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Feed is the largest variable cost for dairy farms in Australia, and dairy farmers are faced with the challenge of profitably feeding their cows in situations where there is significant variation in input costs and milk price. In theory, the addition of 5.2 MJ of metabolisable energy to a lactating cow's diet should be capable of supporting an increase in milk production of one litre of milk of 4.0% fat, 3.2% protein and 4.9% lactose. However, this is almost never seen in practice, due to competition for energy from other processes (e.g., body tissue gain), forage substitution, associative effects and imbalances in rumen fermentation. Pasture species, stage of maturity, pasture mass, allowance and intake, stage of lactation, cow body condition and type of supplement can all affect the milk protein plus fat production response to additional feed consumed by grazing dairy cows. We developed a model to predict marginal milk protein plus fat response/kg DM intake when lactating dairy cows consume concentrates and pasture + forages. Data from peer reviewed published experiments undertaken in Australia were collated into a database. Meta-analysis techniques were applied to the data and a two-variable quadratic polynomial production function was developed. Production economic theory was used to estimate the level of output for given quantities of input, the marginal physical productivity of each input, the isoquants for any specified level of output and the optimal input combination for given costs and prices of inputs and output. The application of the model and economic overlay was demonstrated using four scenarios based on a farm in Gippsland, Victoria. Given that feed accounts for the largest input cost in dairying, allocation of pasture and supplements that are based on better estimates of marginal milk responses to supplements should deliver increased profit from either savings in feed costs, or in some cases, increased output to approach the point where marginal revenue equals marginal costs. Such data are critical if the industry is to take advantage of the opportunities to use supplements to improve both productivity and profitability.

Predicting Immediate Marginal Milk Responses and Evaluating the Economics of Two-Variable Input Tactical Feeding Decisions in Grazing Dairy Cows