Who am I? Outline. Why organic steer production?

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1 Optimal decisions in organic steer production a model including winter feed level, grazing strategy and slaughtering policy Bea Nielsen, KVL/ NOR-FEED A/S Advanced Herd Management, september 26 Who am I? M.Sc. agriculture + Ph.D. 23 Organic beef production Feeding trials Questionnaire Registration of production results on-farm Model Since 23/24 employed at Nor-Feed A/S as R&D Manager Natural additives to production animals Outline Organic steer production: bacround Decisions to be taken by the farmer Steer model: Model structure Presentation of the model Model conditions Results Criterion of optimality: per steer or per time unit? Price changes Perspectives Dairy breed bull calves in organic beef production: Bacround Many organic dairy farms in DK milk is the primary income low number of organic bull calves reach the organic beef market what happens to the bull calves? Typical conventional production of bull calves in DK intensive production of young bulls / calves (about 1 year old) not suitable on organic farms What happens to the bull calves on the organic farms? why is it interesting to investigate? export of bull calves can be an ethical problem to organic farming bull calves are an unused resource on organic farms What happens to the dairy bull calves? Results from a farm survey Why organic steer production? 2% 8% 6% 66% sold to conventional farms killed reared on farm of origin sold to organic farms European organic standards 6% roughage ( DM /animal / day) 15 days on pasture Production of young bulls or calves Steers castrated bulls calm temperament reduced gain intensive feeding is not necessary 1

2 Steer production W eight, g/d g/d 6 g/d 2 6 g/d 1 6 g/d Summer Summer Months intensive extensive Decisions to be taken Which pasture? marginal grass (low quality and gain) clover grass (high quality and gain) Feeding level in winter? low feeding level result in compensatory growth on pasture When should fattening start? Slaughter weight? The steer model Model structure: Action space 4-level hierarchical Markov process with decisions defined at three levels childlevel1: grazing strategy (marginal grass or clover grass), feed level in winter (high and low) child level 2: time for beginning of fattening (19-27 months) child level 3: time of slaughter (19-3 months) Founder Proces Dummy Child level 1 Summer: Marginal grass or clover grass Winter: or low feeding level Child level 2 Continue or start fattening or slaughter Child level 3 Keep or slaughter Model structure The steer model: Founder process Time horizon Stage length State space Founder Proces Infinite Life span of the steer Birt month Child level 1 Finite grazing / winter season Live weight Child level 2 Finite stage1: until 19 months stage2-6: 1 month Live weight gain Child level 3 Finite 1 month Live weight gain processtree state space: birth month, 12 levels 2

3 Child level 1 stages of child level 1: stable and grazing s Child level 1 stable action space: low and high grazing state space: 7 weight levels low and high previous winter feeding action space Child level 2 2 grazing clover grazing is chosen child level 2 is defined - age of 19 months is reached at 19 months () fattening can start stage length action space Child level 3 action child level 2: start fattening 4 stages in child level 3 (19-22 months) 3 states (weight gains) action: keep and replace Parameters Model conditions 3

4 Model conditions Simulation: Gain per steer Growthonclover grass pastures following low winter feeding steers born Optimal strategy in the second grazing (child level 1) according to month of birth and LW. Optimal strategies for all seasons (child level 1) for steers born in. pasture following high feed level Clover pastures following low feed level Optimal strategy in the second grazing (child level 1) according to previous winter feed level, examples of month of birth and LW at the beginning of the. Month of birth Previous winter feed level LW at the beginning of the, Optimal pasture decision /clover Optimal strategies at child level 2 are shown for steers born in in the third stable with low feeding level /clover /clover /clover Low /clover /clover Low /clover /clover Low /clover 4

5 Optimal strategies at child level 3 steers born in in the third stable at low feeding level, a LW of 47 at the beginning of the third stable and with the beginning of fattening in at an age of 24 months. Net return, DKK/steer Net return relative to minimum net return, DKK/steer JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Optimal slaughter weight, Conclusions Optimal slaughter weight, JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC child level 1 low feeding level in winter permanent pastures the 1. grazing season clover pastures for steers with high liveweight child level 2 only few steers should be fattened child level 3 Is the hierarchic Markov proces useful to describe the given problem? Optimal criterion organic steer production has well defined phases decisions are linked to these phases well suited for the state and action spaces of the multi-level hierarchic Markoc proces a big model (474, state combinations), but the hierarchic structure makes it possible Per steer Net return per produced steers is maximised Replacement with a new steer Per time unit Net return per year is maximised 5

