Last year around this time, we wrote an article titled “Questions to ask given the state of feed inventories.” A time when weather, fluctuating commodity prices and supply chain issues were causing major disruptions for producers and nutritionists when sourcing feed ingredients. A year later, many of us may be experiencing déjà vu.
How can producers and nutritionists navigate this new normal where feed ingredients are not always guaranteed? Our recommendation is to have a plan now for when milk prices and feed inventories change. It is important to know what questions to ask now to position your farm for greater financial stability in the longer term.
How do we get more efficient with formulating diets?
Diets are formulated to match the nutrients needed for given levels of component production. With that said, specific nutrient strategies can allow cows to reach added milk and protein percentages or yields when milk pricing supplies a return on that extra investment. With the high values for milkfat supporting milk prices over the past several months, many nutrition programs have had a strong focus on nutrients that support milkfat. However, projected outlooks for the beginning of 2023 show lower milkfat values, which are expected to reduce income over feed cost (IOFC) for most dairy producers.
Given these changing market conditions, consider asking your nutritionists these questions:
- What is our current focus for milk production, and should we change it?
- Do we invest as heavily in strategies to support milkfat and/or protein in the coming months as we have in the past few months?
- Are certain nutrients or additives still delivering a positive return?
Ration software with the capability of nutrient-based formulation – and fully using those capabilities – can be key to better nutrient decisions in your rations when markets are changing. With that in mind, now would be a good time to ask your nutritionist about their modeling capabilities:
- What physical factors are used to describe ingredients and their digestibility?
- Do you have a model to help evaluate ingredients on their nutrient value?
- What is my least-cost ration?
- Can animal inputs like bodyweight, maturity, days pregnant and body condition score (BCS) be included into the model to predict nutrient requirements more accurately?
Ration models/formulation systems are very powerful but rely on the user inputting correct information, like up-to-date nutrient profiles for both forages and concentrates. Be aware that crush facilities vary in their ability to remove oils, starches and so forth from the incoming grain. Additionally, physical factors of feedstuffs affect the way cows digest nutrients in the diet. Characteristics like physical size and form of the forage and grain particles change digestibility and site of digestion (ruminal or intestinal tract).
With a nutrient-based formulation system, nutritionists can review the nutrient composition of multiple ingredients to create the most cost-effective blend of feedstuffs to meet the nutrient requirements of the group or pen. This is not only valuable for IOFC but also managing supply chain disruptions – more on this in the next question.
How to manage supply chain disruptions?
The feed inventory and transportation disruptions that started with COVID are prolonged by the war in Ukraine, natural disasters, fuel prices, major weather events, rail negotiations and labor shortages. These disruptions continue to have vast and dynamic impacts on feed ingredients and mills that are often just trying to keep up. The last few months of headwinds have led to temporary shortages, permanent removal of ingredients that are too hard to source and even prices being slashed to keep supply moving. This volatility can cost the producer when times are tough but can also lead to opportunities, if they are ready and capable of capitalizing.
It is still a suitable time to challenge your long-term plans for commodity buying and storage on-farm. To get started, ask your nutritionist these questions:
- Do I have fixed feed amounts in formulas that are costly during shortages?
- How is my feed affected during shortages?
- If we store an ingredient on-farm, what flexibility or price saving would that give us?
- Has my feed center grown with the size of my dairy?
- Can your software program tell me what and at what price things are a good buy?
Parametric evaluation is a powerful tool for buying feed because it evaluates at which price points feeds will pull in or drop out of a ration, and at what quantity based on the ration’s nutrient profile. A dairy ration software with this capability can help determine the price sensitivity around that commodity and determine whether certain commodities are short-term plays or good deals long-term.
With limited storage spaces and vital “real estate” on the farm, parametric evaluation serves as a great resource to make sure we fill them with the best fits. Expanding storage spaces and evaluating feed center size is a vital conversation to have with your nutritionist. As dairies have expanded, often feed centers haven’t kept up. As we look to help maintain IOFC this year, improving flexibility with on-farm storage will help avoid market disruptions and take advantage of opportunities during future headwinds.
Continuous market disruption also creates pressure to minimize buying feeds, and improving the nutrient supply of those already on the farm – which leads to our next question.
When is our next forage meeting?
Western and Southwestern U.S. states are currently experiencing lower forage inventories along with reduced quality for silages – corn silage, wheatlage, haylage, triticale silage, sorghum silage – and alfalfa hay. Lack of water due to a multiple-yearlong drought along with extreme weather events are mostly to blame.
Some states saw a decrease in cropland used to grow forages as farms opted to grow barley, wheat and other grain crops to fill contracts displaced by world events like the war in Ukraine.
In our increasingly changing world, communication and planning becomes ever more necessary. Plan with your nutritionist to do a biannual forage meeting – one before harvest and one after – and ask questions related to your forage inventories, like:
- What will we do if a forage source is suddenly used up?
- How does using up one forage source impact the other forage sources?
- How are you (the nutritionist) going to handle that in the ration, and how can you be flexible so you get an alternative commodity you want? Not a commodity that is too expensive, or it is the only feed available. That is not a position you want to be in.
Also review your on-farm practices for improving forage digestibility – kernel processing, pile packing and covering, fermentation profiles and use of preservatives for feedout stability – and minimize your dependence on commodity markets.
In summary, even though supply chain disruptions have been with us for a while, it is not too late to plan for them. It can start with asking the right questions and taking advantage of the tools and resources a nutritionist can offer. If you are not challenging your nutritionist and evaluating your feeding program, you could be leaving feed and money on the table.