Compound feed costs for dairy cattle rise by local sourcing

Published on
September 17, 2018

Exclusion of non-European raw materials from compounds feeds for dairy cows can increase feed costs up to 7 Euro per 100 kg feed, depending on the protein content of the feed. This was presented by Gert van Duinkerken of Wageningen Livestock Research at the annual meeting of the European Federation of Animal Science (EAAP) in Dubrovnik, Croatia (27-31 August, 2018).

Reducing European imports

European dairy production tends to increase its focus on local sourcing of feed materials. Exclusion of protein sources imported from outside Europe is mainly targeted on soybean meal from Latin America. However, there also is an overall tendency to increase European self-sufficiency for feed materials and a general reduction of import of feed materials.

Simulating feed costs

A simulation study was performed to calculate the impact of exclusion of soybean products, or exclusion of all non-European feed materials, on the prices of compound feed. Three common compound feeds for dairy cattle (“standard low protein”, “medium protein rich” and “protein rich”) were formulated using a least cost linear programming tool.

Severe impact of local sourcing

Three scenarios were compared:

  1. business as usual with full availability of imported protein rich feed materials such as Latin American soybean meal;
  2. exclusion of all non-European soybean products;
  3. compound feed with exclusion of all non-European feed materials (100% local sourcing).

For the low protein compound feed, scenario 2 did not result in higher compound feed costs, compared to scenario 1. For medium protein rich and protein rich compound feeds, scenario 2 resulted in higher compound feed costs of €0.67 to €5.71 (excl. VAT) per 100 kg, respectively.
In scenario 3, compound feed costs increased compared to scenario 1, with €1.17, €2.54 and €7.38 (excl. VAT) per 100 kg, for low, medium and high protein compound feeds, respectively. If local sourcing would be implemented at large scale in Europe, drastic changes in availability of feed materials would occur, also severely affecting feed material prices, or resulting in shortage of specific compound feed ingredients.

Improving farm management reduces impact

Van Duinkerken concluded that there is a societal trend towards local sourcing and purchasing in food production chains. This has various sustainability advantages, but local sourcing of feed materials also includes the risk of increasing the CO2 footprint per kg feed. He furthermore emphasized that import of non-European feed materials can be decreased by a reduction of yield gaps in grass, forage and fodder crop production in Europe. Furthermore, there is a lot to be gained at farm management level by reduction of losses on the field, during conservation and feed-out of grass and forages. Other important directions are increased feed and nutrient use efficiency in animals, a better use of co-products and residuals and innovations in novel European feed materials.

Sustainability assessments for local sourcing concepts are desired, because local sourcing does not necessarily improve all key performance indicators for sustainability.