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Increasing feeding costs for dairy cows

Feeding costs are one of the biggest problems for dairy farmers. It was the summer of 2012 when breeders of the project ‘S/stema Stalla’, which was created to measure the competitiveness of Italian dairy farms, pointed out an increase in the cost of soya and in general in the protein component of dairy cattle rations. It was then that the consulting firm CLAL developed a new instrument, ‘Alimento Simulato’ (Simulated Food), which serves to monitor the cost of cattle feed.

But what is Alimento Simulato? It is a theoretical food model 70% of which consists of corn and 30% of soybean meal (44% protein content as sampled). Soya drives the price of protein foods whereas corn drives that of energy foods, therefore Alimento Simulato can be used to interpret the trend of food costs related to food concentrates, using constantly updated data.

In April, May and June 2016 Alimento Simulato registered a considerable increase; the price of soya increased in the three months by €110 per tonne and that of sweet corn by €33 per tonne according to data from the Chamber of Commerce, Industry, Agriculture and Artisanship in Milan.

This new situation is contributing to closing the gap between production costs and revenues from milk sales. To put it in a nutshell, if in February a Lombard breeder was able to buy 1.59 kg of Alimento Simulato with the revenue from a kilo of milk, now he or she can only buy 1.29 kg.

And the future does not look promising. In the 2016 edition of their joint report, OECD and FAO state that in all likelihood prices of corn will not decrease further during the course of 2016, and according to forecasts up until 2025, prices of other cereals will be driven by demand for animal feed in China. On the basis of OECD-FAO projections, zootechnics, which is expanding globally, will also drive an increase in prices of oilseed meal.