Revisiting profitable pasture management and silage production

Feed costs are the highest operational costs in a dairy business, so it is vital that we manage these well in order to enhance our farm’s profitability. We are currently well into a somewhat m­ild spring here, in most regions of New South Wales, so thought it would be a good opportunity to revisit some earlier podcast episodes on key aspects of profitable pasture management and silage making.

The extracts come from a couple of very popular episodes and even though they are a couple of years old, the messages and key principles discussed are as relevant as ever.

The first episode was Episode 3 – Lowering total feed costs with good spring pasture management with NSW agronomists Josh Hack and Peter Beale. Aspects such as the importance and economics of nitrogen use and the principles of good grazing management to help capture true pasture surpluses are discussed. Please note that urea prices discussed in this episode were from a couple of years ago when urea prices were abnormally high.

The second episode comes from Episode 24 – The economics of silage making with agronomist Neil Griffiths. It follows on logically from the previous episode. Neil highlights the importance of timing when making silage in relation to producing high quality and profitable silage. This includes capturing silage with high energy content and minimising wastage.

Links to the original episodes have been included in the show notes for this episode which include links to some very useful resources.

Podcast links:

Podcast Episode 3 - Lowering total feed costs with good spring pasture management

Podcast Episode 24 - The economics of silage making

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It is brought to you in partnership the Hunter Local Land Services

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The information discussed in this podcast are for informative and educational purposes only and do not constitute advice. 

Transcript

The Business of Dairy 

Episode #42 Transcript – “Revisiting profitable pasture management and silage production”

Sheena Carter: Welcome to the Business of Dairy podcast. I'm your host Sheena Carter, Development Officer with the New South Wales Department of Primary Industries and Regional Development Dairy Team. As we know, feed costs are the highest operational costs in a dairy business, so it's vital we manage these well in order to enhance our farm's profitability. We are currently well into a somewhat mild spring here in most regions of New South Wales, so I thought it would be a good opportunity to revisit some earlier podcast episodes on key aspects of profitable pasture management and silage making. The extracts come from a couple of very popular episodes and even though they are a couple of years old, the messages and key principles discussed are as relevant as ever. 

The first episode was Episode 3 – Lowering Total Feed Costs with Good Spring Pasture Management, with New South Wales agronomists Josh Hack and Peter Beale. Aspects such as the importance and economics of nitrogen use and the principles of good grazing management to help capture true pasture surpluses are discussed. Please note that urea prices discussed in this episode were from a couple of years ago when urea prices were abnormally high. 

The second episode comes from Episode 24 – The Economics of Silage Making, with agronomist Neil Griffiths. It follows on logically from the previous episode. Neil highlights the importance of timing when making silage, in relation to producing high quality and profitable silage. This includes capturing silage with high energy content and minimising wastage.

Links to the original episodes have been included in the show notes for this episode, which include links to some very useful resources.

Excerpts from Episode 3 – “Lowering total feed costs with good spring pasture management” 

Josh Hack: So the key with the nitrogen is, farmers are quite intuitive, they’re out there, especially dairy farmers, they’re out there working with fences twice a day, so they get to look at their paddocks a lot. It’s really about going back to those basics of looking at our urine stains and seeing what they look like and see if they’re getting responses from those, which could indicate a bit of a deficiency. And also looking across the paddocks to see what their colour and growth is. And also, I'm a big fan of getting farmers to do demos on their own farms, so every time they go and put fertiliser out, make sure they’re doing a double strip and missing a strip. So then you can go back and learn and see where you're at and see where your budget is sort of lying and see where you're getting your responses. So, if you're getting a really good response on that double application, well, there's potential there that you could be applying more to get more growth, on your stuff that you haven't put any nitrogen on and you can't see the difference, maybe you’re applying a bit too much. There is some money to be saved there as well. So that visual stuff is really, really important. But, you know, Pete, you’d have some recommendations that you would go with. 

Peter Beale: Yeah, look, normally we're talking about 40 to 50 kilograms of nitrogen per hectare per rotation, and you could even consider increasing that a little bit as we go into this spring period. We do get a lot of flush of nitrogen from the soil, but you know, those things that you talked about, if the urine stains are showing up, we’ve certainly seen this year with a lot of wet conditions, we've had pastures that have really been responsive to nitrogen. And the thing to always bear in mind is every paddock's different, every farm's different, and we can't just… well, we might say, here’s a kilogram to a kilogram and a half per day of rotation – it really does vary between paddocks. And you've got to make that individual assessment of what the, what that, each paddock does, otherwise you just miss out because we do see such huge variation. 

