Opportunities and challenges for the growth of milk production from pasture: The case of farm systems in Uruguay

S.R. Fariña and P. Chilibroste

Agricultural Systems, 2019, vol. 176, issue C

Abstract: Volatility of markets and climate are driving exporting dairy industries to increase milk production from pasture. However, some regions are not able to grow due to economic, social and environmental constraints. The objective of this study was to analyse at the farm system level the opportunities and challenges for the growth of pasture-based dairy production in Uruguay. A national database of 256 dairy farms was used to compare four groups of Uruguayan farms selected according to the total milk production growth rate from 2013 to 2017. Their productivity (milk production per hectare) and profit was compared by fitting mixed models. Complementarily, the International Farm Comparison Network database was used to compare biophysical and economic indicators of typical farm systems of Argentina, Australia, Ireland, Holland, New Zealand, United States and Uruguay from 2013 to 2017. The growing groups of farms (medium and high growth; >5% per year) showed more productivity due to their higher stocking rate and achieved a higher margin over feed cost and a lower feeding cost per L of milk than the shrinking groups (medium and high decrease; <0% per year). The growing systems showed a higher consumption per hectare of home-grown forage (pasture and conserved forage) and supplements. Margin over feed cost decreased alongside milk price over the time frame analysed, with no significant interaction between group and year. Productivity in New Zealand, Australia, United States and Holland was above 10,000 L/ha whereas in Ireland, Argentina and Uruguay it was below 7000 L/ha. Consumption of home-grown forage per hectare in the former countries more than doubled the latter, which consumed approximately half the potential forage production locally reported. Home-grown forage consumption per hectare was a more likely driver of productivity than bought-in feed or feed conversion efficiency. Uruguay achieved the lowest cost of production however current low stocking rates (0.7 cows/ha for the typical farm system) limit home-grown forage consumption and productivity growth. Inter-annual variation in economic performance was larger than the variation in biophysical performance for all countries. This study showed that pasture-based farming systems in Uruguay could make a leap in milk production without losing competitiveness by doubling their home-grown forage consumption through increased stocking rates. For such growth, some future challenges will remain around managing P accumulation and runoff in intensifying farms as well as improving farm design and infrastructure to attract labour, improve its productivity and assure animal welfare.

Keywords: Dairy farm systems; Pasture-based; Sustainable intensification; Profit; Forage consumption; Home-grown forage (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:agisys:v:176:y:2019:i:c:s0308521x18313787

DOI: 10.1016/j.agsy.2019.05.001

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