BUTCH UMENGAN_ Corn Silage Presentation(1)

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

Assemblers

SemiProcessors

End Users

•

Name:

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Ms. Doris Magsaysay-Ho Chairperson Engr. Roger Navarro Ms. Rosalie Ellasus Atty. Ibarra Malonzo Jonas George Soriano Ayi Hernandez Richard Rejas Oliver Aldeviso Jojo Elvira Jr. Charina Garido-Ocampo Mr. Jet Parma Allan Uy BM Domingo Kristian Haraldseth John Calleja Mr. Ronnie Balolong Ms. Aileen Uy Mr. Rod Bioco Mr. Emmanuel Salvador Mr. Edgardo Abesamis Mr. Benjamin Akol Mr. Ramon Atayde Mr. Jose Go Jr. Mr. Bob Gothong Capt. Romeo Malig Mr. Jay Olivarez Mr. James Go Mr. Emil Tiu Dr. Norman Ramos Mr. Ed Aller Mr. Edwin Chen Mr. Joji San Diego Atty. Bong Inciong Jojie Angeles Reuel Virtucio Mr. Niki Briones Mr. Rico Geron Peter Unabia Sharon Tan Nelson Pual Mr. Noel Taguba Mr. Willy Maldia Mr. Bong Baniqued Dr. Art Salazar Hon. Sec. Proceso Alcala (Honorary Chair) Dir. ASEC Ed de Luna (Honorary Vice Chair)

Sub-sector Represented: Shipping Farmers PO Farmers PO Farmers NGO Farmers NGO Farmers NGO Farmers NGO Farmers PO Farmers PO Seeds/Inputs Seeds/Inputs Seeds/Inputs Seeds/Inputs Fertilizer/Inputs Fertilizer/Inputs Assembler Assembler Farmer PO/Assemb Assembler Ports Ports Ports Shipping Shipping Shipping Shipping Shipping Shipping End User End User End User End User End User End User End User End User End User End User End User End User GOCC GOCC GOCC GOCC Government Government

Company/Office Magsaysay Shipping and Philippine Interisland Shipping Association (PISA) Philippine Maize Federation (Phil Maize) Kasakalikasan Farmers Cooperative – Phil Maize Kasanyangan-Mindanao Foundation Inc. (KFI) Ploughshares Inc. – Phil Maize Balay Mindanao KPMFI Impasugong Samahang Nayon MPC – Phil Maize Bicol Corn Farmers Board – Phil Maize Monsanto Philippines Pioneer Hi-Bred Philippines Asian Hybrids Corn World Yara Fertilizers Phils. Planters Products Cauayan Grains La Filipina Uygongco Corp. Mindanao Grains N.G. Salvador Grains International Container Terminal Services, Inc (ICTSI) Philippine Chamber of Arrastre & Stevedoring Operators (PCASO) Asian Terminals Inc. (ATI) Oceanic Container Lines Inc. Aboitiz Transport Group Inc. Lorenzo Shipping Lines NMC Container Lines Sulpicio Lines, Inc. Solid Shipping Lines Philippine Association of FeedMillers Inc. (PAFMI) San Miguel Corporation (SMC) National Federation of Hog Farmers Inc. (NFHFI) United Broilers Association (UBRA), National Egg Board United Broilers Association Vitarich Corp. Manok Mabuhay – Bounty Fresh LIMCOMA SIDC Cooperative and Batangas Corn Forum Anakciano/Manok ni Sr. Pedro Foremost Farms Inc. Batangas Feed Millers Cooperative Development Bank of the Philippines (DBP) LandBank of the Philippines (LBP) National Agribusiness Corporation (NABCOR) Institute of Plant Breeding UP at Los Banos Department of Agriculture (DA) DA Agri Pinoy Corn Program

The National Corn Competitiveness Board

The National Corn Competitiveness Board

Strategies: • 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

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 (HoslteinSahiwal, 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/Technology Reverse Compressor – Vacuum for Anaerobic Bacteria

PHL Benchmarked Process Harvesting 75 day Corn

Stacking

Process Shredding/Chopping

Process • Sacking Weighing

Process Suction/Vacuuming

Tying Bags

Process Transport 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 Comparison Pangasinan February 2013 ITEM Farm Revenues (Farm Gate 6MT grains x P12/kg) vs. 60,000 kgs. Silage a P 1.25/kg. Farm Production Costs Land Prep Seeds Fertilizers Chemical Glyphosate Irrigation Labor Planting Labor Harvesting Labor Maintenance Shelling Drying (2 days) Sacks (300 sacks x P15 Hauling (300 sacks x P5 Interest and Insurance Farm Income/hectare/crop PHP ANNUAL INCOME OF FARMER

1 ha Corn (Feedstock Grains) 110days

72,000 51,420 3,500 9,100 15,920 800 7,250 1,250 2,500 250 2,150 700 4,500 1,500 2,000 P20,580 3 CROPS CORN SILAGE / YEAR

1 ha Corn (Feedstock Silage) 90days

75,000 40,000 3,500 9,100 15,920 800 7,250 1,250 450 1730 P35,000 P 105,000

1 Kilogram Corn Feed Silage Revenues Costs Incomes per Kg. Unit Silage per KG Price and Cost Structure Raw Silage Fresh Labor Fuel and Energy Sacks and Plastic Transport Hauling from Field Margins

1 hectare Corn Feed Silage Production (60,000 kgs.) Revenues (60,000 kgs. x 3.50) Cost of Silage Production Raw Sillage Fresh Labor Fuel and Energy Sacks and Plastic Transport Hauling from Field and Delivery 15 kms. Incomes from Silage Production

3.50 1.25 0.20 0.10 0.75 0.70 0.50

210,000.00 180,000.00 75,000.00 12,000.00 6,000.00 45,000.00 42,000.00 30,000.00

Cut Cost as Benefit to Dairy Farmer 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

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 150

Total Feed Cost = P 125

Seasonal

All Year Round

Traditional Feeding Cut and Carry

Cost Benefits Silage Corn Farmer

Silage Maker

Revenues P 1.25 / kg

Revenues P 3.50/kg.

Costs

Costs

P 0.66/ kg.

Dairy Farmer Cost of Silage Feed P 3.50 / kg.

P 3.00/kg.

Incomes P 0.58/ kg.

Incomes P 0.50/kg.

Or P 35,000 / hectare

Or P 30,000 /hectare

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 Pangasinan Alitagag Batangas Ubay Bohol Cattle and Dairy Farms Covered: Bayambang Pangasinan Pandi Bulacan Tanauan Batangas Ubay 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 KOREA TMR FACTORY

TMR FACTORIES IN SOUTH KOREA

TOTAL KOREA MARKET POTENTIAL Total Korea Cows TMR Requirement Corn Silage 80% Hectares

5,000,000 100,000mt 80,000mt 1,333 has.

TMR Requirement Corn Silage 80% Hectares

3,000,000mt 2,400,000mt 40,000has.

per month per month per month

TMR Requirement Corn Silage 80% Hectares

36,000,000mt 28,800,000mt 480,000has.

per year per year per year

CURRENT SUPPLIERS VIETNAM US and Pakistan, Others

AT 20 KGS / PER COW / DAY

per day per day per day

80% 20%

COMPETITIVE EDGE Vietnam 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 Feed Ingredient TMR

Limited raw materials for TMR

Abundant raw materials for TMR (pineapple pulp, copra meal, sugar cane bagasse, dried banana rejects, palay stalks 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