The dairy industry is in uncharted waters with the rollercoaster feed and milk prices over the last 15 months. Given the high feed prices and sudden decrease in the milk price, farmers may be tempted to cut corners or cheapen their feeding programs to save money.

Tactical changes
Tactical changes in feeding programs should be associated with improving cash flow for the operation. One of the best methods to evaluate feeding changes on cash flow is Income Over Feed Costs (IOFC). The calculation for IOFC (dollars per cow per day or $/cow/day) is:

IOFC = (all-milk price) x (daily average milk production/100) – daily feed cost

The IOFC goal should be $6 or greater, but with high feed prices, IOFC between $5 and $6 may be more reasonable. Once you have calculated your IOFC, work with your nutritionist and your veterinarian to optimize your feeding program. Some items to discuss are:

• Look at options to improve energy availability in the diet. The cost of a unit of energy (NEL) is high at greater than $0.08. Therefore, you should examine feed substitutions or treatments that will increase energy availability in the diet such as reducing particle size or heat-treating grains. These feeds may have higher per-ton costs, but they will often lead to more milk production (i.e. improved marginal milk production). Reformulation of the diet is necessary to maintain adequate fiber intakes and promote adequate rumen function.

• Evaluate the use of feed additives. Do not remove all feed additives at the same time, but assess individual feed additives one at a time to determine the effect on performance. Cow performance must be closely monitored to ensure that production or health remains at expected levels.

• Consider feeding multiple diets based on stage of lactation or production. One-group TMRs have lost their value as the price of feeds is higher than the value of labor. Feeding more than one ration will allow you to put high-priced feeds where they have the most value – high-producing cows. Late-lactation cows are able to consume more forage in their diet, which will minimize use of high-priced grains.

• Improve your feeding management. While your nutritionist and your veterinarian can make recommendations on feeding changes, it is your responsibility to make sure feeding is done properly. Take a hard look at your feed inventories. Your stored feeds have great value in today’s marketplace, and unexpected shortages in stored feed, especially silages, will cause two problems:

1. Cows do not adjust well or quickly to abrupt feed changes.

2. You will pay top dollar for forages during the summer months.

• Check the calibration of your scales.
High feed prices have increased the economic risk associated with under- or over-feeding of individual ingredients. Even beam scales for stationary TMR mixers can be off. I recently met with a farmer who determined that he was over-feeding by 20 percent depending on where he dumped feed into his mixer, which had a beam scale. He replaced the beam scale with electronic load cells.

• Closely monitor the dry matter of forages.
Small changes in dry matter (DM) can lead to over- or under-feeding valuable forages.

• Determine the level of feed refusals (i.e. the leftover feed you remove from the trough each day), and work toward a 0 to 2 percent refusal rate.
The days of feeding leftover lactating cow ration to the heifers and dry cows are over, as the feed is too valuable. A 2 percent refusal rate on a 50-cow herd fed 50 pounds of DM per cow per day at 50 percent moisture would be 50 pounds of DM or 100 pounds of as-fed.

• Examine your feed storage facilities to determine possible sources of shrink and minimize these impacts.
Examples are feeding birds and rodents, water infiltration, holes in augers or conveyors, etc. Corn silage is currently worth over $0.06 per pound of DM. Two large handfuls of silage is roughly 1 pound of DM or 3 pounds of as-fed. Essentially every 3 pounds of silage that leaves your silo and does not end up in front of your cows is like taking a nickel and a penny from your pocket and throwing them into your gutter.

• Do not feed spoiled feed of any type.
Research from Kansas State University has shown that for every 1 percent spoiled silage in the ration, there is a 0.3-pound drop in milk production. So, at today’s milk price, 10 percent spoiled silage in the ration would cost you $0.45 per cow per day in lost milk income.

Strategic changes
Strategic changes to your feeding program should be evaluated on an annual feed cost per cow basis because we assume the milk production will be maintained at current levels regardless of the feeding change. Focus on increasing forage inclusion and increasing forage quality in rations, which will in turn reduce purchased feed costs. High- quality forages are a cost-effective way of delivering digestible nutrients (e.g. energy, protein and NDF) to lactating cows. Consider the following:

• Increasing yields of high-quality, home-grown forages. Evaluate agronomic changes to optimize forage yield and quality.

• Cash in on the value of your manure as a fertilizer.

• Improve harvest practices to increase both forage inclusion and quality.

– Theoretical length of cut (TLC) for corn silage should be optimized for both intake and animal health.

– All corn silage should be processed (2 to 3 mm setting is optimal). Processing improves digestibility of starch and fiber, and increases intake.

– For legumes and grasses, “hay in a day” technology has shown remarkable results for improving forage quality.

• Reduce shrink in forage inventory.

– Increase packing density in silages. Every 1 pound increase in silage DM density equals a 1 percent decrease in DM loss and a $0.25 per ton reduction in the cost of the silage.

– Make sure all silage storage facilities are in good repair and silages are adequately covered and sealed. Reducing air and water infiltration will dramatically improve fermentation and reduce spoilage.

– Prevent or reduce animal damage and feeding in stored forages.

– Evaluate the use of silage inoculants or preservatives as a means to improve fermentation and reduce spoilage during feedout.

– Consider using feed tracking systems to determine daily feed intakes and more closely monitor inventories.

In summary, during times of volatile feed and milk prices, emphasize marginal milk production in the short-term and improving the amount, quality and use of home-grown feeds in the long-term. These tactics and strategies are less about cheapening the feeding program and more about improving the cash flow and profitability of the dairy operation. PD

—Excerpts from Penn State Dairy Focus Newsletter, February 2009

Ken Griswold
Dairy Extension
Penn State
keg16@psu.edu