Escalating feed costs are changing how we feed dairy cows and heifers, or at least they are making us step back and reevaluate feeding programs.

The bottom line is – what can be done to maximize your profit margin? This article covers some of the do’s and don’ts to consider when re-evaluating or modifying your feeding program.

• DO analyze the forages you are feeding monthly, or at least quarterly, and use these results to balance rations fed to your dairy cattle. The quality of forages fed determines the amount and type of grain or concentrate mix that must be fed to maintain milk production, health and reproductive performance. As forage quality improves, less grain and more forage can be fed. Essentially, forage costs approximately 5 to 10 cents per pound of dry matter whereas concentrate mixes can cost 15 cents or more per pound of dry matter.

Thus, profit margins can be improved when more forage can be fed while maintaining milk production. Monthly or at least quarterly forage testing and rebalancing rations to make sure the appropriate amount of grain is being fed can pay in improved production and potentially improve profits. For example, decreasing the amount of grain needed by a 100-cow herd by 2 pounds saves over $10,000 in purchased grain costs for the year, assuming forages are of the quality to maintain milk production.

• DO look at alternative grain or byproduct sources to improve the economics of the feeding program without sacrificing milk production.

Alternative commodities in rations and concentrate mixes can decrease the costs of a ration while maintaining milk production. For example, on one dairy farm, substituting a byproduct for corn within a heifer mix reduced the cost of this grain mix by 25 percent.

The Feed Val spreadsheet program from the University of Wisconsin (www.wisc.edu/dysci/uwex/nutritn/spreadsheets/FEEDVAL-Comparative.xls) allows the user to enter the current prices of corn and soybean meal and calculate the nutritive value of various grains and byproducts. If you can purchase a grain or byproduct cheaper than its nutritive value, then you need to discuss the merits of using this product in the ration with your nutritionist.

Both the University of Missouri (http://agebb.missouri.edu/dairy/byprod/bplist.asp) and Penn State (www.das.psu.edu/das/pdf/feedprices.pdf) have a listing of commodity prices which are updated weekly. Always remember to add the costs associated with shrink and hauling if you are purchasing the commodity directly from the broker.

In addition, many farmers have used forward contracting to lock in their grain price. Classically, the price of a certain number of tons of a grain mix is guaranteed generally for a year in advance. This practice allows you to budget for this expense and manage your risk.

• DO discuss other possible feeding strategies with your nutritionist. Establishing true communication lines between yourself, your nutritionist and your employees is critical in achieving economical feeding programs that work. Communication needs to flow to and from all parties involved in the feeding program. Often the greatest misunderstandings could have been avoided or quickly corrected if communication lines had been established and all parties truly communicate with one another.

To accomplish these objectives, both sides need to listen to each others’ needs and concerns raised as well as presenting alternatives that can improve the bottom line of the feeding program.

• DON’T forget to practice the basics of feeding management. The following sound, economical feeding management practices need to be incorporated into feeding programs on a daily basis. Cows are creatures of habit and respond to comfortable surroundings, routine management practices and well-managed feeding programs.

These practices do not require cash but attention to the details.
– Feed and milk cows on a set schedule.
– Ensure that plenty of clean cool water is always available.
– Clean waterers with weak chlorine (bleach) solution weekly.
– Provide fresh feed at least twice daily especially in the summertime.
– At the next feeding time, a small amount of feed (5 percent) should be left in the feedbunk to ensure timid and early lactation cows get adequate feed.
– If cows are fed a limited amount of hay or other forage, make sure to provide enough bunk space for all cows to eat at once and enough extra space for the timid animals to get their share.
– Clean out the feedbunk daily especially in the summer, as feed heats quickly in the feedbunk and can decrease feed intake and milk production.
– Provide adequate bunk and feedstall space (90 percent maximum stocking rate) for fresh and early lactation cows as well as cows within three weeks of calving. These cows are the money makers.
– Maintain freestall (barn) bedding to ensure comfortable stalls where cows will lie down, rest and chew their cuds.
– Provide fans and intermittent sprinklers over the feedbunk and the holding pen.
– Consider multiple feeding groups – high cows, low cows, first-calf heifers and mature cows to target feed resources.
– DON’T forget the dry cows and heifers – they are the future profit-generating dairy cattle.

• DON’T cut back on grain or ingredients in the grain mix that compromise milk production or the health and reproductive performance of your cows. When evaluating the costs of a potential ration, you need to ask yourself, will this ration maximize my profits and not just save dollars on my feed bill? Will this grain mix and resulting ration use my feed dollars wisely and maintain milk production, health and reproductive performance of the herd?

The cost of a concentrate mix and ration need to be evaluated based on the potential dollars they will return above feed costs (milk income per cow - feed cost per cow), not just the cost of the grain mix.

Sometimes saving $10 per ton on a grain mix may cost you money in lost milk production and result in less potential profit. In these cases, you have created more problems with your dairy business cash flow, not less. Assuming you are feeding 22 pounds of this grain mix and with milk at $20 per hundredweight, if your cows drop only 0.55 pounds of milk you are starting to lose money even though the grain mix is cheaper.

The bottom line – don’t be a penny wise and a pound foolish. Make sure that you do not compromise production to save a few dollars on your feed bill because it might end up costing you more in the long run. PD

—Excerpts from Kentucky Dairy Notes, July/August 2008