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Management and Economic Implications of Intensive Grazing on Dairy Farms in the Northeastern States1
Management and Economic Implications of Intensive Grazing on Dairy Farms in the Northeastern States1 W. J. PARKER,2 L. D. MULLER,3 and D. R. BUCKMASTER4 The Pennsylvania State University University Park 16002 ABSTRACT
for confined feeding or 2) that the relative price of concentrates, stored forage, and pasture change to favor grazing more. (Key words: intensive grazing, confined feeding, economics, dairy)
The effects of intensive grazing by dairy cattle on annual herbage utilization, forage and crop production, and net returns were compared with a drylot feeding system for a typical Pennsylvania dairy farm using linked spreadsheet models. The 80-ha case farm supported a herd of 53 cows and 48 replacements with a herd average of 6800 kg of milk! yr per cow. Annual feed consumption for the grazing farm included 173, 182, and 118 tonnes of pasture, stored forage, and concentrate DM, respectively. Corresponding tonnes of DM for the drylot feeding system were 47, 293, and 114. Net herbage production of 6589 kg of DMlha was used for grazing (5350 kg of DMlha) and for hay (970 kg of DMlha), and 269 kglha were not utilized on the grazing farm. On the confined farm, herbage was used primarily for hay (4484 kg of DMlha) rather than for grazing (1446 kg of DMlha), and herbage loss amounted to 659 kg of DMlha. The gross margin was $121 per cow higher on the grazing farm. Despite this potential to improve the profitability of dairy farms, the low usage of intensive grazing in the northeastern US is likely to continue until dairy producers become confident 1) that milk production per cow can be maintained at a level similar to that
Abbreviation key: CFS = confined feeding system model, GRS = grazing system model. INTRODUCTION
Received August 12, 1991. Accepted April 27, 1992. I Invited paper presented at Northeast ADSA· Northeastern American Society of Animal Science Meeting, July 23, 1991 at College Park, MD. 2Departrnent of Agricultural and Horticultural Systems Management, Massey University, New Zealand. 3Departrnent of Dairy and Animal Science. 4Departrnent of Agricultural and Biological Engineering.
1992 J Dairy Sci 75:2587-2597
Pasture represents a significant, underutilized forage resource for dairy producers in the Northeast (2). Despite the low cost of grazed forage, its use has declined steadily from 1950 to 1980 (7) as farmers substituted high input mechanized, confined dairy systems for grazing. During the 1980s, increased concern about the negative environmental effects of intensive dairying practices (21), rising costs for machinery and housing, and reduced profit margins for milk production (13) prompted a resurgence of interest in the use of lower input, pasture-based systems for dairy farms. This was assisted by significant improvements in the technology for fencing and watering livestock. The most interest in grazing systems has been shown by dairy producers with herds of fewer than 100 cows, who usually allow more pasture area per cow than do those with larger herds. In addition, these smaller farms have been subjected to greater financial stress than properties supporting large herds (12, 19). Reliable statistics are not available, but by 1990 only 10% of Northeast dairy producers were estimated to be using an intensive (controlled) grazing program. In this context, intensive grazing systems are those that attempt to maximize the productivity of pastures and animals through increased inputs of capital and labor. The lack of information on the potential economic benefit of grazing is likely to be an important reason for the low rate of adoption
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FEED BUDGET 1. Pasture supply Net herbage production Hay,silage,N fertilizer Forage Crops
2. Animal feed demand Livestock numbers Energy requirements Ration composition
-c->IHerbage OM loss
I
[>1 Feed quality values I Annual livestock
C> reconciliation purchases,sales performance
n GROSS MARGIN
LAND USE
Total revenue
Acreage of crops and forages Yields and labor Variable costs
C>
Operating costs
Figure I. Links between spreadsheet models used for the analysis of alternative forage systems for the dairy herd.
of pasture systems. Dairy producers need to know how farm profit will be affected before a change to a pasture-based feeding system is made. An estimate of the financial effect of grazing can be obtained by examining farm case studies that compare costs before and after the adoption of grazing (3, 8) or by comparing the average costs for a larger sample of farms that have or have not adopted grazing (27). A disadvantage of those approaches is that comparisons are made across years, which are likely to differ climatically, or among farms, which have different resources and management inputs. In addition, factors other than the grazing program p'\ve an impact on farm expenditure. The effect of grazing on profitability also can be estimated by comparing feed costs during the grazing season with those realized during the remainder of the year (5), but this comparison relates to only one aspect of the farming system. An alternative approach is to estimate the potential physical Journal of Dairy Science Vol. 75, No.9, 1992
and economic impacts of grazing using partial models (17) or whole-farm models. The advantage of modeling is that comparisons of alternative management systems can be made as if the farm had the same resources and management. This paper describes a modeling comparison of pasture-based and traditional, confined feeding systems on a typical Pennsylvania dairy farm and provides an estimate of the physical and economic impact of intensive grazing. A break-even level of milk production for grazing and confinement dairy feeding systems was derived. Model Description
A series of linked spreadsheet models were constructed to simulate the effects of alternative dairy herd feeding systems on annual ration requirements, land use, and profitability (Figure 1). Grazing (GRS) and confined (CFS) feeding system models were developed.
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The feed budget model summarized the monthly feed supply and demand for each class of livestock on the dairy farm using a feed profile format (25). Pasture production was represented as the product of the average monthly net herbage accumulation rate (kilograms per hectare per day) and the acreage of pasture available (25). Herbage DM production was converted into megacalorie equivalents using NRC (26) NEL values for an orchardgrassdominant pasture (Table 1). Additional herbage grown as a result of applying N fertilizer or by planting forage crops could be added to the feed supply in the appropriate months. Herbage surplus to short-term livestock requirements could be stored as hay (or silage) for later use or could be sold. One-third of the hay DM harvested was assumed to be lost between harvest and final consumption by livestock (4, 23). Corresponding losses assumed for corn silage and concentrates fed to livestock were 20% (35) and 5% (31), respectively. Values for herbage remaining in the pasture at the end of the month were transferred to records for the subsequent months after the herbage accumulation had been reduced by a DM loss factor (Table 1). The DM loss mechanistically simulated the senescence and decay of herbage (6), which are dependent on availability of moisture, temperature, and herbage mass of the sward (20). No published data describing the rate of herbage aging and decomposition for orchard grass-dominant swards were available; thus, assumed values were used in the model. Herbage available to livestock for grazing represented new growth within the current month plus herbage transferred from previous months. The total herbage remaining on the farm at the end of each month was expressed as average herbage cover (HCi) using the equation (25): HCi
= HCj-l
[l - DMLi_ll100]
+ (NHAi x di) + Ni - (HAY/a) - (PDM1i)
= herbage cover at end (kg of DM/ha);
(d,I '" £.J
number groupsn-EH')/E'
J
JJ
I'
j=1
where n = number of animals in group j, E1 = energy intake of group j (Meal of NEdd per animal), fj = fraction of energy intake for group j coming from pasture, and Ei = energy content of pasture during month i (Meal of NEL/kg of DM). The daily ration for each class of livestock could be provided from grazed herbage, stored
TABLE I. Net herbage accumulation rates (NHA), herbage quality, and herbage loss factors assumed in the feed budget model. Month
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
NHA
Herbage qualityI
Herbage loss2
(kg of OM! ha per d)
(Mcal of NELl kg of OM)
(%Imo)
13 45 40 15 20 31
1.61 1.65 1.39 1.30 1.19 1.30 1.47 1.323 1.19 1.19 1.19 1.32
2 2 3 4
5 0 0 0 0 0
5 5 6 6 6 6 6 6
IEstirnated from NRC (26) for an orchardgrassdominant sward. Fixed NEi. of 1.43 and 2.09 Mcallkg of OM were assumed for the stored forage and concentrate component of the livestock rations, respectively.
where HCj
DMLi = herbage DM loss during month i - 1 (%); NHAi = net herbage accumulation during month i (kg of DM/ha per d); d·I = days in month i, Ni = nitrogen response during month i (kg of DM/ha); HAYi = hay made during month i (kg of DM/ha); a = total area of pasture (ha); and PDM1i = pasture DM1 for month i =
2Assumed values relative to seasonal temperature and moisture conditions (6, 20).
of month i
3Herbage quality and loss coefficients from November to March apply to stored herbage. Journal of Dairy Science Vol. 75. No.9. 1992
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TABLE 2. Land use plan for a grazing system showing crop acreages and labor requirements yields and as-fed market prices. Crop-Forage Alfalfa Com silage Grain Pasture Hay Grazing
Area
Labor
Yield l
Price 2
(ha)
(Mla)
(tonnelha)
($Itonne)
14.2 9.7 16.6
22.2 13.1 8.6
6.7 11.2 7.8
90 80 100
3.6 28.7
22.2 2.5
8.9 5.3
65
lHarvested yields, except for grazing, which is net herbage accumulated per year. 2Prices are on an as-fed basis.
