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Improve Dairy Profits Through Feed

11 September 2009

UK - Dairy farmers could increase profits by up to 160 per cent per cow per year by taking better nutrional advice and improving feed conversion efficiency.


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"Feed conversion efficiency (FCE) is calculated by dividing the amount of milk produced per cow per day by the amount of dry matter required. An FCE of 1.2, means that for every kg of dry matter fed, 1.2 litres of milk is produced."
Professor David Colman, International Association of Agricultural Economists

Everyone is a victim of current milk prices, said Gerard Keenan, Chairman of Richard Keenan Co Ltd in a webseminar recently. Market and economic conditions are similar in many countries at the moment. The circumstances are different than have ever been seen before with low milk prices and low profitability as well as the banking crisis and governmental shortage of funds to support agriculture not only effecting dairy farmers but also other agriculture businesses.

Mr Keenan believes that despite many producers running good businesses there are opportunities to improve.

Professor David Colman, president of the International Association of Agricultural Economists has carried out a study with Keenans highlighting the big differences in efficiency in British dairying. Professor Colman poses the question "what can be done to improve efficiency?"

In Scandinavian countries feed conversion efficiency is 1.6, where as the UK average is only 1.2.

Research carried out by Keenans showed that customers who took nutritional advice and new equipment achieved an increase of 0.8 FCE in 90 days, this increased to 0.12 FCE over 365 days.

Professor Colman demonstrated that this increased FCE resulted in increased milk yield and in some cases required a reduction of feed input. By increasing FCE by 0.1, milk yield increased by 16 per cent. In the example given where there was no change in the amount of dry matter fed and a milk price of 24p/litre, profit increased by 160 per cent (equivalent to a 2p/litre rise in milk price).

Tested on 1100 customers over the past four years, Professor Colman believes there are "serious gains to be had". Mr Keenan supported this saying that changes can be achieved effectively and quickly.



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