Brad Oldick, Ph.D., Dairy Nutritionist
As poor economic conditions continue for dairy producers, more of them are asking questions about feeding on-farm commodities. I have had this question resurface on several midsized dairies with high producing cows (average 85 lb+); these dairies had made the decision in the past not to switch to on-farm commodities for one or more of the reasons listed below. These can serve as a starting point for discussion when this question is asked.
- Cash Flow – During poor economic times, cash flow can become more important. To get the best pricing for on-farm commodities, large loads of commodities with large price tags will need to be delivered. As the number of commodities on the farm increases, this problem increases.
- Inventory Cost – Just about every industry, from feed to appliances to clothing, has tried to decrease their inventory during the current economic downturn. Inventory ties up cash flow and is expensive. You must consider opportunity costs vs. returns. Having $10,000 in commodity inventory may not be the best use of this money.
- Shrink – This should be monitored and controlled. Monitoring can simply involve a pen and paper or, for larger dairies, may involve computer software (e.g., Feed Watch, TMR Tracker, etc.). To control shrink, money may need to be spent for proper storage and feed mixing (e.g., bins, windbreaks, commodity sheds, rodent control, etc.).
- Ingredient Variability – To maintain top performance in high producing herds, a quality control program for on-farm commodities is a must. Many commodities will vary in their nutrient content and to ignore this will ultimately result in overfeeding or underfeeding essential nutrients. Samples should be taken regularly and variation monitored and accounted for in ration formulation. How many producers buying soybean meal today believe that this is 48% protein this year?
- TMR Mixing Variability – The more individual ingredients that are going into a TMR at the mixer wagon, the more opportunities for mixing errors. A general rule of thumb is to add not more than 5 ingredients at the TMR wagon. When several ingredients are being mixed at the farm, grains should be premixed into a supplement before adding to the TMR. Some dairies see nice increases in consistency and production by premixing forages for the day before starting to mix the final TMR’s.
- Equipment and Labor Cost – Savings from using on-farm commodities can be diminished significantly when considering the extra time it takes to mix feed, the wear and tear on equipment, fuel costs, etc. Estimate these for each individual case and include them in your analysis.