Corn Product Development:Silage Feed Technologies

“Addressing Feed Issues of a Developing and Growing

Philippine Dairy and Cattle Industry, Opportunities for Corn Smallholder

Farmers in Dairy and Cattle Clusters or Zones”

Presentation to the 9th Corn Congress

Tagaytay City October 23, 2013

The National Corn Competitiveness Board• Mandates: AFMA and the establishment of private sector

led commodity boards to be consulted and partnered with government

• Composition: Multi-stakeholders, all main players in the sector’s supply chain

• Established in November 13, 2002 (SEC REGISTRATION)

Producers AssemblersSemi-

ProcessorsEnd Users

The National Corn Competitiveness Board

• Name: Sub-sector Represented: Company/Office

• Ms. Doris Magsaysay-Ho Chairperson Shipping Magsaysay Shipping and Philippine Interisland Shipping Association (PISA)• Engr. Roger Navarro Farmers PO Philippine Maize Federation (Phil Maize)• Ms. Rosalie Ellasus Farmers PO Kasakalikasan Farmers Cooperative – Phil Maize• Atty. Ibarra Malonzo Farmers NGO Kasanyangan-Mindanao Foundation Inc. (KFI)• Jonas George Soriano Farmers NGO Ploughshares Inc. – Phil Maize• Ayi Hernandez Farmers NGO Balay Mindanao• Richard Rejas Farmers NGO KPMFI• Oliver Aldeviso Farmers PO Impasugong Samahang Nayon MPC – Phil Maize• Jojo Elvira Jr. Farmers PO Bicol Corn Farmers Board – Phil Maize• Charina Garido-Ocampo Seeds/Inputs Monsanto Philippines• Mr. Jet Parma Seeds/Inputs Pioneer Hi-Bred Philippines• Allan Uy Seeds/Inputs Asian Hybrids• BM Domingo Seeds/Inputs Corn World• Kristian Haraldseth Fertilizer/Inputs Yara Fertilizers Phils.• John Calleja Fertilizer/Inputs Planters Products• Mr. Ronnie Balolong Assembler Cauayan Grains• Ms. Aileen Uy Assembler La Filipina Uygongco Corp.• Mr. Rod Bioco Farmer PO/Assemb Mindanao Grains• Mr. Emmanuel Salvador Assembler N.G. Salvador Grains• Mr. Edgardo Abesamis Ports International Container Terminal Services, Inc (ICTSI)• Mr. Benjamin Akol Ports Philippine Chamber of Arrastre & Stevedoring Operators (PCASO)• Mr. Ramon Atayde Ports Asian Terminals Inc. (ATI)• Mr. Jose Go Jr. Shipping Oceanic Container Lines Inc.• Mr. Bob Gothong Shipping Aboitiz Transport Group Inc.• Capt. Romeo Malig Shipping Lorenzo Shipping Lines• Mr. Jay Olivarez Shipping NMC Container Lines• Mr. James Go Shipping Sulpicio Lines, Inc.• Mr. Emil Tiu Shipping Solid Shipping Lines• Dr. Norman Ramos End User Philippine Association of FeedMillers Inc. (PAFMI)• Mr. Ed Aller End User San Miguel Corporation (SMC)• Mr. Edwin Chen End User National Federation of Hog Farmers Inc. (NFHFI)• Mr. Joji San Diego End User United Broilers Association (UBRA), National Egg Board• Atty. Bong Inciong End User United Broilers Association• Jojie Angeles End User Vitarich Corp.• Reuel Virtucio End User Manok Mabuhay – Bounty Fresh• Mr. Niki Briones End User LIMCOMA• Mr. Rico Geron End User SIDC Cooperative and Batangas Corn Forum• Peter Unabia End User Anakciano/Manok ni Sr. Pedro • Sharon Tan End User Foremost Farms Inc.• Nelson Pual End User Batangas Feed Millers Cooperative• Mr. Noel Taguba GOCC Development Bank of the Philippines (DBP)• Mr. Willy Maldia GOCC LandBank of the Philippines (LBP)• Mr. Bong Baniqued GOCC National Agribusiness Corporation (NABCOR)• Dr. Art Salazar GOCC Institute of Plant Breeding UP at Los Banos• Hon. Sec. Proceso Alcala (Honorary Chair) Government Department of Agriculture (DA)• Dir. ASEC Ed de Luna (Honorary Vice Chair) Government DA Agri Pinoy Corn Program

