Israel - where state support cuts milking costs by half

Wednesday, August 1, 2012

The Israeli government is helping its dairy farmers by subsidizing modern cattle housing and encouraging labour-saving robot milking at the same time

by NORMAN DUNN

A visit I took to Israel this spring showed how a government can bring radical farming change with the right incentives for environmental protection and automation. The last few years have seen millions of dollars invested in new dairy setups in a sector that is already well supported through long-term production quotas plus an annually adjusted guaranteed price system.

Only a decade since the first robot milkers appeared in Israel there are now between 50 and 60 in operation. Over 80 per cent of the country's 970 dairy farms also responded to a government demand for zero pollution risk from livestock housing by sealing the flooring of the former dry lot paddock systems and completely roofing them as well. Jerusalem backed this with grant aid of one shekel for every privately invested shekel.

A policy encouraging labour reductions on farms with grant support for private investment in mechanization and automation is mainly responsible for the growth in milking robots. The first farm in the country to fit four Lely systems under a single roof is the 1,600-acre Mishmar Ha'Emek kibbutz in the Jizreel Valley, about half way between the Mediterranean coast and the Sea of Galilee.

Before the changeover, this was a fairly typical Israeli farming co-operative or kibbutz with 300 Holstein cows kept on outside lots in summer temperatures that can soar to over 40 C and milked twice daily through a herringbone parlour. Dairy staff numbered nine full-time workers, mainly imported Thai labor. "Labour costs were over 5p/litre (C$.08) produced," recalls dairy manager Doron Shalem. "When we swung over to robots, we were able to cut staff to four full-time and one part-time unit."

On top of that, the cows responded to the three to three and a half milkings per day through the new system with lactations now averaging just over 12,000 litres compared with 9,500 per year in the old system. This allowed cow numbers in the herd, which has a quota of three million litres to be reduced to 250.

The bottom line: By this spring, labour cost per litre of milk produced had been nearly halved to the equivalent of C$0.05 per litre. Total production costs were reduced to $0.47 a litre, leaving a margin before interest charges equivalent to $0.14 per litre, according to the dairy manager. He adds that the investment in housing and robots that helped bring about these savings totalled some $2.174 million.

So far, the Israeli government has kept an iron grip on milk prices for farmers, negotiating each year's payment scale after talks with producers, processors and the retail outlets. This spring in Israeli supermarkets, UHT drinking milk was selling for the equivalent of $1.60 a litre.

The Mishmar kibbutz herd average of a little over 12,000 litres (at 3.7 per cent fat and 3.3 per cent protein) is pretty impressive. But the whole country's average lactation is put at 11,950 kilograms (2010) and a survey in that year of the 30 top herds covered 9,347 cows averaging 13,208 kilograms per cow year. "But you've got to remember that very tough selection for top production under our own conditions started way back in the early 1900s," reasons manager Shalem.

Culling is still comparatively ruthless. "Average lifetime in the milking herd for our cows is 2.7 years," says Shalem. Despite this figure, he says the selection is for a longer production life. "Fertility, udders and feet/legs are major factors. In fact, we do not keep heifer calves from any cow until she has first of all reached her third lactation."

AI is carried out in co-operation with the state cattle breeding organization that keeps all records. For the last year, first service conception rate has been 43 per cent for cows and 40 per cent for heifers with a final figure of 2.2 inseminations per pregnancy. Nowadays, the belief that the Holstein is the only animal for this system is waning and recently Brown Swiss, Norwegian Red and other lines have been imported and used in crosses. The main targets of cross breeding are increased fertility and prolonged productive life.

The cows at Mishmar are on year-round total mixed ration provided by a central feeding organization supplying most dairy farms in a 20-kilometre radius. "We ensile our own maize, wholecrop wheat and make our own alfalfa hay here on the farm," says Shalem. "But then we sell the silage and hay to the feed processing company, which makes up a TMR according to our requested formula with usually around 15 components, including cotton seed, soybean and sunflower meal, wheat and maize grains. The feeder trucks then visit the farm and deposit the feed directly at the feed bunks.

"Naturally, this costs a bit more than doing our own feeding, but it's yet another labour-saver and we have a very reliable service guaranteeing exactly the right nutrients for our herd. Three different mixes are fed to different yield groups. Payment for this service is around $7.50 per cow per day."

Concentrates are also fed to higher yielders via automatic feeders and in the robot at between four and eight kilograms per day.

Mishmar Ha'Emek wouldn't be a typical Israeli kibbutz if it didn't have a lot more enterprises. For instance here, not far from the ancient port of Caesarea, there's also an 800-cow beef herd on higher ground, a 16-million-broiler-chicks-per-year hatchery and a 100,000-bird layer unit, as well as arable crops of cotton, sunflower and chickpeas – the last grown for the country's almost unavoidable lunch side dish of hummus.

The farm is also home to Tama, global market leader in bale packaging with netting and twine. Every harvest, the farm's straw, hay and silage baling serves as a practical test station for new developments in this field with as many as eight round balers working in the fields at any one time. This industrial aspect and its associated tests mean baled crops are ready for transport off the Mishmar fields a lot faster than on other farms. BF

Norman Dunn writes about European agriculture from Germany.