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By Kirk Arnold NODPA Board Co-President
"A dollar saved is a dollar earned" as the saying goes. Unless it's not. I've been seeing much about cost cutting and feeding less grain with the high feed prices this past year. It makes me worried about being overly cost conscious and not margin conscious. (The sticker shock for a load of high protein feed can be real.)
I don't quite agree with the idea of spending less if what you're spending the money on has a quick and positive return. Soybeans, for instance, have been the most volatile of the organic feeds the past couple of years.
On our farm, we have strategized how to feed less or even possibly eliminate feeding soy in our dairy ration. We didn't chop any corn this year so that we don't have to make up for the low protein forage. We did our first cutting a week earlier than normal to try and make sure we hit our haylage protein and digestibility goals. We came in just under our 20% CP goal.
Even with these changes, I've found we still need a little added protein in the ration and the added milk in this case more than offsets the added cost. In our case, feeding about two pounds per cow of roasted soybeans has a positive return and a quick payback time and turning that one dollar into something more than one dollar. This is with the current prices for organic soy softening as of late. Had I spent this dollar on $1700-1800/ton soy, it would have been about a wash.
One projection I always like to look at is expected pounds of milk per pound of grain fed and then use this to figure out how many pounds of milk it needs to make to pay for itself. I then watch production after the ration change to make sure it pans out as expected. When adding or subtracting protein in the ration, we see a very fast milk response in our herd when compared to energy changes. Sometimes the expectation can be pretty far from the actual result.
In summation, even if prices are high for certain inputs, it's all about the margins and knowing your true costs and returns on those costs to know if that "dollar saved is a dollar earned" or if that dollar not spent actually just cost you $1.30 off your next milk check. One last thing to always be sure to think about in these calculations is finance charges. If you're paying interest on the dollar spent, that has to be accounted for.
Kirk Arnold, Truxton, NY, 607-842-6631
Posted: to Industry News on Thu, Jan 26, 2023
Updated: Sat, Jan 28, 2023