Dairy Australia - Dairy information for Australian Dairy Farmers and the industry

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Learn tips and read information to help you plan well and buy right.

Purchasing

Don'™t roll the dice on quality when you buy feed. Knowing if the feed you are intending to buy is good value for money is critical before handing over your hard-earned money.

Some quick number crunching can give you a much clearer idea whether you are buying good quality and good value feed.

Three steps of the buying process

1. Plan well - prepare feed budgets regularly and determine the maximum feed price you can afford to pay and still make a profit for your business.
2. Buy right - take into consideration feed quality, feed supply as well as price risks.
3. Feed carefully -“ avoid unnecessary feed losses through wastage at delivery, storage and feed-out.

Feed buying methods - farm-to-farm verses trade purchases

At first glance, buying direct from a grain or fodder producer to save costs versus from a feed trader or merchant may seem appealing, but it's always an idea to have a closer look.

Making the choice between a 'direct' purchase farm-to-farm versus a 'trade' purchase means considering the 'contract management' issues and the 'physical movement' issues when sourcing grain or fodder.

You must also consider supply chain costs, market volatility and supplier risk.

Key tips

  • Visually assess a feed's physical quality first.
  • Look beyond the price tag -“ crunch the numbers using feed lab analysis results.
  • Make sure you use reliable feed analysis results for your value assessments.
  • Use yardsticks to determine value per unit energy and protein.
  • Consider whether you have the time to manage all the tasks associated with managing feed supply.
  • Effective management doesn't happen by itself; a stockfeed company, merchant or trader can take these tasks off your hands, so make sure you factor in your time before you take it on.
  • Can you monitor feed prices on a daily/weekly basis to know what is happening in the market or do you use a trusted merchant to keep you informed?
  • Can you manage supplier risk or does it become your problem if the supplier doesn'™t have the feed or fails to deliver, or do you leave that to a stockfeed company, merchant or trader? 

More information

Don'™t gamble with feed quality (PDF, 541KB)

Buying on value, not price. Visually assess a feed's physical quality first. Look beyond the price tag - crunch the numbers using feed lab analysis results. Use yardsticks to determine value per unit energy and protein.

Also includes:

  • Using your senses and experience first
  • Things to look for (table)
  • Look beyond price tag
  • Incorporates series of examples on working out calculations
  • Buying energy and protein

Buying feed direct farm to farm (PDF, 414KB)

Factsheet on understanding difference between direct buying (farm to farm), via a broker and third party methods.

Includes:

  • Key tips
  • Supply chain costs
  • Market volatility
  • Supplier risk
  • Monitoring feed prices
  • Contract execution
  • Grain crushing - on-farm or outsourced

3 steps to better feed buying decisions (PDF, 266KB)

Factsheet outlining three-step approach to buying feed and provides key tips for success:

  • Plan well (feed budget, target feed price for profit)
  • Buy right (quality, supply, price)
  • Feed carefully (store feeds, feed diet to herd)

Buying grain - it's a world market (PDF, 499KB)

Factsheet to help set a strategy to manage price volatility in the global market. Includes:

  • Overview of global grain market
  • Explanation of supply/demand

Buying fodder - it's a domestic market (PDF, 532KB)

Contents:

  • Unlike grain, fodder is a domestic market.
  • Hay prices are less transparent than grain prices.
  • Consider your on-farm fodder buffer.
  • Be proactive in developing a relationship with a professional hay producer

In This Section

  • Buying Fodder

    Buying fodder

    Knowing how the fodder market works is the first step in setting up a smart strategy for buying fodder.

    When buying fodder

    • Be aware that fodder, unlike grain, is a domestic market and hay prices are less transparent than grain prices.
    • Always buy according to weight (tonnes not bales).
    • Always ask for a feed analysis to determine its nutritional value. This will also assist in feed budgeting.
    • Consider using a sliding scale to match price with quality.
    • To manage price risks, consider forward contracting in your feed buying plan as an alternative to buying at the spot price.
    • Always use a contract to secure supply.
    • You can use the 'Contract confirmation form' from the GTA website Obtain Vendor Declarations or use QA-accredited suppliers to satisfy your milk company's QA requirements.
    • You can find more information at the Australian Fodder Industry Association website.

    Tips

    • Run your fodder stocks down to nil each year, and accept the risk that you will have to pay high spot prices if you need to buy more fodder than expected.
    • Maintain fodder stocks in reserve for lean growing seasons.
    • In good years conserve extra forage as silage.
    • Using purchased hay may offer you control over nutritional quality.
    • Be pro-active in developing a relationship with a professional hay producer.

    More information

    Buying fodder in a domestic market (PDF, 520KB)

    This document helps you understand how the fodder market operates to help you develop a fodder buying strategy that meets your needs.

     

Major Initiatives

Focus Farms

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