Rising protein prices are having a big effect on dairy margins with the hit poised to get larger as farmers move out of winter feed price contracts.

“Soya prices have jumped by around £50/t in the last few months, currently trading at around £460/t, up over £150/t on 12 months ago while rape is trading around £90/t up at close to £300/t,” Dr Phil Holder, managing director of molasses-blend specialists ED and F Man comments.

“These commodity price movements will affect on-farm prices looking ahead as farms move out of winter fixed-price contracts, hitting margins even if cows have been turned out unless farmers take action.”

He says the objective must be to ensure the diet contains the optimum balance of rumen degradable and bypass protein sources to meet planned production levels while reducing protein costs.

One option he t is to replace a proportion of rape and soya in the diet with a protein enriched molasses which can be an excellent source of fermentable protein.

In trials at The University of Reading, Centre for Dairy Research the effect of replacing a proportion of the rape and soya with Regumaize 44, a urea enhanced molasses blend to mid-lactation cows was evaluated.

In the trial diet 1.6kg of rape and soya was replaced with 2kg of Regumaize, reducing the rape: soya by 40% but leaving the total dry matter fed the same. The diets had the same energy and protein contents.

The change in the diets had no impact on milk yield and butterfat but milk protein was increased, from 3.62% to 3.71% possibly due to the extra readily fermentable energy in the Regumaize.

“At today’s prices, the diet including Regumaize would be 16p/cow/day cheaper, or nearly £1000/month for a 200-cow herd. For farmers on a constituent-based contract the additional milk protein would help support milk prices too.

“We would never advocate a total switch from conventional protein to a high protein molasses blend as this would compromise the total protein balance in the diet,” Dr Holder stresses. “But a partial replacement could go quite a way to reducing the impact of rising prices.”

He suggests that where a farm has good cover of protein straights purchased at lower prices, Regumaize could be successfully included to make those stocks last longer, delaying the time when more expensive supplies need to be purchased.

“Alternatively, if a farmer is about to order more soya and rape, revising the ration to include some Regumaize will reduce the impact of higher feed prices on margins. But before making any change it is vital to have the ration checked by a nutritionist to determine the most effective replacement rate to ensure the protein sources are balanced to allow cows to produce to their potential and allow lower feed costs to work through to margins.”

KW Alternative Feeds also believes dairy farmers need to act now to mitigate risks and identify cost-effective alternatives, when global feed prices are on the rise.

Chris Davidson, KW senior trader said high soya prices have been driven in a large part due to prolonged dry weather in South America, alongside the huge demand from China, resulting in a need to refill the pipelines.

The UK’s worst wheat harvest in 40 years is also hitting home, with a need to import wheat at some stage soon, and with great resolve. With little availability in nearby markets due to domestic requirements, and with Russia imposing an export tax on wheat to ensure food security, import prices will be high.

Additionally, speculators are holding near record longs of wheat, corn and soyabean contracts, and that will also be inflating the price.

However, while the picture is pessimistic, it is one that should be acknowledged and acted upon to mitigate risk, Mr Davidson said.

“There are alternatives which can help ease the situation. The use of SodaBarley, for example, as an alternative to SodaWheat has given the opportunity to cover summer cereal requirements at levels more in line with what was paid this winter,” he says.

With many dairy farmers likely to consider early turnout to make the best possible use of grass to save costs, KW ruminant technical manager Charlotte Ward says SodaBarley also represents a good option to support diets.

“SodaBarley provides fermentable energy to help utilise the abundance of RDP (Rumen Degradable Protein) in grass, but is also a ‘safe’ starch source, with slow release balancing the fast release sugar energy in the spring grass,” she says.

The booming commodity prices, combined with the likely push for early spring turnout, provides other alternative options to consider.

“The xlyig-treated British rapeseed expeller, NovaPro is also an ideal complement as a protein source,” adds Ms Ward.

“The priority with protein is to meet cow requirements without oversupplying RDP that is so prevalent in grass, so focus needs to be on feeds that are high in rumen-bypass protein (digestible undegraded protein, DUP).

NovaPro fits the bill perfectly, with its higher DUP:RDP ratio in comparison to the prohibitively more expensive soya, allowing for improved protein utilisation.”

This high-energy, rumen protected rapeseed expeller is sourced from British rapemeal, so there are no availability issues, and costs are clearly extremely favourable against current soya prices.

Ms Ward also advises that high energy moist feed TraffordGold is a cost-effective alternative to using compound to top up grass supply, whilst also helping maintain butterfats and supporting rumen health by reducing slug feeding in the parlour. TraffordGold could significantly reduce spring and summer feed costs.

Ahead of the new crop, buying decisions need to be made now to address challenging feed costs. Alternatives are available that can displace reliance on traditional raw materials, while also boosting sustainability and providing significant performance benefits.