University of Illinois Extension

Illini DairyNet Papers

Managing High Feed Costs
Mike Hutjens, Extension Dairy Specialist,University of Illinois, Urbana
07/20/2007

Bill called last week; his feed costs were a concern. He asked if I could look at his ration for his Jersey cows and comment on alternatives and strategies. A summary of Bill's feeding program is listed below (actual dairy farm in the Midwest). Some values are missing (such as the level of each feed ingredient and nutritional profile), but the information is useful to make decision and comments.

Bill's Feeding Information

Feed costs are 9.5 cents per pound of dry matter
Feed costs is $4.47 per cow
Feed costs per 100 lb is $6.28 (converted to 3.5% fat corrected milk)
Cows have not ketosis in the last 10 cows and hit the road running
The herd is averaging 60 lb of milk containing 4.8% milk fat and 3.5% true protein.

Hay is raised and priced at $100 a tonHaylage is priced at $44.70 a ton
Corn silage is priced at $24 a ton
Ground corn is priced $163 a ton
Roasted soybeans are priced at $288 a ton
Protected fat costs 9 cents per cow
Protected amino acids cost 14 cents a cow
Probiotic pack cost 13 cents per cow
Buffer cost 5 cents per cow
Organic trace minerals costs 4 cents per cow
Mycotoxin binder costs 3 cents per cow
Biotin costs 1.2 cents per cow

Looking At Each Feed Ingredient and Value

Let's evaluate each of Bill's feed ingredients he has decided to include in his ration. We will assume the ration is balanced and macro-minerals (such as salt and calcium) are included (not listed).

Feed cost per pound of dry matter at 9.5 cents per pound of dry matter is one cent per pound higher than normal for Jersey cows. Holstein guidelines are 7.5 to 8 cents per pound. Jersey herds typically are one cent per pound of dry matter higher due to lower feed intake and the need to build more nutrient dense rations.

Feed cost is $4.47 per cow converts to a feed cost of $6.28 per 100 pounds or cwt of 3.5% energy-corrected milk base. This benchmark is modestly high also (target value is $5.75 per cwt). The formula for energy corrected milk is pound of milk times 0.323 (19.4 pounds for Bill's herd) plus pound of milk fat times 12.82 (36.9 pounds for Bill's herd) plus pounds of true protein times 7.13 (14.9 pounds for Bill's herd) resulting in 71.2 lb of 3.5% energy-corrected milk.

Feed efficiency was calculate to be 1.52 pounds of 3.5 lb of energy corrected milk per pound of dry matter (calculated by dividing feed costs per cow by 9.5 cents per pound of dry matter—both reported by Bill). A feed efficiency over 1.5 is excellent.

Hay and haylage prices are modestly low (no forage quality values were reported). We use a value of 90 cents per point of relative feed value (150 RFV times 0.9 equals $135 a ton for this quality hay/haylage). Bill has a great buy or he is not charging market prices for his hay/haylage raised on his farm. Bill's prices reflect that his crop enterprise is profitable.

Corn silage at $24 a ton is low. Based on Illinois research, the factor for standing corn for corn silage vs. corn grain is 8 (one ton of corn silage valued on an as fed/wet corn silage basis contains 8 bushels of corn). Using this approach, Bill's corn silage could be valued at $40 a ton at 33% dry matter including shrink and harvesting charges. Price of corn silage: (8 times $4 a bushel for corn + $4 a ton to chop and store silage) time 10% for shrink. For Bill, his corn silage is calculate as (8 x $4) + ($4) + ($4) = $40 a ton.

Ground corn at $163 a ton is 8.1 cents a pound or $4.54 a bushel (high, but it is market price including grinding and transportation costs).

Roasted soybeans at $288 a ton is good price using FeedVal 3 (computer software program) based on current oil/fat and rumen undegraded protein content in roasted soybeans (roasted soybean quality should have a protein dispersion index of 10 to 15 units).

Protect fat at nine cents represents one quarter of pound of a commercial product. This product is "on the bubble" as it is relatively expensive, the level of fat in the ration is not known (roasted soybeans are included), and must be evaluated for its role on health and reproduction.

Protected amino acids also are "on the bubble" based on the methionine status. This decision must be based a rumen model program. Bill's Jersey cows are milking well with solid components which may reflect the value/need for this product.

Probiotic product could be removed as it is a 13 cent investment. Bill and his nutritionist must decide why the product is included based on research results. As probiotics continue to be studied, we will need to pinpoint the bacteria type, number or organisms needed, viability of bacteria in the storage and in the ration, cow response anticipated, and handling characteristics.

Buffer at five cents would remain in the ration as high milk yield is occurring and wet silages are included. Check to be sure 0.75 percent of the total ration dry matter is fed as sodium bicarbonate (an adequate amount to impact rumen response).

Organic minerals would be maintained. Check the level of each organic mineral being supplements (milligrams of zinc, copper, and selenium).

Mycotoxin binder at three cents per cow per day could be remain in Bill's based on the evidence of mytoxin in the silages. Molds can be present in haylage and corn silage depending on type of storage (bags or bunkers), environment risks, and feed bunk stability.

Biotin is a recommended to remain in the ration due to biotin's role increasing milk yield and improving hoof health. A price of 1.3 cents seems low; double check the level of added biotin (15 to 20 mg per cow per day).

In Summary

Bill's Jersey herd is experiencing great health, solid milk yield, optimal feed efficiency, and desirable components. Bill may not want to make any changes as few concerns are occurring with his current ration and higher feed prices. Several strategies are listed below for Bill and his nutritionist to consider.

Point one: Bill's forage costs are low, but we will not change these plus we do not have the level of dry matter being fed. His feed costs are actually higher than listed.

Point two: Corn and roasted soybeans are good choices along with buffer, organic trace minerals, and biotin.

Point three: Protected fat, protected amino acid, and mycotoxin binder represent 26 cents per cow per day. These are tough calls! These nutrients and additives can be important to maintain cow health and performance, but represent six percent of feed costs (could reduce feed costs to $5.77 per cwt).

Point four: Removing the probiotic product at 13 cents per cow per day is another alternative.

These are challenging times. Good cows convert expensive feed to profitable levels of milk. Nutrient requirements do not change with the higher feed prices. Dairy managers and nutritionist must look at each feed ingredient and decide its nutritional impact and economic cost. If the ration was "right" last year, it should be right in 2007 even though the cost is $1.10 per cwt of milk higher. The good news, milk prices are increasing.