Sheena Carter: And is some of that dependent on your soil type, Peter? 

Peter Beale: Yeah, very much so. Sandy soils won’t retain as much nitrogen. They haven't got as much organic matter, so they haven't got the reserve there. A lot of it also depends on just the last 12 months history, whether we've had a lot of clover last year, what sort of application rates you've been using in the past three to four months. Have you build it up, or are we still lagging behind? And certainly coming out of that heavy rain we had, Josh and I both noticed that overall the nitrogen fertility was pretty low. And some of that comes because we had two very dry years where not a lot of nitrogen went on, so it's hard to evaluate it all, but yeah, you've really just got to look at those signs Josh was talking about and say, are the pastures ticking along well? Some are – I’ve seen some great results – and if they are, keep going, but if they're not, you’re really coming to a point we're going to get good growth rates and you don't want to miss out.

Sheena Carter: So we might move on now to talking about our grazing management of our pasture to capture that spring surplus. So, direct grazing management and also conserving any true surplus. Josh, can I hand over to you to have a bit of a chat about that? 

Josh Hack: You know, we talked a bit about nitrogen and trying to grow more feed, and at the end of the day, it's better utilisation. So, I go to quite a few farms that are good at growing feed but sometimes they don’t utilise it. And I go to farms that probably don’t grow as much but they utilise it really, really well. So, grazing management is about how do we utilize what we actually grow and look after those plants, but try and grow really good quality feed as well so that we can optimize the opportunities that come. I always say that everything I’ve learned I’ve learned off someone else, and typically I learn most of this stuff off seeing good farmers operate and being able to put in processes and really focus on those opportunities when they come because sometimes they don’t come that often. So, I think we do have a really good opportunity coming up, good moisture, we’re going to have good nutrition. Let's look forward and start to plan and make sure we get grazing management right. So some of those things like, you know, we haven't got a long time here, you know there’s sometimes, you know, five, six day courses that we go through to talk about grazing management, but the next few months, you know, visually, what we're going to see and what we see on farms, we're going to have increased light and increased temperatures, and if you got good nutrition, you got moisture, right, we're going to grow more feed. Okay, so typically we might be around a 40, 50 day rotation through winter, but as we come out and towards spring, that's going to shorten. So, all to do with temperature and day length, is going to increase our leaf emergence, okay, so we really want to focus on the golden rules. Okay, so the golden rules for our grazing management for setting our rotation, is we want to try and achieve that two to three leaf, okay, so we want two to three leaf because we don’t want to go before two leaf because the plant hasn't recovered enough yet to be able to handle the grazing – we want at least two. We don't get past three leaf because the plant starts to senesce and die and we lose quality. So we want to stick around that two to three leaf for ryegrass and we don't want to go past canopy closure. So, you stick to those two rules before you go in to graze is the key. The quick one with the canopy closure – we're really going to focus on that in spring – I'm starting to see more and more nut grass and weeds and all that stuff coming through summer pastures, and that's really driven by grazing management, in my opinion. And in spring, when we get these flushes, these spring flushes and we haven't got our grazing management and our true surplus and silage and all those sorts of things under control, we get canopy closure and we start to kill those summer pastures underneath our crop and our ryegrass. So canopy closure is really important for our summer plants to be able to come back and recover but it's also important to keep the quality in the ryegrass that we have. So we want to try and preserve as much quality feed as possible. So they’re the two things that we really want to focus on to set our rotation length, okay, so that guides us. Okay, every time it starts to speed up, gets warmer, we get moisture, we’ve got good nutrition – that's going to grow faster – we need to reduce the rotation length and come in there quicker. Okay, what's that going to do to us? Well, what it's going to do, is going to give us more hectares per day to feed our animals. OK, so it's going to give us more grass into the diet, if you have the same cow numbers, and that allows us to then to play with our supplements and reduce our supplements. 

