Leave No Profit Behind

3/3/2014 6:30 AM
By Rick Hemphill Maryland Correspondent

Expert Talks to Dairy Farmers About Maximizing Profitability

FREDERICK, Md. — “I’m going to give you 10 or 11 ideas and hopefully one or two of them will stick.”

That was Michael Hutjens’ goal speaking to attendees of this year’s Maryland Dairy Convention.

A professor emeritus in the Department of Animal Sciences at the University of Illinois, Hutjens challenged and pushed attendees of the dairy convention to review their farming operations to not leave profitability on the table.

“Dairy farming is a business. It may have been a way of life 30 years ago and a great way to raise a family, but now it is a business and we have to treat the dairy farms as a business,” he said. “This is the third time I have been back to this conference and this is all about profitability. We want cows that will make more money and I will challenge you here with some ideas you may think about.”

Hutjens said he’s been criticized in the past about pushing production so hard on dairy farms.

“I have been criticized that if we increase production, all you are going to do is lower the price of milk,” he said. “I can’t control what the crooks in California do; all you can do on your farm is make the right economic decision for your farm.”

In his 45 minute talk, Hutjens highlighted benchmarks farmers should focus on if they want to maximize profitability on the farm. Most of his information comes from Midwestern dairy studies.

“A pound of dry matter is 12 cents and every dairy farmer should know that number because you are a business,” he said. “That is a pretty important cost number as 1 pound of dry matter should produce 2 pounds of milk. So based on the Chicago exchange price for Class III milk, your profit is 32 cents per cow per pound of dry matter.”

An Illinois case study on improving milk fat and protein by even the slightest margins was something he highlighted in his talk.

“I would argue that if you have Holsteins, you should be looking at milk components of 82 percent of protein vs. fat as a benchmark,” he said. “This is DHIR data, and why is that important? If you, your nutritionist and veterinarian can figure out how to get that number back up to 82 percent for Holsteins and 78 percent if you have Jerseys, that will give you an extra 54 cents profit.”

There are more ways to pick up that extra profitability on a farm. Hutjens recommends adding sugar to the dairy ration.

“Ten university studies from 2004-09 show that with 4 to 6 percent of sugar as total dry matter, you will get a 0.16 pound increase in fat — from 0.04-.022 pounds — worth 29 cents per hundred and a .106 pound increase in protein — 0 to .26 — worth 44 cents, and together that is another 70 cents per hundredweight profit,” he said.

Hutjens made it clear that he’s not a fan of raising all replacement heifers simply because of the feed costs.

“You are paying up to $4 per day for each heifer that is not milking,” he said. “So the quick is that in the 22 months it takes to get a heifer to milking age, all you get is manure. It will cost you $2,200 to raise the heifer and you can buy them for $1,600.”

Hutjens thinks producers should also be genomically testing heifers to figure out “who the good ones are.”

“I want to find my best cows and put sexed semen in them so I have the best chance at getting a heifer. Using sexed semen was pretty hot several years ago, but now it’s pretty slow going,” he said. “So the question is: Should you be using sexed semen? You should breed your bottom third producers to beef bulls to get an extra $150 for a bull or heifer calf. I’m not sure you Jersey guys will benefit, but the Holstein breeders will.”

Hutjens also stressed the benefits of feeding amino acids to increase milk yield by up to 5 pounds per day in early lactation.

“I would certainly feed that amino acid to Jersey cows cause I want that 3.7 or 3.8 of milk fat,” he said.

The fecal starch rating determines the digestibility of the feed. Hutjens said every one unit of fecal starch in manure translates to about six-tenths of a pound of milk.

“That milk is stolen by your manure. If you are getting over 4.5 percent of fecal starch in the manure, your feed is not being completely digested,” he said.

But even with all of his suggestions on improving dairy profitability, Hutjens said the “100-pound gorilla” on dairy farms when thinking about maximizing profitability is reducing the amount of feed shrinkage.