forages (corn silage or hay), and concentrates. Intake requirements were described in terms of megacalories to correct for the different caloric content of the feeds available to the herd and averaged over intervals of 1 mo. Intake requirements, derived from NRC (26) tables, were those needed to maintain a 635-kg Holstein cow producing 26 kgld of milk at midlactation and to achieve target rates of liveweight gain in the herd replacements (15). A 10% additional energy requirement was added for the lactating cows on GRS from April to October to account for the environmental effects and increased activity associated with grazing (26). The. respective monthly energy consumption of grazed pasture, cut forage, and concentrate by the livestock were converted into equivalent OM weights using NRC (26) NEL values (Table 1). Sums of those values for feed types across months provided the annual OM consumption for the respective feed categories. For the pasture component of the feeding program, an annual summary of pasture grown, harvested for hay, and lost through senescence and decay was similarly derived. In addition, the program accounted for any change in the average herbage cover on the farm at the beginning (April 1) and end of year (March 31), because opening and closing herbage cover values should be the same when comparisons are made between different pastoral systems. The annual utilization (U) of herbage by livestock was computed as U (%)
=
[(IjIj pasture intakeij) + (IjIj hay intakeij)
+
(HC 12 - HC1)] Ij (NHAidi)
X
100
where hay intake = livestock consumption of hay made from the pasture area. Journal of Dairy Science Vol. 75, No.9, 1992
The forage and grain crop program was developed from the annual ration requirements of the livestock. Land for grain production was available only after the stored forage (corn silage and alfalfa hay) requirements of the herd had been met. The area of pasture harvested for hay and used for grazing also was listed to provide a land use plan for the farm (Table 2). Each farm was assumed to grow 14.2 ha of alfalfa in a rotation with corn silage or grain and some of the pasture area. Pasture hay was assumed to contain 14 to 16% CP and was utilized by the herd fIrst because of its lower market value than alfalfa hay. For CFS, 50% of the stored forage requirements were provided by corn silage. The total cost and labor requirements (hours per hectare) and the yields for the acreages of the crops specifIed were computed using data from the 1990 Pennsylvania enterprise budgets (10). The annual operating costs for stored forage and cereal crops, derived from those budgets (Table 3), were transferred to the gross margin template. The gross margin spreadsheet was used to calculate income earned from milk production, livestock sales, the sale of surplus grain and forage, and subtracted operating costs. Operating costs, other than those incurred for the land use program, were taken from the analysis of accounts for the 1989 fInancial year of Pennsylvania (24) and Northeast (14) dairy farms. All concentrates for livestock were purchased as bulk commodities, and all grain produced on the farm (88% OM) was sold (11). A concentrate with 2 to 4 percentage units lower protein content was used for cows receiving most of their forage by grazing pastures (1). Livestock numbers sold and purchased each year were input directly from the annual livestock reconciliation (Figure 1), which sum-
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Alfalfa
Corn 1
Grazing
Hay
- - - - - - - - - - ($/ha) - - - - - - - - - -
Custom Fertilizer ~
Herbicides and insecticides Other Repairs and maintenance Seed Labor ($51h) Total
27 153 M 42 3 91 35 III 506
22 190
n
25 3 69 74 66 471
0 94 7 3 12 15 5 13 149
0 188 M 3 3 59 7 113 403
ICorn grain variable costs were the same as for corn silage, except for additional fuel to dry grain ($42/ha) and less labor ($23Iha).
marized all livestock transactions within the 12-mo study period. Case Farm Description and Herd Feeding Strategies
The modeling analysis was based on a typical 80-ha Pennsylvania dairy farm with 53 cows and 48 replacements. Land was allocated to forage crops (40.5 ha, or approximately .8 ha per cow), to pasture (32.4 ha, including hay fields), and to buildings, wetlands, and woods (24). The rolling herd average was assumed to be 6800 kg of milk per cow, and 13% of the herd were assumed to be dry at a given time. This milk production compares with the 1989 Pennsylvania state average of 6496 kg per cow (29) and an average of 7019 kg per cow in a sample of 888 Pennsylvania farms (24). Two forage feeding strategies for the herd were compared. The GRS made intensive use of pasture grazing from April to October but maintained a 30 to 35% daily energy intake from concentrates by the lactating cows even during peak grazing (when all forage was provided by grazed pasture) to preserve high milk production and maintain body condition of cows (17). Dry cows and replacements (13 to 24 mo of age) were fed up to 95% of their energy requirements from pasture during the grazing season. Calves (3 to 12 mo) obtained up to 20% of their requirements from May to October through grazing. The CFS represented a typical drylot feeding program, but some grazing by the herd occurred during late spring and early summer while cows were out for exercise. Dry cows
were maintained on the same diet as for GRS, but intake of grazed herbage was reduced to a maximum of 20% in the 13- to 24-mo-old heifers and was excluded entirely for cattle younger than 12 mo of age. Thus, CFS essentially represented the practice of grazing nontillable land by nonlactating cattle. The herd size and average milk production were assumed to be the same for both feeding strategies. The calving interval was 13.1 mo with a 95% calf survival at birth (annual calving 86%). A heifer replacement rate of 28% was used. To simplify the analysis, livestock numbers for both options were assumed to be constant for each month of the year (i.e., calving was distributed uniformly throughout the year). The feediag programs for GRS and CFS were developed iteratively; pasture usage was constrained to equate herbage covers at the beginning and end of the year and to maintain average monthly herbage cover within 1100 to 3000 kg of DMlha; these bounds correspond to the conditions necessary to sustain the sward and to maintain herbage quality for livestock production (30). No data base from a Northeast farm was available to validate the feed budget model output. However, the pattern of herbage cover change corresponded to results in yr 1 from a farm system stocking rate trial at The Pennsylvania State University (9); the feed budgeting technique is an established procedure for modeling pastoral farms (25). For the initial economic comparison, the same costs and prices were applied to both systems so that differences in the gross margin Journal of Dairy Science Vol. 75, No.9, 1992
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PARKER ET AL.
TABLE 4. Feed used. herbage utilization, and land use of grazing and confined feeding systems for a typical Pennsylvania dairy farm. Parameter Livestock and production Lactating cows Dry cows Replacements Herd average, kg of milk per cow Feeding program, tonne of DMlyr Grazed pasture Stored forage Concentrate Pastures, kg of DM/ha per yr Production Consumption Hay DM Loss Utilization, % Hay program, ha Pasture hay Alfalfa Com silage Com grain Hay program. tonne of DM Pasture hay Alfalfa Com silage Com grain
reflected only the effects of feed costs, the cropping and forage program, and less bedding material used in the barn. Subsequently, a 10% reduction in veterinary, breeding, and utility expenses was included; these are commonly cited items for which cost savings are obtained through grazing (3, 22). The 10% value represented a nominal figure; no reliable financial data were available from farms using intensive grazing practices. RESULTS AND DISCUSSION
The model output for the two options for herd feeding is summarized in Table 4. The amount of concentrate fed was slightly greater for GRS than CFS (118 vs. 114 tonnes of DMI yr) because of the 10% additional energy requirement during the grazing season, but total intake of pasture was 126 tonnes of DMlyr greater under GRS. For CPS, harvested forage was substituted for grazed herbage (293 vs. 182 tonnes of DMlyr). Annual utilization of herbage grown (6590 kg of DMlha) was 92% Journal of Dairy Science Vol. 75, No.9, 1992
Grazing
Confinement
46 7 34 6800
46 7 34 6800
0 0 0 0
173 182 118
47 293 114
126 -111 4
6589 5350 970 269 92
6589 1446 4484 659 73
0 3904 -3514 -390 19
3.6 14.2 9.7 16.6 32 95 109 130
16.2 14.2 15.8 10.5 145 95 177 82
Difference
-12.6 0 -6.1 6.1 -113 0 --{i8 48
under GRS and 73% under CFS. The CFS sustained greater losses of herbage during harvest, storage, and feeding of hay than GRS. Decay of herbage in the field also was increased by the hay management system because average herbage cover was higher than for GRS during the early part of the grazing season (Figure 2). The high utilization of herbage grown under grazing reflects the use of net accumulation rates, which exclude withinmonth losses of herbage DM in the model (20) and the medium to high stocking rate on the pasture area. However, herbage losses through trampling and fouling by livestock during grazing may be higher than those accounted for by the DM loss factors (28). Further research to quantify herbage losses under grazing and to develop strategies to minimize these is required. Additional hay (12. 6 ha) was made on the pasture area, and a greater acreage of corn silage (15.8 vs. 9.7 ha) was required to provide forage for the herd under CFS. Less area (6.1 ha) was therefore available for corn grain production, which had an important im-
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pact on the income of CFS because livestock and milk sales from the two systems were assumed to be the same. Total operating expenses (Table 5) were reduced under the GRS because cropping expenses were lower (mainly because less hay was harvested), because concentrate was $181 tonne less expensive during the grazing season (an average saving of $lO/tonne over the full year), because requirement for protein was lower, and because the quantity of barn bedding material (16) required during the grazing season was reduced compared with CFS. An additional 280 h of labor were required for the crop and forage program of CFS, mainly because of additional hay making (which is labor intensive). Hay production also increased the cost of fertilizer necessary to replace nutrients transferred off the farm by hay (Tab]e 2). Nutrient recycling, albeit uneven (32), is
greater under grazing conditions. The net result was a $12] per cow lower income (or $6409 for the farm) for CFS. Inclusion of 10% lower costs for veterinary, breeding, and utilities increased the advantage to GRS by $13 per cow more. Thus, those variables had a small impact on profitability relative to feed and crop costs. The $121 per cow margin compares with an average cost saving of $153 per cow in a 1988 case study of 15 New York farms (8). The annual savings recorded in that study (8) varied ($42 to 290 per cow) according to the area of pasture available for grazing and length of the grazing period. A case farm study of the financial impact of grazing on Vermont dairy farm in 1984, which included an amortized value for capital invested in fencing, showed an annual cost saving of $152 per cow (]8). An advantage of $88 per cow in 1988 for pasture grazing was estimated by a partial
TABLE 5. Sources of income and operating costs (based on 1989 and 1990 conditions) included in the gross margin analysis of grazing and confinement dairy systems. Parameter
Grazing
Confmement
Difference
93,413 14,375 630 16,300 124,718
93,413 14,375 5310 10,341 123,438
0 0 --4680 5959 1280
1166 1855
2215 1855
-1049 0
970 10,557 2233 1325 464 3757 2609 4826 658 0
970 11,735 2257 1325 340 4315 2640 6227 658 0
0 -1178 -24 0 124 -558 -31 -1401 0 0
27.00 18.58 1.85
1431 985 98
1431 985 98
0 0 0
65.00 42.00
25,110 3445 2226 63,715
26,123 3445 2226 68,845
-1013 0 0 -5310
61,003 1\51
54,594 1030
6409 121
($ per cow)
Milk Livestock Alfalfa hay Com grain Total income Operating expenses Bedding Breeding and testing Crop Custom Fertilizer and lime Fuel Herbicide and insecticide Other Repairs and maintenance Seed Labor Fuel (noncrop) Livestock purchases Maintenance (noncrop) Buildings Other Market and advertising Purchased feed (as-fed) concentrate Utilities Veterinarian and medicine Total operating costs Gross margin Per herd Per cow
55.00 35.00
12.42
($)
Journal of Dairy Science Vol. 75, No.9, 1992
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PARKER ET AL.
