The economic impact of cow genetic potential for milk production and concentrate supplementation level on the profitability of pasture based systems under different EU milk quota scenarios

A 3-year study was set up to evaluate the influence of cow genetic potential for milk production and concentrate supplementation level on profitability of pasture based systems of milk production. In each of the 3 years, 96 cows were used in a three (genotype) x 3 (levels of concentrate supplementation) randomized block design. Cows were categorized based on their pedigree index (PD) for milk production (PDMILK) into low (LP; PDMILK less than 100 kg), medium (MP; PDMILK 100-200 kg) and high (HP; PDMILK 200-300 kg). Concentrate supplementation levels were 376, 810 and 1540 kg per cow per lactation, identified as low (LC), medium (MC) and high (HC) concentrate respectively. Three milk production scenarios were investigated using the Moorepark Dairy Systems Model (MDSM) which included: EU milk quota applied at farm level with current costs and prices (SI), EU quota applied at farm level with projected future costs and prices (S2), and EU milk quota applied at industry level (quota purchasing possible) with projected future costs and prices (S3). The effect of variation in milk price, concentrate price and opportunity cost of land were modelled using stochastic budgeting. The results suggest that where EU milk quota is applied at farm level (S1 and S2), the optimum system of milk production is where margin per unit of output is maximized. When milk quota is applied at industry level (S3) the optimum system will be where margin per cow will be maximized. The results also suggest that the optimum system for cows with lower genetic potential for milk production is low level of concentrate supplementation, while cows with higher genetic potential for milk production is high level of concentrate supplementation.