The dairy industry as with any commodity deals with the peaks and valleys of the markets. Other commodities are in a similar situation as the dairy operation and to stay in business they have to know their cost of production. They are constantly monitoring their business’s performance so changes can be made quickly to compensate for a downturn. It can be depressing when the current income over feed cost is less than the breakeven number. Instead of focusing on how to cut costs, many times to the determent on animal performance, focus on making adjustments that improve upon what is already being done. Many times it is honing in on a small detail that can make a significant impact on milk income.
The Penn State Extension Dairy Team is hosting an agricultural tour of Costa Rica in January 2017. Trip details updated! Registration deadline July 10th.
Future milk prices are looking (somewhat) better, but it seems like since 2008 no one has felt completely secure in the stability of the dairy industry. Being more cautious can be a good thing, but letting the milk prices and low milk margins get you down is not healthy for you, your family, or your farm in the long run. There is plenty of advice on how to manage your margins and your herd. Now, it is time to talk about how to manage your stress.
When data is available, managers can look at mortality numbers, feed shrink (tons harvested or purchased compared to as fed), and inventories of supplies to determine what changes if any are needed to reduce these sometimes steady drains on profitability.
A typical discussion of farm safety may focus on equipment operation principles, the use of personal protective equipment, or safe animal handling, but there are other aspects of farm safety that we sometimes neglect to include in our discussions.
We have recently updated an article about trends in age at first calving using records obtained from DRMS for all first-lactation Holsteins in Pennsylvania during 2015.
Today’s technology provides the opportunity to collect a lot of data related to crops, cows and financials. The problem is a human element is still needed to monitor and evaluate the information. Determining the key metrics important to the producer or manager is essential for detecting and correcting problems earlier versus later.
A common mistake when working with dairy producers is focusing solely on production management or finances. It is the combination of the two that determines if an operation will be successful. Over the years the trend has been for advisors to become specialized. However, it is the interactions of the whole farm system that is critical, especially when working in an industry with extreme market volatility. Communication amongst advisors is essential if dairies are to remain in business.
Shredlage has been a hot topic in recent years, but studies have demonstrated it has the same overall dry matter and fiber digestibility as conventional silage.
In 2015, over half of the milk produced in the U.S. came from five states: California, Wisconsin, Idaho, New York, and Pennsylvania. These states have accounted for over 50% of U.S. milk production annually for the last decade. Despite annual production rankings, how do these states compare between themselves for annual milk per cow, milk price, feed cost, and more importantly income over feed cost (IOFC)?
The Penn State Extension Dairy Business Management Team summarizes Pennsylvania dairy cash flow plans annually to assess the factors that lead to farm profitability. In 2015, the 105 farms in the summary were divided by farm size to determine if there are any benefits to larger-scaled farms.
Structures that house cattle are vital to the success of a dairy business. It is essential these buildings are able to withstand weather events, have tolerable maintenance costs, and contain materials resistant to an interior environment that can be rather aggressive. Buildings need to provide a safe environment for employees and animals, remain in good condition for their functional life with minimal maintenance, and last (at least) the duration of the loan taken to construct them.
It is increasingly common for dairy managers to use tools that allow for pregnancy diagnosis earlier than the traditional 35 to 45 days after insemination. Diagnosing pregnancy early is beneficial for identifying open cows and allowing for reinsemination strategies that will help minimize days open and increase profitability, but losing confirmed pregnancies can be very frustrating.
Regardless of high or low profit margins the investment in health care for calves, heifers and cows should not waver.
When margins are tight the conversation usually focuses on the lactating cows and how to improve performance. This makes sense as they are the major driver of income. However, there are other groups of animals that generate expenses and unless they are sold do not contribute to the income stream. Dry cows and heifers take up on average 20 percent of the farm’s total feed costs (home raised and purchased). This number is generated from the cash flow plans conducted by the Extension Dairy Team.
An examination of 2015 cash flow and breakeven production costs for 107 Pennsylvania farms shows that breakeven ranged from less than $16/cwt to over $22/cwt. Not surprisingly, feed costs are a big contributor to differences between farms.
Women have always been an important part of the dairy industry, but at many universities today the number of women earning degrees in agricultural sciences is equal to or greater than the number of men. The number of women who are the principal operator of a farm is also growing.
Understanding differences between cultures can provide helpful insight for situations encountered everywhere in our increasingly global society, including common encounters on U.S. farms.
It should be no surprise when the dairy industry comes off a year like 2014 with exceptional milk prices that the other extreme will come around. The carryover of income from 2014 softened the blow of 2015’s lower milk price. Moving into 2016 the milk price is expected to be even lower. The same issues affecting cash flow in 2009 are impacting producers in 2016. Have we learned from past experience?
The definition of audit is an official inspection of an individual's or organization's accounts, typically by an independent body. Audit is usually associated with financials however it applies very well to a total mixed ration (TMR). The premise of precision feeding is that the same ration is consistently mixed and fed to animals every day. In the real world there are elements influencing how well this practice is implemented. A TMR audit is something every producer should consider.