Drawing on a wealth of experience, Corwin Holtz offers ideas on making sound feed-buying decisions
By Eleanor Jacobs
Dairy producers aren’t the only people who have changed their approach to sourcing feed inputs. Dairy consultants and nutritionists are also taking a different tack in helping their clients make decisions on whether to contract ingredients and, if so, what might be the best options on the market.
For insight on this, PRO-DAIRY talked with Corwin Holtz of Holtz-Nelson Dairy Consultants LLC. Based in Dryden, N.Y., Holtz works with herds across the country.
PRO-DAIRY: How has your approach to making strategic decisions on feed inputs changed in the past five to eight years?
Holtz: As consultants, we spend more time on phone calls to stay on top of the feed markets, especially during certain times when forward contracting. I have 20-plus contacts between brokers and feed companies, but typically make three to five calls.
Half of our clients track feed prices; half ask us to do that. We gather the information, but it’s up to the clients to pull the trigger and make the decision on whether to contract feed at a certain price.
We can’t guarantee the price won’t come down. We try to help clients determine what are the best buys and the best sources of nutrients from feed ingredients that are available.
PD: What information do dairies need to make informed decisions on feed purchases?
Holtz: It’s critical that dairy producers know their cost of production. If they do, then we know what is a reasonable price for the dairy to pay for a feed ingredient.
They need to compute their projected feed needs for a year – how many cows are they going to be milking and how many heifers will they be feeding? This tells them how much tonnage of particular ingredients they need to contract.
If dairies are going to contract feed, they also need to look at the income side and consider contracting some of their milk. By doing this they have the ability to lock in a potential margin.
One of the biggest hazards in contracting feeds is looking back and second-guessing your decisions.
PD: How do you work with your clients to help them determine the best use of their cropland?
Holtz: I see many more people growing soybeans and additional corn acres. They are also more dairies contracting with neighbors for high-moisture corn.
If you got down to the last penny, the cost of growing high-moisture corn or soybeans may not be a money-maker for dairies. But from a cash-flow standpoint, it makes sense for many dairies. They don’t have to write that check for a feed ingredient.
PD: What tools can farmers – or you – use to make informed decisions on feed purchases?
Holtz: We ought to use programs such as Sesame or FeedVal more than we do. But it’s a time issue. Any program that helps us look at different diet scenarios so we can compare certain ingredients at particular prices is valuable.
The unknown is forage quality. We have to deal with forage quality variability and have to adjust our feed program to compensate for that. The biggest thing we as consultants can do is pound on our clients to continually improve forage quality so we can be in position to purchase less feed.
■ Cowrin Holtz is a consultant with Holtz-Nelson Dairy Consultants LLC. Reach him at 607.351.0677.