The National Corn Competitiveness Board

• Investments Promotion in Production, Post Harvest Facilities and Logistics in the Corn Industry; Direct Technical Assistance

• Competitiveness Program Initiatives to Make the Industry and Its End Users World Class

• New Technologies and New Markets Development and Promotion

• Policy Advocacy for the Growth and Advancement of the Corn Sub-Sector

• Resource Mobilization and Financing Facilitation to Fuel Industry Stakeholders’ Enterprises

Strategies:

Dairy and Cattle Issues and Concerns

• Increasing Herd; Developing Breeds: Over 34,000 animal-units (Dairy and Cattle) Nationwide, water buffalo not included

• With 4,000 NDA and BAI Imported Breeds (Hosltein-Sahiwal, Brahman) Coming 2012-2013 (Start June)

• Increasing Pressure on Finite Land Resources, minimum animal-to-land area requirement: ratio of 3 a.u.:1 hectare (Land Reform, Land Conversion, Increasing Land Use for Food Security, advent of Biofuels)

• Increasing Feeding Costs for Dairy and Cattle (Feed Concentrates P 20+/kg up equals hog and poultry feed

Background: Thailand Study Tour October 2011

The Simple Innovation/TechnologyReverse Compressor – Vacuum for Anaerobic Bacteria

PHL Benchmarked Process

Harvesting 75 day Corn Stacking

Process

Shredding/Chopping

Process• Sacking Weighing

ProcessSuction/Vacuuming Tying Bags

ProcessTransport Storage

Hermetic Cocoon

Even Better

Benchmarking

Thailand Silage

• PTO Driven Machinery

• 75 day old corn

• 25 kgs. silage in a plastic bag in a sack

• 2 baht per kg. silage selling price

• 25 kgs. per day silage feed per animal

• Reduced feed concentrates to 1 kg. per day per animal, from formerly 5 kgs. per day

Philippine Silage

• Engine Driven Machinery

• 75-90 day old corn (P-30T80), depending on season

• 2 x 15 kgs. silage in 2 plastic bags in a sack

• P 3.50 per kg. silage selling price

• 30 kgs. per day silage feed per animal

• Reduced feed concentrates to 1 kg. per day per animal, from formerly 5 kgs. per day

Farmers’ Economic ComparisonPangasinan February 2013

ITEM1 ha Corn (Feedstock Grains)

110days1 ha Corn (Feedstock Silage) 90days

Farm Revenues

72,000 75,000(Farm Gate 6MT grains x P12/kg)vs. 60,000 kgs. Silage a P 1.25/kg.

Farm Production Costs 51,420 40,000

Land Prep 3,500 3,500Seeds 9,100 9,100Fertilizers 15,920 15,920

Chemical Glyphosate 800 800Irrigation 7,250 7,250

Labor Planting 1,250 1,250

Labor Harvesting 2,500 -

Labor Maintenance 250 450Shelling 2,150 -

Drying (2 days) 700 -Sacks (300 sacks x P15 4,500 -Hauling (300 sacks x P5 1,500 -

Interest and Insurance 2,000 1730Farm Income/hectare/crop P20,580 P35,000

PHP ANNUAL INCOME OF FARMER 3 CROPS CORN SILAGE / YEAR P 105,000

1 Kilogram Corn Feed Silage Revenues Costs Incomes per Kg. Unit

Silage per KG Price and Cost Structure 3.50

Raw Silage Fresh 1.25

Labor 0.20

Fuel and Energy 0.10

Sacks and Plastic 0.75

Transport Hauling from Field 0.70

Margins 0.50

1 hectare Corn Feed Silage Production (60,000 kgs.)

Revenues (60,000 kgs. x 3.50) 210,000.00

Cost of Silage Production 180,000.00

Raw Sillage Fresh 75,000.00

Labor 12,000.00

Fuel and Energy 6,000.00

Sacks and Plastic 45,000.00

Transport Hauling from Field and Delivery 15 kms. 42,000.00

Incomes from Silage Production 30,000.00

Cut Cost as Benefit to Dairy Farmer

Traditional Feeding Cut and Carry

Per Animal per Day

Cut Carry

25 kgs. x P 2.00 = P 50.00

Feed Concentrates

5 kgs. x P 20.00 = P 100.00

Total Feed Cost = P 150

Seasonal

Silage Feeding

Per Animal per Day

Silage Feed

30 kgs. x P 3.50 = P 105.00

Feed Concentrates

1 kg. x P 20.00 = P 20.00

Total Feed Cost = P 125

All Year Round

Cost Benefits

Silage Corn Farmer

Revenues P 1.25 / kg

Costs P 0.66/ kg.

