Milk the money-makers
With the current low margins, more emphasis needs to be placed on the factors that impact dairy farm profitability. Dairies should milk as many profitable cows as possible to maximize the milking parlor – without exceeding the capacity to take care of cows.
With that in mind, dairy producers need to evaluate the profitability of the individual milking cow.
In a recent income over feed cost (IOFC) benchmarking program of herds fed by Vita Plus, we determined the breakeven milk production of a late-lactation cow. We assumed she was eating 3 percent of her bodyweight, which equals 45 pounds for a 1,500-pound Holstein. As such the breakeven point of this cow is 37 pounds of milk.
Here’s the formula we used:
Dairies need to milk as many profitable cows as possible – as long as their facilities and management can still effectively meet the needs of the whole herd – even if some of those cows have minimal profitability. For example, a cow might only have a breakeven IOFC of $0.25, but she should be kept in the herd until she is either dried off or can be replaced by a cow with a higher IOFC.
Once a cow’s daily milk production is below breakeven, a decision needs to be made about her. Unprofitable cows need to be removed from the herd by culling or drying off early. The risks of early dry-off need to be evaluated as do the feed costs for a dry cow. Cows with low milk production and few days carried calf should almost always be culled.
Taking dry cow feed costs into account changes the breakeven formula to an “early dry-off formula.”
For cows we know we are going to keep, early dry-off breakeven milk production is much lower.
Once a dairy has determined it is milking the maximum amount of cows – and only profitable cows – other factors that improve profitability should be thoroughly investigated. The priorities for producers right now should be:
- Plan to put up high-quality forages. Small grain silage harvest is approaching quickly with first crop haylage right behind it. Harvesting these crops at the optimal nutrient content can dramatically impact purchased feed costs this summer and fall.
- Plan for summer heat stress. Make sure that fans and sprinklers are in good repair. Prioritize heat abatement systems in the holding pen, lactating pens and transition pens. Also consider adding water access in the return alleys.
- Ensure water cleanliness. Milk is 86 to 87 percent water and high-producing cows need a lot of it. Provide plenty of water access and have a strategy to clean water troughs at least on a weekly basis.
- Evaluate cow comfort. High-producing cows want to lie down 12 to 14 hours a day. Give her that opportunity by making sure stalls are comfortably sized and bedded.
- Identify other bottlenecks on the farm that rob profitability and focus on improving those areas. Examples of bottlenecks are excessive shrink, transition cow health, cow foot health and reproductive performance.
About the author: Stacy Nichols is a Vita Plus dairy technical specialist. He grew up in northwest Illinois and finished high school in northeast Georgia. He received his bachelor’s and master’s degrees in dairy science from the University of Georgia. Nichols was the herdsman at Mississippi State University’s Bearden Dairy Research Center from 1994 to 1996. He then returned to Georgia as the herdsman on a private 350-cow dairy. Since 1997, he has been involved in the dairy feed industry on a local, national and global level. Nichols has considerable experience in transition cow management, nutritional modeling and amino acid formulation. He and his wife, Melissa, have eight children and reside in northwest Indiana.
Milk production and components