“I have made some assumptions, but it costs about $6.50 in feed per cow per day, and at an 8 percent shrink — and I think that is a gift — raises the cost to $7.06. If you have a bunker and are not using Silostop for an oxygen barrier or some other product, you are leaving a lot of money on the table,” he said. “Capture that 25 or 50 cents any way you can. Every 1 percent increase in your forage NDFD (neutral detergent fiber digestibility) translates into 1.8 pounds of milk. More fiber makes that rumen happy, and that means more milk.”

And while there are a variety of rumen additives available, Hutjens challenged farmers to know what they are feeding and at what level.

“Know your numbers. There is a linear response to Rumensin. If you don’t know that number, ask your nutritionist what you are feeding,” he said.

On raising calves, Hutjens thinks accelerated liquid feeding programs are a “no brainer.”

“The results are in and something is going on, for that calf will give about 1,100 pounds more milk once she calves. We are going to feed 2 percent of the calf’s body weight as dry matter in a whole-milk or milk-replacer liquid diet. You have to do this in the first 60 days; sorry you missed it because you can’t go back and do this once the calf is 4 months of age,” he said.

A 90-pound Holstein calf, he said, needs around 28 pounds of dry matter solids at 26 percent crude protein, costing a dairy farmer $50 more in feed costs. Even though a dairy farmer will have to spend more in feed costs, “in 22 months you pick up 1,100-1,600 pounds more milk,” he said.

“Under thermal neutral conditions, if she came in at 90 pounds at 5 or 6 weeks of age, she will go out the door at 180 pounds, and that is double the birth weight. I always feed whole milk to my calves and that runs about 2 gallons per day.”

The thought of grouping cows in a dairy is somewhat controversial. But Hutjens thinks farmers can build a cheaper ration by having different cow groups.

“If they are making less milk, they can eat less dry matter, and that can save you $1.50,” he said. “My sample creates a ration for 85-pound, 76-pound and 41-pound producers, and I am looking at just old fashioned nutrition without supplements. But when I move cows from the high group to the lower group, you will lose about 2 pounds of milk a week. With $22 milk, I can take about a 3-pound hit and break even.

“The data is pretty clear, and you really want to separate the springing heifers from the older cows and put the timid cows in there as well. Michigan State data says that I can get 4 or 5 pounds of milk more by just putting them in their own group,” he added. “About 10 to 15 percent of my cows that may be problem-breeding cows or cows that had a tough challenge during their lactation would be in the low group. Low-producing cows are metabolically different from high-producing cows, and it is heavy duty biology having to do with starch and insulin receptors.”

When it comes to breeding, Hutjens said not doing it on time can cost a farmer money.

“For each one day longer a cow stays open reduces milk yield by 0.2 pounds per day,” he said. “If your days open should be 180 and now its 200, you have 4 pounds of milk laying on the table because we could not get a cow pregnant.”

At the other end, keeping a cow in production too long, he said, is inefficient, as feed efficiency and production goes down after about 180 days.

Paying attention to lameness in cows is another thing Hutjens said farmers should pay close attention to.

“Every dairyman in this room should be having a lameness score,” he said.

When it comes to somatic cell counts, Hutjens pointed to data from Wisconsin that shows that even reducing the minimum somatic cell count score by 1 point can result in another 2 pounds of milk.

“And some are pushing for that score to be at 50,000 with less than 1 percent of lactation cows in the mastitis pen. That is a challenge,” he said.

When it comes to the future of dairy farming, Hutjens sees farms getting bigger and smaller farmers struggling to survive.

“Farmers milking less than 50 cows are going to have a hard time competing as some of our milk companies want larger amounts of milk. We have a company in Illinois that won’t be very interested in coming back if you don’t have a semi-load of milk each time,” he said. “The profit margins are going to be squeezed and there are a few wrinkles in the new Farm Bill that provides some opportunities. But the big challenge of course is how to get more milk per cow. Right now, we are at a great time, but that too will change.”<\c> Photo by Rick Hemphill

Mike Hutjens

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