Dairy farmers who plan to change their businesses to zero-grazing and contained housing systems will be supported by a new economic and risk analysis collaborative project.
The project will led by Dairy Australia, Agriculture Victoria and NSW Department of Primary Industries.
The Victorian component of the project is co-funded by Dairy Australia and Agriculture Victoria.
The NSW component is led by the NSW Department of Primary Industries as part of Dairy UP (Unlocking Potential), a large and collaborative NSW-based dairy research, development and extension program led by Sydney University's Dairy Research Foundation, which was partly funded by the Department of Regional NSW, using $6 million from the Bushfire Recovery Sector Development Grants Package.
The proposed project aims to support dairy farmers who are evaluating their options and who may decide to move down a path that transitions them to a new feeding and/or housing system.
This will be achieved through a sound economic and risk analysis of both partial and total mixed ration feeding systems.
For more than 10 years, Agriculture Victoria has provided tailored and extensive support to dairy farm businesses through their feeding transition and inquiries are not slowing.
Agriculture Victoria dairy program manager Terry Batey said there was a handful of farmers considering this type of investment and transition 10 years ago, and this has grown in the past few years.
"We have supported many farm clients on the zero-grazing journey since 2006," he said.
"Farmers are looking for information in Australia and overseas to support their planning and decision-making.
"We need information, data and advice in context of the Australian dairy industry, which is why this collaboration is so timely and important."
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NSW DPI development officer dairy farm business management Sheena Carter said the situation in NSW was similar to that in Victoria with lots of interest from farmers in intensifying their feeding systems in an effort to adapt, as risk and variability continued to increase into the future.
"There are many farmers who are either thinking about, or seriously investigating and costing out options for intensification, particularly with compost or freestall barns," she said.
"These systems require significant capital expenditure and system adjustment.
"Working out the capital required to build barns and the associated infrastructure is probably the easy bit.
"Having insight into what changes in operational costs might look like as you move away from pasture-based systems and the impact that may have on cost of production will be really useful for those considering this type of system.
"This will also have an impact on their ability to service the associated debt.
"The risk analysis component will also be highly valuable.
"All farming systems come with elements of risk.
"Risks associated with more intensive systems will be highlighted with this work and enable farmers to consider how they will manage these, if they do decide to invest."
Agricultural consultant Dan Armstrong said there was a gap for this type of economic information.
"When dairy farmers are evaluating their options and transitioning to these types of farm systems, there is limited information about the farm economics and how the sources of variability need to be managed (such as milk price, grain price and equity position) to be comparable with grazing systems."
The project involves examining assumptions on total mixed ration (TMR) and partial mixed ration (PMR) feeding systems using on-farm data, as well as an-depth risk assessment utilising case study farms.
Dairy Australia's technical lead - feeding and farm systems Karen Romano said the collaborative economic and risk analysis project was part of the three-year Adapting Dairy Farm Systems program, which started in 2019.
"The Adapting Dairy Farm Systems (ADFS) program aims to provide dairy farmers with information and resources to support them to make well-informed decisions when considering new feeding and housing systems," Ms Romano said.
"The Australian dairy industry is currently in a state of unprecedented and rapid transformation, with numerous dairy businesses throughout Australia making changes in their farming system to address evolving feedbase and climatic pressures."
Without targeted technical, planning and strategic support to facilitate farming system adjustment, there was a significant risk sections of the dairy industry might not transition efficiently, and farmers mightmake sub-optimal infrastructure investment decisions.
The ADFS program would also deliver new national guidelines for feedpads and housing systems in collaboration with Agriculture Victoria.
The ADFS program would also develop an operational decision support process (DSP) to guide farm businesses that are contemplating farming system changes.
Ms Romano said through the ADFS program, Dairy Australia had formed collaborative partnerships with Agriculture Victoria, Murray Dairy, NSW Department of Primary Industries (DPI) and subject matter specialists both within and outside of Australia.
The economic and risk analysis project findings were expected to be released later this year.
What the zero grazing project will look at in detail
The economic and risk analysis project aims to explore and understand the drivers of feeding system change of dairy farmers located across NSW and in the Goulburn Murray Irrigation District who have or who are transitioning their feeding system.
The project will conduct a sound economic and risk assessment of intensive feeding systems where the lactating herd is being totally fed with a mixed ration (TMR).
Farms selected for the analysis will be well on their way to adapting their farm systems with zero grazing and commitment to this type of feeding system.
There is limited information available on the economics of these feeding systems and their response to a wide range of physical and financial constraints (e.g. drought, extreme heat, milk price, grain price, water price and equity position).
The proposed project has two parts that brings together data from operating farms and a modelled case study analysis.
The first part of the analysis will use farm data to examine assumptions made about dairy systems incorporating more intensive feeding systems and infrastructure, including:
- Costs for repairs and maintenance.
- Cow longevity.
- Depreciation on plant and equipment.
- Labour requirements..
On each farm, the following areas will be investigated:
- Type and scale of infrastructure.
- Capital investment in feeding infrastructure.
- Type of feeding approach.
- Feedbase e.g. home grown or purchased feed.
- Bio-physical characteristics e.g. changes in calving pattern and labour requirements.
The second part of the analysis will model expected risk and returns on two case study farms: one in Victoria and one in NSW.
Agriculture Victoria is also conducting underpinning social research which will complement this economic and risk analysis project.
The social research will capture the drivers and motivations of dairy farmers as they move through phases of considering a feeding and/or housing system change.
In collaboration with the University of Melbourne, this research will support the farm economic and risk analysis project to help understand how dairy farmers consider issues like climate, water security and profitability in their long-term business planning.
For more information on the project, and on the Adapting Dairy Farm Systems program, visit dairyaustralia.com.au/adaptingdairyfarmsystems.
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