Remember when gas prices approached $3.50 a gallon? It had a tremendous impact on our economy. Hybrid vehicles were on back order, and dealers were practically giving away SUVs. Despite the high prices, we still went to the pumps and filled up our tanks. Why? Because we needed the fuel to run our cars and trucks, and operate our businesses.
The same can be said for managing a dairy when feed costs are high. Cheap corn alternatives either can’t be found or aren’t so cheap anymore. And questions still abound: Will corn prices stay high? How much distillers grains can we feed? What’s going to happen to soybean meal?
Producers need to keep high-quality feed in front of their cows so they stay productive, but with fewer options come less profitability.
As you can imagine, most producers want advice on reducing ration costs while still maintaining productivity – sort of like trying to run a race car on 87-octane unleaded. It can be done, but changes in the pits will need to be made.
Decide what your goals are
Before making any ration changes, get a handle on your financial situation. Know your cost of production and what your margins are. An easy way to find this out is to calculate your income-over-feed cost. This figure will tell you how much money you have to pay bills other than the feed bill. Once you have this figure in hand, decide how you want to make it grow. Here are three options:
•Reduce feed costs and production. This works as long as the drop in feed costs is greater than the value of lost production – something difficult to accomplish. Plus, anytime you reduce production you negatively affect cash flow, and it’s hard to regain production once it’s gone. Many dairy producers learned this lesson when milk prices bottomed out.
•Reduce feed costs and maintain or improve production. An optimal situation, this can be accomplished by doing things like balancing rations for amino acids to optimize protein utilization.
•Maintain or increase feed costs and improve production. Income-over-feed costs will improve if any increase in production is greater than the increase in ration costs. This often happens when purchased feed ingredients replace poor quality alternatives. Often high-quality feed ingredients are more efficient nutrient sources and result in improved performance, more than offsetting any increase in ration costs. This happens, for example, when a bypass fat replaces tallow or a rumen fermentation product replaces soybean meal.
Once you understand your income-over-feed costs and how it should be improved, you can determine how high feed costs can go before they begin to impact your profitability.
Cows don’t like changes
Once you understand your business goals, search for opportunities to offset high-priced feeds. Some producers are looking for unique ways to replace high-priced corn, making starch and energy alternatives scarce, expensive or both. As you look for alternatives, remember one key point – cows don’t like changes. Try these suggestions to help alleviate the stressful changes on your cows.
•Maintain rumen function. When corn is taken out of the ration, starch levels decrease and can go as low as 18 percent. To do this without harming productivity and maintaining rumen function, maximize fermentability of the remaining starch. Feeding maximum levels of sugar can help improve fermentation. Rumen fermentation enhancers work well with highly fermentable ration ingredients to improve rumen efficiency and maintain a consistent rumen environment.
•Feed existing corn differently. Grind corn fine, or feed steam-flaked or extruded corn, to make the starch more fermentable. Process your high-moisture corn and corn silage to enhance fermentability.
•Replace lost energy. Less corn and less starch mean less energy that cows can use to make milk. Replace lost energy with an efficient energy source that won’t impact rumen function. Rumen-protected fats are your best alternative since they bypass the rumen for absorption in the small intestine.
•Test every load. The line between profitability and loss grows finer with each feed cost increase. You can’t afford to have cows crash from eating an unbalanced ration because of variable feed ingredients. Make sure each new load of feed ingredients is tested so you know exactly what is going into your cows.
Even though your rations may be balanced with new ingredients to get the most milk from your cows, you may be without a key component to increased production – bST. There is a lot of buzz in the media about milk processors that have made the decision to sell “bST-free” milk. Whether or not you choose to use bST, the rumen should still be your main focus, especially as ration and other herd management changes are being made. Keep the rumen functioning properly to maintain the highest level of production.
Take a holistic approach
Managing high feed costs with or without bST can be done if producers remain diligent and focused. It starts by feeding a well-balanced ration with proven, tested feed ingredients. Put priority on replacing the starch and energy lost when corn is taken out. Rumen fermentation enhancers and high-quality rumen bypass fats can help the rumen remain stable and provide adequate energy to support high production.
Successful race car teams have great pit crews. Navigating these challenges will be much easier if you use a similar team approach. This means regular visits from the nutritionist, veterinarian, financial adviser and others who have a direct impact on the dairy. Once you have a clear picture of your current profitability, this group can help you determine what will need to be done next to ensure profitability is maintained or enhanced. This will include a long-term strategy that may involve growing more corn or starch alternatives on your operation to offset the high cost of purchased products. Whatever the recommendation, take the necessary steps to make sure the change is gradual to ensure cows can adapt. PD
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