Mailbox milk prices do change; this is the reality of the matter and one that dairymen have to deal with. When the price within a year drops more than 30 percent, as it did in the last 12 months, it raises yellow flags. And for many, this means looking for ways to cut ration costs. Milk price changes should not be a surprise. In the recent past, we have experienced similar, if not wider, swings.
Regardless of where milk is shipped from, mailbox milk prices in the U.S. follow the same pattern. For example, in Figure 1 we have plotted the mailbox milk prices from January 2014 to July 2015 for the average of all Federal Milk Marketing Orders (FMMO), including the California and Florida orders as examples of low and high price regions.
It is noteworthy that although dairymen from different regions of the country receive different pay for the milk they ship, it is also clear that prices follow the same pattern. Even for those producers in “non-component” orders, the mailbox prices track the changes of the price paid in the six FMMOs that use the milk component pricing system.
In short, the milk mailbox price is influenced by similar swings independently of the origin where the milk is produced, and regardless of the price paid, the basic principles that warrant ration balancing, including balancing for amino acids, are the same for all regions of the country.
Run your dairy like McDonald’s
We all know what made McDonald’s what it is today: It wasn’t the hamburgers or the french fries; it was the real estate business. Harry Sonneborn had the vision to lease the land and the buildings for the restaurants and then sublease it to the franchisee that would run the restaurant; this “other” side of the business ensured a steady profit for the company.
Similar to McDonald’s approach, the success of the dairy enterprise depends on a steady cash flow coming from milk production. Furthermore, we all know that consistent milk flow comes from healthy cows that produce efficiently.
Cows have specific nutrient requirements that must be supplied by the diet to keep them healthy and productive. Milk production is the french fries and hamburgers of the McDonald’s business model, but good health and reproduction of the cows are the real estate of the dairy business.
Furthermore, the bricks of the real estate business are all the required nutrients that must be supplied by the diet: minerals, vitamins, carbohydrates, fatty acids and amino acids. When we deprive the cow of one or more of these essential nutrients, the cows respond to this shortage, sometimes within a few days, sometimes in a longer term.
The easy responses to notice are reduced feed intake, reduced milk production or reduced milk components; however, the real and most damaging effects are the hidden responses, like poorer health and reproduction, that take longer to notice and are harder to evaluate.
By the time we see these results, it is too late to quickly avert the negative effects. It goes without saying that health and reproduction have long-term impacts on cow performance and dairy herd profitability.
When milk prices are high, most aim to get more milk out of their cows. On the other hand, when milk prices drop, it is very tempting to look at the diet as a way to cut costs since feed comprises at least 50 percent of the day-to-day costs at the dairy.
This is practiced by many, often times by not only removing questionable feed additives but also by reducing the dietary concentration of essential nutrients, including essential amino acids.
The first question we need to ask ourselves is: Why was a particular amino acid supplement added to the diet? If its use was justified in times of good milk prices, then its use should be even more critical in times of lower prices (remember the bricks).
In good times and bad …
It is now very common to see rumen-protected amino acids added to diets in dairies located within the FMMOs that pay for milk components. Most of the time, the objective is to increase milk component production. When milk prices are high, this is a plausible goal.
Research trials conducted by many leading universities indicate that cows fed an amino acid-balanced diet have higher production, higher milk protein and higher fat concentrations. Practicing nutritionists and dairymen attest to these results.
Unfortunately for the cow, when milk prices go down the cow’s well-being is sometimes forgotten. Rumen-protected amino acids, along with other essential and limiting nutrients, are pulled out of the diet resulting in unintended consequences.
Research conducted at the University of Illinois has shown that cows fed a methionine-enriched diet (an essential and limiting amino acid) during the transition period not only produced more milk, but also the cows were much better prepared to support the additional “metabolic stress” that occurs during the post-calving period.
In addition, research conducted at the University of Wisconsin showed that cows fed a methionine-enriched diet, from calving to at least the second pregnancy check at 60 days after A.I., had larger embryos and lower early embryo mortality. In short, cows have nutrient needs that go beyond milk production and composition, and for this reason it is important to always supply them regardless of milk prices or region of country.
The important thing isto keep the eye on the ball
By accepting the concept that feeding an amino acid diet is as important to the dairyman to keep the cash flowing as it is for the cow to produce efficiently, we have to make sure we consistently try to feed balanced rations throughout the lactation cycle.
Based on work summarized at the University of New Hampshire, milk production (particularly milk protein production) has a tighter relationship with the grams of methionine and lysine flow to the small intestine than grams of metabolizable protein. This is a stark reminder that cows do not have specific requirements for metabolizable protein, but rather they do require different amounts of individual amino acids.
The right grams of supplemental methionine and lysine to include in the diet will not be the same for every dairy. Many variables dictate what those amounts should be. The ration composition, including types and amounts of supplemental proteins, is one factor.
Milk price may also dictate what the production goals are. For instance, in times of high mailbox prices, the goal may be to increase the grams of amino acid inclusion in the diet to maximize milk production or composition.
Then in times of low mailbox prices, it may not warrant the objective of maximizing milk production per cow, but low milk prices do not warrant feeding for less efficient or less healthy cows. Here is when the inclusion rate of amino acids becomes even more important to keep absorbed amino acids in the right balance.
When milk prices are low, the goal is to maximize the efficiency of milk production and to keep a healthy and productive cow. Methionine is almost always the most limiting amino acid, and it is definitely an important nutrient for optimal metabolism and health.
It is a precursor for the most potent natural antioxidant produced in the body; it is a methyl donor and plays a key role in the initiation of protein synthesis, not only for milk protein synthesis but also for all of the other important proteins needed for the cow’s well-being. In this situation, the goal is to maintain a healthy and highly efficient cow.
With the help of current least-cost nutrition software programs that predict amino acid supplies, the practicing nutritionist can design a well-balanced diet. Independently of milk prices, the underlying principle is to offer a diet that supplies all of the required nutrients, including amino acids, all in the right balance, to meet both the goals of the dairyman and the nutritional requirements of the cows. PD
Daniel Luchini is the manager of ruminant product technical services for Adisseo, has a Ph.D. in dairy science from the University of Wisconsin and has received seven U.S. patents. Chuck Schwab is with Schwab Consulting LLC.