Effects of removing imported feed

1 December 2019

What are the effects on production, environmental outcomes and profitability when removing imported supplementary feed from a pasture-based system?

Kieran McCahon, animal and feed developer, DairyNZ, Mark Neal, dairy systems speciality, DairyNZ and John Roche, chief science advisor, Ministry for Primary industries

When demand from the herd exceeds pasture supply, supplementary feed may be offered to increase dry matter (DM) intake and milk production (1). This often comes with an expectation that this increased production will lead to greater profitability.

However, analyses of farm systems experiments (2) and farm databases (3, 4, 5, 6) challenge this. These studies concluded that, on average, increasing the amount of supplementary feed offered in pasture-based systems isn’t associated with an increase in profitability, despite greater milk production and greater gross farm revenue.

Also, the intensification of grazing systems through increases in supplementary feed and stocking rate have often been associated with poorer environmental outcomes, such as reduced water quality and increased greenhouse gas (GHG) emissions (7).

This article describes the results of a recent farm system experiment that determined the biophysical, environmental, and economic effects of removing imported supplementary feed from a pasture-based dairy system.

System comparison

A three-year farmlet experiment, co-funded by DairyNZ and the Ministry for Primary Industries through the Sustainable Farming Fund, was analysed to investigate if New Zealand pasture-based farms could reduce their reliance on imported feeds and maintain profitability.

The experiment was undertaken at the Northland Agricultural Research Farm (NARF), near Dargaville, during the 2015/16, 2016/17 and 2017/18 dairy seasons. Pastures at the site consisted predominantly of ryegrass and kikuyu.

As part of this analysis, two 28ha pasture-based systems, differing in stocking rate and the amount of imported feed, were compared. Treatments were:

  • Palm kernel extract (PKE) — cows were stocked at 2.7 cows/ha, with PKE offered when post-grazing residuals were less than 4cm (approximately 1600kg DM/ha). This equated to an average allowance of 515kg DM/cow/year as
  • Pasture — cows were stocked at 2.5 cows/ha, with the herd’s diet consisting entirely of pasture grown on farm (grazed or conserved as silage).

System-level response to PKE

Pasture production, milk production, body condition score (BCS), 6-week in-calf rate, and not-in-calf rate were measured for each treatment.

Average milksolids production (kg MS/ha) was 16 percent lower in the ‘Pasture treatment’ (915kg MS/ha) when compared with the ‘PKE treatment’ (1092kg MS/ha). This was due to the combined effects of a lower stocking rate (0.2 to 0.3 cows/ha), lower average production/cow/day (0.08kg MS/day), and a shorter average lactation (seven days). There was no significant effect of treatment on BCS, 6-week in-calf rate or not-in-calf rate.

There was a large milk production response to PKE in all three years of the experiment. The PKE treatment cows produced an average of 122g MS/kg DM of supplementary feed (119, 106, and 140g MS/kg DM in 2015/16, 2016/17 and 2017/18 seasons, respectively).

This response is approximately 30 to 50 percent greater than average milk production responses to supplementary feed achieved in historic multi-year farm systems experiments2, as well as those estimated from farm financial databases6.

It is difficult to isolate the cause of this comparatively large response to supplementary feed; however, several factors may have contributed, as detailed below.

Grazing management

The extra milksolids that can be expected from each kilogram  of supplementary feed is primarily determined by the amount of pasture a cow ‘refuses’ when offered supplementary feed. This is referred to as ‘substitution’ (8, 9).

The rate of substitution is primarily determined by the relative feed deficit of the cow, which is a measure of how well the consumed diet meets cow requirements.

For example:

  • the lower the pasture allocation, the less pasture (energy) a cow will consume
  • the less pasture a cow consumes, the less pasture she will refuse when offered supplementary feed (i.e. the lower the substitution of supplement for pasture)
  • the lower the substitution, the greater the total  feed intake, and the greater the milk production response to the supplementary

In the Northland experiment, supplementary feed was offered only when post-grazing residuals were less than target (4cm, approximately 1600kg DM). Post-grazing residual can be used as an approximate measure of the relative feed deficit, with lower- than-target residuals indicating that cows could eat more, and higher-than-target residuals indicating greater substitution and potential pasture wastage. Post-grazing residuals can, therefore, predict likely responses to supplementary feed. For example, responses to supplementary feed decline by 10 percent for every 1cm increase in post-grazing residual (10).

