Assessment of feed formulation and feeding level of urban and periurban dairy cows nexus with economic viability in Central Highland of Ethiopia

S Assaminew and M Ashenafi¹

Agricultural College, ATVET, Holetta, Ethiopia
asaminews1973@yahoo.com
¹ College of Veterinary Medicine and Agriculture, Addis Ababa University, Ethiopia

Abstract

The study was conducted on private urban and periurban dairy production systems around Holetta, Central Highland of Ethiopia. The objective was to evaluate the existing feed formulation and feeding level of crossbred dairy cows in terms of economic viability. A structured questionnaire was employed to generate data from 60 dairy farms.

The average home-mixed concentrates offered and average daily milk yield for urban and periurban farm, respectively, were 5.49 and 4.26 kg/cow/day, and 11.1 and 9.28 kg/cow/day. The average cost of home-mixed concentrates offered, return and net return in Ethiopian Birr (ETB)/ cow/day for urban and periurban farm, respectively, were 17.7 and 15.2, 94.7 and 78.4, and 77.0 and 63.2. Differences in quantity of home-mixed concentrate offering resulted in an apparently variation in milk yield and income earnings between urban and periurban farms. When the cows offered better level of home-mixed concentrates, the milk yield increased, consequently and the income also increased. The milk price/concentrate price ratio was greater than 5 for both urban and periurban farms. Thus, it is concluded that dairy production in using crossbred cattle is a profitable activity for urban and periurban dairy producers around Holetta, Central Highland of Ethiopia.

Key words: cost, home-mixed concentrates, income, milk yield, price

Introduction

Dairy farming is expanding with crossbred high yielding cows in urban and periurban areas of Ethiopia. Urban dairy systems in general are located in cities and/or towns for production and sale of milk, with little or no land resources, using the available human and capital resources mostly for specialized dairy production under stall feeding conditions (Azage et al 2013). By virtue of their location, urban producers are not expected to have access to agricultural or pasture land, as the operation takes place within cities and as a result, they are forced to buy feed (Zegeye 2003). Periurban dairy systems are located in rural areas or at the periphery of the urban areas which have relatively better access to urban centers in which dairy products are highly demanded (Azage et al 2013). These systems are contributing immensely towards filling the large demand-supply gap for milk and milk products in urban centers, where consumption of dairy products is remarkably high and they are the main suppliers of raw milk to the processors of different scales (Zelalem et al 2011). Dairying in urban and periurban areas creates employment opportunities and provides farmers a chance to use land, labour and feed resources to generate regular income (Gillah et al 2012).

These market-oriented urban and periurban systems are emerging as important components of the milk production systems in Ethiopia. The most important benefits are increased income, employment generation, food and nutrition, organic waste recycling and uplifting social status (Gillah et al 2012). The urban and periurban systems are being intensified through the use of crossbred dairy cows, purchased and conserved feed and stall-feeding (Azage et al 2010). Reports have shown that breed improvement will lead to an improvement in milk productivity of cattle ranging from 60 to 300% if accompanied by better feeding regimes (McDermott et al 2010). Without good feeding programs, the benefits of good breeding and management programs cannot be realized (Chakeredza et al 2008). Feed is the major input cost in animal agriculture, accounting for 65-70% of the total rearing cost (FAO 2012). The major constraints to increased milk production under all dairy production systems are inadequate feed resources, poor pasture development and the ever increasing feed prices (Zelalem et al 2011). The authors also confirmed that the problem of inadequate feed is as a result of the limited land available for pasture establishment, especially in the productive highland zones of Ethiopia that have a potential for dairy development.

The use of concentrate feeds is a potential alternative through which the productivity of cows can be improved. Though concentrate feed can be used to increase the milk yield in dairy farms, the feeding cost increases when concentrates are used. Concentrate feeding for dairy cows follows protocols that aim to supply a specific nutritional demand not filled by the basal diet, according to the expected animal performance (NRC 2001) even if; the high cost is a limiting factor. Feed formulation and diet manipulation aiming at increasing milk production thereby increasing the economic return to the producers. Producers mix feed rations at home using locally available feed ingredients in various proportions and are often not aware of their nutrient supplies and cost (Land O'Lakes 2010).

