The profitability and risk of dairy cow wintering strategies in the Southland region of New Zealand

Abstract

This study used a modelling approach to examine the cost effectiveness, exposure to climate induced risk, and major economic drivers of four selected wintering strategies: 1) grazing a forage brassica crop on support land (Brassica system), 2) grazing pasture on support land (All pasture system), 3) cows fed grass silage, made on the support land, on a stand-off pad where effluent is captured (Standoff system), and 4) cows fed grass silage, made on the support land, in a housed facility where effluent is captured (Housed system). The model was driven by virtual climate data generated by the National Institute of Water and Atmospheric Research (NIWA), and economic input data from the DairyNZ Economics Group for the 2008/09 season with a milk price of $4.55/kg milksolids. The Housed system had the highest mean (± STDEV) operating profit over 35 independently simulated climate years ($743±122/ha), followed by All pasture ($681±197/ha), Standoff ($613±135/ha) and Brassica ($599±212/ha). The Housed system was also the least exposed to climate induced risk with a coefficient of variation of profit of 16% compared to 35% of the Brassica system. The four systems demonstrated different financial strengths and weaknesses that largely cancelled each other out. The Brassica system is a high risk system from an environmental perspective and the All pasture system an unlikely alternative because of scarcity of suitable land. Both the Housed and Standoff systems appear to be cost effective alternatives that allows high control over cow feeding, body condition and comfort over winter.