6 The effect of optimal criterion on optimal strategy child level 1 grazing The effect of optimal criterion on optimal strategy child level 2 third stable Per steer criterion, low previous winter feed level Per steer criterion, high previous winter feed level Third Stable Feeding level Low feeding level Age, months Optimal strategy per time unit < 48 and > 54 Slaughter Start finishing < 45 and 55 Slaughter Continue as usual Optimal strategy per steer Continue as usual Per time unit criterion, low previous winter feed level Per time unit criterion, high previous winter feed level 25 < 65 Continue as usual 65 Slaughter < 75 Continue as usual 75 Slaughter < 76 Continue as usual 76 Start finishing < 69 Continue as usual 69 Start finishing Net return per steer, when optimised per time unit or per produced steer Slaughter weight and age at slaughter, when steers are produced under optimal conditions Net return per steer/dkk Optimised per time unit Optimised per produced steer Jan Feb Apr Aug Sep Oct Nov Dec Slaughter weight when steers are produced under optimal strategies, Jan Feb Apr Aug Sep Oct Nov Dec Optimised per produced steer Optimised per time unit Age at slaughter, months (optimized per steer) Age at slaughter, months (optimised per time unit) Sensitivity analysis What happens to the key figures (i.e net return) if the conditions change Beef prices Probabilistic Markov chain simulations were run under the calculated optimal strategy: per time unit Simulations are used to calculate technical and economic key figures characterizing the optimal policy. First grazing Second grazing Third grazing The effect of changes in feed prices (summer) on optimal strategies per time unit at child level 1 for steers born in. pasture -.3 DKK (same price as marginal pasture) pasture +.5 DKK Both ryegrass and permanent especially after high feed level in winter and light steers (< 27 ) Marginal pasture -.35 DKK Both ryegrass and permanent especially after high feed level in winter Marginal pasture +.3 DKK 6

7 The effect of changes in feed prices (winter) on optimal strategies per time unit at child level 1 for steers born in Effect of price variations on net return Second winter winter low -.5 DKK No changes compared to standard price winter low +.5 DKK Low feeding intensity Steers born in and : high feed level winter high -.5 DKK Only high feeding level for steers born from Jan. to and also some steers born in and. Others low feeding level winter high +.5 DKK All steers should be fed at low feeding intensity Net return per steer, DKK Standard prices Net return per time unit, DKK Third winter No changes compared to standard price More feeding at high feed level compared to standard prices (all steers born from Febr-) feeding intensity is optimal for many steers (all steers born from Febr. to ) and half of the steers born the other months Low feeding intensity Meat Prices Premiums optimised per steer optimised per steer winter, high feed winter, low feed marginal grazing clover grazing optimised per time unit optimised per time unit fattening The effect of price variations on live weight at slaughter Conclusions: criterion of optimality optimised per steer Live weight at slaughter, Standard prices Meat Prices Premiums optimised per time w inter, w inter, low marginal clover fattening high feed feed level grazing grazing In general the optimal strategy only changes slightly depending on the criterion (net returns per steer versus per time unit). An optimization per time unit in some cases favours a more intensive production based on high feeding level in winter and finishing of steers as well as earlier slaughtering compared to an optimization per steer. Conclusions: Simulations of key figures Finishing of steers seemed not to be an optimal strategy from an economic point of view and price changes in feed, beef and premiums did not favour finishing of steers. Most important factors with efect on net return: Beef prices prices for ryegrass/white clover pasture Prices for low feeding level Perspectives optimal strategies for an overall organic steer production data from specific farms can be included and optimal strategies can be simulated on farm and animal level data on single animal level might be introduced in steer production effects of price changes can be determined quite easy with simulations not time consuming the effect of fattening of dairy bred steers should be revised 7