Okay, so we try and adjust that so we get more of the relatively cheap feed that we talk about, which is our pasture – try and get as much of that into the diet as possible. And then we're going to hit a stage, okay, once we get to August or September, everyone will be different with different stocking rates, but you’ll get to a stage where you've pulled back your supplements enough where you're comfortable you don't want to pull out anymore and you still look to be wasting feed, and if the cows are wasting feed, okay, you’ve spent money, okay, there's no point wasting it, our golden rule is we want to be about that four to six centimetre residuals, we don't want to go below that. Once we start going above six centimetres we’re wasting the feed, so instantly once we're at that point, we start to see cows waste the feed and we don't want to pull out any more supplements, instantly it's telling us we have a true surplus, then we can use some maths and some information, or you know, there's ways to do it, is to work out how many hectares you need to pull out, so then you can conserve that feed. Some people really worry about conserving feed and they don't want to conserve it, and that's okay, but in my opinion, you've spent the money, you've done the right thing with the grazing management, you get good quality feed into the animals, so it’s now sitting there going, here’s some true surplus feed, but if you don't deal with it, okay, it's not going to be conserved, but you're also wasting it, and then also, if it's wasting too much, and I see this on farms in spring all the time, it will start to mulch down and it’ll start to kill out new tillers, starts to shade, and the cows didn’t eat it last time, so they’re not going to eat it next time, so we're missing an opportunity and we're actually doing damage to our pastures going forward. So being able to recognize when that true surplus is there, keep the light down into the base of those plants, we're going to be able to grow better quality feed, grow more feed, and we’re going to be able to conserve a lot more feed as well. 

Sheena Carter: Josh, do you want to just talk about our break-even response rates and potentially something around that urea pricing at the moment? 

Josh Hack: So, if we quickly, you know, have a think about it, the first thing I’ll… and Sheena you can put some links to these YouTube clips, and Richard Eckard, a bloke that I've listened to and watched the most, and he taught me as much as I know about nitrogen, so if you look at some of his YouTube clips, and they’re really simple, they’re only two, three-minute sort of videos. He talks about how much nitrogen you should use, the timings and what the cost is. And I guess it's the cost one we’re sort of talking about now Sheena, and you know, if we want to get 50 kilos of urea to the hectare, which is sort of the higher rate of where we’re wanting to be. Even if it gets to a thousand dollars a tonne, roughly, let’s say a thousand and forty, or something like that. So it works out at two dollars a kilo. So if we work on two dollars a kilo of unit per N, we're going to put 50 units out, so it's going to cost us, let's say, one hundred dollars a hectare for that fertiliser. So, and we should be able to get a twenty to one response. The response we're going to get, Peter’s got some numbers here that he's had locally where we've been getting up to 30 and 35 to 1 responses. Okay, so the higher that response is, it's 30 kilos of dry matter grown per one kilo of nitrogen applied. So if we put 50 kilos out and do a 20 to 1 response, basically that's going to grow a thousand kilos per hectare of dry matter, so one tonne of dry matter, it's going to cost us, at two dollars a kilo, one hundred dollars. So for that extra tonne, even at two dollars a kilo, we’re normally, we’re at about $1.30 or $1.20 a kilo, so it is substantially higher at the moment, but even at $100 a tonne for feed for the return, still pretty cheap feed. But again, you should be always doing these numbers to see whether you need the feed. Nitrogen is a feed source, okay, and if you don't need the feed and you don't want to store the feed and for whatever reason, it might be stocking rate, you've culled most of the animals, or whatever it is, well then don’t apply the feed, I mean the nitrogen. If you need the feed and it's going to be relatively cheap feed, $100, you’ve already done the planning cost, you've already done everything else, and you’ve got your grazing management under control, and you’ve got the ability to conserve some feed, you know, the extra $100 a tonne to grow that extra feed. 

Sheena Carter: Yes, so there's still opportunity there despite those high prices that we're going to see. Thanks for that, Josh. Is there anything, anything else? 

Josh Hack: Yeah, look, I guess one thing that we have skipped over a bit is potassium as well. So once we do start to grow a lot of feed and our rotation is going to shorten, so we're going to be on a shorter rotation, we’re going to start harvesting a lot more feed. I’d definitely be sort of, looking at your blends. Obviously, the nitrogen rate we talked about, but looking at some potassium in that blends as well. Because you’re going to start to remove a lot more potassium as you start to produce more feed.

Peter Beale: And a comment on that too, with the soil testing we've done often it's one or two paddocks that are really low in K where you've been taking silage off. So there's probably 20 percent of the farm might be low in K and really needs to be addressed. But conversely, you can have pretty high K in some paddocks so it's always worthwhile knowing which one's which.

Josh Hack: Soil test.

Peter Beale: Yeah, soil test.

