Optimal dairy feed input selection under alternative feeds availability and relative prices

Abstract

Feed formulation is essential in the dairy production chain from economic, nutritional, and environmental perspectives. Optimizing the feed formulation across those three domains – given uncertainty of input prices, input availability, and regional climatic conditions – is a challenge for those in the industry. The diet formulation method that is widely used by trading firms and feed production facilities employs a static linear programming (LP) approach. This approach does not allow for intertemporal feed formulations and switches between dietary feed commodities under feed availability conditions, which result in foregone economic gains for feed producers.The current study develops a multi-period LP feed model that uses historical data to capture ration switch opportunities between available feed resources for dairy cows and demonstrates the potential use of the method in different commodity feed availability situations. We apply 14 diet formulations, each covering 150 months, representing a total of 2100 diets. The diet formulation considers a specific milk production level for a “model cow”, alternative feed formulations available, and volatility in feed prices. The results demonstrate that there is an opportunity for efficiency gains in the dairy industry with respect to feed formulation.Based on dietary feed inclusion and price spreads, barley can be an important dairy feed grain which completely replaces wheat, corn, and sorghum at price spreads of less than 94%, less than 78%, and less than 67%, respectively. Grain-based feed scenarios represent the lowest nutrient variation while multiple meal feeds had the lowest costs. Furthermore, and on average, multiple meal feed scenarios provided 10% higher dietary crude protein contents compared to grain based feed scenarios (i.e. 163 vs 179 g/kg DM formulated feed). Meanwhile, multiple meal feeding cost was 11% lower than that in the grain based feeding scenarios. Additionally, the use of multiple meals reduces alfalfa dietary inclusion by 7% on dry matter basis. Our analysis shows a strong reduction in feed cost associated with dietary crude protein reduction equivalent to 7.6 USD/tonne per 1% reduction in dietary crude protein level.The modeling approach allows for the interaction between feed components over time taking into consideration volatile global feed prices, thereby improving feed availability and feed formulation. Overall, the model provides a decision making tool to improve the use of feed resources in the dairy sector. Keywords: LP modelling, Diet formulation, Feed availability, Feed switch, Feed prices