Lower corn prices can translate to 50¢ to 75¢/cow/day feed savings.
Corn prices continue to decline in most areas of the U.S. with nearly 14 billion bushels projected by USDA. Also, changes in ethanol fuel guidelines and fewer beef cattle may put more pressure on lower future corn prices.
What impact can lower corn prices have on feed costs?
If you are feeding 10 lb. of shelled corn per cow per day (as fed basis), lowering corn prices from $6 to $4.50/bu can reduce feed costs by 27¢/ cow/day. Corn silage saving will be impressive also.
If you feed 10 lb. of corn silage dry matter per cow, changes in corn silage prices from $60/ton to $45 a ton with current corn prices, savings can be 23¢/cow/day. That translates to 45¢/cow/day if you feed 20 lb. of corn silage dry matter. Adding both 10 lb. of corn grain and 10 lb. of corn silage dry matter, the total reduction in feed costs is 50¢/cow per day or 77¢/cwt of milk (with 70 pounds of milk yield). This drop in corn prices can represent a 10% reduction in feed costs.
So, will lower corn prices reflect in lower forage prices?
High quality legume prices continue to remain modestly high due to the winterkill of nearly two million acres in the Midwest, strong export to the Mideast and China, and legume value is driven by protein content and NDF digestibility.
Low quality hay appears lower in price and may be impacted by lower corn prices. The University of Wisconsin’s FeedVal 2012 (table) indicates high quality legume hay breakeven price is $187/ton.
Corn silage continues to be a "good buy" with lower breakeven prices. Fuzzy cottonseed had a breakeven price using FeedVal 2012 at $263/ton when considering the fuzzy cottonseed value of oil, fiber, energy, and protein.
Added fat and oil should be feed to high producing cows (cows producing over three pounds of milk fat per day). Jersey cows producing 60 pounds of milk with 5.0% milk fat or Holstein cows producing 80 pounds of milk with 3.7% milk fat are examples.
If corn is relatively cheap, should I increase the amount feed?
If dairy managers have "cheated" on lower level of starch and corn grain fed due to high corn prices, you may want to adjust the level up from 20 to 22% to 24 to 26% starch. Higher levels of 26 to 28% starch can be fed, but monitor manure score, milk fat test, dry matter intake, and lameness/hoof hardness.
With feeding higher levels of starch, consider the level of effective NDF, particle size of feed, processing of corn grain (micron size and moisture level of corn grain), and feed additives.
Will by-product feeds drop in feed prices?
The table is based on FeedVal 2012 to compare break even prices of feeds reveal interesting patterns. Corn prices were $6.70 or $4.50 a bushel.
One guideline is a ton of corn silage (as fed basis) can be priced at 10 times the price of a bushel of corn grain at the time of harvest ($4.50 bushel corn results in $45 a ton corn silage at 33% dry matter).
Based on the Table data, by-product feed should drop based on lower corn energy prices, especially corn by-products. But reports in the Midwest do not reflect lower by-product prices which may be related to strong export markets and favorable breakeven prices. Continue to shop for local "good buys".
Breakeven prices for Midwest dairy feed ingredients using two corn grain prices.
||$4.50 Bu. Corn
||$6.70 Bu. Corn
|Legume hay (high quality)
|Legume hay (low quality)
|Corn gluten feed
|Corn distillers' grains