Avoiding FEI penalties with supplementary feed

With Fonterra's new fat evaluation index grading system, farmers using a lot of PKE will have to change their feed options to mitigate or avoid penalties

Although it’s still months away, New Zealand dairy farmers are already preparing for the impact of Fonterra’s new fat evaluation index (FEI) grading system, which comes into effect on 1 September 2018.

Matthew -Grayling -from -Taranaki ,-with -his -herd

Fonterra established the FEI test to measure the fat composition in the cow’s milk it collects to ensure it is suitable for manufacturing products that meet customer specifications.

The use of palm kernel expeller (PKE) as a supplementary feed has been identified as a key influencer on high FEI levels in dairy milk.

A by-product of the palm oil extraction process from the fruit of the palm, PKE has become increasingly popular as a feed option in dairying due to its relatively low cost. However, high use of PKE can impact the fatty acid profile of milk and has led to manufacturing challenges for Fonterra with certain products.

From March 2017, Fonterra’s FEI test was rolled out nationwide, and since last May, farmers have been able to view their FEI results and take steps to improve poor test results.

From 1 September, farmers supplying milk with higher-than-acceptable levels of FEI will incur demerits and financial penalties.

"For many farmers, FEI won’t be an issue, but farmers who use a lot of PKE will have to change their feed options to mitigate or avoid penalties," Daniel Calcinai, general manager of New Zealand-based national feeds company GrainCorp Feeds, says.

"The FEI test analyses the milk and if the levels are above a certain threshold during the grading process, then the farmer is penalised – in some cases, up to 20% of the value of that day’s milk," Daniel says.

The FEI grading framework is on an A-B-C-D scale, with A grade milk meeting requirements, a B grade meeting requirements but approaching the threshold limit (alert), a C grade exceeding threshold limits (two demerits and 10% deduction per collection day), and a D grade well in excess of threshold limit (with four demerits and 20% deduction per collection day).

GrainCorp Feeds has been working with farmers to plan alternative feed strategies to improve their FEI grading and avoid demerits and penalties. "We have a large range of supplementary feed options, and our team can meet with farmers to plan the best feed strategy to suit their farm situation," Daniel says.

"We’ve worked closely with those wanting to improve their FEI grading results and have had some great success."

Taranaki farmer Matthew Grayling has been preparing for the introduction of the FEI grading system. Based on a 200-hectare farm at Okato, Matthew milks 500 dairy cows across two herds, 300 Jerseys, and 200 Friesians.

He has been "mixing up" his feed options, with the help of GrainCorp Feeds to understand the impact on his cows’ milk and to improve his overall FEI grading. After feeding his stock a small amount of PKE as supplementary feed at the end of April 2018, he was shocked to find his farm’s milk had received an FEI grade of ‘D’.

Dairy -cows -eating -molasses

"It was just two to three kilogrammes (per cow) of PKE, which was a little concerning.
A ‘D’ is a 20% penalty, and I felt we couldn’t afford to be in that range." At that time of year, it would have cost $700 a day, Matthew estimates, "and even more at the peak of the season".

He dried his cows off, and come spring, he decided to tweak his feed options based on advice from his GrainCorp representative Darrel McCracken.

"Using ProCow30 as a base (a blend of PKE, minerals and 30% molasses), we added 30% soya hull to the feed, which brought his FEI grade back to an A," Matthew says. "Dealing with the FEI grading system is going to be a challenge and difficult for some farmers. To keep producing quality milk, we need to manage our input feed carefully. If we want to add supplement feed, we have to be smarter in how we do it."

GrainCorp Feeds has access to a wide range of exclusive, highly nutritional feeds as well as competitively priced commodity feeds. These feed options can be blended at rates required to meet specific herd and budget requirements. "We’ve found that altering the mix of dry feeds can dilute the impact," Daniel says.

"For those who may use higher levels of PKE during certain parts of the season, blending with a liquid feed such as molasses is a very good option. Not only will it help reduce FEI levels but we have also seen it improve production and help enhance the utilisation of other feeds. What’s more, it is safe to feed ad-lib and can be fed through existing bulk PKE feeding systems."

In January, GrainCorp Feeds began offering molasses through its national supply chain, and Daniel says there has been a lot of interest in that, particularly with PKE/Molasses blends.

"We’ve found that blending molasses with PKE up to 30% has helped farmers reduce FEI significantly over a short period of time. Adding molasses is not only helpful in reducing FEI but is also a really high-quality feed for dairy cows."

Daniel says molasses is the "next lowest cost feed to PKE" that farmers can get, so it also makes sense from a financial point of view.

"If a farm is set up to bulk feed, it’s definitely a viable option to consider adding molasses to mitigate FEI risk and get results," he says.

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