developing the local dairy industry

“If we are serious about developing Philippine Dairy Industry, we must turn to beef cow/calf operations in sourcing our

dairy animals – and by securing the grazing lands for cattle.”

-Emil Javier

Developing the Local Dairy IndustryThe local dairy industry should aim to produce and supply at least 30% of the Philippine milk market. Based on the recent national milk consumption and production of 10kg/day for 300 days, the targets should be:

• At 10 kgs/day, hitting some 171,822 dairy cows on the milk line;

• Or, at 80% lactation on the milk line, a total of 214,778 breedable units – and

• Increasing as the market grows each year.

The Dairy Herd Structure

Breeding UnitsCows 80%Replacements 20%Total 100%

Monthly Breeding PlanCows 10%Replacements 2%Total 12%

Cows on the Milk Line 80%Calves-Growing Mortality 10%

Dairy Industry SituationParameters 2008 2009 % Change

Supply Situation (Volume in '000 MT- LME)Imports 1,618.71 1,789.65 10.56%

Local production

NDA-Assisted 13.81 14.27 3.33%

Others 4.14 4.05 -2.17

Sub-total 17.95 18.32 1.02%

Total 1,632.52 1,803.92 10.50%Note: Local sufficiency is a mere 1%.Local dairy production per species

Cow’s milk, 63% 11.31 11.541.025

Carabao’s milk,36% 6.46 6.60

Goat’s milk, 1% 0.18 0.18

Total DamsCow, cattle 6,871 7,583 10.36%

Cow, carabao 6,811 6,791 -0.29%

Does 1,351 1,517 12.29%

Average production (kgs) per dam per day

Cow, cattle 6.86 6.34 -7.58%

Cow, carabao 3.95 4.05 2.53%

Does 0.56 0.49 -12.5%

Note 2009 NDA data. Standardized at 300 lactation days at 80% on the milk line.

Dairy Issues and ConcernsDairy development in the Philippines hinges on the importation of dairy animals. It’s been roughly 30 years since NDA (PDC) was established and self sufficiency was and is still a mere 1% on the milk supply side. PCC on the other hand has been in existence for 18 years.

• Of the estimated 20,000 heads dairy animals imported over the years, there are only 7,583 dairy cows in inventory – roughly producing an average of some 6.5 litters/day.

The grounds of the importations therefore are questionable. If it’s a question of management or marketing, then focus should

be in these areas before any importation is done.

• As there are also 6,791 milking carabao in inventory, which is roughly equal the number of dairy cattle and producing only some 4 litters/day or 36% of the total local milk output, the impact of the imported milking Bulgarian Murrah Buffalo BMB) relative to the local dairy industry development has to be evaluated.

COMMERCIAL COW/CALF RANCHING

SOURCE OFDAIRY ANIMALS

Cow/calf operation

• A cow/calf operation is the production of a calf from a cow.

• Ranching is freely grazing animals in a pasture land.

• Commercial cow-calf is ranching for the purpose of breeding-weaning, without the growing and finishing component.

Definitions

Industry Situation

Cattle Inventory.

No

of

Head

s

Years:

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Backyard 1,754,968 1,768,658 1,835,130 1,929,039 2,056,427 2,168,149 2,228,705 2,285,054 2,307,371 2,364,133 2,379,836

Commercial 159,893 167,391 185,921 199,416 209,857 208,953 197,224 193,799 188,230 183,686 177,204

TOTAL 1,914,861 1,936,049 2,021,051 2,128,455 2,266,284 2,377,102 2,425,929 2,478,853 2,495,601 2,547,819 2,557,040

.

Industry Situation

Growth Rate

Year:

.

Industry Situation

Value of LIVESTOCK and POULTRY (Billion Pesos)Livestock/Poultry 1998 1999 2000 2001 2002 2003Hog 68.2 74.7 78.7 83.4 86.57 92.7Cattle 11.2 11.8 13.7 13.4 13.9 14.3Carabao 3.7 4.1 4.9 5.3 5.8 6.0Goat 2.9 3.3 3.3 4.0 4.2 4.5Dairy 0.1 0.1 0.1 0.1 0.2 0.2TOTAL Livestock 86.1 94.0 100.7 106.2 110.7 117.7Chicken 46.7 48.7 56.3 70.8 66.7 73.8Chicken egg 11.5 12.4 13.9 15.1 16.6 17.2Duck 2.6 2.7 2.8 3.1 3.0 2.9Duck egg 2.4 2.5 2.2 2.4 2.4 2.5TOTAL Poultry 63.2 66.3 75.2 91.4 88.7 96.4GRAND TOTAL 149.3 160.3 175.9 197.6 199.4 214.1

Production Performance

The National Beef HerdBeef Cattle Production

[1998-2001 Average Performance]

Parameters Heads Indicators

Total Population 2,444,371 Ave. 3.51% growth from 1995-2002

Breeders Backyard 1, 282,273 91% Commercial 124,038 9%

Total 1,406,312 58%Extraction 686,983 48.85% Retention 42,593 3% Slaughter 616,911 43.9% Mortality 9,274 0.4%Notes: DA-BAS data as processed by LDC re Beef Cattle Roadmap. Extraction % is based on the total # of breeders. Data can only account for derived retention and the given slaughter and mortality figures.