3500
"'
~
-~~
/\
3000
o
~2500 ~ 2000
8 ~1500
----------~.
! \
/
OJ
.0
1! 1000 '" ~ ~
500
o
---.. -..
-----~~---
- - -- .
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
Figure 2. Predicted average herbage cover at the end of each month on the pasture area for grazing (.) and confined (.) feeding systems. (The initial herbage cover on April I was 1120 kg of DMIha for both systems.)
budget analysis (16) that included some of the fixed cost factors (e.g., fencing capital) associated with the adoption of pasture grazing. A $249 per cow reduction in 1986 operating costs per cow compared with the northern New York Farm Business Summary average was reported for a farm practicing intensive grazing (22). In another case farm example, a 31 % reduction (about $88 per cow in 1987) in feed costs was achieved during the grazing season compared with the remainder of the year (5). The gross margin analysis does not include the effects of grazing on fixed costs, herd reproductive performance, or labor requirements for managing the herd. There are potential fixed cost savings from a reduction in machinery and equipment usage, size, or both under GRS. However, these savings are not likely to be realized unless equipment is being replaced or unless a farmer is starting a completely new dairying venture. Potential capital savings are reduced by the need for additional capital expenditure on fences, waterers, and possibly lanes (16) when an intensive grazing system is implemented. Herd reproductive performance that has improved, probably because of improved estrus detection when cows are taken to and from pastures, is claimed to be a benefit of grazing, especially when calving is concentrated in the fall or spring to create a seasonal milk production system (36). The overall benefit from better herd reproductive performance in these circumstances then becomes a function of the local seasonal variation in milk prices. Labor for barn cleaning (5) Journal of Dairy Science Vol. 75, No.9, 1992
and for crop and forage production (as shown by the model) may be less under GRS, but more time may be required to take cows to and from pastures during the grazing season, depending on the layout of an individual farm, distances travelled, and the existence of a lane system to direct livestock. Those factors, together with climate, also influence the additional energy required by cows for maintenance under grazing conditions. The 10% increase in requirements during the grazing season assumed for the present study probably is simplistic, and further research to quantify the effect of increased walking and grazing activity on the cow's energy requirement is needed. The analysis also showed that GRS would be able to utilize labor released from crop and forage production for other management activities. Break-Even and Sensitivity Analysis
At the price of $11.75/45.4 kg assumed for milk in the budget and the $121 per cow advantage for GRS, milk production could decrease by as much as 467 kg per cow before CPS would more profitable. Survey results for Pennsylvania dairy farms that do or do not use intensive grazing indicated that, for herds with fewer than 100 cows, production was 368 kg per cow lower on the farms using pasture grazing (7305 vs. 7673 kg per cow) in 1989 and 365 kg per cow lower in 1990 for herds that had DHIA rolling herd averages available (27). These production differences include the effects of herd genetic merit, managerial ability, and the quality of the land resource as well as the use of grazing. However, because 58% of the survey farmers using pastures had 5 yr or less experience with grazing, production per cow could be expected to increase as pastures and grazing management skills improve. In both 1989 and 1990, given the assumptions made for the modeling analysis, GRS would have generated a similar gross margin to the CFS, despite less milk per cow on the average survey property. This emphasizes the importance of considering the overall farm system rather than a single variable (e.g., milk per cow) when the profitability of dairying systems is being evaluated. The break-even analysis assumed that the composition of the milk produced under GRS and CFS was the same.
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There is some evidence that the fat content of milk is reduced when cows are grazing pastures compared with that achieved during indoor feeding of forages (3). The financial impact of changes in milk composition depends on the relative prices paid under the component formula and on the annual proportion of milk produced under intensive GRS. The savings from using a lower protein concentrate were estimated from prices provided by a commercial feed company. These averaged almost $lO/tonne over the 12-mo period. For the case farm, lower protein concentrates saved $1013/yr ($19 per cow), or 17% of the total advantage to GRS. The concentrate cost saving may be increased if rations are balanced so that the dairy cow can more efficiently utilize the high protein content of wellmanaged pastures (33) and if the use of grazing during the second half of lactation is maximized by either adjusting the calving pattern (36) or feeding cows individually. Less savings from grazing accrue if pastures are poorly managed such that more stored forages and concentrates are required to compensate for the lower feed quality of the pastures. A common concern with pasture systems is variability in herbage production within and between years (27). The impact of a 30% reduction in herbage production during a July and August drought reduced annual hay production by 13.6 tonnes of OM (market value, $1040) for GRS. The model lacked the specifications to assess the impact of a drought on herbage quality or intake of pasture. A drought also affects the pastures and crops of CFS and increases costs through lost feed production, although some forage crops are more tolerant of dry conditions than temperate pasture species. The net financial effect of unfavorable weather may, therefore, be similar for both systems. The availability of barn feeding facilities provides flexibility to cope with variable pasture production under GRS. An important aspect of both dairying systems was the extent of forage losses. Reduction of total hay losses from 33 to 25% (4) decreases hay requirements by 11 tonnes of OM for CFS and by 7 tonnes of OM for GRS. The as-fed market value of this hay (85% OM, $90Itonne) is equivalent to annual cost savings of $22 and $14 per cow, respectively, which emphasizes the importance, particularly under CFS, of efficient hay management practices.
