High feed costs are shrinking dairy farm profit margins even with $20 milk prices.
Increasing demand for ethanol and exports is driving corn prices higher. Higher corn prices are also driving soybean, cottonseed and nearly all other feed prices up. While nobody is certain how high corn and soybean prices will climb in 2008, controlling feed costs, especially on farms that purchase most of their feed, is becoming increasingly important, says Paul Dyk, Fond du Lac County Extension dairy and livestock agent. According to Dyk, one of the easiest ways to lower feed costs is to control feed losses or "shrink."
"If you bought a semi-load of hay," Dyk asks, "did you end up with 23 tons of hay in front of your cows or did you lose 5% to 10% of it or more?"
Dyk says it's not uncommon for many dairy producers to be looking at 20% shrink.
The best way to control shrink is to first measure shrink on your farm. If you have a bin that is going empty, let it run out and refill it.
"If you put 20 tons of protein in the bin, for example," he says, "see if at the end of the week you used 20 tons of protein or can you only account for 18 tons?"
How does shrink happen?
Moving feed from the commodity shed to the mixer with a skid loader or putting more protein into the mixer than is necessary accounts for most shrink. Driving over feed and allowing feed to blow away are two more common culprits.
Dyk suggests premixing commodities and minerals for a two- or three-day supply and storing it in a separate bay in the commodity shed.
"That's a much more accurate way to mix feed and it will reduce shrink on many farms," he says. "That's why feed companies pre-mix vitamins and trace minerals in order to get more accurate mixes. The same can be done on farms."
Remixing feed doesn't work when it's hot outside, but it works nine months of the year, Dyk notes.
You may not prevent all shrink, "but if you can save 5% off the top, that's something to think about."