The Cheap Can Turn Out to be Expensive. Stick to the Basics!

Posted: April 4, 2008

Every dairy operation has its unique set of challenges; however there are a few management and nutrition options that can help maintain profit.

Everyone is feeling the crunch of high fuel and food costs and the dairy industry is no exception. In the last few months it has become very expensive to feed cows. If milk prices drop and feed costs continue to rise, then profit margins will shrink. Every dairy operation has its unique set of challenges; however there are a few management and nutrition options that can help maintain profit (income over feed costs).

  1. Excellent forage quality is the foundation on which good rations are built. It won’t be long until producers are harvesting first cut haycrop silage. Make sure that the moisture content is appropriate for the storage structure so as to avoid issues with improper fermentation. Harvesting at the correct stage of maturity will increase the odds of highly digestible forage. With increasing corn and soybean prices, strategies to improve forage quality should allow higher forage rations and less grain to be fed.
  2. Examine the big picture when evaluating commodity or grain prices. Best cost rations tend to be more profitable than least cost. Know what you are buying. Evaluate the nutrient analysis and physical appearance. If a commodity is priced cheap and it is inconsistent in analysis and/or has an extremely dark color (possibly indicating heat damage), then the commodity may turn into a very expensive purchase. Cows may drop in production and/or components, which ultimately may lead to lower profits.
  3. If you are not doing so already, start monitoring income over feed costs (IOFC). This measurement will help in deciding when it is time to make some ration changes. If a particular feed is increasing in price, but cows are performing well and IOFC is still meeting or exceeding the benchmarks, then it may not be time to remove that commodity from the ration.
  4. In order to control costs, know what and how much your cows are consuming. This requires checking dry matters on all high moisture ingredients on a daily or at least weekly basis and adjusting rations accordingly. Producers can not afford to be overfeeding forages and risk running out of inventory or overfeeding concentrates at today’s current prices. Monitoring dry matter intake efficiency (DMIE) can be a barometer for when ration adjustments may be needed. A realistic goal for most herds is maintaining a DMIE of 1.4 to 1.6. If efficiencies are lower than 1.4, then cows are not very efficient in converting nutrients to milk. If efficiencies are too high, then there is the risk of cows losing too much body condition, which may have ramifications on reproduction and long term performance. Use energy corrected milk divided by dry matter intake to calculate DMIE. 
  5. Environmental issues related to water and air quality are not diminishing. There are some nutritional strategies that can help improve IOFC and improve the environment. If appropriate, removing inorganic phosphorus sources from the diet would be a simple change. It may only make a difference of a few cents per cow per day, but it will be money in your pocket. Formulating diets for the cow’s requirement for protein is timely right now. However, if feed management practices are not good, then lowering protein in the diet to meet the cow’s requirement may end up negatively affecting IOFC. It is extremely important to work with a good nutritionist or consultant before implementing this option.

These are just a few points to consider with increasing prices. Right now is the time to be asking questions on how to maintain profits. Think about strategies that can be implemented on the farm to control costs.

Virginia Ishler, Extension Associate, Nutrient Management, Dairy Alliance, a Penn State Cooperative Extension Initiative