Feeding Systems with Legumes to Intensify Dairy Farms - cgiar

Ex-ante analysis for Nicaragua. The situation in Esquipulas,
Nicaragua, was similar to Costa Rica; in other words, the forage alternatives
evaluated in this study significantly reduced production costs. Figure 4
shows the cost of producing milk with different forage options according to
cow productivity. Under study conditions, milk production cost was
US$0.26/kg while the price received was US$0.22/kg. With the income
obtained from the sale of weaned male calves, producers obtain an income
similar to the minimum wage.
This situation, however, could improve even with the current situation if
cow productivity was higher. The quality of H. rufa is enough to maintain
cows yielding up to 1,500 kg/lactation, without additional supplementation
during the rainy season and cows yielding 2,000 kg/lactation, with energy and
protein supplementation year-round, but with H. rufa it is possible to reduce
milk production costs to US$0.20/kg based on grazing management (for
example, good degree of coverage of pastures, weed control, rotation of
paddocks, shade, availability of water for grazing animals, and adequate
resting period).
Cratylia with sugarcane in Nicaragua. With this forage option, as well
as in the case of Costa Rica, it is possible to completely eliminate the need for
supplementation during the dry season. The production cost was reduced by
31% (from US$0.26/kg to US$0.18/kg) with the same productivity of the
existing herd. Similarly, it is possible to reduce the production cost to
US$0.14/kg with a cow productivity of 1,500 kg/lactation. It is even possible
to reduce it to US$0.12/kg with a cow productivity of 2,000 kg/lactation. The
investment required to establish this forage option, on an average farm of 29
cows at this benchmark site, was approximately US$4,600. This investment
covered the establishment of 5 ha of Cratylia, 2.4 ha of sugarcane, and the
purchase of a cane chopper with diesel or gasoline engine because very little
rural electrification infrastructure exists at this site.
Figure 5 shows the real interest rates that could be paid for this
investment, depending on the productivity per cow, assuming that the
producer allocates 50% of the marginal income to pay back the loan regarding
the base scenario (H. rufa + feed concentrate). During the study, the
Nicaraguan financial system offered a real interest rate of 18% for
farm/livestock credits with a 5-year payback period.
In this situation and with the prevailing milk productivity at that time, it
was not be possible to adopt this forage alternative because it was not
economically viable. However, with productivities per cow of 1,500
kg/lactation, the payment of a credit was perfectly viable under the conditions
prevailing in the country at the time of the study because it was possible to
pay a real interest rate up to 22%, with a payback period of 5 years. With
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