In milk production systems which do not rely heavily on pasture grazing and fodder crops to provide cow nutrition, the milk price/concentrate price ratio is an important indicator of the economic viability of the dairying (Staal and shapiro 1996). The milk price/concentrate price ratio also largely determines the profitability of concentrate feeding (Kellaway and Harrington 2004). Milk production per kilogram of concentrate can be used as an indicator of economic viability of the supplementation, when considering the prices of the concentrate and milk as indicated by Pimentel et al (2013). Therewith, the economic analysis of the dairy activity becomes essential to measure the profitability and to identify possible setbacks in the productive system, enabling a more accurate analysis of the actual conditions of efficiency of the farms, which facilitate the allocation of production factors (land, labor and capital) for dairy farm investment, conditioning the producer to a greater rationality in decision-making and business planning (Oliveira et al 2014). The success of dairy production in general and crossbreeding programs in particular need to be assessed regularly through evaluating the economic viability under the existing feed formulation and feeding level of dairy cows in connection to milk yield, concentrate feed cost, return , net return and milk price/concentrate price ratio. Thus, this study was undertaken to evaluate the existing feed formulation and feeding level of crossbred dairy cows in terms of economic viability.

Materials and methods

Location

The study was conducted on private urban and periurban dairy farms around Holetta, Ethiopia. The site is located at 9^o 3’ N latitude and 38 ^o 30’ E longitude, about 30 km West of Addis Ababa along the main road to Ambo. The study area has an altitude of 2400 meters above sea level and receives an average annual rainfall of about 1000 mm. The mean minimum and maximum temperatures are 6 and 22 ^oC, respectively. In this study, urban system constitutes those dairy farms, which are located within the boundary of Holetta town, whereas periurban system dairy farms are located outside of the town’s boundary (5 to 10 kilometers), produce milk and deliver to the town milk collectors.

Sampling techniques

Two production systems, urban and periurban, around Holetta area were considered for this study. Crossbred cows with any exotic blood level were used for the urban and periurban dairy system of the Holetta area. A reconnaissance survey was conducted in order to select specific dairy farmers and to get a general picture about the study sites. Based on the records available from the Dairy Union, there were about 596 dairy farmers, where 295 and 301 farmers were keeping crossbred cows in urban and periurban sites of Holetta, respectively. Considering 10% of the farms from each site, 60 dairy farms (30 from each urban and periurban) were considered for questionnaire survey.

Data collection and economic analysis

Structured questionnaires were developed and pre-tested for the survey work. Cross-sectional survey was conducted across the dairy farms from November, 2013 to February, 2014. Data were gathered on the feeding level of home-mixed concentrates per cow/day, average daily milk yield per cow/day, the proportion and price of each ingredients blended and milk price from each farm at the time of the survey period from the farmer/producer and retailers. To come to the final conclusion of economic viability, calculation of partial budget analysis was employed. The technique includes calculation of total cost of home-mixed concentrates/cow/day, return/cow/day, net return/cow/day and milk price to concentrate price ratio. The cost of home-mixed concentrate was estimated from the proportion of each ingredients blended and multiplied by their average corresponding price per kilogram and then price per kilogram  home-mixed concentrate multiplied by the quantity offered per cow/day. Return was calculated as the product of average milk yield/cow/day and price of milk per kilogram sold. Net return was calculated as the difference of return/cow/day and the cost of concentrates/cow/day. Milk price/concentrates price ratio was found as the quiescent of return/cow/day to total cost of home-mixed concentrates offered per cow/day according to Staal and Shapiro (1996).

Statistical analysis

Data were analyzed using Statistical Analysis System software (SAS 2004). General Linear Model (GLM) procedure of SAS was employed to analyze the effect of classification variables.

Results and discussion

Cattle ownership and grazing land holding

Average crossbred cows ownership was similar between production systems of the study site (Table 1). The average heads of cattle were smaller in urban than in the periurban dairy production system.