Industry Situation

Income of Smallhold 2003 Estimate

People involved 798,621

Average Income per Smallholder P 12,926

Total Income P 10,323,132,000

Source: Livestock Development Council

Background

Commercial Cow/Calf Ranching

• In the Philippines, commercial calf ranching is known as grazing beef cattle in a large tract of land.

• Time was when 4% of the total land area of the country was classified as permanent pastures – an equivalent of 1.2 million hectares.

• These were granted as pasture leases to private entities for large animal production.

Background

Dwindling Lands for Grazing

• In 1985, only 10% of the 4% was left of the government classified permanent pastures – a mere 120,000 hectares.

• In Northern Mindanao, the originally ninety seven (97) pasture leases were down to a little below thirty (30) and only about eight (8) remained functional.

• The two (2) carabao ranches in Bukidnon also ceased to operate.

Background

Current Situation of Grazing Land

• Today, all over the country, there are just roughly 115,000 hectares of government lands devoted to grazing.

• The days of the large ranches are gone. Many of the ranches are now operating in private lands.

• Most cow/calf areas average less than 20 cows per herd – surprisingly, not that far from the average holdings in many states of the USA.

Beef Cow/Calf Operations

Most Versatile Livestock Enterprise

• But, in spite the decreasing grazing lands and commercial beef population, beef remains the “premium meat” – that is the beef from cattle. And, it will remain so in years to come.

• Beef cow/calf production is still the most versatile of today's livestock enterprises.

• Beef cattle are very durable and can be produced efficiently in large commercial scale or in the backyard, under many climatic conditions – as well as sloping and even barren lands.


Most Versatile Livestock Enterprise

• A beef cow/calf enterprise can easily be diversified and converted to other enterprises. Among others:

It can choose to be a purebred stud breeder or commercial raiser.

It can just sell a calf or grow/finish – and integrate. And,

Significantly, it can produce F1 as source for dairy animals.

Beef Cattle for Dairy Animals

Beef Cattle as Source of Dairy Animals

Objective

• Sourcing dairy animals from a systematic local commercial and backyard beef cow/calf operation


Source of Dairy Animals

• As espoused by former DOST Secretary and UP System President, Dr. Emil Javier, if we are serious about developing our Dairy Industry, we must turn to Beef Cow/Calf Operations for the production of dairy animals – and the cattle grazing lands must be given security of tenure.

• As the local dairy animal is necessarily founded on the F1s (Bos indicus x Dairy Bos taurus), the importation of dairy cattle has only done so much on the national scale.


Source of Dairy Animals

Considering the essentials of dairy development:

• Genetic reconstruction, • Large volume of animals required, and• Scarcity of funds.

The entrepreneurs in FCRAP request the NDA and DAIRYCON to reconsider its 7-Point Agenda and take a second look into its Focus: “Live Importation or Local Production of the F1 Dairy Animals?”


Challenges

• The idea of Breeding dairy animals in the country • The prospects of achieving the Numbers


The Idea of Breeding Dairy Animals in the PhilippinesDairy development in the Philippines hinges on the importation of dairy animals, rather than its local production – cross-breeding Holstein-Friesian (HF) with Brahmans and local cattle. The programs have been mainly based continuous infusion of imported F1s.

• At certain point of time, we have to rethink and stop importing dairy animals to build our herds.

• In the Philippines and in many places in the tropics, crossbreeding temperate cattle with local breeds has been a lot more successful and advocated.

Breeding Dairy Animals

• There are experiences both from NDA-Assisted Projects (Sankanan) and other dairy enterprise (Del Monte) that will show crossing local breeds, including native cattle, with HF is the better alternative. In beef cattle, similar work has been done with Simbrah and Wagyu.

• In the Philippines, as proven, the minimum objective should be the reconstruction of a new animal breed that can produce an average of 10 liters of milk per day per 300 lactation days and highly adapted to the overall local condition.

• These animals should breed back (80% on the milk line) and its calves surviving and growing (7% mortality) accordingly.


The major principles in genetic improvement for consideration in our strategies and activities are:

• Pure Breeding: The reconstruction of animals for the type with predetermined percentage of genes composition and the necessary conservation work of the base herd. There is a difference between "Purebred" and "Full blood".

• Full blood cattle are fully pedigreed animals where every ancestor is registered in the herd book and shows the typical characteristics of the breed.


• Nucleus Farms and Pure Breeding: Purebred cattle are those animals that have been bred-up to purebred status as a result of using full blood animals to cross with an animal of another breed.