[Break]

Excerpts from Episode 24 – “The Economics of Silage Making”

Neil Griffiths: But as I said earlier, it really doesn't cost you that much more to make good silage compared to poor quality silage. What the thing in the paddock is, is that we want to get it done as quickly as we can but get it done right. So sometimes people get the “do quick” message, but they rush it and they don't get enough wilting in there. Or they focus on, “aw, we've got to get to 35% or 45% dry matter” and leave it out in the paddock. Those things happen, but if you expect them to happen, if they happen every time you go out there, then really you should sit back and say, well, what can I change to get a better result next time? And that is part of, you know, part of improving what we do all the time. You know, we look at what we've done. Why did it happen that way? What could we tweak, little things that might improve things next time? It'll never be exactly the same, but that's what we're aiming for. So at that point when we go to make our silage, I guess we've already at this point sat back and said, well okay, we're in a baled silage system, we're in a pit silage system. So that big picture type stuff, those decisions have been made, whether we've got our own equipment, whether we're using contractors – they're the big-ticket items that are going to affect the economics of the whole thing. And a lot of it is risk management as well, that sort of, do I want to take the risk of having a poor year and not getting the chance to make silage and having all that machinery sitting in a shed doing nothing, or do I leave the contractor to do that and I'll get the contractor in. If I'm using a contractor, are they going to turn up on time? You know, particularly with pastures, but any of our crops. A week can make a huge difference in feed quality. We can lose a megajoule in a week. That can be a lot of milk. If we make hundreds of tonnes of silage, that's a lot of milk at the end of the day. So, how we manage it to make sure we get that quality in there is, you know, that's a serious consideration. On the flip side, capital management, we don't want to have a whole heap of money tied up in machinery and infrastructure if we're not using it effectively. 

Sheena Carter: Yeah, and I guess before you go on, I think just to touch on that, I think particularly in New South Wales and perhaps other states of Australia, we have seen with… dairies are more, sort of, dispersed these days and the service provision to support them, particularly with contractors, is quite challenging in some areas and we have seen a lot of farms start to invest in some of their own silage making equipment because of this issue that you're talking about – contractors getting there late and the quality being affected once the silage is made. It is a very real issue for farmers, but I guess it is one that needs to be thought about quite carefully and some, sort of, rigorous numbers put around it to justify the expense. But we can talk about the contractors a bit more, I just thought I'd mention that as an issue because I, yeah, I've certainly seen a lot of farmers talking about, and purchasing, that silage making equipment due to challenges with accessing contractors. But sorry, back to the quality. 

Neil Griffiths: Yeah look, going right through, we need to do the job properly so when we go to store, you know, get it sealed up as quick as we can, compacted well, get all the air out, get it sealed up. Whether we use inoculates or not, that used to be a debate, I think we've moved past that debate now, I know not everyone does, but I think the results are certainly out there that show that using inoculates will help. They won't make rubbish into good silage, never will. But I guess the analogy I always use is it's the icing on the cake. You know, we want to have a good cake to start with. If we can get another 3% - 5% improvement by putting inoculates on silage, then that's the icing on the cake and that can be very effective. With some of the inoculates, certainly with maize and so forth, there are specific inoculates that do a slightly different job, not just improving the fermentation so we get a better result at the end. When we're thinking about those things, but also, we need to acknowledge that not only are there costs, but there are also losses that we can't eliminate when we make silage. We can't eliminate them when we make hay. But when you graze a paddock, you're never 100% efficient either.  You know, to leave sort of 20% or 30% of the feed in the paddock, you know, we can go out there and do our pasture assessments with quads or the rising plates and technology, if people are into that sort of thing, but the amount actually harvested is never what was out there, whether it's, sort of, not grazed… with silage we have a little bit of field losses, nowhere near as bad as hay, but we do have fermentation losses – that takes a bit of energy. There's always going to be some losses, but what we want to avoid is that wastage where we don't pick up the feed in the paddock or when we go to feed it out, that we've got those big wastages. You know, you wouldn't go and leave half a load of grain on the ground. We don't want to do that with silage either. It's just as bad on your economics if you go and waste a whole heap of feed with silage as it is with grain. So it goes right through. So, we acknowledge those things, but we're always managing to be as efficient as we can. I guess with some of those decisions about where do we invest, sometimes it's, do we need more labour or more capital. Some of the times that's why we're investing in capital is to be more efficient with our labour use, and I would always start with making the feed out program as efficient as possible. We can get contractors in to make the silage, they might work for a week or something – it might take us 6 or 12 months to feed that out. We can't get contractors in to feed out, so we've got to make sure that that's efficient from a labour perspective. Feed wastage – just as efficient as we can, and the first part about that is usually that we're going to store it near where we're going to feed it out. 

­Sheena Carter: Yep, good common-sense stuff. Now look, I know you've run a few numbers on the cost of energy, or poor-quality silage relative to better quality silage. Can we just have a chat about that? We might work out whether we can share those in the show notes, and I will caveat this by saying, as soon as you start putting some numbers and costs on things, they're outdated the next day, but we'll work through the process. Yes, you run some run some numbers on the quality of silage on current, well, some current prices, can we talk a bit about the impact that has on the bottom line of, you know, feeding your milking herd at the moment? 