External Factors
The benefits of an aesthetically improved landscape, reduced soil erosion, less ground water contamination, and lower chemical usage that may accrue to pasture-based feeding systems in general were not accounted for in the analysis. Undoubtedly, the environmental costs of external factors in agriculture will become more visible in the future, and more of these will be paid for by the farmer. These additional costs of production may constrain the trend toward increased numbers of herds under intensive, confinement management (34) and may help to maintain the viability of smaller dairy farms. CONCLUSIONS
The decision to change from a stored feeding system to increased pasture grazing is strategic and requires a thorough evaluation of the total farm system. Although the development of the model was restricted by the lack of data for pasture-based dairy systems, the comparison of GRS and CFS for the dairy herd confirmed the economic advantage of pasture grazing that previously has been reported from farm case studies. The importance of considering the total farm system, rather than the dairy herd separately, when considering alternative herd feeding systems was demonstrated. The model provides a framework for considering the implications of pasture grazing on dairy farms, and this can be updated readily by new research on components of pasture-based dairy systems. In particular, field research to quantify the input-output relationships of high producing cows on pastures and the commodities necessary for maintaining a balanced ration for these cows during the grazing season is required to quantify more accurately the impact of intensive grazing on farm productivity and profit. Better data are required to describe the protein quality and availabilities in pasture that are intensively grazed, because this represents an area in which significant savings may be obtained by dairy producers. The analysis suggests that an average Pennsylvania dairy farm could reduce operating costs by $6000 to $7000 annually through intensive grazing, but overall income would not be improved if production per cow fell by Journal of Dairy Science Vol. 75, No.9, 1992
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more than about 450 kg per lactation under this herd feeding program. Use of grazing presently is restricted by factors such as the dairy producer's lack of confidence in the ability of pastures to provide high quality forage and the dearth of information describing grazing systems and ration programs necessary to maintain milk production. The current slow rate of adoption of intensive grazing in the Northeastern states, therefore, is likely to continue; most dairy producers prefer to maintain their existing confined management, which provides a more easily controlled ration program for the herd (27). However, different types of pasture-based dairying systems (e.g., seasonal production or concentrated fall calving) may provide larger financial advantages than shown for the year-round calving system reported. ACKNOWLEDGMENTS
Many helpful suggestions during the preparation of the manuscript were made by R. S. Adams, S. L. Fales, W. T. McSweeny, and J. L. Aldrich. REFERENCES I Adams. R. S.• J. G. Hlubik. and S. C. Bosworth. 1988. Ration progranuning and feeding tips for dairy cattle on pasture. Page 129 in Proc. Pasture in the Northeast Region of the United States, Publ. 36. Northeast Reg. Agric. Eng. Serv.• Ithaca. NY. 2 Brougham. R. 1988. A report on the potential role of grass-legume pastures in present day livestock farming in Pennsylvania and an assessment of some research requirements. Mimeo. College Agric.• Pennsylvania State Univ.• University Park. 3 Brown. R. J. 1990. Farmer experiences with intensive grazing. Page 228 in Proc. Dairy Feeding Systems Symp.• Publ. 38. Northeast Reg. Agric. Eng. Serv., Ithaca, NY. 4 Buckmaster. D. R., C. A. Rotz, and 1. R. Black. 1990. Value of alfalfa losses on dairy farms. Trans. Am. Soc. Agric. Eng. 32:351. 5 Cassels. E. K.. and R. 1. Brown. 1988. Pasture as a component of a forage system for dairy cattle. Page 21 in Proc. Pasture in the Northeast Region of the United States. Publ. 36. Nonheast Reg. Agric. Eng. Serv.• Ithaca. NY. 6 Chapman, D. F.. D. A. Clark, C. A. Land. and N. Dymock. 1984. Leaf and tiller or stolon death of Lotium perenne. Agrostis spjl.• and Trifolium repens in set-stocked and rotationally grazed swards. N.Z. J. Agric. Res. 27:303. 7 Dairy Herd Improvement Association. 1990. 1990 Yearbook. Pennsylvania Dairyman's Assoc.• New Cumberland. Journal of Dairy Science Vol. 75. No.9. 1992
8 Emmick. D. L., and L. F. Toomer. 1991. The economic impact of intensive grazing management on fifteen dairy farms in New York State. Page 19 in Proc. Am. Forage Grassl. Conr.. Georgetown, TX. 9 Fales. S. L., L. D. Muller, R. J. Hoover. and L. A. Holden. 1991. Intensive grazing of high producing dairy cows: pasture and milk production at three stocking rates. Page 187 in Agron. Abstr.• Am. Soc. Agron., Madison, WI. 10 Greaser. G. 1991. Pennsylvania enterprise budgets. Dairy Sci. Ext. Mimeo. Pennsylvania State Univ.• University Park. 11 Greaser, G., R. S. Adams, and V. Ishler. 1990. Economics of commodities vs. finished dairy feeds. Page 184 in Proc. Dairy Feeding Systems Symp.• Publ. 38. Northeast Reg. Agric. Eng. Serv.• Ithaca. NY. 12 Hallberg. M. C.• and E. J. Partenhiemer. 1991. The structural character and recent trends of Pennsylvania agriculture economy. Bull. 869. College Agric .• Pennsylvania State Univ .• University Park. 13 Hastings. J. 1987. Profitability of small Northeast dairy farms. Page 93 in Proc. Sustaining the Smaller Dairy Farm in the Northeast. S. R. Kaffka, ed. Sunny Valley Foundation, Inc., New Milford. CT. 14 Hastings. J. 1990. 1989 Dairy farm summary. Farm Credit Bank, Springfield, MA. 15 Heinrichs. A. J. 1990. Feeding the dairy heifer. Dairy and Anim. Sci. Ext. Cire. 387, Pennsylvania State Univ.• University Park. 16 Hlubik, J. G.• and T. R. Smith. 1988. Economics of pasture systems. Page 67 in Proc. Pasture in the Northeast Region of the United States. Publ. 36. Northeast Reg. Agric. Eng. Serv., Ithaca, NY. 17 Hoffman, K. 1991. Rotational grazing systems: pasture quality evaluation and concentrate supplementation of lactating cows. M.S. Thesis. Pennsylvania State Univ.• University Park. 18 Jones. C., and P. Burns. 1989. Economic effects of adoption of rotational grazing. Mimeo. Soil Conserv. Serv., Orono. ME. 19 Kaffka, S. R. 1987. Prospects for the survival of the small dairy farm in the nonheastern US. Page 7 in Proc. Sustaining the Smaller Dairy Farm in the Nonheast. S. R. KaffIca, ed. Sunny Valley Foundation, Inc., New Milford, CT. 20 Kone, C. 1.. A. C. Chu, and T. R. Field. 1987. Pasture production. Page 7 in Livestock feeding on pasture. A. Nicol, ed. Occ. Publ. No. 10. N.Z. Soc. Anim. Prod., Hamilton. 21 Lanyon. L. E., and D. B. Beegle. 1989. The role of on-farm nutrient balance measurements in an integrated approach 10 nutrient management. 1. Soil Water Conserv. 44:164. 22 Lucey. R. F., W. S. Reid, and C. A. Ti1Iinghast. 1988. Optimizing grazing on a 50 cow dairy farm in nonhern New York. Page 55 in Proc. Pasture in lhe Nonheasl Region of the United Stated, Publ. 36. Nonheast Reg. Agric. Eng. Serv.• Ithaca. NY. 23 McGeehan, M. B. 1990. A review of losses arising during conservation of grass forage. Part 2. Storage losses. J. Agric. Eng. Res. 45:1. 24 McSweeny, W. T.• and L. Jenkins. 1990. 1989 Pennsylvania Dairy Farm Business Analysis. Ext. Circ. 388. Pennsylvania State Univ.• University Park.
OUR INDUSTRY TODAY 25 Milligan, K. E., I. M. Brookes, and K. F. Thompson. 1987. Feed planning on pasture. Page 75 in Livestock feeding on pasture A. Nicol, ed. Occ. Publ. No. 10. N.Z. Soc. Anim. Prod., Hamilton. 26 National Research Council. 1989. Nutrient Requirements of Dairy Cattle. 6th rev. ed. Natl. Acad. Sci., Washington, DC. 27 Parker, W. J., L. D. Muller, S. L. Fales, and W. T. McSweeny. 1991. A farm survey of pasture and confined feeding systems for dairy cows in PeMsylvania. J. Dairy Sci. 74(Suppl. 1):314.(Abstr.) 28 Peel, S., E. A. Matkin, and C. A. Hooles. 1988. Herbage growth and utilized output from grassland on dairy farms in southwest England: case studies of five farms, 1982 and 1983. II. Herbage utilization. Grass Forage Sci. 43:71. 29 Pennsylvania Department of Agriculture. 1990. Pennsylvania Department of Agriculture Annual Report 1988-89. Pennsylvania Agric. Statistics Ser., Harrisburg. 30 Rayburn, E. 1989. Dry matter intake of dairy cows and supplemental feeding on pasture. Seneca Trail Resource Conservation and Development Area, Franklinville, NY.
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31 Rotz, C. A., D. R. Buckmaster, D. R. Mertens, and J. R. Black. 1989. DAFOSYM: a dairy systems model for evaluating alternatives in forage conservation. J. Dairy Sci. 72:3050. 32 Saunders, W. M. 1984. Mineral composition of soil and pasture from areas of grazed paddocks, affected and unaffected by dung and urine. N.Z. J. Agric. Res. 27:405. 33 Welch, J. G., R. H. Palmer, A. M. Bueche, and W. M. Murphy. 1990. Balancing rations (protein) for dairy cattle on pasture. Page 223 in Proc. Dairy Feeding Systems Symp., Publ. 38. Northeast Reg. Agric. Eng. Serv., Ithaca, NY. 34 Westphal, P. J., L. E. Lanyon, and E. J. Partenhiemer. 1989. Plant nutrient management strategy implications for optimal herd size and performance of a simulated dairy farm. Agric. Syst. 31 :381. 35 Wilkinson, J. M. 1981. Losses in the conservation and utilization of grass and forage crops. Ann. Appl. BioI. 98:365. 36 Zartman, D. L. 1990. The New Zealand system in Ohio. Page 236 in Proc. Dairy Feeding Systems Symp., Pub\. 38. Northeast Reg. Agric. Eng. Serv., Ithaca, NY.