The average heads of crossbred cows in urban (2.90 heads) and periurban (2.80 heads) of the present study is comparable to the value reported by Fekede et al (2013) 2.70 heads of cows per household for greater Addis milk shed, Central Ethiopia. The average number of cows per household in this study was greater than the value reported for smallholder dairy farmers (1.29 heads of cows), but lower than the value reported for medium farms (6.43 heads of cows) in Bishoftu, Ethiopia (Mulisa et al 2011). Significant difference (P<0.05) on the average heads of total cattle ownership was existed between urban and periurban dairy producers of this study site. This variation could be attributed to differences in production objectives between urban and periurban farmers, and also the lack of sufficient space to accommodate large number of heads of cattle in urban centers.

Larger grazing land holding in the farming area was reduced from the periurban farmers compared to the urban dwellers (Table 1). This result is in line with Hassen et al (2010) who reported the average size of private grazing land holding per household to be 0.46 ha in the high altitude zone of Central Highlands of Ethiopia. The present result (0.45 ha in urban and 1.00 ha in periurban areas) is larger than the reported figure of 0.10 and 0.077 ha for private grazing land for Umbulo Wacho Watershed in Southern Ethiopia and West Hararghe (Funte et al 2010; Abdi et al 2013), respectively.

To improve forage development over the production systems, the periurban farms and few of the urban farms had planted improved forages such as Napier grass and oats. Land allotted for growing improved forages was very small in urban (0.02 ha) compared to periurban (0.07 ha). The respondents who did not grow improved forages were hindered by limited access of land. This finding is in line with (Diriba et al 2014) who observed shortage of land is to be one of the factors hindering successful evolution of the dairy value chains in Nekemte and Bako areas of western Ethiopia. The problem of inadequate feed is as a result of the limited land available for pasture establishment, especially in the productive highland zones of Ethiopia that have a potential for dairy development (Zelalem et al 2011).Small grazing land holding and small plot of land allotted for improved forages in this study site compared to cattle herd size clearly indicates that dairy production is dependent on purchased feed resources.

Feed marketing and blending

The major feed resources marketed in the study site included grass hay and crop residues as basal feed source. According to Azage et al (2013), among the roughages, grass hay and crop residues of wheat, barley, teff and pulse straw are marketed in small quantities in different dairy production systems in Ethiopia. Besides basal diets, agro-industrial by-products such as noug (Guizotia abyssinica) seed cakes, wheat bran, wheat middling, and linseed cake and bean hulls are marketed commonly. Linseed cake is the most expensive feed ingredients available in the market, however, only few farms purchase and incorporate in the crossbred dairy cows’ home-mixed concentrate. To overcome feed scarcity from own production, dairy producers in different dairy farming systems purchase feeds from outside in both the urban and periurban areas of Holetta Town. Agro-industrials are the main supplementary feed source commonly found in the feed retailer shops. The different agro-industrial byproducts could be purchased either directly from the processing plants or from traders who buy the byproducts in large quantities from the factories and re-sell them to livestock producers (Berhanu et al 2009). Feed marketing is common around Holetta areas where dairy farmers have limited or no access to land for feed production. Thus, purchased feed is the major source of feed in the site for dairy production.

Commercial mixed concentrates were not the important source of feed to be purchased and fed to animals in the study site. The reasons of the dairy producers to be hindered to purchase commercial mixed concentrate were often not available in retailer shops and/or sometimes when available high prices hindered the producers to purchase it. Dairy producers also indicated concern regarding lack of information and milk yield was not better while feeding commercial mixed concentrate compared to home-mixed concentrates. The common types of concentrates feed ingredients used were identified and blended and offered to crossbred dairy cows in the study site included wheat bran, noug seed cake, wheat middling, linseed cake, bean hulls and salt (Table 2).

Dairy producers in the study site commonly used wheat bran and noug seed cake as major ingredients in their home-mixed concentrate. Noug seed cake was the major protein source in the home-mixed concentrate which is consistent with Diriba et al (2014) who reported noug cake as the major concentrate ingredient used as protein supplement in Bako and Nekemite, western Ethiopia. Concentrate feed ingredients (agro-industrial by-products) commonly were blended to feed all lactating crossbred cows similar mixtures regardless of milk yields. Dairy producers did not mix and feed concentrate mixtures to different classes of cattle. Price and availability of ingredients were considered as the bases of blending (formulating) concentrate mixtures for crossbred dairy cows. Home-mixed concentrate feeding was mainly for lactating crossbred dairy cows. Thus, the act of offering home-mixed concentrate to non-lactating cattle was not a common practice in this study. This finding is in line with Hassen et al (2010) reported that farmers around the periurban areas utilize by-products of grain for lactating crossbred cows.

