With the emergence of dairy farming as a commercially viable enterprise, the demand for cattle feed concentrate in milkshed areas is increasing. A nutrition balanced and scientifically compounded feed enhances the milk yield per animal by 20 to 30 per cent. This is also valid for non-descript cattle. Health and disease resistance capacity of animals increases since all nutrients are met through proper feeding.

Feeding of animals is the biggest single item of expenditure, amounting to more than half of the cost of milk production. In the process of compounding the feed, its volume is reduced considerably thus effecting sizeable saving in transportation costs.

There is ample scope for compound feed manufacturers in cattle feed sector. The demand is booming. The demand for cattle feed is expected to go up to 20 million tonnes by 2020. A growth rate of 10 per cent per year is estimated in this sector.

The new technology in cattle feed production viz by-pass protein is increasing milk yields and fat percentage, thus giving more profits to cattle owners. However, the use of high quality protein sources like soyabean meal and maize gluten meal are not required as the cow is endowed with organisms in its stomach (rumen) to make proteins from feeds of non-protein origin as also from protein of lower biological value. The trick lies in providing feeds with energy to support optimum milk yields.

Cattle Feed Plant Economics

A small feed mill of 20 tonnes/day mash production capacity on one-shift basis calls for investment of Rs. 6-8 million (including machinery with civil work). The annual production of such a unit would be 6,000 tonnes of cattle feed, giving a turnover of about Rs. 90-100 million. The annual profits (pre-tax) could be around Rs. 3-4 million. The unit is expected to pay for itself within two to three years. There is a built-in scope for expansion and diversification into related commercial activities like production of poultry feed. Once the business picks up, the number of shifts can be increased to two. Besides regular branded feed, the special rations (protein by-pass) can also be formulated to meet specific needs of large dairy farmers.

In assessing the economic and technical feasibility of the cattle feed unit, the suitability and availability of the following should be looked into:

Capital investment

Plant and machinery: Rs. 2.5 million

Warehouse: 6,000 sq ft @ Rs. 400/sq ft: Rs. 2.4 million

Additional for small pellet mill: Rs. 5.0 million

MCC + Electricity: Rs. 2.0 million

Land (1 acre): Rs. 2.0 million

Total: Rs. 13.9 million

Location: It will depend on the transport costs; availability of feed ingredients; nearness to railway station and main road; assured availability of sufficient water and electricity; and, easy accessibility to market.

Land and building: An industrial shed of about 6,000 sq ft is required for the plant and storage of feed. Including space for machinery (1,000 sq ft), office building (1,000 sq ft), molasses tank (200 sq ft), pump room space, laboratory (200 sq ft), etc. In all, about one acre of land may be needed. To reduce the capital cost, the land may be hired on a long-term lease.

Area of warehouse: For estimating the warehouse space, the rule of the thumb is: ten square feet of space will accommodate about one tonne of raw material if stacked up to a height of 11 feet. The plinth of the warehouse should be 3 feet above the pucca road level with rat-proof horizontal parapet around the building.

Plant and machinery: The machinery has to be selected as per the production plans, type of raw materials to be used and the form of feed to be produced. All the machinery is indigenously available.

Raw materials: A minimum of two weeks’ requirement of feed ingredients has to be stocked for efficient running of the unit. Similarly, gunny bags are required for packing of feed and polythene (HDPE) bags of high density for mash feed. A significant part of the working capital will have to be earmarked for purchase of feed ingredients.

Output: Cattle feed concentrates are formulated in two ways — mash and pellets. The conversion of one tonne of mash into 8 mm diameter pellets costs between Rs. 500 and 600 per tonne. Extra machinery will have to be installed for a pellet making plant. It is a big expense.

Marketing: Well-organised marketing support is a pre-requisite for the commercial viability of the project.

