Reducing Dairy Production Costs Through the Use of Pasture
The current and future disruption of the dairy industry will require producers to think outside the box and possibly inside the fence. Two dairy enterprises that can benefit the most from pasture are the heifers and cull cows.
Raising livestock on pasture can reduce the cost of production for certain groups of dairy animals. Allowing the animal to harvest their own forage and spread their own manure has been shown to reduce costs of machinery, fuel, and labor.
A paper from the Journal of Dairy Science it stated: “On average, over the 8-yr period, each additional tonne of pasture dry matter used increased gross profit by €278 and net profit by €173 on dairy farms. Conversely, a 10% increase in the proportion of purchased feed in the diet resulted in a reduction in net profit per hectare by €97 and net profit by €207 per tonne of fat and protein.”
Like any other management regime, grazing takes top management to be successful. It is a style that doesn’t fit every manager. Typically, most grazing dairies are less than 300 milking animals but that doesn’t mean larger dairies can’t benefit from the use of grazing to reduce their costs. Work done in Minnesota and duplicated by work I have done here at Cornell, It has been shown that grazing yearling and bred heifers can reduce their costs. In my study I used work put out by Cornell ProDairy on the cost of raising heifers in confinement. It showed that just the feed and labor costs of raising heifers in confinement was higher than the cost of working with a custom grazier to raise the animal for 6 months. This didn’t include the savings on fuel, machinery, and repair costs. You can see a series of fact sheets on grazing dairy heifers on the NE SARE website.
Many dairy producers could be using pasture to hold cull animals though the summer when there will hopefully be a stronger price for the animals. With the recent change in dairy markets there has been a double negative impact on milk prices for the northeast: First the lowering the Class 3 and 4 prices to below cost of production levels and second the move by some processors to instigate a two tier pricing with a substantially lower price for up to 15% of a producer’s production. As to be expected this has caused producers to begin culling their herds to reflect this change in pricing structure. This culling is happening at the same time as beef prices are at unprecedented lows. Putting cull animals on pasture can maintain them at a lower cost per day to allow the producer to choose a more profitable marketing opportunity when supply chains have adjusted. For example, a 1400 lbs. cull animal kept a custom grazing operation at a cost of $1/day would only need to see an increase of $0.08/lb in cull prices to pay for 112 days of boarding cost.
If a dairy is looking to adopt grazing as part of their reorganization, they need to decide if they have the resources to add it to their operation or do they work with a custom grazier to do it at the grazier’s farm. As stated earlier, grazing management is not for every producer. The managing of grasses to always being at the most nutritious stage of growth and all the other potential pitfalls of pasturing takes experience. Those that have adopted it enjoyed it which improved their chance of success with it. If a dairy producer is interested in finding information about grazing in their area, I advise reaching out to County Extension offices or Soil and Water Districts to find what resources there are for custom grazing in their region.