Possible financial pitfalls for dairy farmers and ways to avoid them while making every penny count during this time of instability in the dairy industry were topics discussed in a ‘Money on the Table’ meeting held at Cornell Cooperative Extension of Saratoga County.
Speakers at the meeting included Central NY CCE Regional Field Crop Specialist Kevin Ganoe, Central NY CCE Regional Dairy Specialist David Balbian, Cornell PRO DAIRY Senior Extension Associate Jason Karszes, CCE Capital District Farm Business Management Specialist Sandy Buxton and Saratoga Co. CCE Resource Educator Kirk Shoen.
“This whole program is really about what’s going on with the dairy industry and the financial stress,” commented Balbian, who spoke on the topic of managing your dairy herd for profit.
“Milk sales represent the final financial end point of your operation. It generates a vast majority of your income on a dairy farm that is basically a dairy farm. If you have multiple other enterprises, it may be a different situation. But, for that dairy operation, it’s milk going out the door that’s really your income.”
Balbian made recommendations for improvements in milk protein, butterfat, milk pounds, reproduction, and overall health in dairy herds.
“Research tells us that if we were to select one number as a proxy for an indicator of profitability, without actually calculating profitability, on most dairy farms the best number to use is looking at net milk income per cow/ per day. What’s the value of that milk, minus hauling and some of those other types of things, minus total feed costs. A lot of times people don’t have a good handle on what all of those are. It’s the net that’s most important.”
Balbian discussed 10 “key herd management opportunities” that affect profitability on dairy farms.
Maximizing milk component production leads the list.
Balbian said currently fat components are bringing more money than protein. “The American consumer has realized that butter tastes pretty good, and it’s better for you than margarine after all! So, that’s pushed butter values up.”
For Holsteins, fat levels below 3.5 percent and milk protein below 3.0 percent suggest that there are some opportunities for improvement. Balbian said although a low fat test is often attributed to low fiber rations, more often than not, it is caused by high levels of unsaturated fatty acids in the diet. Low milk protein percent can be attributed to microbial protein synthesis that’s not being maximized.
Low milk protein percent may be corrected by increasing carbohydrate levels of rations; sugars, starches, digestible fiber, and improving amino acid balance. “Amino acids are the building blocks of protein. For a number of years you have heard me talk about balancing diets for amino acids; looking at lysine and methionine, especially.”
Fresh cow and calf management are important factors to watch closely. Identify and cull cows that are of low value.
“Repro, this is really important! Extremely important!” emphasized Balbian. “Are you getting all of your cows bred for the first time by 70 days in milk? With a calculated 21-day pregnancy at 20 percent or greater? Better pregnancy rates on dairy farms generally correspond to lowered average days in milk and more overall production and milk component production, by virtue of the pounds of milk that cows are producing. Cost per day for cows that are open run from about $3 per day at 120 days in milk to $5 per day later in lactation.”
Maximize your reproductive program by working with your veterinarian and strategically using a synchronization program.
Raising healthy heifers and calving them by 22 months will increase profit, while waiting to calve later will eat up profits due to costs incurred through feed, facilities and labor. “The Pro Dairy website has a tremendous amount of resources about raising heifers, from a nutritional standpoint or from a cost standpoint, lots of great data there to take a look at.”
Maximize your feeding management program. Losses through lost through spillage and shrink at the silo can be substantial.
“Labor management, nutrition, repro, heifer raising, crops; everything culminates into the vast majority of the gross income for your operation,” said Balbian. “There’s also a lot of money lost on dairies on the cropping side of things that we just don’t even pay attention to. There’s no substitute for high quality forage!”
Kevin Ganoe spoke more on forage in his discussion of growing profitable crops.
“If you were buying all of your feed, would you buy the crops that you grow?” Ganoe asked.
“To me, this is the way that you should be thinking. What am I putting together for profitable crops? We need to be looking at high yields, high quality, we’re trying to keep the costs low, and there’s some interaction among these. Increase the income and try to decrease the expenses, so we can keep that margin as big as we can.”
Plant what you know you can harvest successfully. “Maybe this isn’t the time to play around with those extra acres. Maybe I can get it planted, maybe I can get it sprayed, maybe I can get it harvested. I suggest there’s never really a time for that, and this is definitely not the time.”
Ganoe recommends using a nutrient management plan and soil analysis and drainage, as well as getting seed in the soil at proper depths. “Depth matters!” Ganoe recommends 2 inches for corn seed. “I’d rather be two than an inch and a half. I get called out when that is not happening, and typically that is where the problem starts.”
Weed control is important. “Now isn’t the time to be cheap, just because milk price is what it is, cash flow is a little tight, I appreciate that, but, weed control is a must! I see people make a change in their weed control to save a dollar or two, and all at once they’re not getting the weed control that they were before. I don’t think this is the time to start making those kind of changes.”
Timing is critical. “I’d rather be a little early and throw in some residual, than come in late and already have crop loss.”
When it comes to crop production, get that first cutting done on time!
“Looking at yields should be an indication of management decisions.”
Contact Ganoe for information about the Spring 1st cutting monitoring program at firstname.lastname@example.org