Process and formulations: The process of manufacture of cattle feed requires batching of raw materials as per formulation, then blending using hammer mill and then mixing with supplementation of mineral mix, and other premixes like salt, urea premix, Dicalcium Phosphate (DCP). The mix has to be fixed for all the batches which can be controlled by timer switch. After the mixing of powder is done then molasses is sprayed in the mixer @ 8 to 10% and then again entire mixture is properly mixed and blended before it is bagged in HDPE bags and these bags are tagged and machine stitched.

Costing per tonne of feed:

Raw material: Around Rs. 12,000 per tonne

Processing: Rs. 300 to 400 per tonne

Laboratory Analysis: Rs. 250 per tonne

Packing: Rs. 400 per tonne

Distribution: Rs. 700–800 per tonne.

Some of these costs can be brought down, depending on the innovativeness of the entrepreneur. For example, a small feed unit may do direct selling to farmers and not use the distribution network. One major item for cost is the stocking of raw materials to ensure uninterrupted production of the unit. This also influences the production cost because ingredient prices usually come down after their harvesting; also, the quality is better. However, bulk purchasing at that stage means locking up one’s capital and warehouse space to stock the material.

The formulation of cattle feed largely depends on the availability of ingredients in the neighbourhood and their prevailing prices. By and large, these materials are inexpensive and bulky. Minor, but nevertheless essential, constituents include mineral mixture, vitamin mix, DCP, all of which are high value items. Salt to  the extent of one per cent is also essential. For convenience and assured quality, it may be desirable to make arrangements with a commission agent who can serve from one point a wide range of feed ingredients as per needs of the formulation.

Standard specifications pertaining to cattle feed and feed ingredients have been formulated by the Bureau of Indian Standards (BIS).

Cattle feed plant machines are now manufactured in different parts of the country and the names of manufacturers are listed in Buyer’s Guide to ‘Equipment Manufacturers’ in the Directory Section of this compendium.

Cattle feed standards

A complete proximate analysis is needed for costly items. While following cattle feed standards, special attention must be given to the level of protein, fat, fibre  and of Acid Insoluble Ash (AIA) in feeds. Generally, these parameters have been of high cost.

Raw materials needed for formulations

Different types of raw materials will have to be used to compound feed rations. These include: broken rice; broken wheat; bajra; barley; babul extractions/chuni; cottonseed extraction; groundnut cake; groundnut extract; guar gum meal; jowar; kardi cake; kardi extraction; kokum extraction; limestone; maize; molasses; mineral mixtures; palm kernel extraction; ragi; rapeseed extraction; rice bran; rice bran extraction; sunflower cake; sunflower extraction; sal seed extraction; salt; tapioca chips; tapioca thippi; tamarind seed powder, urea; and wheat bran.

Is pelleting necessary?

Through pellet the ruminant is being helped in mastication via more salivation but at the same time, pelleting is not necessary although heat treatment does improve the digestibility of feed by gelatinisation. Pelleting means extra cost, which has to be examined. More important is the production of well-balanced rations easily acceptable to cows and buffaloes. However, it must be said that currently most cattle feeds are sold in pellet form. A large feed mill with 6 to 8 mm size pellet facility will cost about Rs. 14 million. Pelleting costs are estimated between Rs. 500 and 600 per tonne.

Quality control

Quality control of feed ingredients must always be ensured. Use of a proper quality control laboratory may be considered. Quality control laboratories are located all over the country, and feed manufacturers should take advantage of them.

When cattle feed of the best quality is manufactured, the profit margin is thin. To survive, feed manufacturers must pay attention to quality. The quantity sold must be high to ensure profitability of the feed plant. Stress should be on quality. Quantity will follow. Least cost formulations should not be misunderstood with so called “cheap feed” formulations. The profitability of the feed manufacturer improves much when all the production of the plant is sold. Therefore, it is better to take less profit per tonne of feed than to keep the plant idle for any length of time.

The commercial aspect of feed manufacturing must be studied carefully before venturing into the cattle feed industry. The erection of the plant is not difficult. The selection of raw materials and quality control are the two key factors that contribute to the viability of the commercial compounded feed manufacturing plants.