Building in flexibility so producers can react to changes will help balance forage rations and protect margins this spring and summer, and into next winter. Two feed specialists tell us more about forward buying.
TEXT STUART BOOKER
Producers may already have an eye on when they are looking to turn out, but key is to measure forage stock today, to avoid disappointment should the date be delayed.
So says KW Feeds’ Richard Slack, adding that, before thoughts turn to this year’s growing season, managing current forage stocks should be an immediate priority. “And this is reliant on understanding requirements and analysing quality,” he says.
“It is crucial to continue to analyse silage, because it is highly likely that it will be lower in energy and protein than it was at the start of the winter. Keep checking quality and ensure rations are balanced.”
When it comes to grazed grass, timing of turnout will not only depend on region and personal preference but also, ultimately, the climate. Contingency plans should be in place for if the weather is not favourable.
“It is all good and well looking at forage stocks and thinking ‘I can make it to mid-April’, but there’s no guarantee the grass is going to be there – there’s no telling what’s going to happen,” says KW Feeds’ Alex Roue.
“Producers should be asking themselves: is it going to be a dry summer; how much forage is there in the clamp; and will feeding be required through the summer? If conditions turn dry and grass growth is impacted, some producers will have to get the feeder wagon out again in May or June,” he adds.
If producers are frequently close to running out of grass silage each year, they should consider a more forward-thinking strategy.
“If, for example, cow numbers are increasing without any more land being added, producers should aim to go into summer with a forage buffer 10% greater than previous years. That would be a better position to be in,” says Mr Slack.
Forage stocks: assess silage quantity and quality
“Then look at how to stretch forage stocks throughout next winter, to avoid being in the same position the following summer. It makes sense to look ahead, even as far as summer 2024, and get that contingency in place now,” he adds.
Mr Slack says forward buying forage-extender materials, such as pressed pulp, early in February or March when prices are still at a discount, makes economic sense.
If the buffer to extend forage stocks is needed in late summer/early autumn then that contingency is already in place.
Although milk prices are currently relatively strong, there is concern they may fall back again soon. “Producers are facing milk-price uncertainty and this is making feed purchasing decisions and planning difficult. “So, to help mitigate risk, it will be important to act quickly when feed costs offer value for money, and listen to advice. Look at the price and the market overall,” says Mr Slack.
“Rather than just buying an 18% blend, producers should look at the materials – rape, soya or wheat – and purchase them when the markets look more favourable, rather than only when they would typically buy them.”
He urges producers to take advice from traders, and gain insight from resources such as KW Feedcast, and review their buying strategy.
“Do you try and wait for the bottom of the market and buy it all? In my experience, the more successful dairy businesses use rolling averages. They ‘dip’ into the market when they think the price is typically low and that way, if they do buy incorrectly, they are not completely exposed,” he says.
That is a tactic used by a lot of businesses to mitigate risks, and it’s relevant both to purchasing straights and blends. While February and August tend to be the heaviest buying periods, for both summer and winter feeding respectively, the key is to not make buying decisions without the appropriate information.
“What you really need to think about is continuity of supply. Look ahead to what you want, and when you are going to want it,” says Mr Roue.
“If you need to pay a little more for it to arrive when you need it, and to have the confidence that it is going to arrive, it is always worth it. Ensuring consistency in dairy rations is particularly important.
“The question is, would you wait for it to drop another £10 per tonne and risk losing availability? Or would you say ‘yes, I’ll have it’? There is an obvious answer to that.” Volatile world markets and turbulent weather conditions mean planning for dairy feed requirements has never been more challenging, and this underlines why producers should be looking ahead.
“Developing a long-term buying strategy, while looking for opportunities to take strategic forward cover for proportion of feed needs is going to be important this year,” adds Mr Slack. “Thinking about comparative value is also important. Is there a more cost-effective feed available that you should be looking at, or that would be a better fit for your situation?” he adds.