Journal of Dairy Science Vol. 75, No.9, 1992
for confined feeding or 2) that the relative price of concentrates, stored forage, and pasture change to favor grazing more. (Key words: intensive grazing, confined feeding, economics, dairy)
The effects of intensive grazing by dairy cattle on annual herbage utilization, forage and crop production, and net returns were compared with a drylot feeding system for a typical Pennsylvania dairy farm using linked spreadsheet models. The 80-ha case farm supported a herd of 53 cows and 48 replacements with a herd average of 6800 kg of milk! yr per cow. Annual feed consumption for the grazing farm included 173, 182, and 118 tonnes of pasture, stored forage, and concentrate DM, respectively. Corresponding tonnes of DM for the drylot feeding system were 47, 293, and 114. Net herbage production of 6589 kg of DMlha was used for grazing (5350 kg of DMlha) and for hay (970 kg of DMlha), and 269 kglha were not utilized on the grazing farm. On the confined farm, herbage was used primarily for hay (4484 kg of DMlha) rather than for grazing (1446 kg of DMlha), and herbage loss amounted to 659 kg of DMlha. The gross margin was $121 per cow higher on the grazing farm. Despite this potential to improve the profitability of dairy farms, the low usage of intensive grazing in the northeastern US is likely to continue until dairy producers become confident 1) that milk production per cow can be maintained at a level similar to that
Abbreviation key: CFS = confined feeding system model, GRS = grazing system model. INTRODUCTION
Received August 12, 1991. Accepted April 27, 1992. I Invited paper presented at Northeast ADSA· Northeastern American Society of Animal Science Meeting, July 23, 1991 at College Park, MD. 2Departrnent of Agricultural and Horticultural Systems Management, Massey University, New Zealand. 3Departrnent of Dairy and Animal Science. 4Departrnent of Agricultural and Biological Engineering.
1992 J Dairy Sci 75:2587-2597
Pasture represents a significant, underutilized forage resource for dairy producers in the Northeast (2). Despite the low cost of grazed forage, its use has declined steadily from 1950 to 1980 (7) as farmers substituted high input mechanized, confined dairy systems for grazing. During the 1980s, increased concern about the negative environmental effects of intensive dairying practices (21), rising costs for machinery and housing, and reduced profit margins for milk production (13) prompted a resurgence of interest in the use of lower input, pasture-based systems for dairy farms. This was assisted by significant improvements in the technology for fencing and watering livestock. The most interest in grazing systems has been shown by dairy producers with herds of fewer than 100 cows, who usually allow more pasture area per cow than do those with larger herds. In addition, these smaller farms have been subjected to greater financial stress than properties supporting large herds (12, 19). Reliable statistics are not available, but by 1990 only 10% of Northeast dairy producers were estimated to be using an intensive (controlled) grazing program. In this context, intensive grazing systems are those that attempt to maximize the productivity of pastures and animals through increased inputs of capital and labor. The lack of information on the potential economic benefit of grazing is likely to be an important reason for the low rate of adoption
2587
2588
PARKER ET AL.
FEED BUDGET 1. Pasture supply Net herbage production Hay,silage,N fertilizer Forage Crops
2. Animal feed demand Livestock numbers Energy requirements Ration composition
-c->IHerbage OM loss
I
[>1 Feed quality values I Annual livestock
C> reconciliation purchases,sales performance
n GROSS MARGIN
LAND USE
Total revenue
Acreage of crops and forages Yields and labor Variable costs
C>
Operating costs
Figure I. Links between spreadsheet models used for the analysis of alternative forage systems for the dairy herd.
of pasture systems. Dairy producers need to know how farm profit will be affected before a change to a pasture-based feeding system is made. An estimate of the financial effect of grazing can be obtained by examining farm case studies that compare costs before and after the adoption of grazing (3, 8) or by comparing the average costs for a larger sample of farms that have or have not adopted grazing (27). A disadvantage of those approaches is that comparisons are made across years, which are likely to differ climatically, or among farms, which have different resources and management inputs. In addition, factors other than the grazing program p'\ve an impact on farm expenditure. The effect of grazing on profitability also can be estimated by comparing feed costs during the grazing season with those realized during the remainder of the year (5), but this comparison relates to only one aspect of the farming system. An alternative approach is to estimate the potential physical Journal of Dairy Science Vol. 75, No.9, 1992
and economic impacts of grazing using partial models (17) or whole-farm models. The advantage of modeling is that comparisons of alternative management systems can be made as if the farm had the same resources and management. This paper describes a modeling comparison of pasture-based and traditional, confined feeding systems on a typical Pennsylvania dairy farm and provides an estimate of the physical and economic impact of intensive grazing. A break-even level of milk production for grazing and confinement dairy feeding systems was derived. Model Description
A series of linked spreadsheet models were constructed to simulate the effects of alternative dairy herd feeding systems on annual ration requirements, land use, and profitability (Figure 1). Grazing (GRS) and confined (CFS) feeding system models were developed.
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OUR INDUSTRY TODAY
The feed budget model summarized the monthly feed supply and demand for each class of livestock on the dairy farm using a feed profile format (25). Pasture production was represented as the product of the average monthly net herbage accumulation rate (kilograms per hectare per day) and the acreage of pasture available (25). Herbage DM production was converted into megacalorie equivalents using NRC (26) NEL values for an orchardgrassdominant pasture (Table 1). Additional herbage grown as a result of applying N fertilizer or by planting forage crops could be added to the feed supply in the appropriate months. Herbage surplus to short-term livestock requirements could be stored as hay (or silage) for later use or could be sold. One-third of the hay DM harvested was assumed to be lost between harvest and final consumption by livestock (4, 23). Corresponding losses assumed for corn silage and concentrates fed to livestock were 20% (35) and 5% (31), respectively. Values for herbage remaining in the pasture at the end of the month were transferred to records for the subsequent months after the herbage accumulation had been reduced by a DM loss factor (Table 1). The DM loss mechanistically simulated the senescence and decay of herbage (6), which are dependent on availability of moisture, temperature, and herbage mass of the sward (20). No published data describing the rate of herbage aging and decomposition for orchard grass-dominant swards were available; thus, assumed values were used in the model. Herbage available to livestock for grazing represented new growth within the current month plus herbage transferred from previous months. The total herbage remaining on the farm at the end of each month was expressed as average herbage cover (HCi) using the equation (25): HCi
= HCj-l
[l - DMLi_ll100]
+ (NHAi x di) + Ni - (HAY/a) - (PDM1i)
= herbage cover at end (kg of DM/ha);
(d,I '" £.J
number groupsn-EH')/E'
J
JJ
I'
j=1
where n = number of animals in group j, E1 = energy intake of group j (Meal of NEdd per animal), fj = fraction of energy intake for group j coming from pasture, and Ei = energy content of pasture during month i (Meal of NEL/kg of DM). The daily ration for each class of livestock could be provided from grazed herbage, stored
TABLE I. Net herbage accumulation rates (NHA), herbage quality, and herbage loss factors assumed in the feed budget model. Month
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
NHA
Herbage qualityI
Herbage loss2
(kg of OM! ha per d)
(Mcal of NELl kg of OM)
(%Imo)
13 45 40 15 20 31
1.61 1.65 1.39 1.30 1.19 1.30 1.47 1.323 1.19 1.19 1.19 1.32
2 2 3 4
5 0 0 0 0 0
5 5 6 6 6 6 6 6
IEstirnated from NRC (26) for an orchardgrassdominant sward. Fixed NEi. of 1.43 and 2.09 Mcallkg of OM were assumed for the stored forage and concentrate component of the livestock rations, respectively.
where HCj
DMLi = herbage DM loss during month i - 1 (%); NHAi = net herbage accumulation during month i (kg of DM/ha per d); d·I = days in month i, Ni = nitrogen response during month i (kg of DM/ha); HAYi = hay made during month i (kg of DM/ha); a = total area of pasture (ha); and PDM1i = pasture DM1 for month i =
2Assumed values relative to seasonal temperature and moisture conditions (6, 20).
of month i
3Herbage quality and loss coefficients from November to March apply to stored herbage. Journal of Dairy Science Vol. 75. No.9. 1992
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PARKER ET AL.