The decision rules around pasture  management,  and when and how much supplementary feed was offered in the Northland experiment, likely reduced pasture wastage and maximised the potential response to supplementary feed.

Milking frequency

Throughout the experiment, once-a-day (OAD) milking was  a management strategy that could be used in both farmlets to offset the negative consequences of a large feed deficit (e.g. energy balance and BCS).

In the third year of the experiment, high rainfall and saturated soil conditions led to very poor pasture production and utilisation during early spring. As a consequence, in the PKE treatment,  cows were fed additional PKE to increase feed supply, while in  the Pasture treatment, cows were milked OAD for six weeks.

Milking cows OAD in early lactation has a negative, immediate and carry-over effect on milk production, due to reduced mammary cell activity and number (11).

The negative effects of OAD milking on immediate and whole- season production likely contributed to the greater response to supplementary feed that occurred in the third year of the experiment (140g MS/kg DM). This inflated the average response to supplementary feed at a farm systems level.

Pasture species

This experiment was conducted in Northland with kikuyu forming a seasonal component of the pasture sward. Kikuyu has a lower DM digestibility than ryegrass pastures. A cow grazing kikuyu-dominant pastures will consume a lower quantity of metabolisable energy and, potentially, be in a greater relative feed deficit, compared with a cow grazing ryegrass pastures

for the same DM intake. As a result of the greater relative feed deficit, a larger response to supplementary feed could be expected from cows grazing kikuyu-based pastures than ryegrass pastures.

Environment

The effects of the different treatments on the environment were modelled through Overseer version 6.3.1.

There was no significant difference in nitrogen (N) surplus (Figure 1) and, as a result, no effect on estimated N leaching between the PKE (16.3kg N/ha/year) and Pasture (15.7kg N/ha/year). However, in contrast, GHG emissions were 15 percent less in the Pasture treatment relative to the PKE treatment (11t of CO2 equivalents/ha/year and 13t CO2 equivalents/ha/year, respectively –see Figure 2).

These differences were largely the result of lower methane emissions/ha associated with lower total feed eaten (DM intake/ha) in the Pasture treatment. The contribution of CO2 to total GHG emissions also tended to be lower with the removal of PKE due to the off-farm carbon footprint associated with PKE (kg CO2- equivalents/kg DM).

There was no effect of treatment on emissions intensity (kg CO2-equivalents/kg MS – see Figure 2), which is consistent with previous studies investigating the effect of feed use on GHG emissions(7).

Profitability

Financial data from the experiment were analysed to determine the average operating profit for each treatment, including a non- cash adjustment for differences in capital requirements between treatments.

In addition to the three-year financial analysis, economic modelling was undertaken to account for changes in milk and key input prices and to evaluate the likely long-term profitability of the two treatments.

An average milk price of $6.16 (± $1.54/kg MS) and PKE price of $287 (± $47/t) were used in the analysis (± standard deviation).

On average, gross farm revenue was 16 percent less ($1129/ha) in the Pasture treatment, relative to the PKE treatment. However, average operating expenses were also 17 percent ($831/ha) lower in the Pasture treatment relative to the PKE treatment.

Similar to the conclusions of previous studies2, 3, 5, increased expenditure on imported supplementary feed was associated with a more-than-equivalent increase in total  expenses.  In the Northland experiment, for every $1 spent on imported supplementary feed-related expenditure, total operating expenses increased by an average of $1.89.

As a result of net differences in gross farm revenue and operating expenses, the PKE treatment returned only a small average operating profit advantage of $150/ha (seven percent) compared with the Pasture treatment (see Table 1). When accounting for the variability of key market prices, such as milk and palm kernel, the PKE treatment returned a greater operating profit in approximately 70 percent of scenarios (also see Table 1).

The relative profitability of the treatments was highly sensitive to the response to supplementary feed. The response to supplement  in the current study was 30 to 50 percent greater than average responses previously reported from farm systems experiments and farm financial benchmarking databases.