Incomes P 0.58/ kg.

Or P 35,000 / hectare

Silage Maker

Revenues P 3.50/kg.

Costs P 3.00/kg.

Incomes P 0.50/kg.

Or P 30,000 /hectare

Dairy Farmer

Cost of Silage Feed

P 3.50 / kg.

If Dairy Farmer is

Corn Farmer, Cost

of Silage Feed

P 2.41 / kg.

CORN SILAGE BAR RESEARCH 2012-2013

EFFECTS ON FATTENING

• Rate of Increase of Weight 10% Higher than Forage Fed

EFFECTS ON MILK PRODUCTION

• Increase in Milk Volumes Produced up to 50%

• Increased Milk Quality (Fats, Protein and Others 30-50%)

Corn Silage Farmers Corn Silage Areas Covered:Bayambang PangasinanAlitagag BatangasUbay Bohol

Cattle and Dairy Farms Covered:Bayambang PangasinanPandi BulacanTanauan BatangasUbay Bohol

Corn Silage Hectarage Requirements

• 30 kgs per day daily animal feed requirement

• 11,800 kgs per year or 11.8 metric tons per animal

• 34,000 total herd in the Philippines

• 401,200 mt silage requirement per year

• 4,012 hectares x 2 crops per year

• 1 hectare silage corn crop can feed 11 animals all year round

Recommendation

• Dairy Farmers Should be Corn Farmers for Maximum Benefits

• Dairy and Cattle Dispersal Program should Target Corn Farmers in Corn Clusters overlapping NDA and BAI Dairy and Cattle Zones

NEW MARKET OPPORTUNITY SOUTH KOREA TOTAL MIX RATION (TMR)

Can be described as a mixture of both the roughage and the processed ingredients, formulated and mixed to supply the cows nutritional requirements, in a form that precludes selection.

80% of the main ingredient of TMR is corn silage

Other ingredients include pollard, distillers dried grains (DDGs), soybean meal, dried baled straw, pineapple pulp, cotton seed, micro minerals and others.

In KOREA, with scarce land resources and limiting climates, studies and research on TMR have led to TMR optimum nutrition mixes requiring only 20 kg. TMR Feed Per Cow Per Day (as compared to US, Thailand and Philippine standards of 30 kgs. Per cow per day)

SOUTH KOREATMR FACTORY

TMR FACTORIES IN SOUTH KOREA

TOTAL KOREA MARKET POTENTIAL

Total Korea Cows 5,000,000 AT 20 KGS / PER COW / DAY

TMR Requirement 100,000mt per dayCorn Silage 80% 80,000mt per day

Hectares 1,333 has. per day

TMR Requirement 3,000,000mt per monthCorn Silage 80% 2,400,000mt per month

Hectares 40,000has. per month

TMR Requirement 36,000,000mt per yearCorn Silage 80% 28,800,000mt per year

Hectares 480,000has. per year

CURRENT SUPPLIERSVIETNAM 80%

US and Pakistan, Others 20%

COMPETITIVE EDGEVietnam Silage Philippine Silage

Selling Price/MT $120/mt $105/mt

Grain Content 10% 12.5-14%

Corn plant weight < 1kg/plant 1.1-1.3kg/plant

Variety Use Traditional varieties High yielding improved varieties

Planting Season 2 distinct planting seasons All year round corn planting in many areas

Distance to Korea LONGER SHORTER

Availability of FeedIngredient TMR

Limited raw materials for TMR

Abundant raw materials for TMR (pineapple pulp, copra meal, sugar cane bagasse, dried banana rejects, palaystalks and molasses

Spraying with Good Bacteria from South Korea (enterococcus faecium, lactobacillus

plantarum and pediococcus acidilactic)

Packing in PE Plastic Liner inside 600 kg. Jumbo Bag, Curing for 3 Days, Vacuuming and Tying Air Tight. Ship Out Container

CORN SILAGE EXPORTS (AND IN THE FUTURE TMR EXPORTS) PROMISES TO

RAISE PRODUCIVITY OF CORN FARMERS BY 35% AND FARM INCOMES BY 90% ON 3

CROPS PER YEAR. IT WILL EARN DOLLARS FOR THE COUNTRY, GENERATE

GOVERNMENT REVENUES/TAXES AND CONTRIBUTE TO OVERALL GROWTH IN THE

PHILIPPINE COUNTRYSIDE- thank you