Benefits and costs of grazing various proportions of perennial ryegrass and chicory for dairy production

Understanding the economic trade-off between changes in the supplementary feed required and the cost of pasture renovation is important when considering investing in alternative forages. Perennial ryegrass (Lolium perenne L.) is the main pasture species used for dairy production in temperate Australia. Alternatives to perennial ryegrass are grown to complement the seasonal growth pattern of perennial ryegrass, and to potentially increase annual dry matter (DM) yield. A case study analysis of a dairy farm in Gippsland was used to explore the benefits and costs over 15 years when either 0%, 20% or 40% of the milking area was sown to chicory (Cichorium intybus L.), with the balance sown to perennial ryegrass. Chicory was part of a 3-year pasture renovation cycle; in the year of establishment, annual ryegrass was sown in the autumn, with chicory sown in spring, followed by 27 months of production. This was compared with a 5-year renovation cycle of perennial ryegrass. Stocking rates of 3.3 and 2.5 cows/ha were modelled. A whole farm budget approach with stochastic simulation was used to quantify the potential effect on profit and risk. The profitability of growing chicory depended on the balance among (1) savings in supplementary feed costs during summer and autumn, and (2) possible reductions in the overall supply of DM during winter and early spring, and (3) increased pasture renovation costs. Stocking rate influenced the most profitable percentage of land sown to chicory. When stocking rate was 3.3 cows/ha, sowing 20% of the milking area to chicory returned a net present value (NPV) over 15 years AU$31 000 greater, on average, than did sowing 0% chicory, and AU$46 000 greater than sowing 40% chicory. With 2.5 cows/ha, sowing 40% of the milking area to chicory returned an NPV AU$39 000–AU$102 000 greater, on average, than did sowing either 20% or 0% chicory, respectively. The ratio of perennial ryegrass to chicory had little effect on the variability of NPV. For an individual farm, the most profitable percentage will fluctuate over time with variations in prices, seasonal conditions and management choices.