The destruction of delayed decisions

Decision-making. This is something we do constantly on our dairy farms. These decisions range from many, small, daily management decisions to very large decisions that drastically alter the course of our dairy farm. However, the one thing that is often overlooked in the decision-making process is the cost of doing nothing. 

The decision-making process can be a lengthy conversation weighing the pros and cons and looking at the financial investment of the decision. The upfront cost is a large factor that has an immense impact on the final outcome. Oftentimes, it’s the single factor considered in making an investment. However, we need to remember to pause and consider the cost of not taking the action. Not taking an action is operating our dairy as we had in the past. It is comfortable and familiar. Changes can be unsettling, the unknown can add additional stress. We often overlook the aspect of non-action in the decision-making process because not making a choice often requires very little of us. We also may not see the money that is being lost because it’s not a check that is written, a specific draw from our bank account. That being said, we need to note that the cost of not doing something is not just the simple negative of doing the action, but rather a whole host of ripple effects may enter into the situation.

Let’s consider a few prime and simple examples where the cost of inaction is higher than the initial investment. The upfront investment of installing Alta’s CowWatch system powered by Nedap is quite large, and probably the largest deterrent to purchasing cow monitoring technology. However, when we considered the cost of not installing the technology, inaction, it ended up being a much larger cost to the dairy. There are many gains that occur to the dairy upon installation of the system, but for simplicity, we are going to consider just one; increased reproductive efficiency and reduced days open. The cost of an additional day open on an average dairy can range from $2-$6 — and possibly higher depending on many individual herd factors. This cost is not one readily considered as it is not a physical financial draw from the bank account that a dairy sees each month. A producer milking 1,000 cows installs the system, reduces days open by 15 days, which are costing the dairy $5 a day, would have a $75,000 financial impact on the dairy in a year. So not installing the system — inaction — is costing the dairy $75,000. This monetary effect is also just one of the many gains that, when totaled, make inaction a larger cost to the dairy than the upfront investment. 

Another example of an action we have recently taken is the installation of Valley Ag Software’s Feed Watch program. The physical cost of the system is a few thousand dollars. Also, feeding cows using a computer program and iPad monitor in the total mixed ration tractor can be intimidating and much slower at first until the feeder becomes accustomed to a new way of feeding using technology. For our dairy, it was much easier to continue feeding as we had in the past and we felt that we did a great job doing things the way they were. However, the cost of  inaction — not installing the system — was actually much higher than what the program, time, and effort learning it cost our dairy. A specific example would be how the program handles our weigh backs. Traditionally, we incorporated weigh back feeds into a new ration mix as a replacement for corn silage for mixing purposes. However, after implementation of the program, as our weigh backs are incorporated into a new mix, the computer not only adjusts the levels of corn silage needed but also automatically adjusts the amount of expensive ingredients needed such as soybean meal, premix and feed additives, which are also in the weigh backs. Not installing the feeding system and taking no action on that decision to implement the program would have been easier. However, it would have cost our dairy an enormous amount of money at the end of the year. 

Consider a recent decision you delayed making. What was the cost of the action? Then pause and take some time considering all the costs of no action. Changes can require more effort and investment, but in the long run, not taking an action may cause more destruction and limitations than we think.

Megan Schrupp and Ellen Stenger are sisters and co-owners of both NexGen Dairy and NexGen Market in Eden Valley, Minnesota. They can be reached at [email protected].