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The Benefits & Downfalls of Hay Supply Contracts

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It has been impressive to witness the strong growth achieved by Australian dairy companies, particularly in export markets, by convincing customers as to the quality and value of our local dairy products.

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The Benefits and Downfalls of Hay Supply Contracts

It has been impressive to witness the strong growth achieved by Australian dairy companies, particularly in export markets, by convincing customers as to the quality and value of our local dairy products.

However, with this success comes the responsibility to deliver these products reliably and consistently in order to maintain market share and be in a position to increase those volumes.

 Customers, retail or wholesale, tend not to be particularly interested in the suppliers' problems: such as swings in production due to seasonal factors; or hardship that may be caused by drought.

They just expect the product to be there when they need it, otherwise they will buy a substitute and maybe not return to the original product when it becomes available again.

1. Pasture and on-farm fodder conservation can limit performance

In an era of globilisation, when competing in tough international markets, a practice that should be questioned is Australia's heavy reliance on a pasture-based production system on the second driest continent on earth (after Antarctica).

For a long time the main focus of Australia's dairy industry's production development strategy has been pre-occupied with getting more out of pasture based systems.

It must be recognised that a lot of progress has been made in Australia with fodder conservation practices, including the use of silage and haylage.

However, these practices ultimately limit the milk yield per cow because even the best quality pasture has low nutritional density as it contains about 70% water by weight.

Silage has a higher nutritional density and milk production potential than pasture but this is also limited by a relatively high water content (45%-60%). Haylage, having an even higher nutritional density and milk production potential, is also ultimately limited by water content (35%-45%).

Unfortunately, even a relatively short period of dry weather for one to two months can impact milk production in a rain-fed pasture based system.

Drought can negate a lot of hard work on incremental improvements to pasture systems, whether rain-fed or irrigated.

It is worth noting that over the last 30 years, for more than 80% of the time, some part of NSW has been drought declared. Roughly the same story is true of the rest of Australia.

2. Hay can improve milk yield

One measure of Australia's likely long-term success could be average milk yield per cow. For Australia, this rose by 13% from 4,219 Kg/cow to 4,763 Kg/cow during the decade from 1991 to 2001 (the latest year that comparisons are available from the Australian Dairy Corporation).

During the same period, the world average annual milk production rose by 28% up from 3,903 Kg/cow in 1991 to 4,981 Kg/cow in 2001. In 2001, twenty one countries were above the average, and sixteen below. Australia, ranked 23rd, was below the average, with New Zealand ranked 28 th lagging behind on 3,700 kg/cow.

The six highest yielding countries in kilograms/cow were Canada (9,242), followed by USA (8,228), Sweden (7,980), South Korea (7,844), Netherlands (7,415) and Japan (7,400).

There is not that much difference in the genetic potential of breeding stock in these countries. So, what makes these top countries successful at producing so much milk?

The answer lies largely in their feeding practices. Typically dairy farmers in these countries use a nutrient dense forage diet, somewhat like the following:

  • hay 50 60% of diet
  • corn, soya bean meal, minerals, salt, vitamins 40 50% of diet

According to studies carried out by dairy scientists at the University of Minnesota there appears to be a direct relationship between milk production volume and nutrient value of hay.

  • The higher the feed value of the hay, the higher the volume of milk produced.
  • The hay predominantly used is lucerne and it forms the foundation for high milk production.

Does this make lucerne hay the perfect dairy feed?

The answer to this question is "nearly"! The hay must be of high nutritional value and be consistently available in large quantities to be a practical feeding option for dairy farmers. If it is not reliably available at the levels of nutrition necessary for high quality milk production then it is not the perfect dairy feed.

Assuming Australian dairy farmers can reliably obtain high quality hay, just how much production is possible? To answer this question studies by the University of Minnesota came up with performance figures, based on a diet of 50 60% lucerne hay.

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