An economic analysis of interseeding of pasture and feeding legume forages to dairy cows in an organic system

Abstract

This study assessed the economic viability of interseeding a legume-grass mixture in an existing organic pasture system, focusing on the implications for milk yield, milk composition, and profitability. Using net present value analysis, financial and production data were analyzed from the University of Minnesota Farm Financial FINBIN database and university feeding trials (University of Minnesota and University of New Hampshire). The analysis modeled a baseline 88-cow organic dairy herd with an average milk yield of 7,185 kg. A 10-yr net present value analysis was used to account for the time value of money at a discount rate of 7% and fluctuating pasture productivity, with interseeding occurring in years 1, 5, and 10. The analysis found a positive net present value of $394,274, which indicated that the investment was financially feasible for organic dairy farms. Sensitivity testing found that although the modeled farm was resilient to increased seed costs, profitability was more dependent on milk price and production. Specifically, an 18.7% decrease in milk price or a reduction in annual milk yield to 5,844 kg/cow would be required to reduce the net present value to zero. In conclusion, integrating legume-grass mixtures into organic rotational grazing systems was economically feasible and could support long-term profitability.