Strategies For Dealing With High Dairy Feed Prices

What are some strategies we can utilize/reinforce to assist our dairy customers with feed prices?

1.  Raise high-quality forages. The top strategy for minimizing purchased feed costs every year is to optimize the
yield and quality of forages. High-quality forages will:
• Maximize dry matter intake and milk production, leading to greater profitability and reduced supplement costs.
• Allow higher forage diets to be fed.
• Maintain higher rumen pH’s and improve rumen health.
Be vigilant in calculating forage inventories and in estimating forage needs for your dairies so that we do
everything in our control to maintain a consistent diet.

2.  Make maximum use of home-grown feeds to reduce out-of-pocket feed costs.
• Forages, as stated in item #1.
• Grains such as corn, wheat or barley. If the growing season was good in your area this year, excess corn may
be available to be harvested as dry grain, high-moisture corn or snaplage.
• Soybeans

3.  Control feed shrink on the farm.
• Silage losses can be huge during storage and feed-out. Forages are worth more than ever with high feed prices,
so anything that can be done to minimize losses will be huge. During harvest, make sure bunker silos are packed
quickly and adequately, cover silos ASAP after filling, and maintain good face management to reduce losses
during feed-out. The use of a quality silage inoculant such as our  Silage Supreme 3X products has a tremendous
payback, now more than ever.
• Store higher priced ingredients in bins to control shrink.
• Consider the use of feeding management software such as TMR Tracker™ to manage inventories and improve
feeding accuracy.
• Control feed refusals by minimizing overfeeding. Cows should be fed for a maximum 3% refusal, particularly in
lower-producing groups.
• Frequent monitoring and adjustment of silage dry matters is critical!

4.  Utilize more stringent culling practices on the dairy. Understand your breakeven and income over feed costs
(IOFC). We don’t want extra mouths to feed that aren’t paying their way.

5. Reformulate, reformulate, and reformulate to search for the most cost-effective nutrients.  Make full use of our
dairy formulation programs (NDS) to formulate the most cost-effective diets for your dairy customers. Make sure
that you are taking full advantage of our ration balancing tools and not overfeeding expensive nutrients such
as protein. Are there economical alternative ingredients available in the area such as wet brewer’s grains, wet
distillers grains, or whey? You must utilize our programs to determine the most cost-effective sources of nutrients
within a diet. NDS also allows us to dig deeper into farm economics and IOFC.

6. Scrutinize all ingredients in your diets, particularly feed additives.  Feed additives can easily add 15¢ to well
over $1/cow/day in feed costs. Are all of the additives necessary during these tough economic times? Take the
opportunity to review these products with your dairy customers and either reinforce why the additive is in the diet
or make the decision to pull it out for now. Ingredients like Kent Natural Yeast and NutriVantage for dairy have a
positive ROI associated with them. If other additives are not guaranteeing a positive ROI, eliminate them.
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7. Do your best to feed cows according to milk production. If feeding a TMR, this may be something as simple as
moving away from a one-group TMR system to multiple TMR’s based on production. If cows are individually fed,
do your best to properly feed the higher-producing, early-lactation cows that provide the best return, and don’t
over feed low-producing cows.

8. Optimize the production of milk components. Throughout our trade area, dairies are paid for pounds of milk
components (fat and protein) that are shipped. Milk fat tests below 3.5% are unacceptable, even during summer
heat, so make sure we are feeding for adequate milk fat production. Milk protein production is best maintained
through amino acid balancing, particularly looking at methionine supplementation. Also keep in mind that there
are some definite seasonal variations in milk component production, both fat and protein.

9. Don’t skimp on dry cow diets. Poor dry cow diets can reduce milk production in the succeeding lactation by 1000-
1500 lb. A strong transition cow program is the springboard to a productive lactation, so don’t cut corners when
feeding dry cows, particularly the close-up dry cows. Anything that can be done to minimize metabolic disorders
such as milk fever, ketosis, retained placentas and displaced abomasums results in a great return on investment.

10. Control milk quality. The SCC limit for shipping Grade A milk is 750,000 cells/ml (U.S. PMO). Most milk co-ops
offer some sort of premium for low SCC milk and/or low bacteria counts. However, there are also direct and
indirect costs of high SCC. The direct costs are antibiotic therapy and milk withholding to treat clinical mastitis. The
indirect costs are due to the fact that whenever SCC for a cow exceeds 100,000 cells/ml, milk production losses
are 1.5 lb/cow/day for every doubling of SCC. And of course, there is the cost of culling cows for mastitis or high
SCC, which often times are higher-producing cows. NutriVantage for dairy is research-proven to lower SCC, and
may be worth evaluating in the diet.

11. Improve cow comfort. Do your best to improve cow comfort and help cows achieve their genetic potential for milk
production. Some of these items are relatively simple and have little to no cost.
• Manage heat stress in lactating and dry cows during warmer times of the year. This includes things such as
increasing water availability during high temperatures; providing shade over housing areas, feed bunks and
holding pens; improving ventilation with the use of fans in the holding pen, over the feed bunk, and in free stalls;
and potentially cooling cows with water through the use of sprinklers in the holding pen or over the feed bunk.
• Minimize the amount of time per day that cows spend standing idly, such as time spent in the holding pen
awaiting milking or time locked in headlocks or at palpation rails.
• Make sure stall surfaces are bedded comfortably to improve lying time and minimize hock abrasions.
• Improve footing surfaces to minimize wear and tear on hooves and improve traction.

12. Have frank discussions with your dairy producers about current feed costs and how to weather these tough
economic times.  Decisions about the inclusion or removal of feed additives and the use of alternative ingredients
in diets should involve the producer and evaluation of their ROI. You may make a formula change that would reduce
pellet quality in order to save on feed costs in the short term, but the producer needs to be involved in that process.
While these discussions aren’t fun, it can be a good opportunity to build a stronger relationship with the customer.
Be proactive in having these discussions with your customers or else a competitor may beat you to the punch.
Some of these strategies may not apply in your area, but this is an opportune time to be proactive with your
customers.

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