Balchem (BCPC) investor relations material

Environmental and industry context

• Nitrogen pollution from dairy manure is a growing concern in Europe and the US, with regulatory and public pressures increasing on producers to address nitrate contamination in water and greenhouse gas emissions.

• Imported feed is the largest contributor to whole-farm nitrogen balance, making dietary interventions key for reducing nitrogen losses and environmental impacts.

• Regional differences in sustainability drivers exist, with economics dominating in North America and environmental regulation leading in Europe.

• Dairy cows can convert inedible feed into nutrient-rich food, but managing manure nitrogen surplus remains a key concern.

Flexibilities in protein nutrition and energy source

• Dairy cattle exhibit metabolic flexibility in protein and energy utilization, with three main areas: rumen, post-rumen digestive tract, and post-absorptive system.

• Protein efficiency in milk production is closely linked to the type and supply of dietary energy.

• Glucogenic energy sources (e.g., starch) consistently increase milk protein yield and nitrogen efficiency, stimulating insulin and shifting amino acid partitioning.

• Lipogenic energy (e.g., fats) can improve nitrogen efficiency at low protein levels but does not affect amino acid partitioning; research on its effects is limited.

• Flexibility includes deriving similar metabolites from different feed resources and interaction between metabolic compartments, such as urea recycling.

Rumen protein balance and nitrogen recycling

• Excess rumen-available nitrogen leads to increased urinary nitrogen excretion, with up to 80% of surplus nitrogen excreted, indicating over-supplementation is common.

• Balancing for estimated rumen nitrogen requirements by adding urea may increase nitrogen excretion without improving milk yield or protein output.

• Endogenous urea recycling can compensate for short-term rumen nitrogen insufficiency and increases as dietary protein decreases, suggesting potential to reduce dietary crude protein and nitrogen excretion.

• Higher fermentable carbohydrate diets paired with lower rumen degradable protein increase urea recycling to the rumen.