2009-2010 Dairy Cattle Feeding Issues with High-Moisture Corn, Snaplage and Dry Shelled Corn Paul Esker, Randy Shaver, Jim Leverich, Mike Ballweg, Pat Hoffman and Mike Rankin  

Understanding Corn Test Weight Mike Rankin, Crops & Soils Agent Fond du Lac County

High Moisture Corn Harvest and Storage Considerations Mike Rankin, Crops & Soils Agent Fond du Lac County

Sweet Corn Waste: Forage Quality and Fermentation Characteristics Paul Dyk, Dairy & Livestock Agent Fond du Lac County

Using corn silage starch to navigate high-priced grain Randy Shaver  

Also, a link to was placed under the "Links" tab to the Team Grains web site which has several new postings related to grain harvest issues this Fall including information regarding a November 6th Webinar on this topic

To register for these meetings online, visit the DCRC web site at: http://www.dcrcouncil.org/CONVENTIONS/index.html.

QUESTION:

I am a loan officer, and a lot of my dairy clients are looking for ways to cut back in these tough times. Obviously all the easy cost cutting has been done, and now they are looking at their purchased feed costs. I have more of a crop production background, and may not understand this fully, but here goes! If they cut back on purchased feed, that would most likely be protein? Then milk production will drop. I am ok with that since milk is not really worth that much now, and feed is so expensive. But shouldn't there be a mathematical curve based on the cost of protein, price of milk, and the conversion of protein to milk ratio?
Similar to the cost of nitrogen, price of corn, and the conversion factor of nitrogen to more corn production?

Again, I may be way off, but this seems to keep coming up at my distressed farm call meetings. I do understand that by cutting production it would decrease the peak production until next calving, and the milk/feed ratio may change by then. But hypothetically this could be shown?

ANSWER:

First, as you say, most of the easy cuts have already been done. Other cuts are dangerous because those need to be carefully considered because of their production impacts. Yes, protein feeds could be revisited, but also I think energy feeds could and should be revisited.

From the point of view of proteins, we have an interesting spreadsheet called "Optimization of Income Over Feed Supplement Cost" (IOFSC) that you could download at http://www.uwex.edu/ces/dairymgt/tools/. This tool will find the maximum IOFSC at user-defined prices of energy and protein sources for a defined dry matter intake and maximum protein levels (according to rumen degradable protein and rumen undegradable protein). User enters prices of commodities and milk and can find the optimal levels of feeds by the click of a button. The tool takes care of all the implications of production when diets are reformulated and will always suggest the optimal level the usage of feeds.

We have also performed similar analyses to what you propose: a mathematical curve based on commodity cost, milk price and feed efficiency of commodity. The analyses are performed for corn and include in addition the feed efficiency changes that occur throughout the lactation curve, hence these feed changes also take into account the stage of the cows in lactation. We have online tools, a spreadsheet and documentation at this address: http://www.uwex.edu/ces/dairymgt/feeding.cfm under the name of alternatives to corn grain feeding.

We are also working on two other important projects under this area. One is the "Wisconsin Dairy Feed Cost Evaluator." With the support of County Extension Agents, we are collecting farm specific data of feed costs and income over feed cost in participating farms. The idea is to find out weaknesses and strengths of farms when compared with their peers. By benchmarking income over feed cost and particular commodity costs, producers are in better position to address and implement an educated plan of feed costs of production.

In addition, we are performing some analyses regarding the mid-term implications of feed cost cutting. You are right that with low milk price, the rationale would be to cut costs even to decrease milk production, which nowadays is not worth much. Right, when you are making a decision in the very short-term. What happen for example in a year period? We all know milk price is cyclical and although we may be going though an historical low, we expect that the milk price will recover. At that time the producer should take full advantage of the good milk price. Since the moment the price improves to the moment the farm reaches optimal production there will be a "lag" time during which the marginal return will not be optimal. For instance, consider this hypothetical example. Today: Milk $10, Feed $5 and 6 months from now: Milk $15, Feed $5. If farmer produces 70 lb/cow per day the IOFC will be $3.5 today and $7 6 months from now. What happens if a producer reduces its milk production to 58.3 lb/cow per day by decreasing the cost of feed from $5 to $4: the IOFC will still be $3.5/cow per day today, but it will be only $4.75 6 months from now, a difference of $2.25/cow per day. Now, let's suppose the farm will require 2 months to reach back 70 lb/cow per day production, then, there would be an opportunity loss of $135/cow for this period of time!

Please stay tuned as we keep working in this issue.

