Evaluate nutrition strategies to maximize cash flow
Feed expenditures are the single largest operating expense in a dairy business. Given the current and projected economic environment, it is critical to evaluate on-farm nutritional strategies to determine if any potential changes can improve the dairy’s cash flow. Milk production is the income generator for a dairy business, so saving 10 cents in feed costs but losing 20 cents in productivity is not a good economic decision. Consider several key nutritional and management strategies to help maximize income over feed costs. Forage quality 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 improve forage quality, but it needs to be balanced with input costs. Reduce feed wastage With current prices, going from 15% to 5% feed shrink accounts for feed savings of greater than 50 cents per head daily. Feed shrink can be defined as any ingredient that enters the dairy but is not consumed by the cow. Some forage shrink is 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. Birds, rodents and wildlife control can also help reduce feed loss, especially with the large volume of snow experienced this winter across much of the Midwest. Bunk management and refusals Maximize dry matter intake to maximize milk production. One pound of additional DM can lead to a 2-pound increase in milk production. In some cases, there may be an opportunity to reduce percentage leftovers below 5%. Feed distribution, push-up frequency and overall bunk management need to be excellent to make this happen. Pre-fresh and fresh cow pens are usually exceptions to this approach of lower refusals. Evaluate feed efficiency Feed efficiency is an important economic measure used to evaluate the amount of milk produced per unit of feed. Utilizing 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 to allow 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 cows and dry cows. – Culling strategies to remove low-end producers, especially with current cull cow prices. – Aggressive reproduction strategies to have more cows in peak lactation. – Proper particle size and moisture in the TMR and adequate water access. Assess non-productive assets 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 a nutrition consultant to review and fine-tune the 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 a list of potential changes, evaluate the positives and negatives of each potential change, and prioritize which nutrition changes will have the largest effects on 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.