The Art of Controlling Feed Costs

With today’s sophisticated and high-powered ration balancing programs, it would seem dairy farmers and their nutritionists could take the art out of feeding and rely solely on science.

But stuff happens. Nutrients vary from book values. Feed tests give a more accurate analysis of nutrient content, but can vary due to variation within the feed pile and sampling errors. Then, poor feeding mixing can compound those errors. And if cows are over-crowded or bunks left empty, timid cows are left to scrounge for the remnants of a once-precisely balanced ration.

Optimizing feed intake to achieve the highest income over feed cost is dependent on a whole host of factors: Feed costs, ration balancing, mixing and delivery, grouping strategies and minimizing feed shrink.

To control feed costs without reducing production means addressing all of these issues, says Bill Weiss, a dairy nutritionist with Ohio State University. He spoke this spring at the Professional Dairy Producers of Wisconsin Business Conference in Madison.

Feed costs. “Dairy cows do not require feeds; they require nutrients,” says Weiss. “Feeds are just packages of nutrients.

“So you need to ask the right question: What combination of feeds will give you the best return, or income over feed costs?” he asks.

As such, cows can utilize a variety of feeds. To reduce feed costs, farmers need to pay attention to both the cost and the feed value of commodities, working them into rations as costs, availability and practicality change. Ohio State provides monthly updates on changing feed values. It plugs these values into its SESAME program, which then values each commodity based on its nutrient content. Go here to find the updates: https://dairy.osu.edu/newsletter/buckeye-dairy-news

These values change as market prices change. So what may have been a bargain last month, based on the energy, fiber and protein value of the feed, might be over-priced this month. For example, in March, bakery by-products, corn grain, corn silage, distillers dried grains, feather meal and gluten feed were all considered bargains. But feeds such as alfalfa hay, beet pulp, citrus, 41% cottonseed, fish meal, 44% soybean meal and tallow were considered over-priced.

Farmers need to pay attention to these relative price changes to ensure their ration costs remain competitive, says Weiss. On the hand, factors such as local availability, variability, quality and palatability also have to be taken into account.

“For example, feather meal might be a bargain but sometimes has quality problems,” says Weiss. Soybean meal might be considered over-priced, but it’s very consistent in quality versus distillers grain, he notes. And making frequent, rapid ration changes can also depress feed intake. So farmers and nutritionists have to be continually evaluating when and where a lower-priced commodity might fit into their rations.

Group cows. If you’re currently not grouping cows, consider it. If you are grouping, do you have enough groups—or too many? Grouping allows you to better tailor rations to the group you’re feeding. This means you can target nutrients where they’re needed, increasing income over feed costs through better milk production. It also allows you to cut back on nutrients where they’re not needed, increasing income over feed costs through lower costs.

The benefits of grouping are lower feed costs, perhaps better body condition scores and better forage inventory management. The costs include increased labor for feeding more group TMRs, more pen moves and the social costs of that movement, more management time and perhaps more feed inventory separation. 

The most profitable separation is first-calf heifers and older cows. When first calf heifers are housed separately, they’ll increase lifetime production. The reasons are four-fold:  They won’t have the social stress of being housed with older cows so there will be fewer aggressive interactions, they’ll eat more total feed, eat more meals per day which aids rumination, and they’ll lie down more.

“You see these benefits even when cows and first-calf heifers are fed the same diet,” says Weiss. One study also suggests separating heifers from older cows even while grazing will result in higher milk production in the heifers, says Weiss.  

For older cows, how many groups you have might depend on how your facilities are laid out. But he urges farmers to consider separating fresh cows for the first three weeks. Fresh groups have a very different milk/dry matter intake ratio than cows later in lactation. They eat less, which means you have to balance rations differently to ensure they still get essential nutrients. You can also target more expensive feed additives to this group where they might have the most benefit.

A smaller fresh group also allows for more intense observation, the implementation of health monitoring protocols and even 4X milking. Understocking the fresh pen also helps ensure adequate bunk space and more frequent meals, which in turn encourages higher intakes. If possible, Weiss recommends feeding the fresh group twice a day to ensure feed is fresh and palatable. 

“Beyond that, I think two groups based on milk production is usually enough, unless late lactation cows are still getting too fat,” says Weiss. Going to two groups typically shows a gain of $40 per cow in income over feed costs. Going to a third lactation group offers just marginal increased returns.       

Diet formulation. Diets must be balanced based on each group’s milk production and dry matter intake. “But diets should never be formulated to meet the needs of the average cow,” says Weiss. How much you over-formulate depends both on milk prices and feed costs. If you have cheap feed and high milk prices, over-formulating has the most potential benefit. If feed is expensive and milk is cheap, some over-formulation is still necessary so top cows in group are fed adequately.

“And the less certainty you have in your feed analysis and TMR formulation, the more you have to overfeed to prevent drops in milk production,” says Weiss. His rules of thumb:

            •For energy, you can balance rations pretty near the average for the group. If you want the group to gain body condition, the rule is to balance for 10% more than the group average. “In any case, monitor body condition score and adjust if necessary,” Weiss says.

            •For metabolizable protein, the maximum over formulation is  average milk yield plus one standard deviation above. “If the pen’s dry matter intake is 58 lb and the pen’s average milk production is 90 lb, feed enough protein for about 104 lb of milk,” Weiss says.

            •For minerals and vitamins, feeding 1.2X National Research Council recommendations works pretty well. Note: With Vitamin A costs up four to five times this year, you may need to prioritize. “Don’t go to zero. If necessary, prioritize first pre-fresh cows, dry cows, early lactation and then lactating cows,” he says.

Reduce shrink. “Shrink is always expensive and often preventable,” says Weiss. “Feed that is wasted costs the same as feed fed.”

If a ton of dry matter feed is $100, 15% shrink means the actual cost of that feed is $118. If shrink rises to 20%, the cost jumps to $125/ton.

Another way to think about shrink is to consider a 7,000-ton corn silage bunker. At $40 per ton, that’s $280,000 worth of feed. If 20% of it spoils however, the feed cost rises to $50 per ton and you’re left with 1,400 tons of spoiled, unusable material that you’ll have to spend even more money disposing. Do everything you can to minimize shrink including bunker management and proper storage for hay and commodities.