A 10 percent lower milk production response to supplementary feed would erode any profit advantage from feeding PKE (Table 1). In other words, even with a response of 110g MS/kg DM, over a decade, the PKE and Pasture treatments would return a similar average operating profit.

Despite the large responses to supplementary feed achieved in the current study, if an economic valuation of treatment differences in GHG emissions (at $25/t CO2 equivalents) was considered, the average profit advantage of the PKE treatment over the three-year period of the experiment was reduced to $89/ha. In addition, the PKE treatment would then return a greater operating profit than the Pasture treatment in only 55 percent of years.

Conclusion

In summary, reducing the use of imported supplementary feed will likely reduce total feed intake, milk production,  and GHG emissions per hectare. The effect on profitability depends on several factors, including the potential response to supplementary feed, milk and supplementary feed prices, and the extent to which total costs can be reduced with lesser quantities of imported supplementary feed.

This article was originally published in DairyNZ’s technical series December edition.

References

  1. Bargo, F., L. D. Muller, E. S. Kolver, and J. E. Delahoy. (2003). Invited review: Production and digestion of supplemented dairy cows on pasture. Journal of Dairy Science 86(1):1-42. https://doi.org/10.3168/jds.S0022-0302(03)73581-4
  2. Macdonald, K. A., J. W. Penno, J. A. Lancaster, A. M. Bryant, J. M. Kidd, and J. R. Roche. (2017). Production and economic responses to intensification of pasture-based dairy production Journal of Dairy Science 100(8):6602–6619. https://doi.org/10.3168/jds.2016-12497
  3. Ramsbottom, G., B. Horan, D. P. Berry, and J. R. Roche. (2015). Factors associated with the financial performance of spring-calving, pasture-based dairy farms. Journal of Dairy Science 98(5):3526-3540. https://doi.org/10.3168/jds.2014-8516
  4. Ma, W., A. Renwick, and K. Bicknell. (2018). Higher intensity, higher profit? Empirical evidence from dairy farming in New Zealand. Journal of Agricultural Economics 69(3):739-755. https://doi.org/0.1111/1477-9552.12261
  5. Neal, M., and J. R. Roche. (2018). Profitable and resilient pasture-based dairy farm businesses in New Zealand. Journal of Animal Production Science. https://doi.org/10.1071/AN18572
  6. Silva-Villacorta, D., C. W. Holmes, N. M. Shadbolt, N. Lopez-Villalobos, W. Prewer, C. B. Glassey, and M. Blackwell. (2005). The productivity of pasture-based dairy farms in New Zealand with different levels of extra feed New Zealand Society of Animal Production 65:63-67. https://doi.org/10.1079/BJN19660078
  7. Ledgard, S. F., N. L. Bartlett, P. J. Van Boheemen, B. R. Wilton, S. B. Allen, and D. P. Muggeridge. (2017). Implications of increased use of brought-in feeds on potential environmental effects of dairy farms in Journal of New Zealand Grasslands 138:135-138.
  8. Roche, J. R., J. K. Kay, A. G. Rius, T. M. Grala, A. J. Sheahan, H. M. White, and C. V. C. Phyn. (2013). Short communication: Immediate and deferred milk production responses to concentrate supplements in cows grazing fresh Journal of Dairy Science 96(4):2544-2550. https://doi.org/10.3168/jds.2012-4626
  9. Stockdale, C. R. (2000). Levels of pasture substitution when concentrates are fed to grazing dairy cows in northern Victoria. Australian Journal of Experimental Agriculture 40:913-921.
  10. Poole, C. M. (2018). Association among pasture-level variables and grazing dairy cow responses to supplementary feeds. (Thesis). Massey University, Palmerston North,  New
  11. Grala, T. M., C. V. C. Phyn, J. K. Kay, A. G. Rius, M. D. Littlejohn, R. G. Snell, and J. R. Roche. (2011). Temporary alterations to milking frequency, immediately post- calving, modified the expression of genes regulating milk synthesis and apoptosis in the bovine mammary NZ Society of Animal Production 71:3–8.

This article was originally published in Technical Series December 2019

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