Strategy involves setting a specific course of action to achieve your goals. When it comes to feed inputs, strategic planning helps optimize the largest variable cost of production on the dairy. Attention to detail and deliberate improvements can have a significant effect on your economic returns. Let’s break it down to some key elements.
Ingredients
Supplements
A well-balanced diet considers a forage and commodity base with feed supplementation to provide vitamins, trace minerals and other essential nutrients. Work with your nutritionist to develop a formulation that uses highly bioavailable ingredient sources, minimizes excess nutrients and applies the correct amino acid balance. Precise feeding regimens help lessen environmental impact, increase animal performance and optimize cost-effectiveness of your production.
Being prudent at the point of sale is also important. Be sure to take advantage of all available discounts when purchasing supplements, such as volume and cash discounts, pick-up allowance, bulk vs. bag discounts and the form cost differential of meal vs. pellets. Also watch for seemingly small costs that add up fast, like cups for milk replacer, which might be provided by your feed supplier instead. If you have a batch mixing system, an agglomerated milk replacer is probably not necessary. Consider contracting opportunities on supplements if it makes good business sense.
Additives
Additives are incorporated into the diet to address a specific challenge, such as to help reduce post-calving metabolic issues or bolster milk components. They’re often the most expensive items in the diet and should be scrutinized. Continually evaluate the benefit of each additive. Is it doing what’s intended and providing return on investment? How do you know? Are there less expensive alternatives – with strong data to support efficacy – to consider? Money is well spent on the areas of greatest return. Spend on solutions to optimize transition cow health, improve early lactation animal performance and enhance milk components.
Forage Harvest and Inventory
The hallmark of dairy profitability is optimizing the quantity and quality of home-grown feeds. Harvesting at the appropriate time, achieving the correct packing density, covering the silage and investing in a quality silage preservative are all critical steps to maintain quality of the ensiled crop and reduce dry matter losses. Maintaining silage and total mixed ration (TMR) integrity includes proper defacing, feed out and minimizing excess let down of feed, removing only the amount to be used for feeding. Furthermore, knowledge of the dry matter and nutrient value of each forage will keep diets on
track. Routinely checking dry matter and analyzing forage nutrients are essential in maintaining ration precision.
Feed Management
Needless waste and shrink cost money. For example, shrink can be 3-8% for dry feeds in a three-sided commodity bay. If a single ingredient costs $500/ton and has a 5.5% level of shrink (.945 x 2,000=1,890 lb. of ingredient→$500/1,890 lb.=$.265 x 2,000 lb.=$530/ton actual cost), on a 4 lbs. feeding rate this costs an additional $.06/cow/day. Keep in mind that this is one ingredient of many on the farm.
To minimize waste and shrink losses, design commodity storage to minimize exposure to elements and bird infestation, don’t overfill storage spaces, minimize spillage, avoid mixing in the wind, and consider upright bin storage for the most expensive ingredients. In the sample above, a 2.5% shrink rate would reduce costs by $.04/cow/day.
Additionally, a TMR mixer audit will ensure scales are properly weighing up feed and confirm the equipment is well-maintained to minimize ration variation and support cost control. Likewise, the use of feed management software provides real-time oversight of feeding accuracy.
You can also help control for human error. Employees are key and confirming they understand your feed management operating procedures will help maintain diet integrity. Keeping feed and water accessible, optimizing bunk space, and limiting feed refusals to 2% or less while maintaining cow comfort are all critical to achieving the highest dry matter intake and best return on your feed investment.
Summary
Feed costs represent the greatest variable cost in producing milk, as much as 65%. This cost spans from field to feed-out, and there are many areas where small improvements can have a significant impact. But without a strategy, cost savings might not be optimized. Strategic feed decisions can pay great dividends on the highest cost on the dairy.
Bill Earley is the Dairy Business Manager for ADM Animal Nutrition. Upon graduating from Michigan State University, he began a 36-year career in animal agriculture providing nutritional consultation for dairy producers in Michigan. Bill has served several roles within ADM, including Director of Animal Health, Director of Marketing, Sales Manager and Dairy Business Manager, working domestically and abroad. Bill has been active throughout the industry as a judge for the Intercollegiate Dairy Challenge and served as a member of the Tri State Dairy Nutrition Conference Planning Committee. His number one priority has been, and continues to be, finding profit leaks on the dairy before they become a financial burden to the producer and focusing on how to enhance dairy farm profitability.
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