• Cross Breeding and Stabilizing the Herd: Our experiences and the present results reported in Asia and Africa have already proven the importance and potential for increased lactation performance in crossbred cattle (Holstein-Friesian x to local cattle) in comparison to the local breeds (genetically a poor milk producer) and full bloods (temperate).

• Other Dairy Breeds: Work has been done with Jerseys, Browns Swiss, and possibly other breeds.

• The F1: Particularly in the Philippines, the first task is to produce the F1 (50/50 HF cross) from the roughly 1.5 million local beef cattle breeders in the backyard and commercial raisers. And, at the same time, create the nucleus farms that will be the source of local breeding bulls in particular.

• Semen and Artificial Insemination: Fast tracking the results would entail planned dispersal of semen – a minimum of 6 and up to 24 unrelated bulls for sustainability nationwide. This is only one or two years of serious work!

• Progeny-Tested Local Dairy Bulls: Selection comes in the second stage once the F1s cows and the progeny-tested local bulls are on the ground.


The main features of the crossbreeds are:

• F1 cows can produce more milk than the local breeds. In the milking process, the native cattle may require always the presence of the calf to let-down the milk, whereas the F1 will continue lactating even after the death of its calf.

• F1 cattle and calves are strongenough to survive under the prevailing environmental conditionsand do well with reasonable management.


Breeding Dairy Animals 5/8s for breeding stability: As the 5/8s are closest to the

F1s, fixing the 5/8s coupled with strict selections is the preferred option for the commercial sector, which can lead to a stabilized herd and even the creation of a new Philippine dairy breed.

The 5/8s is established as a barometer for animal breeding. This is because once the genetics reach the 5/8 level the breeding performance becomes consistent.


The Australian Milking Zebu (AMZ) is a good example of a composite breed of dairy cattle. The Commonwealth Scientific and Industrial Research Organization in Australia developed the breed by breeding Sahiwal and red Sindhi cattle from Pakistan with Jersey cattle. Some Illawara, Guernsey and Friesian genetics were also included.

The development of the breed was governed by strict selection for heat tolerance, milk production and cattle tick resistance to result in the modern AMZ breed.

Cows produce approximately 2,700 kg of milk per lactation (300 days) or 9 kg/day.

The Prospects of Achieving the Numbers National Beef Cattle Herd Backyard Commercial Total

Breeders, heads 1,282,273 124,038 1,406,312Year Percent AI Breedable F12010 Preparation2011 1%2012 2%2013 3% 3,846 372 4,218

4% 7,693 744 8,4375% 11,540 1,163 12,70310% 15,387 1,488 16,87515% 19,234 1,860 21,09420% 38,468 3,721 42,18950% 57,702 5,581 63,283

- 76,936 7,442 84,378Notes: Extraction is 75:50:30 in 3 years for breedable F1 heifers and 4 years to drop F2 or 5/8s calves.

Key Activities

• Achieving a total system of producing dairy animals and marketing.

• Massive cross breeding local cattle by artificial insemination.

• Setting up nucleus and multiplier farms for sustaining genetic improvement programs (especially for local bulls).

A Total Production, Support Facilities and Distribution System

Some commercial and backyard cattle raisers have already started to breed for dairy animals. These models can be used for organizing a massive contract AI, Nursery, and Growing/Breeding F1 Programs:

To encourage beef cow/calf operations to cross, if NDA is willing to pay the price of P120,000 for an imported animal, local beef cattle breeders should be given enough price parity.

Allowances should be given to male produce as these are priced lower in the slaughter market.

Nurseries have to be in place to raise the calves.Growing/Breeding facilities also have to be set up.

RecommendationGovernment talks of “…common purpose to put our economic house back in working order."

Again, it’s been roughly 30 years since NDA (PDC) and 18 years since PCC were established. How much government funds have been spent on importing dairy animals? As we still supply a mere 1% of our milk, we can therefore conclude that the present strategies and activities have not worked.

We do need to immediately put our livestock industry house back in working order. Among others, the livestock industry inventories, its values, growth rates, cost-benefit and competitiveness analysis, including import parity and outlook, should determine our strategies and activities. Otherwise we are just wasting good money and giving our country false hopes.

Let’s breed our dairy cattle!

The Federation of Cattle Raisers Association of the Philippines

(FCRAP)

By Benjamin C. Albarece, DVM, Dip. PCRP (FCRAP President) in consultation with Edwin Sanches, Ansa Farms (FCRAP Technical Committee Chair), Ben Devesa, Ramcar Ranch (LARA-Mindanao, GIP Chair), Ireneo S. Escandor, Jr. DVM, Dip. PCRP (LARA-Mindanao, Technical Committee Chair), and Salvador C. Albarece, DVM (Formerly with Del Monte, the oldest running commercial dairy operation in the country).

…Daghan Salamat…

developing the local dairy industry

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