Because feed makes up about half the total cost of producing milk, controlling feed costs is important regardless of milk price. Good feed cost control does not necessarily mean having the lowest feed cost because feed should be considered an investment rather than a cost.
If reducing feed costs results in a loss of milk, it is almost never profitable, whereas increasing feed costs if it increases milk component yields is often profitable.
Although there are several aspects of feed cost control this article will concentrate on only two: proper selection of diet ingredients and cow grouping systems. Cows do not require specific dietary ingredients, they require nutrients and some feeds provide those nutrients at a lower cost than other feeds.
Because most feeds provide multiple nutrients (for example, energy, protein and fiber) comparing the economic value of different feeds is complicated, but different tools are available to help. Every other month, OSU Extension publishes an article on feed costs in the Buckeye Dairy News (https://dairy.osu.edu/newsletter/buckeye-dairy-news).
The average cost of energy, protein and fiber in Ohio during that time period is calculated and presented. In addition, tables of “bargain” feeds and “overpriced” feeds are included. Bargain feeds provide energy, protein, and fiber at costs below average while overpriced feeds provide those specific nutrients at above average cost.
In December 2018, bargain feeds included corn grain, corn silage, distiller grains, corn gluten feed, whole cottonseed, expellers soybean meal and wheat middlings. Corn grain and corn silage are almost always considered bargain feeds in Ohio and are included in the vast majority of diets fed in the Midwest.
Distiller grains, corn gluten feed and whole cottonseed are also often bargains and incorporating them into diets can reduce feed costs. However, just because a feed is a bargain does not necessarily mean it should be fed on a specific farm; they have to contribute needed nutrients in a way that does not reduce milk yields.
Distiller grains and corn gluten feed may not work well in diets that already contain lots of corn-based ingredients. On the other hand if your diets currently contain soybean hulls, you may want to consider using wheat midds instead.
In December 2018, overpriced feeds included citrus pulp (Ohio is not known as a major orange growing region), canola meal, molasses, low protein soybean meal (44 percent protein) and whole roasted soybeans.
Some “overpriced feeds” are fed because they provide nutrients other than just energy, protein and fiber. Molasses provides energy, but it is also a good source of sugar, which can have more value than just energy.
Feeds that are considered overpriced can be a good fit in many diets; however, they should provide more than just energy, protein and fiber. Based on recent prices, if your diets contain whole roasted soybeans, you should consider replacing them with expellers soybean meal and maybe whole cottonseed.
If your diets have canola meal, consider replacing that with soybean meal. Feed additives can add substantial cost to diets and should be evaluated carefully. Effective additives can increase milk component yields or improve health and can be good investments.
The two most important criteria for evaluating a feed additive is its return on investment and how often it produces positive responses. A feed additive that has an average daily net return of 20 cents per cow sounds very profitable.
However, if it works only 50 percent of the time, half the farms that use it will be making about 40 cents per day and half the farms will be losing 20 cents per day. Ask the company representatives for both pieces of information.
Putting cows with similar nutrient requirements into groups and then formulating specific diets for those groups can reduce feed costs. University of Wisconsin researchers calculated that a two-group system (groups with above average and below average production) can reduce annual feed cost by about $38/cow compared to a one group system.
A three-group system (low, mids, and high cows) reduced annual feed cost by about $45/cow compared to a one group system. Because of the labor and management needed to make these systems work, a two-group system is likely the better choice.
For these savings to be realized, diets must be formulated correctly. All diets should be formulated to provide more nutrients than needed by the average cow in the group. For an average producing herd fed a single diet, the diet should be formulated for about 10 to 12 pounds more milk than that produced by the average cow.
But when cows are grouped into 2 or 3 production groups the degree of overfeeding can often be reduced to 4 or 5 pounds above group average. For cost savings to be realized by grouping, diets must be formulated closer to the average cow than would be done for a one group system.
Another grouping strategy that can reduce feed costs while maintaining or even increasing production is to group fresh cows into a single group. The diet for this group should be targeted specifically to fresh cows (up to three weeks after calving).
It might include specific feed additives and could have higher concentrations of expensive nutrients such as protein. Some feed additives work best when fed to fresh cows and a fresh group allows targeting additives to the cows most likely to respond.
To keep costs in check, however, cows cannot remain in this group beyond about three weeks post-calving. Another grouping strategy that does not reduce feed costs but often increases milk production which increases income over feed costs is separating first lactation cows from older cows.
To keep things simple, the groups could be fed the exact same diet, but research has shown that separating first lactation cows from older cows increases lifetime production. For any of these grouping systems to work, cows must be housed in proper facilities, pens should not be overcrowded, and the feed mixer needs to be sized appropriately.
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