Are the views of a retired Dairy Professor reflect the times he studied dairy systems, or is there a clear message that the NZ dairy industry needs to relook at its systems and return to a mainly grazing operation?
With a big swing to the use of Friesian genes and grain supplementation in NZ, Colin Holmes questions whether the net cost of grain fed systems are any better than grazing only.
With the heavy use of grain and PKE, are dairy farmers losing the skills of pasture management, balancing and planning the feed supply and demand equation?
The Lincoln University Dairy Farm uses a system without these supplements.
Are they missing out on potential profits or are the skills they have developed managing the pasture and harvesting the surpluses bringing them better net profits?
NZ dairy expert says the industry must refocus on grazing cows rather than having increased reliance on supplement feeds. Retired Professor, turned consultant, Colin Holmes says supplementary feed helps milk production, but does little to lift on-farm profitability. He was speaking at the 19th World Jersey Conference in Hamilton last week. Confessing to having “a soft spot” for Jerseys, Holmes did not hide his preference for grazing-based dairy reports Rural News.
“Grazing systems have the lowest cost in the world,” he told 180 delegates from around the globe. “Being a low-cost producer is necessary for NZ, which exports 95% of its dairy products.” According to Holmes, NZ was “excellent” in grazing systems 20 years ago, but then farmers started using more feed to lift milk production. He says this also led to farmers opting for Friesian cows which are better suited for eating more supplementary feed and producing more milk.
In 1980, Jerseys made up 86% of the NZ herd but now the breed makes up only 14% of the national herd. Friesians have jumped from being 12% of the national herd 60 years ago to 46% last year. Holmes acknowledges that milk production has jumped over the years as feed supplement intake has increased. But he points out the cost of producing a kilo of milksolids has also gone up. “Farmers focus too much on costs and profitability, what we should look at is profitability and cost of production. “There is too much focus on milksolids production. Everyone knows how much a kilo of milksolids costs, but what is the cost of producing that?”
3 Comments
The whole high input dairy system thing started in the mid 90s with the merger of Kiwi dairys and NZDG. The shareholders in the new company, Fonterra, had 3 seasons of milk production averaged to determine their share allocation in the newly formed entity..geeez did we do a good trade in supplements as cockys stuffed their milkers with brought in feed in what was basically a 'share grab'..that saw the birth of the high input consultants, who were followed like 'cultist rockstars'..it worked well as surplus feed in the drystock areas was plentiful and as they were doing it tough were happy to cash up the surplus, but as more and more cockys went 'high input' and the drystock boys got pushed out surplus feed has now become quite 'pricey'...And as for Jersey v friesian..The jersey guys take longer to pay!
NZ dairy farming is now an exercise in controlled starvation of a vast number of our dairy herd. Harsh farming systems widely followed by many dairy farmers are ringing the last cent out of many underfed cows. So much for the clean green image that is so keenly portrayed overseas. Time now perhaps with high international demand for our primary produce to adopt a more sustainable back to basic low cost low imput feeding policy..... Quite simply grass fed, less number of cows per ha may well equal better bottom line all with less stress for man and cow.
What do you call high cost input. Dont you regard grass as being an expensive feed, i sure do. It is not driven by debt level, it is simply the cost of the land. we either pay the bank or we try and pay ourselves a rate of return. For anyone who has studied economics they will remember that 'normal' profit is a cost of production.
So start adding in fertiliser, maintenance of pastures, water reticulation around the farm. These are all costs that are directly related to growing to grass.
Then you also have a rates bill. Some would argue that this isnt a cost of growing grass. But there a portion of this,probably 3/4, which is based on the value of the land(not improvements), with out the land you cant grow grass.
If one is honest about all their costs directly related to growing grass then it is quite easy to get a value of grass around that 35 cents per kg DM.
Why would i not then buy maize silage if it cost me less than this figure and milk more cows.
The next simple economics theory we are taught is the law of diminishing returns. If we can still make a margin even though it is an ever decreasing margin it is probably worth doing.
Now i no professor like Colin Holmes but this is 2011 not 1981 it time he moved on and understood the economics of today and i would quite happily debate this subject with him, the world needs feeding and if NZ can be a food rich country and become like the oil rich nations of the middle east then full steam ahead i say, we will all benefit
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