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Where are all the cheap byproducts?

Shane Holt for Progressive Dairyman Published on 06 February 2018
Potato waste is piled for mixing with the TMR

When milk prices are low and the dairy economy gets tough, we all look for ways to cut costs. The feed ration is often one of the first places we turn.

Twenty years ago, feeding local byproducts really helped keep ration cost down. Most of the time, you could find something someone was looking to get rid of so they wouldn’t have to haul it to the landfill. You could purchase it at next-to-nothing and have an instant feed cost savings.

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This seems to be harder to do today. I have many of my customers asking, “Where have all of the cheap byproducts gone?”

Before we delve further into this question, let’s take a step back for a short quiz. Read through the following questions, and make a note of what you think the answers are.

1. Which of these protein sources is a byproduct?

a. Soybean meal

b. Corn gluten feed

c. Canola meal

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2. Which of these fat sources is a byproduct?

a. Cottonseed

b. Corn dried distillers grains

c. Bakery waste

3. Which of these fiber sources is a byproduct?

a. Almond hulls

b. Soyhulls

c. Beet pulp

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As you may have noticed, these are actually trick questions. Every answer listed is actually a byproduct or a co-product. All these ingredients result from processing commercial crops, the food-processing industry and the milling industry. Due to differences in milling facilities and protocol efficiency, there can be considerable variation in feed value for byproducts.

For example, dried distillers grains with solubles is a co-product of the ethanol industry. Nutrient content for dried distillers grains with solubles can vary greatly depending on the grain source and process used for ethanol and dried distillers grains with solubles production. As a result, the crude protein content has been shown to range from approximately 25 percent to as high as 50 percent.

In the last 30 years, much research has been done to characterize the nutritional contribution of individual byproduct feeds to ruminant animals. Society is becoming more environmentally conscious and, as the motto of “reduce, reuse, recycle” has gained recognition, more and more companies have realized that what used to be waste now has a value.

Not only can they reuse and recycle byproducts to reduce their overall waste output, those very things that used to take up space in a landfill can add profit to their bottom line. These byproducts are no longer viewed as waste. They have been researched, analyzed, catalogued and marketed.

Byproduct feedstuffs are no longer a cheap replacement for “the good stuff.” They have become ingredients in their own rights, priced based on the market value of the ingredient they used to be an inexpensive replacement for.

While this is good news for both the environment and the companies that produce these ingredients, it has become a real challenge for dairy producers who are struggling to find ways to shave precious dollars and cents off feed costs without sacrificing nutrition and, ultimately, herd health and production.

In light of this new reality, it has become increasingly important to look at feeding a ration that brings the most profitability as opposed to feeding the cheapest ingredients that can be found. This approach takes a little more time and effort, but it is possible. It takes science-based creativity and the willingness to look at and challenge the overall value (not just the price) of every ingredient we put into the ration.

It’s time to stop asking where the cheap byproducts have gone (because they are mostly gone) and start asking the questions that lead to the perfect balance between the highest performance at the least cost that makes our dairy the most profitable.

Do we have and understand current nutritional test information on the ingredients to ensure every dime we put into feed gives us the nutrient-based return we believe it will? Is every ingredient filling a dietary need of the cow? Are the physical attributes of our TMRs lending themselves to optimal digestion? Do we have proper particle size so the energy we are feeding stays in the rumen long enough to be utilized?

Is our physical effective fiber providing peak rumination time? Dairies need to feed ingredients that make the most money, and all of these factors contribute to the value of the ingredient.

As I work closely with producers to answer these questions, we are able to find areas where money can be saved without sacrificing profit. The opportunities for savings are as varied as the dairies, but one of the key performance indicators I measure for all of my herds is component efficiency.

When we look for opportunities to save money on the ration, I always calculate the potential impact to the fat and protein components within their milk. Maximizing production of these components is critical to maximizing the dairy’s profit margin and absolutely essential in tough economies.

Many nutritionists have ration formulation software that can evaluate a wide range of ingredients in real time, providing the ability to maintain a consistent supply of nutrients that will keep herd production high at the best ingredient cost.

Some software systems can project the impact of multiple diet scenarios, making it easier to analyze the impact of different ingredient changes on both component production and ration cost. These are great tools to help maximize the true value of a ration.

At the end of the day, the ultimate goal of the ration is to fuel production and positively influence the dairy’s profit margin. Instead of asking your nutritionist, “Where have all of the cheap byproducts gone?” ask them which ingredients can provide the most value to your operation.

My goal as a nutritionist is to deliver my clients a ration that supplies the nutrients needed to improve component efficiency and herd profitability. Right now margins are small; efficient, consistent, healthy cows that produce high amounts of milkfat and protein are crucial. As we continue to raise the ceiling on component production per cow, consistent high-quality feeds will be key to driving efficiency and profitability.  end mark

PHOTO: Potato waste is piled for mixing with the TMR on a dairy in southern Idaho. Photo by Lynn Jaynes.

Shane Holt
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