Understanding the economics of grass growth

No sooner do we feel like we’re getting to grips with living with Covid than the world sends more challenges our way. With the cost of raw materials and gas escalating and availability reducing, inputs such as fertilizer and cattle feed have become expensive for everyone. Despite this, the economics of replacing homegrown forage with purchased feed is not justified even at current fertilizer costs .

Just this week AHDB launched their new grass input calculator. It essentially compares the cost of fertilizer and the return you can expect to receive from it with the cost of cattle feed. The calculator models three different scenarios depending upon sward productivity so that you can estimate your costs and returns.

With rising costs across the board, there is no doubt farmers will have to use all the tools at their disposal to anticipate returns, model costs, inform decisions and ultimately deliver a return on all their hard work. AHDB’s calculator could not have come at a better time.

Just one difficulty farmers have is choosing a long term or short term approach. The return from your fertilizer investment takes time but has the added benefit of preserving your future business allowing you to develop contingency silage to see you through winter as well as providing for unpredictable weather conditions that may delay grazing in the spring. Whilst cattle feed may seem cheaper by the tonne, it’s a short term solution that holds no long term benefits and will eat into your return.

Let’s look at an example:

A dairy farmer utilising a 4 cut silage system decides to reduce their annual mineral nitrogen by 25% to 185kg/ha due to the high fertiliser prices. How will this then impact their homegrown forage supply?

If the farm has good soil fertility and good grass growing potential, growing in the region of 13 t/ha DM or more, then we would expect that each kg of N will grow 20 – 30 kg of grass DM. So, this reduction of 65 kg/ha will see a loss of between 1,300 – 2,000 kg of grass per ha. Let’s take into account losses from ensiling and feed out which will likely reduce the amount to 1,100 – 1,700 kg/ha of silage DM.

Across 40 ha over all of the cuts, this is a reduction of 44 – 68 tonnes of silage DM or a loss of energy equivalent to 484,000 – 748,000 MJ. That’s enough energy to produce 91,000 – 141,000 litres of milk.

AHDB’s fertiliser calculator estimates that for the scenario above, growing grass with purchased mineral fertilizer (@£2.40 per kg) is between 2.8 and 4.2 times more cost-effective than replacing this grass/silage with parlour cake costing £400 per tonne.

So, despite increasing costs, homegrown grass is still the cheapest feed.