Rising costs of bought in animal feeds

Rising input costs require a short, medium and long-term strategy if we are to protect and develop profitability. Of course the prices we receive for farm outputs have also risen, but input costs and output prices do not exist in the same markets and high numbers for feed and fertilisers, compared to a couple of years ago, appear set to stay, with volatile markets a certainty. So, how can we respond and build resilience into the farm business?

Short term
In the short term, the message has to be to stick with the plan. Fertiliser and feed costs might be high, but if we cut back on these planned inputs substantially, then we create an existential threat to the business. And anyway, cutting back in the short term doesn’t make financial sense. For example, at £650 for a tonne of ammonium nitrate, if we reduce applications by 30kg nitrogen/ha on a 50ha silage area, we’d save £2,826 on the fertiliser bill, but we would lose 112 tonnes fresh weight of silage yield. Buying in that silage at £30/tonne would cost £3,360. Even worse, if we had to replace the lost grass energy with bought-in concentrate at £280/tonne, it would cost us almost £9,000 (see the table below).

In a good growing season, you might get away with the fertiliser nitrogen cut back and see no yield reduction. In a poor season, that 30kg nitrogen might be critical and cause yield to drop more than in an average year. So, messing around with the quantity of inputs in the short term is not good for risk management within the business either.

But (and it’s a big but), it doesn’t look like these input cost rises are going to end soon. The gas industry is saying prices will likely remain high for the next 12 to 18 months and even if they halve, we are still dealing with substantial input cost rises compared to pre-pandemic days. Volatility is here to stay as well, so we need to do something about the resilience of the farming business to handle the more extreme ups and downs. Looking at the short-term rationally can be helped by doing partial budgets that can help with thinking and decision making, like the fertiliser example in the table

Financials on cutting back on fertiliser nitrogen

Medium to long term reset
So, in the medium to long term, it’s time for a reset. Easily said, not so easily done. A reset means we should look at the energy and nitrogen we can produce on-farm and how we can use these more efficiently, cutting waste so that we can reduce the quantities we buy-in. Two simple examples.

First, regular soil testing and action to make sure that soil pH is 6.5 and fertility is adequate will help optimise the nitrogen we apply in bagged and manure forms, so that 30kg nitrogen/ha might be saveable if we eke out more from the bag and slurry tanker.

Second, getting a silage sample done every four to six weeks over the winter, rather than just one in the autumn, will enable us to tailor our rations more accurately and hopefully cut 

back on bought-in energy in the form of concentrates.

More radically, a reset means looking to do things differently so that we can replace bought-in nitrogen (including in the form of protein) and energy with what we grow, preserve and feed on the farm. These longer term changes of mind-set and how we might do things were highlighted in a British Dairying article (‘More grass from less fertiliser’, January 2022), which had input from Kelvin Cave Ltd. 

The article focused on soil management, adding clovers to grass swards, managing slurry and ensuring that the forage we make is preserved in both quantity and quality. We will develop some of this thinking in this edition of KnowHow, with practical examples.

Legumes are playing an increasingly important role.
Legumes are playing an increasingly important role.

Free nitrogen for your soil and cheaper protein feed
One strategy going forward is to look at rotations and see where legumes like peas and beans can be inserted. Our case study “12-week catch crop produces high protein baled silage” shows how this can be done with peas as a break crop. Peas and beans can be crimped to make a high energy and protein feed, replacing some bought-in concentrate, but in this example, pea haylage has been produced from the break crop, which also leaves nitrogen in the soil for the following wheat crop, so saving on manufactured nitrogen.

More nitrogen from your slurry
Our second case study shows how the fertiliser bill can be trimmed using DIGEST-IT® which provides a rich food source for microbes as well as dormant aerobic bacteria species that are able to feed on and break down the organic matter in the slurry and use the ammonia gas as a source of nitrogen to grow, thus turning it into microbial nitrogen. The details in our field study “Making a family business fit for the future” show how this can enhance the available nitrogen in your slurry and could shave 20 to 40kg N/ha off your manufactured nitrogen input. The enhanced slurry is more consistent and easier to work with and also has a positive impact on soil health and in reducing ammonia smell and associated wasted nitrogen. Previous on-farm trials with DIGEST-IT used on pig slurry show a 6:1 return on investment from using the product, and that was before the current hike in manufactured fertiliser nitrogen prices. The value at current fertiliser prices is now pushing towards £10 back in slurry value for crop nutrition, from every £1 spent.

Don’t lose what you have captured
In the recent British Dairying article, independent silage consultant, Dr Dave Davies, pointed out that once we have captured our nitrogen as crude protein, it is easily lost in the ensilage process and we should do all we can to avoid losses. Dave said: “The preservation of true protein is particularly important as it more efficiently converted to meat and milk than non-protein nitrogen.” Which leads to us to our case study which focuses on the use of Safesil to preserve forage and has enabled a dairy farmer to reduce costs in terms of £ spent per cow per day.

Unlike biological silage additives, Safesil Pro and Safesil Challenge actually destroy unwanted, harmful bacteria such as clostridia and enterobacteria, which compete for sugars with the desirable lactic acid bacteria in the sealed clamp. If allowed to multiply, these harmful bacteria produce acetic and butyric acid and large amounts of carbon dioxide and use much of the available energy, lowering the nutritional value and palatability of silage.

Reset thinking
It is clear that if we are going to control costs and produce more energy and protein on-farm, then we need to reset our thinking and focus on the how we grow more and waste less, with the ultimate key performance indicators of how much we buy-in and what this does to costs per litre of milk, kg of milk solids, or kg of meat that we produce. As in the sporting adage, it will be the accumulation of gains that wins the day.

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