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Three options to improve your dairy bottom line now
Dairy producers remain challenged by market conditions that are well beyond their own control, and many continue to push the pencil to stretch budgets. Mike Hutjens, professor emeritus of animal sciences at the University of Illinois, provided dairy producers three key take-home messages they could implement immediately to boost their milk check.
Speaking at the 2020 Illinois Dairy Summit regional meeting in Freeport, Illinois, he told a packed room that, while challenges remain in the dairy industry, producers can use these three strategies that will see clear bottom-line benefits.
Option 1: Build your milk check
The first question to ask is if your herd is meeting the breed average when it comes to milk fat and milk protein. “How many pounds of solids are you getting?” Hutjens asked. “That could impact what you are doing the first 40 days or in the transition diets. You need to ask yourself if there is an opportunity to clean that up and boost milk solids.”
Taking advantage of milk premiums is always a sound strategy. Hutjens says the December values for milk fat stood at $2.20 per pound and milk protein at $3.65 per pound. The profit potential, assuming 75 pounds of milk per cow, is 20¢ per point increase in milk fat, and 29¢ per pound increase in mild protein. In addition, in Illinois there are premiums for milk quality (78¢ per cwt) and for not using rBST (35¢ per cwt).
Option 2: Marginal dry matter intake
Dry matter intake has a direct impact on milk production.
“For a Holstein cow, the first 13 pounds of DMI is for maintenance, every day. And when they stop eating (lameness, heat stress, overcrowding), that can have a direct impact on milk production,” Hutjens says. “The last pound of dry matter consumed by the cow can support 2+ pounds of milk. With a pound of dry matter costing 10¢ and 2 pounds of milk worth 35¢ (at 17½¢ per pound) the profit potential is 25¢ per pound of dry matter, or per cow per day."
Option 3: Feed efficiency
Getting the most out of every pound of feed is imperative, and producers need to closely monitor how efficiently their cows are converting feed to milk. “This is leaving dollars on the table,” Hutjens says.
Using the pounds of 3.5% FCM (fat-corrected milk) divided by the pounds of dry matter consumed, a high group of mature cows have a feed efficiency of greater than 1.7, while a low group may be at 1.2. A feed efficiency of 1.3 means 54 pounds of dry matter per day, a feed efficiency of 1.4 means 50 pounds of dry matter intake per day, and a feed efficiency of 1.5 means 46.7 pounds of dry matter per day based on a 70-pound production average.
“The savings per day between a feed efficiency of 1.3 and 1.4 (70 pounds of milk per day and 10¢ per pound dry matter) is 40¢, and from 1.4 to 1.5 is 33¢ per day,” he says.
While 2020 looks better in terms of milk price projections, producers should continue to monitor their herd to ensure optimum efficiency, Hutjens says.