Balastos Dimerizables

The introduction of a housing structure may cause opportunities to arise within the farming system. These are opportunities that have not been taken into account in this study, but this section will identify them and their potential future application:

Use of shed as calving tool

Calving is a difficult and important time during the dairy season, and there can be complications with the current system of cows being calved outdoors, such as the wet and often cold early spring conditions. With the housing infrastructure, there is potential to develop a calving area in conjunction with the shed to be used as a calving platform. This would improve the monitoring of calving cows and give them a more controlled environment in which to calve. Arnold et al. (2009) reported that 34% respondents to their survey used their housing structure for calving. This would have to be considered during the construction of the housing structure, as a maternity area would have to be incorporated into the design of the shed as cows would not be able to safely calve in the free-stall area.

Use of shed as breeding tool

In the confined systems of the Southern United States of America, the housing structures have lockable head bales which cows put their heads through to eat from the feed lane. This allows the cows to be locked into these bales, making for ease of observation for mating purposes. They would be fed in the shed for a period during mating for this purpose, before returning to pasture. This is a potential opportunity for use in the proposed systems, as minimal extra infrastructure would be required in order to set this system up, and it could improve mating practices.

Scenario Summary

Changing Cells:

Milk Price ($/kgMS) $ 6.50 $ 9.00 $ 5.00 Supplement cost ($/kgDM) $ 0.36 $ 0.30 $ 0.45

Milk Production (kgMS/cow) 520 530 470

Housing structure cost $ 1,400,000 $ 1,000,000 $ 1,800,000

Interest rates 6% 4% 8%

Result Cells:

Current system DOP $944,217 $1,695,427 $493,491 Roofless system DOP $953,160 $1,913,404 $192,895

Current system IRR 7.63% 12.84% 4.52%

Roofless system IRR 7.82% 13.99% 3.17%

Use at different times of the year

The climate in Canterbury is often unpredictable, and unseasonal weather frequently occurs, which can be detrimental to the farming operation. The housing structure can be used to soften the effects of this unseasonal weather, and the ability to bring cows inside for protection from unexpected weather could be an effective risk-mitigation tool. Potential situations where the shed could be utilised are:

 During hot summer days for shade from the sun (fully-enclosed structure only)

 Out-of-season snow – cows could be removed from the paddock to protect the paddock and improve cow comfort

 In hail, wind or flooding, to reduce the climatic impact on the cows and the cows impact on the pasture.

Expansion

The number of cows wintered in both proposed systems is 650, with peak milking numbers of 630. The selected housing structures are designed for a potential capacity of 720 cows. This design was chosen for increased area per cow, as well as potential for future expansion with the extra capacity to increase cow numbers. This could result in increased overall production, which could also increase the profitability of the enterprise and assist in covering the capital cost of the shed. As the housing structures allow the cows to be contained and fed inside 24/7, there is no limit in the amount of extra time the cows can spend inside, as long as sufficient feed can be imported to feed them. It is much easier to intensify with the proposed systems, as the volume of supplementary feed is simply increased and fed out in-shed, allowing for greater production. It also allows for rapid expansion if conditions change, for example an increase in milk price could be quickly followed by an increase in supplementary feed to capitalise on increased prices.

Despite this, Journeaux (2013) modelled two intensification scenarios in his study (Table 3), and although increasing intensification increased the financial viability of the enterprise, it also increased the environmental impact of the system. Any intensification of the system has to be approached with caution for this reason.

Palm Kernel Extract

Palm kernel extract (PKE) is ‘a by-product of the palm oil industry in South East Asia. It is a dry, gritty meal with low palatability, but with reasonable levels of energy (ME) and protein, and is relatively easy to introduce to cows over a range of farm systems’ (DairyNZ, 2014). PKE is a commonly used, easily sourced supplementary feed on Canterbury dairy farms, and has the potential to be fed out as a cheap, high protein supplementary feed in the housing structure during the winter:

Table 53: PKE specifications (DairyNZ, 2014; Winton Stock Feed, 2014)

Due to its high protein, fat and energy content, PKE is an effective feed for putting on cow condition, and is often used in autumn when cow condition becomes a focus. This would make it fit well into the potential housed system as a feed used in conjunction with pasture silage to assist in cow condition gain in autumn and winter. At a cost of $0.31/kgDM, it would also provide feed cost savings as it is significantly lower cost than pasture silage and lifted/transported fodder beet.

LUDF currently has a ‘no-PKE’ policy for its system due to the bio-security risks that arise from its importation and for political reasons, but it is a feed that has the potential to be added to the ration fed in-shed, allowing for improved weight gain performance and a reduction in supplementary feed costs. Aside from PKE, there are many other alternative feeds that could be researched to see if they can reduce costs. These include maize silage, lucerne silage, wheat, barley or triticale. An advantage of the proposed system is that these feeds can be easily interchanged; if one feed were to increase in price dramatically, another could be selected to fill its place in the ration.

Use of late calving/carry-over cows

As the housing structure provides controlled conditions which allow the extension of lactation, late calving cows have the potential to be better utilised and milked as long as desired. There is also the option to continue to milk empty cows and get them back in calf for an autumn calving. This would result in utilising the cowshed year round, therefore increasing the capital efficiency of the investment. The financial viability of this practice is dependent on winter premiums for milk, which aren’t necessarily going to be paid by Fonterra in future. The LUDF may not have the enough scale to produce enough empty cows to justify running the shed year round, but it is an option for other adopters with greater cow numbers. Implementing autumn calving does not encourage a tighter calving spread, and could result in the system becoming increasingly confinement based as less emphasis goes on fertility.

Other investment opportunities

With the substantial capital requirements of building a housing structure, there are opportunity costs that are forgone to undertake this investment. With the $1.5million roofless structure, and more so with the $2.4million housed structure, an alternative investment would be to purchase more runoff land, or

PKE

Cost (per tonne) $280

Cost (per kgDM) $0.31

Energy (MJME) 11.0-11.5 Crude Protein (minimum) 16%-18%

Fat (minimum) 10%-13%

extend the dairy platform. This would be investing in an appreciating asset rather than a depreciating one. At $40,000/ha for runoff land, the roofless structure could purchase 38ha of runoff, and the housed structure 60ha of runoff. Despite this, investing in extra land may not have the environmental mitigation effects of the housing structure, and finding a runoff block of correct size which is suitable to the property and available on the market within budget is unlikely.