Neil Griffiths: Yeah. So what I've used is just a little calculator that Dairy Australia has as part of their TopFodder package, which came off a thing we did earlier for beef producers and varied it around. So this is good that we've got the dairy version now if you like. So those that are listening might want to just pencil down a few numbers, but I've put five options or five columns if you like, and we've varied feed quality starting from nine megs, nine and a half, ten megs, ten and a half, 11 megs – the feed quality that I've put in. I've assumed 400 tonnes of dry matter made into silage, and what the calculator has used is, by changing the feed quality it's making assumptions about intake. And so what it's suggesting is that at nine megs that cattle would be eating just over 15 kilos of dry matter. Now I should say also, that this little calculator is also set at the moment to be, everything is getting six kilos of concentrate grain, 13.5 megs across the board – that hasn't varied. So at nine megs – just over 15 kilos, get up to 11 megs and they're eating about 17 kilos, 17.5 kilos of dry matter per cow. We plugged in, with your advice, $11.50 per kilo of solids as a milk price, so that's a variable that can be put in.

Sheena Carter: Yep, so for the those that speak in cents per litre still, even though you're probably paid on solids, it's around $0.90 a litre. 

Neil Griffiths: And I just put in some costs, which might be a little bit too conservative, but $200 a tonne of dry matter for making silage – that varies enormously – if you're doing wrapped bales, that's way too low, if you're doing really efficient pit silage, chop silage, you might have a little bit up your sleeve there. And I've also just allowed just over $300, $317, I think, for the concentrate cost, which again might be a bit low. Anyway, so that mixture of… we're calling it silage, but in fact it's roughage. So that could be a combination of silage, hay, pasture, they're all in that roughage category. So the numbers really wouldn't make any difference whether it was silage or grazing pasture. At nine megs, cows were expected to be producing 15.3 litres a day, and at 11 megs they're producing just over 24 litres a day. Bottom line, as far as our silage focus is concerned, that at nine megs, potentially you could be making about $595 per tonne of dry matter fed. At 11 megs, you're making $917. It basically came down that every half unit increment that we could improve our silage quality, we could make somewhere between $75 and $85 per tonne more at, really, no greater cost. It costs us no more to… as long as we've got the good feed to start with, we do everything well, then we can make more money out of everything. So I guess for me, the take home out of that is there's never a reason to make poor quality, and sometimes that's a bit of debate people want to have around drought feeding, aw, you don't need good quality, but from a dollar return, a profitability question, the better the quality is always going to be an advantage. You'll always make more money out of it. You'll produce more milk, you'll make more money out of it. So everything is aimed at feed quality from that initial crop selection. Which paddock are we going to conserve? How are we going to manage it? What do we do? We want that good quick wilt to maintain that feed quality. We want to get it into a bale or a pit, compacted as hard as we can get it, seal it up, again, maintain that initial quality, standing feed in the paddock is always the best. What we want to do is minimise the losses right the way through, and when we go to feed out, it comes to feed quality. Again, it's really interesting that when we're talking about losses and wastage when we feed out, we think about what we see out there, but you know, the biggest thing that affects wastage often, particularly on a feed pad, is feed quality, not so much how it's presented, when it's presented, it's feed quality. If you put good quality out there, they'll lick it off the ground. You put rubbish out there, they lay all over it and they'll waste it every time.

Sheena Carter: Expensive bedding. 

Neil Griffiths: Absolutely. So we can talk all we like about infrastructure and management for feed out, but it comes back to feed quality again. Then we start tinkering. All of those things are obviously important, but it's feed quality that drives the profitability of the thing every step of the way.

Sheena Carter: That's all for today's episode of The Business of Dairy. We hope you enjoyed diving into the fascinating world of dairy farming and industry insights. As we continue to expand and evolve, we greatly appreciate your support. Our show is thriving, attracting new listeners each week, but we believe there's always room to grow, and we need your help to make it happen. If you've found value in our discussions, we kindly ask you to take a moment to rate and leave a comment about the podcast on your preferred platform. Your feedback not only lets us know what you enjoy but also helps boost our visibility to others who might benefit from our content. I sincerely thank you for being part of our community, and we look forward to bringing you more engaging episodes in the future with the continued funding and support of the Hunter Local Land Services. Until next time, stay curious and keep milking those opportunities.