Today’s economic climate may be rough, but in the dairy industry we know that fluctuating milk prices and maintaining a budget are just part of the business.

We are always on the lookout for ways to cut costs while keeping our animals’ productivity at its peak, but times like these force us to reevaluate many of our previous business decisions. Because the ration is the single-most expensive operational cost for producers, it is often the first expense to attract scrutiny whenever milk prices drop.

If a nutritionist is doing an adequate job of ration formulation, then every ingredient and feed additive in a ration has a purpose, and removing a component in that ration may manifest itself in problems down the road. Whenever one of my clients asks me to create a new ration to cut costs, I often respond by saying “OK, which nutrient do you want your animal to be deficient in?” If, when pressured to cut costs, a nutritionist is suddenly able to develop a new ration that’s less expensive while maintaining the nutritional integrity of the diet and current production levels, then the producer should question the job that was being done in the first place.

A no-win situation every time
When a client is suffering financially and has no other alternative but to take ingredients out of the ration, it becomes a real challenge for nutritionists to prioritize which ingredients will have the least immediate negative impact on the herd’s health and performance.

Typically, the first item in the ration to be cut back or removed is the vitamin mineral package. Reducing or removing these ingredients will likely not immediately affect the herd’s health and production level, giving the producer a false sense of security. However, after a few months without proper vitamin and mineral nutrition, producers begin to see an increase in metabolic diseases, foot problems, a weakened immune system and a decrease in herd reproductive efficiency.

The next class of nutrients often removed from the diet are fat components such as oil seeds, tallow and rumen-inert fats. These nutrients are also some of the more expensive components in a ration. Immediate effects are observed when these components are removed. For example, a drop in fat tests are commonly observed shortly after removal; however, reduction in milk production, per se, is minimal. More likely is a decrease in the herd’s body condition, especially in high-producing animals, without the extra energy in the ration.

Feed additives like yeasts, chelated trace minerals and sodium bicarbonate are another area that may receive serious scrutiny in difficult economic times. Many of these ingredients provide a vital function in the diet but when cuts have to be made, nutritionists and producers are forced to prioritize which ingredients will stay in the ration and which will not. Cows face serious challenges to their immune system during lactation. Those challenges are going to increase as we begin to cut important nutrients from the ration.

It is far more important and cost- effective to promote good health by maintaining a healthy immune system than it is to treat disease. Maintaining a healthy immune system is one of the dairy producer’s most economically rewarding management tools.

Cost isn’t the only thing you’re cutting
We’re all familiar with the fable of the goose that laid the golden egg. Once the goose was dead, there were no more golden eggs. The same is true for our cows.

If we compromise our herd’s nutrition, we will limit its ability to produce profits, not only today, but in the future. If we fail to supply the nutritional building blocks to make milk, cows will not produce milk efficiently. If we do not provide the raw materials required to maintain healthy, functioning cows, they will eventually break down. Ultimately, the cost of treating problems resulting from inadequate nutrition will typically be more expensive than providing adequate nutrition and promoting good herd health to begin with.

As a nutritionist, I would never recommend skimping on nutrition as a quick way to save money. I’ve seen many times when a producer switches to a lesser quality feed just to save money and then misses an opportunity to cash in when milk prices rebound because their animals are not physically prepared or capable of performing effectively.

However, producers are under tremendous pressure from banks and lenders to cut costs, making it difficult to maintain investments in ration inputs. Maintaining adequate cash flow is the single-most important economic factor in this current economy. Without adequate cash flow, producers can’t pay their bills and risk foreclosure by bankers and lenders that are facing challenges of their own.

If the nutritional integrity of the ration is changed to reduce costs, producers run the risk of negatively affecting cash flow because cows may not be performing efficiently or because funds are being spent to treat diseases caused by a lower plane of nutrition. If a ration change results in a production loss that exceeds the ration savings, the change should be reversed and re-evaluated.

It is important to understand how much money is being saved over the long term by keeping the ration intact and estimating the profit level that can be generated once economic conditions improve.

Yes, ration costs are probably the largest single expense on the farm, but they also have a direct impact on income and cash flow. The reality today is that producers must cut costs.

My advice is that when cost-cutting measures are required, you may want to first focus on other options before turning your attention to one of your most important income-drivers – your ration. PD

Robert B. Corbett
Veterinarian
Dairy Health Consultation
cowdoc@dairy-health.com