With market signals indicating that the industry is entering a period of falling milk prices, producers are being urged to plan carefully before cutting expenditure on feed.
“Historically, when milk prices have fallen, some produces try to ‘cost-cut’ their way out of the situation, particularly with regards to purchased feed,” says ForFarmers’ Bruce Forshaw.
“But the net result of these blanket cuts means that when milk prices begin to recover herds can be on the back foot."
Wholesale cuts to feed will result in reduced cow fertility, increasing days in milk and poorer animal performance. This in means that when producers do renew expenditure on feed there is a significant time lag before cows experience improved milk yields.” And with each milk-price cycle that producers go through, this lag becomes more significant.
“We’re seeing a shorter time between each cycle of high and low milk prices, so there’s less time to ‘catch up’ and make the most of higher prices when they occur,” adds ForFarmers’ Philip Ambler. “The net result is that once three or four milk price cycles have passed, the time lag between increasing expenditure on feed again and getting a subsequent increase in milk yield is so significant that some systems end up producing more milk when price is low, and less when prices are high. They’ve become trapped in a negative milk-price cycle due to declining herd performance.
“Detailed feed planning is vital during times of lower milk price,” adds Mr Ambler. “While this process might involve some overall reduction on feed expenditure, what we would encourage producers to do is really examine where they are utilising feed.
“It’s likely to be better to take the financial ‘hit’ to maintain current dry- and transitioncow diets to secure the long-term fertility of the herd, and then cut back a little for mid- or late-lactation cows.”
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