Farmer Focus: Organic feed contracts – risky but successful

With our silage crop in the bag, it is time to work with our dairy nutritionist on a feed plan for the next 12 months.

This year we harvested 4,000 tonnes of oat, rye and barley grass silage. Grass silage is the most common type in northern California.

We do not have irrigation water to grow corn silage in our area, which is the most common silage in the state as a whole.

Our silage was grown on various properties, custom harvested by a company that specialises in silage harvesting, then put into large white silage bags.

The bags keep air from getting to the grass and allow for fermentation. This allows the grass to last for the months ahead.

See also: Heat and rain aid Californian crop growth

The first thing that has to be done is to gather the harvest weight records, so we can plan how much we will feed various groups throughout the year.

Our nutritionist gathers samples for the silage test so that he can properly formulate our feed rations. Once the feed has been evaluated, we can go to work contracting feed for the rest of the year.

Contracting feed means we enter into an agreement with a feed company to purchase a set quantity of feed at a given price.

This price is often set 6-8 months before receiving the feed and often before the feed is even harvested.

As the receiver, we are taking a risk entering a price agreement months in advance, when the spot market price could be significantly different.

See also: California at war over minimum farm wage

Contracting organic feedstuffs is not very common where we farm. We were actively involved in contracting feeds for many years before our farm became organic, so it was a practice that we were used to.

In all we have been successful with our feed contracts. For example, we are entering a corn market that is looking to be upwards of $450/tonne (£340/tonne).

We have six months of our corn usage contracted at $400/tonne (£304/tonne). So for six months we will make a minimum saving of $50/tonne (£36/tonne). We feed roughly 100 tonnes of corn per month, so we will see a great saving.

To be contracted with feeds is risky, but we feel that taking a risk and contracting at least 50% of our feed gives our farm a good hedge.

See also: Read more from the Livestock Farmer Focus writers

Jessica McIsaac milks 350 pedigree Holsteins in Petaluma, California, with her husband, Neil. They sell organic milk and also have 6,000 laying hens.