Potential impacts of negative associative effects between concentrate supplements, pasture and conserved forage for milk production and dairy farm profit

Abstract

A case study and whole-farm modelling approach was used to examine the potential impacts of negative associative effects on milk production and economic performance of two dairy farms in northern Victoria. The two case studies differed in herd and farm size, calving pattern, forages grown and use of labour, but both had production systems based on grazed pasture, grain fed in the dairy at milking and conserved hay fed out in the paddock. The feeding system of each farm was altered by implementing a partial mixed ration (PMR), where cows grazed once a day and received supplements in a well formulated mix once a day. Negative associative effects between feeds were included in the biophysical modelling by deriving a relationship from published studies between declining neutral detergent fibre digestibility and increasing grain intake. Before applying a PMR system, both farms were profitable and earning competitive rates of return after tax, with mean real internal rate of return higher than 5%, and positive mean annual operating profit and mean net present value, at a discount rate of 5%. Feeding a PMR enabled both farms to increase profitability and internal rate of return, particularly if milk production was increased as well, but only when associative effects were less than those in the feeding system based on grain fed in the dairy and hay in the paddock. Increased profitability was also associated with higher standard deviation in annual operating profit, internal rate of return and net present value, in other words risk increased under the PMR feeding system, as the businesses would be more vulnerable to fluctuating supplementary feed prices.