TABLE 2. Land use plan for a grazing system showing crop acreages and labor requirements yields and as-fed market prices. Crop-Forage Alfalfa Com silage Grain Pasture Hay Grazing
Area
Labor
Yield l
Price 2
(ha)
(Mla)
(tonnelha)
($Itonne)
14.2 9.7 16.6
22.2 13.1 8.6
6.7 11.2 7.8
90 80 100
3.6 28.7
22.2 2.5
8.9 5.3
65
lHarvested yields, except for grazing, which is net herbage accumulated per year. 2Prices are on an as-fed basis.
forages (corn silage or hay), and concentrates. Intake requirements were described in terms of megacalories to correct for the different caloric content of the feeds available to the herd and averaged over intervals of 1 mo. Intake requirements, derived from NRC (26) tables, were those needed to maintain a 635-kg Holstein cow producing 26 kgld of milk at midlactation and to achieve target rates of liveweight gain in the herd replacements (15). A 10% additional energy requirement was added for the lactating cows on GRS from April to October to account for the environmental effects and increased activity associated with grazing (26). The. respective monthly energy consumption of grazed pasture, cut forage, and concentrate by the livestock were converted into equivalent OM weights using NRC (26) NEL values (Table 1). Sums of those values for feed types across months provided the annual OM consumption for the respective feed categories. For the pasture component of the feeding program, an annual summary of pasture grown, harvested for hay, and lost through senescence and decay was similarly derived. In addition, the program accounted for any change in the average herbage cover on the farm at the beginning (April 1) and end of year (March 31), because opening and closing herbage cover values should be the same when comparisons are made between different pastoral systems. The annual utilization (U) of herbage by livestock was computed as U (%)
=
[(IjIj pasture intakeij) + (IjIj hay intakeij)
+
(HC 12 - HC1)] Ij (NHAidi)
X
100
where hay intake = livestock consumption of hay made from the pasture area. Journal of Dairy Science Vol. 75, No.9, 1992
The forage and grain crop program was developed from the annual ration requirements of the livestock. Land for grain production was available only after the stored forage (corn silage and alfalfa hay) requirements of the herd had been met. The area of pasture harvested for hay and used for grazing also was listed to provide a land use plan for the farm (Table 2). Each farm was assumed to grow 14.2 ha of alfalfa in a rotation with corn silage or grain and some of the pasture area. Pasture hay was assumed to contain 14 to 16% CP and was utilized by the herd fIrst because of its lower market value than alfalfa hay. For CFS, 50% of the stored forage requirements were provided by corn silage. The total cost and labor requirements (hours per hectare) and the yields for the acreages of the crops specifIed were computed using data from the 1990 Pennsylvania enterprise budgets (10). The annual operating costs for stored forage and cereal crops, derived from those budgets (Table 3), were transferred to the gross margin template. The gross margin spreadsheet was used to calculate income earned from milk production, livestock sales, the sale of surplus grain and forage, and subtracted operating costs. Operating costs, other than those incurred for the land use program, were taken from the analysis of accounts for the 1989 fInancial year of Pennsylvania (24) and Northeast (14) dairy farms. All concentrates for livestock were purchased as bulk commodities, and all grain produced on the farm (88% OM) was sold (11). A concentrate with 2 to 4 percentage units lower protein content was used for cows receiving most of their forage by grazing pastures (1). Livestock numbers sold and purchased each year were input directly from the annual livestock reconciliation (Figure 1), which sum-
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OUR INDUSTRY TODAY TABLE 3. Variable costs for alternative forage crops grown on the case fann. Item
Alfalfa
Corn 1
Grazing
Hay
- - - - - - - - - - ($/ha) - - - - - - - - - -
Custom Fertilizer ~
Herbicides and insecticides Other Repairs and maintenance Seed Labor ($51h) Total
27 153 M 42 3 91 35 III 506
22 190
n
25 3 69 74 66 471
0 94 7 3 12 15 5 13 149
0 188 M 3 3 59 7 113 403
ICorn grain variable costs were the same as for corn silage, except for additional fuel to dry grain ($42/ha) and less labor ($23Iha).
marized all livestock transactions within the 12-mo study period. Case Farm Description and Herd Feeding Strategies
The modeling analysis was based on a typical 80-ha Pennsylvania dairy farm with 53 cows and 48 replacements. Land was allocated to forage crops (40.5 ha, or approximately .8 ha per cow), to pasture (32.4 ha, including hay fields), and to buildings, wetlands, and woods (24). The rolling herd average was assumed to be 6800 kg of milk per cow, and 13% of the herd were assumed to be dry at a given time. This milk production compares with the 1989 Pennsylvania state average of 6496 kg per cow (29) and an average of 7019 kg per cow in a sample of 888 Pennsylvania farms (24). Two forage feeding strategies for the herd were compared. The GRS made intensive use of pasture grazing from April to October but maintained a 30 to 35% daily energy intake from concentrates by the lactating cows even during peak grazing (when all forage was provided by grazed pasture) to preserve high milk production and maintain body condition of cows (17). Dry cows and replacements (13 to 24 mo of age) were fed up to 95% of their energy requirements from pasture during the grazing season. Calves (3 to 12 mo) obtained up to 20% of their requirements from May to October through grazing. The CFS represented a typical drylot feeding program, but some grazing by the herd occurred during late spring and early summer while cows were out for exercise. Dry cows
were maintained on the same diet as for GRS, but intake of grazed herbage was reduced to a maximum of 20% in the 13- to 24-mo-old heifers and was excluded entirely for cattle younger than 12 mo of age. Thus, CFS essentially represented the practice of grazing nontillable land by nonlactating cattle. The herd size and average milk production were assumed to be the same for both feeding strategies. The calving interval was 13.1 mo with a 95% calf survival at birth (annual calving 86%). A heifer replacement rate of 28% was used. To simplify the analysis, livestock numbers for both options were assumed to be constant for each month of the year (i.e., calving was distributed uniformly throughout the year). The feediag programs for GRS and CFS were developed iteratively; pasture usage was constrained to equate herbage covers at the beginning and end of the year and to maintain average monthly herbage cover within 1100 to 3000 kg of DMlha; these bounds correspond to the conditions necessary to sustain the sward and to maintain herbage quality for livestock production (30). No data base from a Northeast farm was available to validate the feed budget model output. However, the pattern of herbage cover change corresponded to results in yr 1 from a farm system stocking rate trial at The Pennsylvania State University (9); the feed budgeting technique is an established procedure for modeling pastoral farms (25). For the initial economic comparison, the same costs and prices were applied to both systems so that differences in the gross margin Journal of Dairy Science Vol. 75, No.9, 1992
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PARKER ET AL.
TABLE 4. Feed used. herbage utilization, and land use of grazing and confined feeding systems for a typical Pennsylvania dairy farm. Parameter Livestock and production Lactating cows Dry cows Replacements Herd average, kg of milk per cow Feeding program, tonne of DMlyr Grazed pasture Stored forage Concentrate Pastures, kg of DM/ha per yr Production Consumption Hay DM Loss Utilization, % Hay program, ha Pasture hay Alfalfa Com silage Com grain Hay program. tonne of DM Pasture hay Alfalfa Com silage Com grain
reflected only the effects of feed costs, the cropping and forage program, and less bedding material used in the barn. Subsequently, a 10% reduction in veterinary, breeding, and utility expenses was included; these are commonly cited items for which cost savings are obtained through grazing (3, 22). The 10% value represented a nominal figure; no reliable financial data were available from farms using intensive grazing practices. RESULTS AND DISCUSSION
The model output for the two options for herd feeding is summarized in Table 4. The amount of concentrate fed was slightly greater for GRS than CFS (118 vs. 114 tonnes of DMI yr) because of the 10% additional energy requirement during the grazing season, but total intake of pasture was 126 tonnes of DMlyr greater under GRS. For CPS, harvested forage was substituted for grazed herbage (293 vs. 182 tonnes of DMlyr). Annual utilization of herbage grown (6590 kg of DMlha) was 92% Journal of Dairy Science Vol. 75, No.9, 1992
Grazing
Confinement
46 7 34 6800
46 7 34 6800
0 0 0 0
173 182 118
47 293 114
126 -111 4
6589 5350 970 269 92
6589 1446 4484 659 73
0 3904 -3514 -390 19
3.6 14.2 9.7 16.6 32 95 109 130
16.2 14.2 15.8 10.5 145 95 177 82
Difference
-12.6 0 -6.1 6.1 -113 0 --{i8 48
under GRS and 73% under CFS. The CFS sustained greater losses of herbage during harvest, storage, and feeding of hay than GRS. Decay of herbage in the field also was increased by the hay management system because average herbage cover was higher than for GRS during the early part of the grazing season (Figure 2). The high utilization of herbage grown under grazing reflects the use of net accumulation rates, which exclude withinmonth losses of herbage DM in the model (20) and the medium to high stocking rate on the pasture area. However, herbage losses through trampling and fouling by livestock during grazing may be higher than those accounted for by the DM loss factors (28). Further research to quantify herbage losses under grazing and to develop strategies to minimize these is required. Additional hay (12. 6 ha) was made on the pasture area, and a greater acreage of corn silage (15.8 vs. 9.7 ha) was required to provide forage for the herd under CFS. Less area (6.1 ha) was therefore available for corn grain production, which had an important im-
2593
OUR INDUSTRY TODAY
pact on the income of CFS because livestock and milk sales from the two systems were assumed to be the same. Total operating expenses (Table 5) were reduced under the GRS because cropping expenses were lower (mainly because less hay was harvested), because concentrate was $181 tonne less expensive during the grazing season (an average saving of $lO/tonne over the full year), because requirement for protein was lower, and because the quantity of barn bedding material (16) required during the grazing season was reduced compared with CFS. An additional 280 h of labor were required for the crop and forage program of CFS, mainly because of additional hay making (which is labor intensive). Hay production also increased the cost of fertilizer necessary to replace nutrients transferred off the farm by hay (Tab]e 2). Nutrient recycling, albeit uneven (32), is
greater under grazing conditions. The net result was a $12] per cow lower income (or $6409 for the farm) for CFS. Inclusion of 10% lower costs for veterinary, breeding, and utilities increased the advantage to GRS by $13 per cow more. Thus, those variables had a small impact on profitability relative to feed and crop costs. The $121 per cow margin compares with an average cost saving of $153 per cow in a 1988 case study of 15 New York farms (8). The annual savings recorded in that study (8) varied ($42 to 290 per cow) according to the area of pasture available for grazing and length of the grazing period. A case farm study of the financial impact of grazing on Vermont dairy farm in 1984, which included an amortized value for capital invested in fencing, showed an annual cost saving of $152 per cow (]8). An advantage of $88 per cow in 1988 for pasture grazing was estimated by a partial
TABLE 5. Sources of income and operating costs (based on 1989 and 1990 conditions) included in the gross margin analysis of grazing and confinement dairy systems. Parameter
Grazing
Confmement
Difference
93,413 14,375 630 16,300 124,718
93,413 14,375 5310 10,341 123,438
0 0 --4680 5959 1280
1166 1855
2215 1855
-1049 0
970 10,557 2233 1325 464 3757 2609 4826 658 0
970 11,735 2257 1325 340 4315 2640 6227 658 0
0 -1178 -24 0 124 -558 -31 -1401 0 0
27.00 18.58 1.85
1431 985 98
1431 985 98
0 0 0
65.00 42.00
25,110 3445 2226 63,715
26,123 3445 2226 68,845
-1013 0 0 -5310
61,003 1\51
54,594 1030
6409 121
($ per cow)
Milk Livestock Alfalfa hay Com grain Total income Operating expenses Bedding Breeding and testing Crop Custom Fertilizer and lime Fuel Herbicide and insecticide Other Repairs and maintenance Seed Labor Fuel (noncrop) Livestock purchases Maintenance (noncrop) Buildings Other Market and advertising Purchased feed (as-fed) concentrate Utilities Veterinarian and medicine Total operating costs Gross margin Per herd Per cow
55.00 35.00
12.42
($)
Journal of Dairy Science Vol. 75, No.9, 1992
2594
PARKER ET AL.
