**Extended comments highlighted in blue.
With drought challenges, higher feed costs and current milk prices, the following three items should be considered by all dairy managers.
Also check with your banker to be sure you have a credit line available to lock in favorable feeding decisions.
Forage inventory. One guideline is 5.5 tons of forage dry matter per cow (30 lb. per cow includes 5% to 7% shrink or waste value and dry cows). If you are going to feed heifers, add another 30% to this value or 7 tons of forage dry matter per cow or heifer unit.
You can calculate your dry matter inventory on the farm by using silo capacity tables, square feet of forage in bunkers and piles, and number of bales.
Strategy: Decide now if you are going to:
- cull less productive cows, open cows and/or cows with a high somatic cell count.
- reduce the number of heifers being raised using genomics to find the better heifers (current heifer prices are $1,300 to $1,500 with cost to raise at $1,700-plus).
- buy forage or forage extender feeds.
Know your feed cost. The following feed-related values can be helpful in monitoring and evaluating the economics of your feeding program.
- Income over feed cost (IOFC) reflects the profitability of the dairy herd, including value for higher components, quality payments and other incentive programs that add value to your milk check.
Strategy: Maintain a greater than $10 IOFC to cover nonfeed cost items.
- Feed efficiency reflects the herd or group’s ability to convert your ration dry matter to milk production corrected for your milk components. Factors driving this value include forage quality, days open (reproductive status of the herd), somatic cell count (loss of milk production) and rumen acidosis (lack of effective rumen digestion).
Strategy: Yield more than 1.5 lb. of 3.5% fat-corrected milk per pound of dry matter consumed (subtract weigh-backs from the dry matter fed, as only feed consumed is used in the calculation).
- Feed cost per pound of dry matter reflects the cost of ingredients selected to feed your cows. All forages and feeds are priced at current market value.
Strategy: Stay below 15¢ per pound of dry matter (Midwest value). Other areas may be higher due to the cost of transporting selected feed ingredients such as corn grain, alfalfa hay and soybean meal.
- Feed cost per 100 lb. of milk can be calculated if you know the value of milk sold and feed cost on the farm (homegrown at market value and purchased feed sources). Milk yield is corrected to 3.5% fat correct basis. Factors that can impact this value are milk production and feed losses such as shrink and weigh-backs.
Strategy: Remain under $9.50/cwt. (Midwest value).
Look at feed prices. Feed ingredient costs will vary depending on whether you are using soybean meal and corn in the Midwest, barley and canola meal in the Northwest, or sorghum and cottonseed meal in the Southeast.
- Byproduct feeds can be an economic choice depending on where you are located (citrus pulp in the Southeast region, almond hulls in the Western region and corn gluten feed in the Midwest).
- Forages priced on the Relative Forage Quality (RFQ) index can be priced at a value of $1.40 per point. For example, hay with a 170 RFQ could be worth $238 per ton while hay with a 200 RFQ could be worth $280 per ton.
Two programs that can be useful are FeedVal 2012 from the University of Wisconsin and Sesame from The Ohio State University. Both programs evaluate feeds (forages, grain and byproducts) based on feeds in your area. Each feed price impacts the break-even price for all feeds. Users can select which feed ingredients to use (such as starch, lipid, fiber, RUP) with FeedVal 2012, while Sesame locks in preselected nutrients.