. Grasslds 27, 162-179. KERR, D., DAVISON, T., HETHERINGTON, G., LAKE, M. and MURRAY, A. (1996). Queensland Dairy Farm Survey 1994-5, Summary Report.(QI96115: DPI Brisbane). MINSON, D. J., COWAN, T. and HAVILAH, E. (1993). Trop. Grasslds 27, 131-149. MOSS, R.J., MARTIN, P.R. and CHAPMAN, N.D. (1994). Proc. Aust.Soc. Anim.Prod. 20, 124-7. NSWA (1997). Dairy Industry Situation Statement. (NSW Agriculture: Orange). 128