Milk marketing

Dairy producers were organized in cooperatives and supplied their raw milk to cooperatives at the price of Ethiopian Birr (ETB) 8.50 per kilogram of milk. Thus, the role of intermediaries to deliver the product to the end users is minimal in this market chain (Zekarias and Shiferaw 2012). Few farmers sold milk to the nearby hotels and private milk processors at the price ranging from ETB 7.50 to 10.0 per kilogram of milk. The dairy production and marketing unions/cooperatives collected fresh milk from their members in the area and resold it to processors, cafeterias, hotels and/or final consumers. Raw milk was the most marketable dairy product in Holetta, Central Highland of Ethiopia. The cost of milk found in the market today is a reflection of the high cost of feed supplements used by the majority of dairy farms that are engaged in market-oriented milk production (Zelalem et al 2011). This is especially true for those farms that maintain crossbred and grade dairy cattle.

Home-mixed concentrates feeding level and economic viability

Home-mixed concentrates feeding per cow/day, concentrate cost per cow/day, calculated returns per cow/day, net returns per cow/day, and milk price/concentrate price ratio are presented in Table 3. The smaller average (4.26 kg/day) quantity of home-mixed concentrate supplementation to crossbred lactating cows was found in periurban farms than urban farms (5.49 kg/day). This variation could be leading to the differences in milk yield produced per cow/day and resulted in variations of income in terms of returns and net returns per cow/day. The absence of procedures for determining the optimal level of supplementation might be the main reason for the variation use of concentrates by dairy producers in this study site.

The high cost of home-mixed concentrate (ETB 17.7 per cow/day) found in urban farms could be attributed to the quantity of home-mixed concentrate offered per cow/day leading to high milk yield (11.1 kg/cow/day). Significant differences (p<0.05) were found in average return and net return earned per cow/day between the urban and periurban production subsystems. The higher average return and net return, ETB 94.7 and 77.0 per cow/day, respectively, were earned by urban dairy producers compared to periurban dairy producers who earned return and net return of ETB 78.4 and 63.2 per cow/day, respectively. These differences could be attributed to better quantity of home-mixed concentrates offered in urban farms which resulted in better milk yield per cow/day. Pimentel et al (2013) concluded that the economic return of the supplements is directly related to the increase in milk yield, with the inclusion of the concentrate in the diet. Thus, when the cows are supplemented with better level of home-mixed concentrates milk yield increased leading to increased income. Adequate concentrate supplementation improves performance of dairy cows to reach animal’s genetic potential (Gillah et al 2012).

The milk price/concentrate price ratio was similar per cow/day for both urban and periurban production systems. Home-mixed concentrate supplements in this study seemed to be the most cost effective since it had a favorably higher milk price to concentrate price ratio. The milk price/concentrate ratio greater than 3 is the minimum acceptable economic viability according to (Staal and shapiro 1996). In the present study, milk price/concentrate price ratio was greater than 5 for both urban and periurban systems. This indicates that dairy farms are profitable at Holetta, Central Highland of Ethiopia. This finding is in line with Staal and Shapiro (1996) who concluded that farms which have milk price/concentrate ratio greater than 5 can be said to have a relatively optimum feeding approach (Staal and Shapiro, 1996). The milk price/concentrate price ratio largely determines the profitability of concentrate feeding (Kellaway and Harrington 2004).

Conclusion

• Variation in the quantity of home-mixed concentrate offered resulted in variation of milk produced and income between production systems. When cows were supplemented with better level of home-mixed concentrates, the milk yield increased leading to a raise in income. The milk price/concentrate price ratio indicates the optimum profitability and feeding approach in terms of cost. Thus, it is concluded that dairy production in general with crossbred dairy cattle is a profitable activity for both urban and periurban producers even to those that purchase all their feed inputs.

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Received 20 April 2015; Accepted 15 May 2015; Published 2 July 2015

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