Occasionally, I talk to dairy producers about the financial aspects of operating a barn, aside from dairy nutrition. All producers wish to reduce their lactating feed costs. One producer I know wants to switch to a notorious cheap protein supplement, while another wants to hire a private dairy consultant and tender out all dairy feed purchases. Still another producer wants to buy a dairy micro-premix and build his lactating cow diet from the ground up. In all three cases, each producer did not know a detailed account of their current lactation dairy diet costs.
Knowing the average total daily feed cost is not by itself particularly helpful in reducing feed costs. Rather, it’s more valuable to have a detailed spreadsheet listing each feed ingredient — forages, grains, protein feeds, added fats, mineral/vitamin premixes and feed additives — and to how much each is fed to a lactating cow and what each ingredient costs, summarized to a bottom line.
Know your costs
By calculating daily feed costs for lactating dairy cows in this way, the dairy producer receives immediate payback as such:
- The initial spreadsheet is a starting reference from which future diet costs can be derived and compared.
- The cost of similar feed ingredients (re: different forages) can be compared.
- Market cost changes of feed ingredients can be updated at any moment.
- Formula and relevant feed costs can be updated, so respective costs to feed a lactating cow can be estimated.
- The value of specific feed ingredients can be justified, added, increased, decreased or deleted.
- Movement to another feeding regime can financially examined.
Besides, setting up a feed cost spreadsheet is simple!
Within 20 minutes, I pencilled out the cost of three lactation feeding regimes: 1. Protein supplement, 2. Dairy premix and 3. Dairy micro premix for dairy diets, all based on a lactating dairy herd of 160 DIM, 39 kg milk production, four per cent milkfat and 3.3 per cent protein. Note: the cost of each ingredient was based upon western Canadian regional feed prices.
The first thing I see is the bottom line of each feeding regime — $6.80 to $7.65 per lactating cow, daily. From this point, I can make my first assessments of these three different diets.
Real farm experience
This exercise parallels my own experience. I know a producer (operates a 200-cow dairy) who wanted to get away from his present dairy (macro) premix and move toward a micro premix in order to save on feed costs. Since I am familiar with his facilities (age of mill, number of bins and other storage space), I advised against this move based his own similar spreadsheet savings of about $0.14 per lactating head daily or a monthly feed savings of about $840.
Next, I can make more in-depth observations concerning the use of specific feed ingredients. For instance, the value of using palm fat and/or feed additives such adding direct-fed microbials (DFMs).
In the above case, the cost of adding palm fat constitutes about 15 per cent of this total dairy diet’s cost.
I recommend dairy producers in their own situations to give adding palm fat a second thought depending on where their current butterfat per cent stands. If their milkfat yield is already over 4.0-4.2 per cent without adding palm fat, then adding any palm fat might be an unnecessary increase in feed costs due to the “law of diminishing returns.” Similarly, I budget 50 cents for formulating feed additives into the diet of high producing dairy cows, only on the consignment that they produce tangible results such as adding yeast to the lactation diet to help combat heat stress.
No dairy producer should compromise good milk production/milkfat yield in favour of solely reducing feed costs. I believe that dairy producers should use any feed ingredient that contributes to optimum milk production, but also realize that there are limits to the financial reward of any feed ingredient. Common sense must prevail that neither the most expensive nor the cheapest ration for high-producing dairy cows is likely the most profitable.