3500
"'
~
-~~
/\
3000
o
~2500 ~ 2000
8 ~1500
----------~.
! \
/
OJ
.0
1! 1000 '" ~ ~
500
o
---.. -..
-----~~---
- - -- .
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
Figure 2. Predicted average herbage cover at the end of each month on the pasture area for grazing (.) and confined (.) feeding systems. (The initial herbage cover on April I was 1120 kg of DMIha for both systems.)
budget analysis (16) that included some of the fixed cost factors (e.g., fencing capital) associated with the adoption of pasture grazing. A $249 per cow reduction in 1986 operating costs per cow compared with the northern New York Farm Business Summary average was reported for a farm practicing intensive grazing (22). In another case farm example, a 31 % reduction (about $88 per cow in 1987) in feed costs was achieved during the grazing season compared with the remainder of the year (5). The gross margin analysis does not include the effects of grazing on fixed costs, herd reproductive performance, or labor requirements for managing the herd. There are potential fixed cost savings from a reduction in machinery and equipment usage, size, or both under GRS. However, these savings are not likely to be realized unless equipment is being replaced or unless a farmer is starting a completely new dairying venture. Potential capital savings are reduced by the need for additional capital expenditure on fences, waterers, and possibly lanes (16) when an intensive grazing system is implemented. Herd reproductive performance that has improved, probably because of improved estrus detection when cows are taken to and from pastures, is claimed to be a benefit of grazing, especially when calving is concentrated in the fall or spring to create a seasonal milk production system (36). The overall benefit from better herd reproductive performance in these circumstances then becomes a function of the local seasonal variation in milk prices. Labor for barn cleaning (5) Journal of Dairy Science Vol. 75, No.9, 1992
and for crop and forage production (as shown by the model) may be less under GRS, but more time may be required to take cows to and from pastures during the grazing season, depending on the layout of an individual farm, distances travelled, and the existence of a lane system to direct livestock. Those factors, together with climate, also influence the additional energy required by cows for maintenance under grazing conditions. The 10% increase in requirements during the grazing season assumed for the present study probably is simplistic, and further research to quantify the effect of increased walking and grazing activity on the cow's energy requirement is needed. The analysis also showed that GRS would be able to utilize labor released from crop and forage production for other management activities. Break-Even and Sensitivity Analysis
At the price of $11.75/45.4 kg assumed for milk in the budget and the $121 per cow advantage for GRS, milk production could decrease by as much as 467 kg per cow before CPS would more profitable. Survey results for Pennsylvania dairy farms that do or do not use intensive grazing indicated that, for herds with fewer than 100 cows, production was 368 kg per cow lower on the farms using pasture grazing (7305 vs. 7673 kg per cow) in 1989 and 365 kg per cow lower in 1990 for herds that had DHIA rolling herd averages available (27). These production differences include the effects of herd genetic merit, managerial ability, and the quality of the land resource as well as the use of grazing. However, because 58% of the survey farmers using pastures had 5 yr or less experience with grazing, production per cow could be expected to increase as pastures and grazing management skills improve. In both 1989 and 1990, given the assumptions made for the modeling analysis, GRS would have generated a similar gross margin to the CFS, despite less milk per cow on the average survey property. This emphasizes the importance of considering the overall farm system rather than a single variable (e.g., milk per cow) when the profitability of dairying systems is being evaluated. The break-even analysis assumed that the composition of the milk produced under GRS and CFS was the same.
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There is some evidence that the fat content of milk is reduced when cows are grazing pastures compared with that achieved during indoor feeding of forages (3). The financial impact of changes in milk composition depends on the relative prices paid under the component formula and on the annual proportion of milk produced under intensive GRS. The savings from using a lower protein concentrate were estimated from prices provided by a commercial feed company. These averaged almost $lO/tonne over the 12-mo period. For the case farm, lower protein concentrates saved $1013/yr ($19 per cow), or 17% of the total advantage to GRS. The concentrate cost saving may be increased if rations are balanced so that the dairy cow can more efficiently utilize the high protein content of wellmanaged pastures (33) and if the use of grazing during the second half of lactation is maximized by either adjusting the calving pattern (36) or feeding cows individually. Less savings from grazing accrue if pastures are poorly managed such that more stored forages and concentrates are required to compensate for the lower feed quality of the pastures. A common concern with pasture systems is variability in herbage production within and between years (27). The impact of a 30% reduction in herbage production during a July and August drought reduced annual hay production by 13.6 tonnes of OM (market value, $1040) for GRS. The model lacked the specifications to assess the impact of a drought on herbage quality or intake of pasture. A drought also affects the pastures and crops of CFS and increases costs through lost feed production, although some forage crops are more tolerant of dry conditions than temperate pasture species. The net financial effect of unfavorable weather may, therefore, be similar for both systems. The availability of barn feeding facilities provides flexibility to cope with variable pasture production under GRS. An important aspect of both dairying systems was the extent of forage losses. Reduction of total hay losses from 33 to 25% (4) decreases hay requirements by 11 tonnes of OM for CFS and by 7 tonnes of OM for GRS. The as-fed market value of this hay (85% OM, $90Itonne) is equivalent to annual cost savings of $22 and $14 per cow, respectively, which emphasizes the importance, particularly under CFS, of efficient hay management practices.
