The profitability of supplement use depends on both the revenue generated from the purchased feed and how much it costs to buy and provide it.
The Supplement Price Calculator uses international and New Zealand research results to estimate the milk production response to providing supplements to milking cows under different feed deficit situations and at different stages of lactation. It estimates the likely profitability of doing this under different milk price scenarios and compares the value proposition of different feeds.
Total milk production response to supplement
In the Supplement Price Calculator, the milk production response to feed offered is the sum of the milk produced when cows are receiving the supplement (immediate response) and milk produced later as a result of pasture spared and cow body condition score (BCS) gained from the supplement (deferred response).
Multiple experiments have been undertaken evaluating the milk production response to supplements under different levels of feed deficit.
Although both the immediate and the deferred responses decline with increasing pasture dry matter intake (DMI), the deferred response is especially sensitive to feeding level (see Figure 1 below). For example:
in severe pasture deficit situations (e.g. unsupplemented post-grazing residual of 1200kg DM/ha for a milking cow), as much milk is produced after the period of supplementation as during the feed deficit when the supplements are offered;
when cows are relatively well fed (e.g. unsupplemented post-grazing residual of 1600kg DM/ha), the deferred milk production is only approximately 10 percent of the immediate response.
How is the total milk production response determined?
The total milk production response to supplement (immediate plus deferred response) is determined by many biological and management factors which have been taken into account in the Supplement Price Calculator.
These factors include; stage of lactation, amount of purchased supplement that is wasted and the amount of pasture refused (substitution of supplement for pasture).
For more information on how each of these factors is used in the Supplement Price Calculator, see the extended version of this article in September’s Technical Series or read it online here.
Revenue and costs
The Supplement Price Calculator accounts for all of the above factors, which allows a more accurate estimation of total revenue.
As well as accounting for direct costs of supplements, it also includes associated costs (e.g. tractor running costs, depreciation and repairs and maintenance).
The Supplement Price Calculator makes no allowance for capital costs (it is assumed that the equipment for feeding is already available) or variable costs that aren’t associated with feeding.