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Trickle effects of high dairy feed costs

Farm Progress photo dairy cattle
FEEDING HEIFERS: Feed costs during the first quarter of 2021 were substantially higher than at the same time in 2020 and 2019. These costs reflect market prices for both forages and grains, and if you have limited land and buy in your heifer feed, your costs might be a lot higher this year.
Getting prefresh heifers off to a good start is crucial to help offset high feed costs.

The feed costs for dry cows and heifers can affect cash flow as much as the lactating cow. And this is especially true if forage inventories are lacking.

Feed costs per non-lactating animal can be very close to what the market is reflecting. This is due, in part, to feeding both purchased forage and grain. Examining feeding strategies for all animal groups is warranted considering the continued high feed costs this year.

The first quarter showed substantially higher feed costs compared to the same period in 2019 and 2020.

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These feed costs reflect market prices for both forages and grains.

It’s not unusual to see feed costs close to market prices for dairies with limited acreage because they purchase most of their feed for dry cows and heifers. Based on financial assessments conducted by the Extension dairy business management team, about 15% of total feed costs, including forage and grains, are devoted to the non-lactating animals. Even though this is not a big amount, it can affect total cash flow and profitability.

Rations fed to dry cows are critical to preparing for the next lactation. Transitioning to the lactating cow ration requires feeding similar forages and grains in the two- to three-week period before calving.

If ensiled forages are limited or not fed, and dry cows are receiving mainly a hay-based diet, this could make the fresh cows more susceptible to metabolic problems and sluggish in reaching peak milk production. It’s not only the direct feed cost that can negatively affect cash flow, but also the ripple effects on animal performance in the first 100 days in milk.

Time is money

There are two major milestones for the dairy heifer: Breeding age and age at first calving.

Improper nutrition that results in short, fat heifers or skinny heifers can delay heifers getting pregnant, which then delays the age at first calving. If heifers freshen past 24 months of age, there is the additional feed cost before she starts generating income.

Like the dry cow scenario, it’s not just the high feed cost that affects profitability, but the potential for poor animal performance at freshening. Heifers should be averaging more than 60 pounds of milk in the first 40 days in milk. If that goal isn’t being met, you should evaluate the heifer enterprise for bottlenecks.

There are direct and indirect implications of high feed costs for dry cows and heifers. Beyond the obvious purchased feed costs, there are the indirect effects of relying on purchased forages and grains, and the possible shortcuts on feeding with limitations on quality and quantity. Herds that have competitive costs of production usually have very efficient cropping and heifer enterprises.

In today’s economy, it is no longer enough to just evaluate the whole farm. The other enterprises can make or break a dairy operation’s cost of production.

Monitoring feed costs

This must include an economic component to determine whether a management strategy is working. For lactating cows, income over feed cost is a good way to check that feed costs are in line for the level of milk production.

Starting with July 2014’s milk price, income over feed cost was calculated using average intake and production for the past six years from the Penn State dairy herd. The ration contained 63% forage consisting of corn silage, haylage and hay. The concentrate portion included corn grain, candy meal, sugar, canola meal, roasted soybeans, Optigen and a mineral vitamin mix. All market prices were used.

Also included are the feed costs for dry cows, springing heifers, pregnant heifers and growing heifers. The rations reflect what has been fed to these animal groups at the Penn State dairy herd. All market prices were used.

Take a look for yourself:

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Note: March’s Penn State milk price is $18.07 per cwt; feed cost per cow is $8.16; average milk production is 84 pounds.

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Ishler is an Extension dairy specialist with Penn State Cooperative Extension.

Source: Penn State Cooperative Extension, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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