I have been involved in the international dairy world since 1994, and in this period I have lived in the Netherlands, Australia, and since last year, in New Zealand. My knowledge of grass-based dairying has been built during my time in Australia and especially in my role as grass-based product manager for CRV.

Peter Van Elzakker

Since last September, I have visited and met with grass-based operators in Chile, Argentina, Uruguay, the U.S., Ireland, the UK, South Africa, Australia, New Zealand and the Netherlands.

An overview of grazing operations globally

New Zealand

The benchmark for grass-based dairying still is New Zealand. Contrary to general belief, New Zealand does have variation in dairying systems, with one unifying trait – they are all grazing-based.

DairyNZ, the county’s educational resource system which provides information similar to that delivered by the land-grant university extension system in the U.S., has grouped the production systems by allocation of imported feed:

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  • System 1 – All grass self-contained, all stock on the dairy operation. No feed is imported. No supplement fed to the herd except forages harvested off the farm’s milking cow forage area, and dry cows are not grazed off the milking cow forage area.
  • System 2 – Feed is imported, either supplement or forage, and fed to dry cows. Approximately 4 to 14 percent of total feed is imported.
  • System 3 – Feed is imported to extend lactation (typically autumn feed) and for dry cows. Approximately 10 to 20 percent of total feed is imported.
  • System 4 – Feed is imported and used at both ends of lactation and for dry cows. Approximately 20 to 30 percent of total feed is imported onto the farm.
  • System 5 – Imported feed is used all year, throughout lactation and for dry cows. Approximately 25 to 40 percent (but can be up to 55 percent) of total feed is imported.

Note: Farms feeding 2 to 4.5 lbs of concentrates or grain per cow per day for most of the season best fit in System 3.

The percentage of farms operating a specific system allows us to track trends in the New Zealand industry. Up to 2002, 41 percent of farmers were operating System 1, but by 2008 this had gone down to 12 percent.

During that period, the percentage of farmers running a System 2 has stayed stable (approximately 30 percent). System 3, however, has grown from 17 percent to 35 percent, System 4 from 11 percent to 17 percent and System 5 from 1 to 5 percent.

This information shows a growing trend toward more bought-in feed, which has led to higher per-cow production.

The main driver has been higher land prices. Rather than buy more land, farmers are looking at ways to produce more from the same platform. Environmental pressures are further contributing to this trend.

Australia

Like in New Zealand, Dairy Australia has also defined their production systems:

  • Grazed pasture + other forages + up to 1 ton of grain and concentrates fed in the parlor (30 percent of systems).
  • Grazed pasture + other forages + more than 1 ton of grain and concentrates fed in the parlor (50 percent).
  • Pasture grazed for most or all of the year + partial mixed ration on feed pad ± grain and concentrates fed in the parlor (11 percent).
  • Pasture grazed for less than nine months per year + partial mixed ration on feed pad ± grain and concentrates fed in the parlor (5 percent).
  • Zero grazing. Cows housed and fed a total mixed ration (1 percent).

These systems, in general, contain a much bigger portion of bought-in feed than the New Zealand systems. When we overlay these systems with New Zealand, we find that Australia System 1 covers everything from Systems 1 through 3 in New Zealand.

System 2 and 3 cover 4 and 5 in New Zealand. However, the Australian systems 4 and 5, to date, are not really represented in New Zealand.

Ireland

With the returned focus to grazing-based production, the Irish have the closest environment to New Zealand. Their focus is on low cost, and New Zealand Systems 1 through 3 dominate. However, there are a number of significant differences with New Zealand:

  • Cows are housed inside between mid-November and early February, which means (low-cost) housing is required.
  • Herd size is much lower (average 60 versus 393 in New Zealand).
  • The demand for beef calves means many dairy farmers keep an eye on beef cow value.

United Kingdom

The high input costs and low milk prices have many farmers in the UK looking at what is happening in Ireland.

In the areas that lend themselves to grass-based dairying, farmers are moving back to this system away from higher feed systems, and cows are spending more time outside. Indications are that the UK will end up with three defined systems:

  • Grass-based with seasonal calving (Spring or split seasons with spring and autumn, similar to the Irish and New Zealand systems 1 through 3)
  • Hybrid – Australia (System 4) and New Zealand (System 5)
  • TMR

The location and climate of a farm will decide what system farmers can adopt. The added challenge here is the focus on fluid milk production. This doesn’t lend itself to seasonal production and might lead to farmers choosing to adopt a hybrid system.

South America (Chile, Argentina, Uruguay)

The climate in most South American countries means cows don’t have to be housed, and the climate lends itself to cows grazing most parts of the year.

While only a small part of Chile shows a similar favorable climate to New Zealand, which will lend to very seasonal, year-round grazing, many parts will be able to graze nine months of the year.

Australia’s Systems 1 and 2 are dominant, and relatively low grain prices have supported these systems. The increased demand for biofuel is also putting pressure on input costs in this part of the world, making producers rethink the value of grass and grass-based production.

How does the U.S. compare?

The drivers and opportunities for grass-based dairying in the U.S. are the same as in the countries discussed above.

Higher input costs and a focus on lower overall cost prices are making producers consider different production systems. Producers in the Northwest, Southeast and Southwest are already adopting production systems similar to New Zealand’s Systems 1 through 3 and Australia’s Systems 1 and 2.

The climate is no limitation but will simply affect the type of system that can be adopted or will be most profitable.

The biggest limitation to date is the general lack of understanding of the requirements and complexity of grass-based systems. These systems are not cow-focused but grass-focused and require a different skill set.

Over time, farmers and the farm extension services have focused on the cow, and whole systems and support have been developed around them. This includes the commercial support systems like farm advisory, feed, machinery and genetics companies.

For successful growth of this segment, the knowledge base needs to be re-established at both the farm and advisory level.

This is a common factor across dairy-producing sectors worldwide. New Zealand and Ireland, not surprisingly, have a headstart in this process. PD

Peter van Elzakker