Each month in "Dairy $ense" income over feed cost per cow is listed in addition to the feed cost per non-lactating animal. For 2015 using the ration formula fed at Penn State for dry cows and heifers, the feed cost averaged $3.48/cow and $1.66 per heifer (does not include pre-weaned calves). These feed costs are based on the Penn State Feed Price List.
Ninety farms participating in Extension's cash flow workshops were evaluated on their dry cow and heifer feed costs. In the cash flow Excel spreadsheet, both market and producer cost prices are compared for the various animal groups. The average dry cow feed cost per day for market and cost was $3.37 and $2.44 respectively. However, there was a wide range in feed costs: $0.79 to $5.78/cow/day. The low and high numbers were similar for the market and cost categories.
The feed costs for heifers were $1.99 and $1.58/animal/day, market and cost respectively. This group also had a wide range in feed costs: $1.00 to $4.38/heifer. It appears there are opportunities to achieve better cost control for the non-lactating animals on some farms.
A common theme for dry cows and heifers is inadequate forage inventory. Many cash flow plans purchase a substantial amount of grass hay or straw to meet their fiber needs. It is not unusual to observe excellent feed cost control on the lactating cows but the opposite for the dry cows and heifers. Every farm has its set of challenges and should be evaluated to determine opportunities.
For example, the cash flow plans from two 400-cow dairies were evaluated. In 2015, their purchased concentrate cost including both heifers and dry cows was very similar at $63,000. However, one farm had to purchase grass hay for these animals at $76,700, so this farm's purchased feed cost was almost $140,000 for the non-lactating animals. This has significant implications to a cash flow plan. Many of these issues require a thorough look at the cropping plan for the operation to find ways to produce more of the forage needed for heifers and dry cows.
No matter how many cash flow plans are analyzed, feed costs keep rising to the top of the list as a critically important topic impacting the farm's potential cash surplus. Lactating cows make up the majority of feed cost, however, dry cows and heifers can influence the farm's break-even cost of production. Working with Penn State's Dairy Business Management Team, producers can get their feed costs divided out between the lactating and non-lactating animals. This provides one more opportunity to manage both production and finance for a critically important area of the farm.
Action plan for evaluating feed costs for the dry cows and heifers.
Determine the annual feed costs for dry cows and heifers.
- Step 1: Organize invoices to capture all the purchased feed costs for dry cows and heifers. This would include calf starter, grower, heifer supplements, minerals and dry cow grains. Average their prices for the year.
- Step 2: Summarize the rations from baby calves through springing heifers and dry cows. Determine the most representative ration for the various animal groups for the year.
- Step 3: Using the Penn State Excel cash flow spreadsheet, enter in the respective rations and their costs to determine the feed costs per animal group.
- Step 4: If feed costs for this group exceed 20% of the total feed costs, evaluate the potential causes.
Monitoring must include an economic component to determine if a management strategy is working or not. For the lactating cows income over feed costs is a good way to check that feed costs are in line for the level of milk production. Starting with July's milk price, income over feed costs was calculated using average intake and production for the last six years from the Penn State dairy herd. The ration contained 63% forage consisting of corn silage, haylage and hay. The concentrate portion included corn grain, candy meal, sugar, canola meal, roasted soybeans, Optigen (Alltech product) and a mineral vitamin mix. All market prices were used.
Also included are the feed costs for dry cows, springing heifers, pregnant heifers and growing heifers. The rations reflect what has been fed to these animal groups at the Penn State dairy herd. All market prices were used.
Income over feed cost using standardized rations and production data from the Penn State dairy herd.
Note: February's Penn State milk price: $16.52/cwt; feed cost/cow: $6.40; average milk production: 85 lbs.
Feed cost/non-lactating animal/day.