Dairy economics in 2020 have been filled with volatility and uncertainty. The recent surge in feed costs is just one more example. Soybean and corn markets climbed at harvest time fueled by lower carryover stocks, higher export demands and South American weather concerns. Protein and energy sources quickly followed suit. Common protein sources – such as soybean meal, canola meal and corn distillers – have seen 15% to 20% increases the past few weeks.
    As profit margins tighten, it is critical to evaluate on-farm nutrition strategies to determine if any potential changes can improve the dairy’s cash flow. Milk production is the income generator for your dairy business, so saving 10 cents in feed cost, but losing 20 cents in productivity, is not a good economic decision. Consider several key nutrition and management strategies to help maximize income over feed costs.
    High-quality forage reduces supplemental feed costs. Current forage inventory is established, but the value of harvesting high-quality forages this next season may be greater than ever. Harvesting forages at the correct moisture and maturity is a critical component. Hybrid selection can be part of the solution to improved forage quality but needs to be balanced against input costs.
    Feed shrink can be defined as any ingredient that enters the dairy but is not consumed by the cow. With current prices, going from 15% to 5% feed shrink accounts for savings of greater than 50 cents per head daily. Some shrink to forages in inevitable, but with proper packing and storage practices, these losses can be minimized. Evaluate ingredient handling and storage as well. Byproducts can be a great buy but may lend themselves to double-digit shrink values under certain conditions.  
    Maximize dry matter intake to maximize milk production. One pound of additional DM can lead to 2 pounds increase in milk production. In some cases, the percentage of leftovers may be reduced below 5%. Feed distribution, push-up frequency and overall bunk management need to be excellent to make this happen.  
    Feed efficiency is an important economic measure used to evaluate the amount of milk produced per unit of feed. Using energy corrected milk will give credit to the milk component contribution. Several factors will impact feed efficiency:
    – Multiple groups of milk cows versus one group; multiple groups allow for better targeting of nutrients and additives designed to improve feed efficiency.
    – Overcrowding to the point where performance is negatively affected.
    – Cow comfort and heat abatement for milk and dry cows.
    – Culling strategies to remove low-end producers.
    – Aggressive reproduction strategies to have more cows in peak lactation.
    – Proper particle size and moisture in the TMR.
    – Adequate water access.
    Two common non-productive assets related to nutrition expenditures are forage inventory and heifer replacements. If a farm is sitting on eight to 12 months of carryover on a given forage, managers may consider harvesting fewer acres to remove some crop input expenses. With heifer replacements, take a hard look at the number needed versus inventory. In addition, recognize the feed costs associated with calving heifers less than 24 months of age on most farms.
    Work with your nutrition consultant to review and fine-tune your feeding program. Any feeding changes that potentially jeopardize milk production or future cow health need to be carefully evaluated; do not sacrifice long-term gains for short-term savings. Develop your list of potential changes, evaluate the positives and negatives of each potential change and prioritize which nutrition changes will have the largest effects on your cash flow. In some cases, no changes will be made. In other cases, significant changes can be made, resulting in greater income over feed costs.  
    Barry Visser is a nutritionist for Vita Plus.