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Feed is generally the greatest expense on a dairy farm. Nutritionists and dairy producers closely monitor ration ingredient cost, feed cost per cow, and usually equate a low feed cost to more profit. However, a recent study of 95 Pennsylvania dairy farms over four years (2009 to 2012) indicates income over feed cost (IOFC) is a much better measure of milk production profitability than feed cost per cow (Journal of Dairy Science May 2014). The objective of the researchers from Penn State University was to evaluate the effects of ration cost and ingredient composition on IOFC and milk yield. The Pennsylvania State Extension Dairy Team IOFC tool is available on the web if you are interested in using it to track your IOFC (http://extension.psu.edu/animals/dairy/businessmanagement/financial-tools/income-over-feed-cost/introduction-to-iofc).
Monthly data collected by the Penn State researchers included average milk yield, milk income, ration ingredients, purchased feed cost, homegrown feed cost and amount of each ingredient fed. Homegrown feed cost was determined from market value and purchased feed cost was actual cost of the feed.
Herd characteristics and cost measures for the 95 farms over the four years are in the table below.

Herd item Average Minimum Maximum
Number of lactating dairy cows 170 20 1475
Milk production (lb/cow/day) 69.5 40.3 111.5
Gross milk price ($/cwt) 19.07 11.75 25.39
Milk income ($/cow/day) 13.33 3.94 20.91
Feed cost ($/cow/day) 5.63 2.92 9.20
IOFC ($/cow/day) 7.71 -0.33 16.60
Purchased feed amount (lb/cow/day) 23.3 1.8 112.0
Total feed amount fed/cow/day (as fed lb) 100.8 55.1 166.9


Purchased feed cost, which included grain, protein and mineral mixes, commodity feeds, and some forage, averaged $3.16 ± $1.07/cow/day from 2009 to 2012. Milk yield and IOFC did differ with purchased feed cost/cow over the four years. This suggests purchased feed cost was not a key factor in high milk production or directly related to profitably (IOFC). However, it should not be concluded a high purchased feed cost is not without risk of income loss. Purchased feed cost needs to be minimized whenever possible, but the least cost ration is not the determining nutrition or feed factor in maximizing profit.
A key ration factor in determining profitability was the forage cost (i.e. amount) in the ration. Herds with an intermediate forage cost between $1.45 and $1.96/cow/day had the highest average IOFC ($8.19) and average milk yield (71.2 lb/cow/day) over the four years. Forage cost in the ration can be explained by both the quality and quantity of forage in the ration. A low forage cost generally would be associated with feeding low quality forage and/or inadequate amounts of forage in the ration. A high forage cost means the opposite in that forage quality is likely high and excess forage is being fed, thus limiting milk production.
Minimizing total feed cost/cow/day did not maximize IOFC of the farms studied in this Penn State research as shown in the graph below. What they concluded was the use of high quality feeds in the ration achieves high milk production and the highest IOFC rather than the lowest ration cost. Inclusion of commodity byproducts, an intermediate level of forage and a ration cost to provide all essential nutrients results in both higher milk yield and higher IOFC.

















President Obama's Administration recently announced a series of actions to reduce carbon pollution and address climate change through decreasing Green House Gas (GHG) emissions. While not singled out in the current action plan, ruminant animals have been pointed to for several years as a major source of methane or GHG. Methane is derived from the microbial digestion of feed in the rumen (92 percent) and large intestine (8 percent). A recent paper in the Journal of Dairy Science (April 2014) from the Netherlands indicates about 6 percent of the gross energy fed to dairy cows is lost as methane and about 50 percent of the total methane production associated with producing milk can be attributed to methane production in the rumen and large intestine. Reducing methane production from dairy cows, therefore, not only helps the environment, but also increases the energy in feeds available to the cow.
The type and amount of feed fed to dairy cows affects the production of methane. In the recent research from Wageningen University in the Netherlands, researchers evaluated the effectiveness and cost effectiveness of three feeding strategies to reduce methane production. This was a simulation model involving supplementing diets with (1) an extruded linseed meal at 2.2 lbs/cow in the summer and 4.4 lbs/cow in the winter, (2) a nitrate source (75 percent nitrate) at 1 percent of dry matter intake, or (3) reducing the maturity of grazed and harvested grass and grass silage. The thought behind the feeding strategies was: (1) fatty acids (linseed meal) have been shown to reduce methane production, (2) nitrate is reduced to ammonia in the rumen providing another compound for hydrogen atoms to bond to rather than methane, and (3) higher quality forages have less NDF and more digestible energy and protein available for milk production reducing methane production in the rumen.
After simulating milk production from the three feeding strategies and determining costs (expenses and revenue) associated with each, it was concluded that reducing the maturity stage of grass and grass silage was the most cost-effective way of reducing methane production followed by supplementation of dietary nitrate and then extruded linseed meal. Supplementation of nitrate resulted in the largest reduction in GHG emissions at 70.5 lbs. of CO2 per ton of fat-protein corrected milk (FPCM) produced, followed by maturity of grass and grass silage fed at 24.2 lbs. of CO2 per ton of FPCM produced and lastly, extruded linseed meal at 19.8 lbs. of CO2 per ton of FPCM produced.
The take home message from these two research studies is forage quality affects the efficiency of the ration to produce milk and profitability of milk production. As we approach this year's forage harvest season, the goal should be to harvest high quality forages for the most cost efficient and environmental friendly way to produce milk.[[In-content Ad]]

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