Regards,

Powerpoint Presentation and WORD document presented at the September 11, 2009 Ag Lenders Conference, Kimberly, WI.

http://cdp.wisc.edu/ppt/Ag%20Lenders%202.ppt

http://cdp.wisc.edu/pdf/John%20Dairy%20Case%20Study.pdf

Gary Frank and I are pleased to announce an update to the Cost of Production (COP)  papers titled "Cost of Production III". In this version we revisit the COP option of Per Dollar or Percent of Gross Revenue in addition to the other COP calcualtion approaches previously addressed. Also new to this discussion is the establishment of purpose for the information generated to guide the COP option decision of which approach to use.

Ken Bolton

Check it out!It is available at the UW Dairy Management Webpage: http://www.uwex.edu/ces/dairymgt/ : Management Tools
or directly at: http://www.uwex.edu/ces/dairymgt/tools/optigen.html

Hello Everyone,

We (V. Cabrera, K. Bolton, and P. Hoffman) are happy to report the release of a new tool to support decisions related to calves and heifers. Specifically, the "Cost-Benefit of Accelerated Liquid Feeding Programs for Dairy Calves" calculates the difference in costs and benefits of using accelerated feeding programs compared to conventional feeding programs. The online tool and its full documentation are available on my webpage: http://www.uwex.edu/ces/dairymgt: Management Tools. It allows the user to calculate the cost-benefit at weaning and at calving as well as the break-even milk amount needed to pay for calf and heifer feed.

We are planning to have  a booth display of it at the upcoming ANRE meeting in October where we will be available to discuss it. Check it out! and give us a haul if you have questions or comments.

Cheers!

The University of Wisconsin-Extension dairy calf and heifer management website hosted by Department of Dairy Science has been re-tooled to provide more information to Dairy Team members.  Research and Extension information from the Department of Dairy Science (Pat Hoffman), University of Wisconsin-Extension (Tina Kohlman) and the Wisconsin School of Veterinary Medicine (Dr. Sheila McGuirk) was merged to provide more dairy calf and heifer information in one place.  Check the updated website out at http://www.uwex.edu/ces/heifermgmt/

The USDA’s pay price for nonfat dry milk is being raised 12 cents a pound from $0.80 to $0.92 and its pay price for cheddar cheese is being increased 18 cents a pound for both blocks and barrels of cheddar. The price of blocks will rise from $1.13 per pound to $1.31 per pound while the barrel price will increase from $1.10 per pound to $1.28 per pound.

Increases in the pay prices from nonfat dry milk and cheddar cheese will boost the all milk price for farmers. The USDA estimates that dairy farmers’ revenues will rise by $243 million as the higher pay prices for nonfat dry milk and cheddar cheese translate into higher pay prices for raw milk.

According to data reported by the USDA’S National Agricultural Statistics Service, US dairy producers are currently about 15.5 billion pounds of milk per month. Thus total milk production over the August-October period should be around 46.5 billion pounds. So the additional $243 million of revenues earned by US dairy producers, as a result of higher pay prices for nonfat dry milk and cheese, will be spread across 465 million hundredweights of milk. This means the average per hundredweight earnings to producers will be slightly greater than 50 cents when higher pay prices are in effect for nonfat dry milk and cheddar cheese.

Normally the $0.18 per pound increase in the cheese price would be expected to raise the milk price by about $1.80 per CWT since it takes roughly 10 pounds of milk to produce a pound of cheese. But the USDA estimates the pay price for milk will only be rising by about $0.50 per CWT. This lower than expected rise in the price of milk is explained by the fact that the cheese price is not going to be rising the full 18 cents per pound. This is because because cheese price had not been down at the previous support level. So the increases in the support prices for blocks and barrels of cheddar will not have as big of impact on milk prices as one might normally expect.

There is no doubt dairy producers will be pleased to receive another 50 cents per CWT for milk. But it needs to be understood this small bump in milk price is not going to solve the cash flow and income problems of dairy producers across the US.

Attached is a paper that discusses the estimated cash flow positions of Wisconsin and California dairy producers.

2) A stochastic decision support system tool for dairy expansion

3) Livestock Gross Margin for Dairy Insurance under Different Feeding Strategies, and

4) The Economic Impact of Five Dairy Cattle Clinical Diseases as Measured by the Correlation between Lactational Incidence Risk and the Income Over Feed Cost in Wisconsin Dairy Herds (data for March-April 2009)

These are working-in-progress projects, which however may already have some useable information. An additional purpose of posting these artciles is to hopefully have some feedback on these projects.

You can access to these articles by visiting the UW-Dairy Management website at: http://www.uwex.edu/ces/dairymgt and click on the "Staff Resources" link under the red menu on the left. You will need to enter your UWEX logon ID and password to access this area. All articles are 2-page long word documents.