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Tips to weather the milk price storm

Insights

While dairy farmers are all too aware of the financial strain their businesses are currently under, there are still some issues to look at, which might help alleviate some problems. Katie Jones gets some expert tips.

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Examine costs

The two biggest costs of dairy units – feed and heifer replacements – should be examined, says Bryn Davies of Advanced Nutrition.

 

When it comes to heifers, Mr Davies advises not carrying any ‘excess’ and says look at selling them instead.

 

“Target first calving at 22-24 months, use sexed semen on maiden heifers and bull 25 per cent of cows for replacements with the remainder put to the beef bull for increased cash flow.”

 

Mr Davies says producers should ensure they do not fall into the trap of least cost rationing, as the end result will be no concentrate fed.

 

“You must balance rations to minimise feeding excess nutrients and maintain a body condition score of 2.8. You should also challenge all things which are stopping cows eating 1kg dry matter more, as 1kg feed is worth 2.3 litres of milk, which is a 17p cost against a 50p return.”

 

Challenging marginal litres

Bryn Davies says you can improve milk quantity by:

 

  • Improving dry matter intakes
  • Protecting rumen health
  • Maximising digestible energy available to each cow
  • Cleaning feed troughs every day
  • Pushing feed up 10 times a day
  • Coating trough floors in epoxy resin
  • Taking waste feed to heifers
  • Checking head rails are at least 1.3m (51in) from concrete to rail
  • Checking cows each have 610mm (2ft) trough space

Clamp management

According to Bryn Davies, this can be optimised by:

 

  • Keeping the pit face clean to minimise heating and lost nutrients
  • Leaving no forage on the floor for tomorrow
  • Targeting best forage at best cows
  • Evaluating forage accurately and making sure you challenge cows to give you what it is worth. Good silage should supply 10 litres production (25-30 per cent production)

 

culling passenger cows

Culling passenger cows

When prices were high, the focus was on maximising production, producing marginal litres and keeping as many cows as possible.

 

According to Promar consultant Andy Taylor, this meant cows which should probably have been culled were kept.

 

He says: “On many farms, there will be cows which are costing the business, so it will make sense to review the future for these cows.

 

“High cell count and chronic mastitis cows will have disproportionately high veterinary and labour costs as well as acting as a source of infection and extending milking times. In some cases, they will be depressing milk price further.

 

“Cows which regularly go lame are another source of loss. It many cases, it will make better sense to remove these cows from the herd.”

 

Mr Taylor says barren cows should be sold sooner because they will provide a welcome boost to cash flow as well as reducing costs.

 

“Sorting through cows and moving out problem animals will provide a source of income and help cut many costs. In addition, staff will have more time to focus on the remaining, more productive cows.

 

“It is highly likely by reducing herd size, the remaining cows will milk better due to more space, better access to forage and more management time.”

 

Analyse silage

Regularly reviewing the diet based on a recent silage analysis will help ensure cows perform to their potential, according to Roy Eastlake from Biotal.

 

“Accurate rationing is crucial to make the best margins you can and the foundation of this is knowing the quality of the silage you are using.

 

“If you underestimate silage quality, you may end up feeding more concentrates than required. Overestimate it and cows will underperform and you run the risk of health problems. Regular analysis, which usually costs you nothing, can avoid these problems.”

 

He says grass silage can vary considerably from cut to cut and field to field. Maize silage quality will change during winter as the degradability of starch increases, meaning more starch is available to the rumen microbes in the cow. It is important you know the starch degradability of the maize you are feeding.

 

Mr Eastlake says if degradability has increased, it should be possible to reduce the levels of other starchy feeds in the diet, therefore saving money. If starch levels are not adjusted, there will be an increased risk of acidosis and the problems associated with it.

 

Mr Eastlake says: “Analysing all forages monthly will allow you to balance diets and help support margins.”

Keep up with vet visits

While accepting cost control is a high priority on many dairy farms, Genus ABS technical services consultant Alex Garnett says working closely with the vet is still a valuable investment.

 

He says: “Getting cows back in-calf quickly should still be a priority and regular fertility visits can help make sure this happens. If they are worthwhile when milk prices are good, I would argue they are even more important when margins are squeezed.”

 

Timely identification of open cows provides the opportunity to take action to ensure cows are bred as soon as possible.

 

Regular visits to pregnant cows allow vets the chance to diagnose cows, assess cows not in-calf and look at problem cows, such as those not seen in heat. These visits can play a key role in improving the number of cows in a herd which are pregnant sooner.

 

Setting targets is key – 50 per cent or more of the herd pregnant by 100 days in milk is an achievable target. And similarly, 75 per cent or more of a herd pregnant by 150 days in milk is a good benchmark.

 

Mr Garnett says: “Following a set procedure for submitting cows for examination can help reduce the losses due to poor fertility and missed opportunity. Each cycle saved due to veterinary intervention is worth more than £100, so benefits can soon outweigh cost.” 

Beware of cost cutting

While every dairy farmer is rightly trying to minimise spending, beware of a cost cut which risks being uneconomic in the long-term.

 

Duncan Forbes, Kingshay managing director, advises comparing a number of quotes, but also says avoid making decisions just on price.

 

He says: “This particularly applies where a premium product is saving you money or giving you more for your money. It might be a premium teat dip seems expensive, however, switching to one which is cheaper but of lower quality, for example, with less emollient, might prove a false economy if mastitis cases increase. Just one extra case of mastitis can cost £284.”

 

Mr Forbes says good quality forage seed can be a good investment. “Kingshay maize data shows premium varieties, which might cost £50/hectare more, produce a higher yield worth £230/ha more than the average of the varieties farmers responding to a survey actually chose last year. The potential gain from some premium varieties can be as much as £400/ha.

 

“However, it is important to take control of spending plans and look at budget and cash flow, even if this is not the normal routine. It is likely to show a big reduction in profitability and maybe a loss.

 

“It allows the situation to be managed and conversations to be held with bank managers, who are more likely to support businesses which are taking control of their financial affairs, preparing forecasts and benchmarking costs, than those who wait until they run out of cash.”

Business position

By looking at herd performance on a monthly, weekly and even daily basis, Hefin Richards of Profeed Nutrition Consultancy says dairy producers can keep an eye on their business’ current position.

 

He says: “Look at milk sold and unsold, for example, and multiply this by your milk price to give you your total daily output/value, then calculate daily feed costs for the herd.

 

“The next step is to look at what individual cows are contributing and whether culling criteria should be altered to aid efficiency and cash flow. Trimming cow numbers by removing the least efficient animals is the best option for many herds.”

 

Mr Richards advises reviewing ‘actual’ feed use against the intended ration.

 

He says: “This way, you can identify ways of minimising losses or ‘shrink’ as the Americans call it.”

 

Mr Richards urges dairy producers not to compromise cow health by removing products such as rumen buffers. “While this may seem like an immediate and easy fix, moves such as this may prove to be counter-productive if cows edge towards acidosis.

 

“Equally, foot health is a long-term and ongoing issue, so reducing foot bathing or foot trimmer input is likely to lead to increased problems, costs and loss of output going forward.”

 

Feeding

Hefin Richards says:

 

  • Check and calibrate mixer wagon and parlour and/or out of parlour feeders – an hour spent doing this can reap significant savings
  • Strive to increase forage intakes – with good forage stocks on most farms, extra intake offers the opportunity to reduce concentrate inputs or increase milk output. Feeding twice a day, feed bunk management and regular push-ups will all contribute to this, as will excellent clamp management and feed presentation
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