As dairy producers rapidly improve cow comfort, reproduction and forage quality, yesterday’s herd benchmarks have become more attainable and easier to maintain. This means the historic role of the nutritionist has evolved beyond simply designing and managing rations. Today’s nutritionist must push the boundaries of herd performance to reach the farm’s future goals in the most profitable way. There are many technological and strategic resources available to help the nutritionist to maximize cost efficiencies.
As volatile markets push nutrient costs higher, consider these four strategies to manage your feed budget.
1. Create diet options and scenarios that provide best-fit, least-cost comparisons
Ration-balancing programs offer the ability to optimize a ration. This function selects ingredients to meet the nutrient needs of your animals based on age, size, breed, lactation stage, reproductive status and performance goals. The price of nutrients supplied from each feed, whether forage or concentrate, dictates if and how much of the ingredient ends up in the diet. This requires accurate, and preferably multiple, sources of pricing for potential ingredients to achieve the most cost-efficient diet. One of the most common scenarios is allowing the program to utilize this unbiased data to select which degradable protein sources are most cost-efficient. It will also illustrate which additional ingredients can meet your amino acid targets at the least cost. Cost of on-farm forages should also be calculated or estimated as accurately as possible to identify situations where replacing forage with non-forage fiber sources may be beneficial.
Diet option evaluation can be reviewed at the end of the contract year if you are a herd that fixes inputs annually. If you do not take long-term positions on feeds, this strategy can be utilized throughout the year to purchase best-fit ingredients. Ingredient prices and sources of nutrients change rapidly over the course of the year – taking time to evaluate market options and trends will create large opportunities to save on feed expenditures.
2. Stay up-to-date on current market trends and be willing to make prompt decisions
Maintaining knowledge of currently available ingredient options and market factors is critical. It provides the ability to capture opportunities during price changes and ensures the dairy's feed budget is used in a responsible and efficient way. Market opportunities need to be addressed quickly so opportunities may be discussed and implemented before they disappear. Following market trends also builds confidence in the nutrition program. For example, the value of soybean meal has been extremely volatile the last six months. How was this handled on your operation? Were attempts made to create diets that provided similar nutrients to your cows but worked around price spikes?
3. Evaluate diet makeup and ingredient selection without bias
With your production and herd health goals in mind, there are numerous combinations of ingredients that can meet a cow’s nutrient requirements and achieve your production and herd health goals. Some of these combinations may not be considered traditional, i.e., corn versus other carbohydrates, non-forage fiber sources versus forage. When accurate prices are applied to all ingredient options, including homegrown feeds, true least-cost diet options can be created. In regions of the U.S. favoring high forage production and usage, cost of homegrown feeds can be easily overlooked or underestimated. This creates a situation where the diet becomes biased toward these ingredients. Often, potential cost savings can be uncovered in utilizing purchased feeds in place of some homegrown feeds.
Utilizing new ingredients can feel risky; however, nutrition software can manage nutrient consistency appropriately across multiple ingredient types, allowing for management of risk and cost savings. Ingredient bias, complacency in using what you always have, not trying to rock the boat or an unwillingness to explore new feed options may limit your ability to successfully manage around high input costs.
4. Create diets to maximize profits based on current milk market factors
The values of milk protein and fat can vary dramatically month to month. Be knowledgeable on current component price inputs. This allows diets to be managed to promote greater yield of the more valuable milk component, a strategy that can lead to greater profits. An example is to reduce rapidly fermenting non-fiber carbohydrates like starches and replace them with high-
quality fiber sources, such as forages, to promote butterfat production. There are several tools available to stay up to date on current component pricing, including registering to receive Federal Milk Marketing Order (FMMO) price email updates or sharing processor pricing with your nutrition consultant.
The majority of your operating expense is focused on feeding animals. As an owner, you and your nutritionist can use these strategies frequently to test decisions and solidify responsible use of the feed budget. Although it may not seem like it, elevated and volatile feed markets will create opportunities to buy nutrients for the herd. Keeping up-to date with feed option markets, being impartial to new nutrient sources and putting in the work to analyze diets frequently will add up to increased profitability for your operation.