External Factors
The benefits of an aesthetically improved landscape, reduced soil erosion, less ground water contamination, and lower chemical usage that may accrue to pasture-based feeding systems in general were not accounted for in the analysis. Undoubtedly, the environmental costs of external factors in agriculture will become more visible in the future, and more of these will be paid for by the farmer. These additional costs of production may constrain the trend toward increased numbers of herds under intensive, confinement management (34) and may help to maintain the viability of smaller dairy farms. CONCLUSIONS
The decision to change from a stored feeding system to increased pasture grazing is strategic and requires a thorough evaluation of the total farm system. Although the development of the model was restricted by the lack of data for pasture-based dairy systems, the comparison of GRS and CFS for the dairy herd confirmed the economic advantage of pasture grazing that previously has been reported from farm case studies. The importance of considering the total farm system, rather than the dairy herd separately, when considering alternative herd feeding systems was demonstrated. The model provides a framework for considering the implications of pasture grazing on dairy farms, and this can be updated readily by new research on components of pasture-based dairy systems. In particular, field research to quantify the input-output relationships of high producing cows on pastures and the commodities necessary for maintaining a balanced ration for these cows during the grazing season is required to quantify more accurately the impact of intensive grazing on farm productivity and profit. Better data are required to describe the protein quality and availabilities in pasture that are intensively grazed, because this represents an area in which significant savings may be obtained by dairy producers. The analysis suggests that an average Pennsylvania dairy farm could reduce operating costs by $6000 to $7000 annually through intensive grazing, but overall income would not be improved if production per cow fell by Journal of Dairy Science Vol. 75, No.9, 1992
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more than about 450 kg per lactation under this herd feeding program. Use of grazing presently is restricted by factors such as the dairy producer's lack of confidence in the ability of pastures to provide high quality forage and the dearth of information describing grazing systems and ration programs necessary to maintain milk production. The current slow rate of adoption of intensive grazing in the Northeastern states, therefore, is likely to continue; most dairy producers prefer to maintain their existing confined management, which provides a more easily controlled ration program for the herd (27). However, different types of pasture-based dairying systems (e.g., seasonal production or concentrated fall calving) may provide larger financial advantages than shown for the year-round calving system reported. ACKNOWLEDGMENTS
Many helpful suggestions during the preparation of the manuscript were made by R. S. Adams, S. L. Fales, W. T. McSweeny, and J. L. Aldrich. REFERENCES I Adams. R. S.• J. G. Hlubik. and S. C. Bosworth. 1988. Ration progranuning and feeding tips for dairy cattle on pasture. Page 129 in Proc. Pasture in the Northeast Region of the United States, Publ. 36. Northeast Reg. Agric. Eng. Serv.• Ithaca. NY. 2 Brougham. R. 1988. A report on the potential role of grass-legume pastures in present day livestock farming in Pennsylvania and an assessment of some research requirements. Mimeo. College Agric.• Pennsylvania State Univ.• University Park. 3 Brown. R. J. 1990. Farmer experiences with intensive grazing. Page 228 in Proc. Dairy Feeding Systems Symp.• Publ. 38. Northeast Reg. Agric. Eng. Serv., Ithaca, NY. 4 Buckmaster. D. R., C. A. Rotz, and 1. R. Black. 1990. Value of alfalfa losses on dairy farms. Trans. Am. Soc. Agric. Eng. 32:351. 5 Cassels. E. K.. and R. 1. Brown. 1988. Pasture as a component of a forage system for dairy cattle. Page 21 in Proc. Pasture in the Northeast Region of the United States. Publ. 36. Nonheast Reg. Agric. Eng. Serv.• Ithaca. NY. 6 Chapman, D. F.. D. A. Clark, C. A. Land. and N. Dymock. 1984. Leaf and tiller or stolon death of Lotium perenne. Agrostis spjl.• and Trifolium repens in set-stocked and rotationally grazed swards. N.Z. J. Agric. Res. 27:303. 7 Dairy Herd Improvement Association. 1990. 1990 Yearbook. Pennsylvania Dairyman's Assoc.• New Cumberland. Journal of Dairy Science Vol. 75. No.9. 1992
8 Emmick. D. L., and L. F. Toomer. 1991. The economic impact of intensive grazing management on fifteen dairy farms in New York State. Page 19 in Proc. Am. Forage Grassl. Conr.. Georgetown, TX. 9 Fales. S. L., L. D. Muller, R. J. Hoover. and L. A. Holden. 1991. Intensive grazing of high producing dairy cows: pasture and milk production at three stocking rates. Page 187 in Agron. Abstr.• Am. Soc. Agron., Madison, WI. 10 Greaser. G. 1991. Pennsylvania enterprise budgets. Dairy Sci. Ext. Mimeo. Pennsylvania State Univ.• University Park. 11 Greaser, G., R. S. Adams, and V. Ishler. 1990. Economics of commodities vs. finished dairy feeds. Page 184 in Proc. Dairy Feeding Systems Symp.• Publ. 38. Northeast Reg. Agric. Eng. Serv.• Ithaca. NY. 12 Hallberg. M. C.• and E. J. Partenhiemer. 1991. The structural character and recent trends of Pennsylvania agriculture economy. Bull. 869. College Agric .• Pennsylvania State Univ .• University Park. 13 Hastings. J. 1987. Profitability of small Northeast dairy farms. Page 93 in Proc. Sustaining the Smaller Dairy Farm in the Northeast. S. R. Kaffka, ed. Sunny Valley Foundation, Inc., New Milford. CT. 14 Hastings. J. 1990. 1989 Dairy farm summary. Farm Credit Bank, Springfield, MA. 15 Heinrichs. A. J. 1990. Feeding the dairy heifer. Dairy and Anim. Sci. Ext. Cire. 387, Pennsylvania State Univ.• University Park. 16 Hlubik, J. G.• and T. R. Smith. 1988. Economics of pasture systems. Page 67 in Proc. Pasture in the Northeast Region of the United States. Publ. 36. Northeast Reg. Agric. Eng. Serv., Ithaca, NY. 17 Hoffman, K. 1991. Rotational grazing systems: pasture quality evaluation and concentrate supplementation of lactating cows. M.S. Thesis. Pennsylvania State Univ.• University Park. 18 Jones. C., and P. Burns. 1989. Economic effects of adoption of rotational grazing. Mimeo. Soil Conserv. Serv., Orono. ME. 19 Kaffka, S. R. 1987. Prospects for the survival of the small dairy farm in the nonheastern US. Page 7 in Proc. Sustaining the Smaller Dairy Farm in the Nonheast. S. R. KaffIca, ed. Sunny Valley Foundation, Inc., New Milford, CT. 20 Kone, C. 1.. A. C. Chu, and T. R. Field. 1987. Pasture production. Page 7 in Livestock feeding on pasture. A. Nicol, ed. Occ. Publ. No. 10. N.Z. Soc. Anim. Prod., Hamilton. 21 Lanyon. L. E., and D. B. Beegle. 1989. The role of on-farm nutrient balance measurements in an integrated approach 10 nutrient management. 1. Soil Water Conserv. 44:164. 22 Lucey. R. F., W. S. Reid, and C. A. Ti1Iinghast. 1988. Optimizing grazing on a 50 cow dairy farm in nonhern New York. Page 55 in Proc. Pasture in lhe Nonheasl Region of the United Stated, Publ. 36. Nonheast Reg. Agric. Eng. Serv.• Ithaca. NY. 23 McGeehan, M. B. 1990. A review of losses arising during conservation of grass forage. Part 2. Storage losses. J. Agric. Eng. Res. 45:1. 24 McSweeny, W. T.• and L. Jenkins. 1990. 1989 Pennsylvania Dairy Farm Business Analysis. Ext. Circ. 388. Pennsylvania State Univ.• University Park.
OUR INDUSTRY TODAY 25 Milligan, K. E., I. M. Brookes, and K. F. Thompson. 1987. Feed planning on pasture. Page 75 in Livestock feeding on pasture A. Nicol, ed. Occ. Publ. No. 10. N.Z. Soc. Anim. Prod., Hamilton. 26 National Research Council. 1989. Nutrient Requirements of Dairy Cattle. 6th rev. ed. Natl. Acad. Sci., Washington, DC. 27 Parker, W. J., L. D. Muller, S. L. Fales, and W. T. McSweeny. 1991. A farm survey of pasture and confined feeding systems for dairy cows in PeMsylvania. J. Dairy Sci. 74(Suppl. 1):314.(Abstr.) 28 Peel, S., E. A. Matkin, and C. A. Hooles. 1988. Herbage growth and utilized output from grassland on dairy farms in southwest England: case studies of five farms, 1982 and 1983. II. Herbage utilization. Grass Forage Sci. 43:71. 29 Pennsylvania Department of Agriculture. 1990. Pennsylvania Department of Agriculture Annual Report 1988-89. Pennsylvania Agric. Statistics Ser., Harrisburg. 30 Rayburn, E. 1989. Dry matter intake of dairy cows and supplemental feeding on pasture. Seneca Trail Resource Conservation and Development Area, Franklinville, NY.
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31 Rotz, C. A., D. R. Buckmaster, D. R. Mertens, and J. R. Black. 1989. DAFOSYM: a dairy systems model for evaluating alternatives in forage conservation. J. Dairy Sci. 72:3050. 32 Saunders, W. M. 1984. Mineral composition of soil and pasture from areas of grazed paddocks, affected and unaffected by dung and urine. N.Z. J. Agric. Res. 27:405. 33 Welch, J. G., R. H. Palmer, A. M. Bueche, and W. M. Murphy. 1990. Balancing rations (protein) for dairy cattle on pasture. Page 223 in Proc. Dairy Feeding Systems Symp., Publ. 38. Northeast Reg. Agric. Eng. Serv., Ithaca, NY. 34 Westphal, P. J., L. E. Lanyon, and E. J. Partenhiemer. 1989. Plant nutrient management strategy implications for optimal herd size and performance of a simulated dairy farm. Agric. Syst. 31 :381. 35 Wilkinson, J. M. 1981. Losses in the conservation and utilization of grass and forage crops. Ann. Appl. BioI. 98:365. 36 Zartman, D. L. 1990. The New Zealand system in Ohio. Page 236 in Proc. Dairy Feeding Systems Symp., Pub\. 38. Northeast Reg. Agric. Eng. Serv., Ithaca, NY.
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