The economy for dairy farmers is certainly not very affirming at the moment and hasn’t been for several months. Well, actually this has been the case for the past three years and immediate improvement is not in sight.
Thus, several farms in the U.S., including Ohio, have gone out of business, especially a high level of exits in 2018. A little spirit lift has occurred with the Market Facilitation Program and passage of the new farm bill, but major improvements are needed in the marketplace before ease is found in the dairy industry.
On the other side of the farm scene, meticulous management is going to be needed to push through the tough economy.
We just experienced the annual holiday whereby we are told that the jolly old guy is checking his list, checking it twice. It is suggested that you check this list twice or more for determining where some efficiencies can be made on the production side.
1) Lactating cows. Maximize income over feed costs. What are your feed costs per hundredweight of milk? Generally, feed costs per hundredweight should be about 30 percent of milk price. However, given the low milk price, most farms have feed costs above this benchmark, often nearing 50 percent.
There may be opportunities for increasing milk price through higher fat and protein and lower somatic cell counts (SCC), but it must also be kept in mind that lower feed costs will not always increase income over feed costs because of the potential decrease in milk production.
2) Optimize reproduction. Target for a pregnancy rate of 24 percent or higher.
3) Optimize health. This item is very broad and can imply improving cow comfort and reducing disease. Improving cow comfort will not only improve the effective state of the cow but improve her health and milk production.
Facility ventilation may be a factor to address to reduce respiratory disease. Most diseases in lactating cows occur at or shortly after calving, so a general benchmark for most metabolic diseases is less than 5 percent.
Within the first 60 days in milk, death rate should be less than 2 percent and involuntary cull rate less than 6 percent. Achieving a SCC for the herd of less than 200,000 cells/mL improves cow heath, reduces treatment costs, and increases milk yield.
Dry cows: The average dry period should be between 45 to 60 days. Cows with extended days dry need to be checked for pregnancy and possibly even culled. Reducing days dry to 45 to 50 days can be worthwhile as long as your facility will support additional cows in milk above the typical 85 percent of the herd, plenty of forage is available for the milking herd, and cows are producing sufficient milk toward the end of their lactation to be paying for above the variable costs of milk production.
1) Optimize health. The two major diseases for calves are pneumonia and scours, which most commonly occur within the first two months of life. Careful management of the feeding and housing program are essential to minimize these two diseases.
2) Feed to optimize rate of gain for calving at 22 to 24 months of age. This means than a rate of gain between 1.75 and 2.0 should be targeted.
3) Feed costs. Feed costs do become quite important given that you are keeping that animal on the farm for almost two years before they calve. Feed costs typically account for about 50 percent of the cost of raising heifers.
Also, farmers should closely assess their heifer-to-cow ratio; a ratio of 0.85 to 1 heifer per cow will be sufficient for typical replacements rates on dairy farms.
Excess heifer calves should be sold within the first two-to-three months of age. These are just a few key areas to check in an attempt to reduce costs of production and improve animal performance.
It’s not an all-inclusive list, but these items are very important for remaining profitable during the upcoming months when tight margins are going to remain.
Maybe you want to add others, develop your own list. Set goals, discuss them with farm employees, and frequently assess if you are accomplishing your goals. Managing these goals during the year can result in an improved financial standing.
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