Agriculture & processing

Financing affordable and climate resilient feeds for dairy farmers in Kenya

May 26th, 2023

Dairy farmers need financing to consistently purchase fodder for their cattle. Among the constraints that limit farmers from appropriately feeding their cattle is inadequate cashflow to purchase fodder as and when required. Farmers often opt for lower quality feed alternatives which lead to lower productivity.

FSD Kenya partnered with Performeter Ltd to address fodder quality and availability constraints through a tripartite contract enjoining Family Bank, o taker dairy cooperatives and commercial fodder producers.

The objectives of this pilot were:

  • To test new rations using available forages in local farms with maize silage as the basal fodder.
  • To demonstrate ration-based feeding (RBF) and its impact on dairy profitability and milk productivity.
  • To have in place a forage demo site for training pilot farmers.

The dairy cooperatives were supported to stock quality maize silage and incorporate it into their check-off system-s in addition to other products e.g., farm inputs that they were already selling to their members. The maize silage was also made available at cooperatives’ collection centres for their members to conveniently purchase all year round.

Transitioning dairy farmers from unstructured feeding to RBF based on a balanced Total Mixed Ration (TMR) required a well-thought-out feed plan. Therefore, farmers and cooperatives were tasked to come up with feed plans that were adopted and used as a basis for contracting based on member subscription to the RBF programme.

The projected TMR comprised of maize silage as basal fodder, grass hay, napier grass/oats, and minerals. The average weight of cows in the contracted regions was 450 Kg. The assumption in the pilot was the conversion rate of Dry Matter intake (DMI) of 3%-4% to a daily DMI of 13.5Kg which is recommended for lactating cows. The experiment started by costing the Total Mixed Rations for a balanced ration assuming usage of highquality fodder with high dry matter for silage and starch of not less than 28%. This is further tabulated below:

A ration containing maize silage as the basal forage, supplemented by napier grass or oat, dairy meal, and minerals currently costs KShs. 556 on average. The price graduation for procured fodder that was contracted for the year is as follows:

Price Graduation for maize silage per Kg

From the price graduation table, logistical costs constituted more than 20% of the total cost of the maize silage. Note that in these experiments, 50 dairy cows were selected and subjected to a balanced feeding regime for 3 weeks and daily data on milk production, feed and water intake recorded.

Before the trials, the experiment undertook an analysis of pretrial milk production volumes. From the analysis, the daily average milk production per cow under early lactation was 17.2 litres.

The related pretrial costs averaged KShs 25.5 per litre. At an average price of KShs 40 per litre, pretrial revenue was estimated at KShs 688.00, against pre-trial costs of KShs 438.60 per cow. The margin above feed is 36%. At the end of the experiment, it was evident that on average, the production costs increased by 65% whereas the revenues increased by 46%. The pre-trial average production cost per litre was KShs 25.5 – 28.5 against KShs 32.3 post-trial production cost per litre demonstrating 65% marginal increase. In conclusion, the findings revealed that,

  • There was a 50% increase in average milk production with the highest increase recorded at 150%
  • RBF with maize silage as the basal fodder increased the cost of feeding, but this was compensated by the increased milk production and corresponding revenues.
  • The net profit per cow under RBF averaged 17% demonstrating profitability and sustainability.

FSD Kenya intends to intensify this partnership with Performeter in 2023 and hopes to further explore collaboration in the following areas:

  • Scale up on financing a€ordable and climate resilient TMR with Family and Equity bank-s.
  • Testing the economics of commercially growing alternative fodder e.g., sugar graze, super napier grass by small holder women farmers.
  • Financing dairy farmers linked to Equity and Family bank-s nested on SME dairy processors and other processors (processors financing).
  • Financing bundled extension services with fodder purchase – including dairy catalogue to guide farmers in selecting fodder choices for di€erent cattle growth stages.
  • Testing new improved business and financing models for sustainability and for dissemination through group aggregation/ digital platform by Perfometer Dairy Academy
  • Piloting village-based aggregation feed centres (village fodder producers, local fodder buyers, youth/women managed/ para-extensionist feed centre manager through palletisation) and subsequent linkage to finance.

Testing of new business and financing models for re-usable fodder packaging materials to reduce cost and negative environmental impact.

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