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Small changes can make or break profitability of dairy operations

Kelli Boylen for Progressive Dairy Published on 30 September 2019

During the last 20 years, many dairy farmers have seen their profit margins reduced even though they’re producing more milk.

Jim Salfer“Pounds of milk per cow does not automatically mean more profit,” said Jim Salfer, dairy extension educator with the University of Minnesota.

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Salfer and Jenn Bentley, dairy specialist for Iowa State University, shared input about the little things which can make or break a dairy operation at the Four-State Dairy Nutrition Conference, held earlier this year in Dubuque, Iowa.

Colostrum management, transition cows

“Colostrum sets the stage for a cow’s entire lifetime production,” Bentley said about the most profitable cows. “And your transition cow program has the biggest impact on her peak milk.”

Colostrum is much more than just antibodies. “Colostrum is the most important management factor for calf health and survival,” Bentley said. “And good colostrum management results in increased milk production later in life.”

Jenn BentleyShe said a calf should receive 150 to 200 grams of immunoglobulins (IgG) during its first feeding. Immunoglobulins are the large proteins found in colostrum that contain antibodies providing the calf’s immune system during the first few months of life.

“A dairy producer cannot visually look at colostrum and know the quantity of immunoglobulins, but they can use simple on-farm tools such as a colostrometer or Brix refractometer,” Bentley said. “If the reading comes back with at least 50 grams per liter IgG, the producer can then feed three to four liters to adequately supply the antibodies. If the colostrum is of lesser quality, then alternative colostrum (frozen or bagged) should be used.”

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Calves should be fed 10% to 15% of their birth weight within two to four hours of birth. Feeding, freezing or pasteurizing colostrum immediately is very important as the bacteria count can double in just 20 minutes. Colostrum bacteria counts should be less than 100,000 colony-forming units per milliliter (cfu/ml). If calf health is an issue, samples can be taken by the herd veterinarian to determine bacteria load in colostrum and/or handling equipment.

Transition cow programs need to look at many different factors, Bentley said, including optimal cow comfort, a low-stress environment, feed and resting space, reduced social stress, labor efficiency and safety for cows and people.

“If you are working with existing facilities, priority should be given to feed access,” she said. To maximize dry matter intake in transition cows, 30 to 36 inches of bunk space need to be allotted for pre- and post-fresh cows, compared to 18-24 inches for dry cows and 24 inches for milking cows. If your dry cow facility is at 80% stocking density or less, dry cow feed access space can be reduced down to 24 inches.

Bentley said at 30 days in milk (DIM), producers should ideally be culling less than 4% of fresh cows, and by 60 DIM, the cull rate should be 6% or less. “Death loss is often an issue with less profitable farms,” Salfer said.

Milk sales and milk value per worker

The most profitable operations are the ones that sell the most high-value milk per employee, Salfer said. He suggests calculating pounds of fat plus protein or energy-corrected milk rather than just milk per cow. “Successful farms are also efficient with labor, producing high amounts of milk per worker,” he said.

According to the numbers Salfer has analyzed, the top 40% of the most profitable farms produced an average of 1.73 million pounds of milk per full-time worker; the bottom 40% for profitability produced 1.48 million pounds of milk per full-time worker. The production levels per cow were similar on most of the farms.

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Labor cost is second only to feed cost on a dairy operation. “Increased labor productivity equals increased cow productivity,” Salfer said.

Farms that have the right equipment and well-trained workers (family or hired) allows people to complete their tasks efficiently and rapidly.

Profitable farms also have facilities that allow people to complete their tasks with a minimal number of people in a timely manner. Examples include headlocks, well-positioned gates and drovers lanes. Barn designs allow efficient delivery of feed and bedding and manure removal. The feed centers are also designed to minimize a lot of moving equipment between locations, with easy access to feed ingredients and a logical flow of equipment.

Investing in equipment such as post-dip sprayers, robotic milkers and auto-sort gates also can increase labor efficiency. But he suggested producers do their homework first to know if they will get a good return on their investment.

Labor turnover is a hidden cost many farm managers overlook. Bentley cited an example of a farm with 20 employees making $10 to $12 per hour and a turnover rate of 10% is losing $75,000 to $90,000 annually with searching, hiring and retraining new employees.

Bentley noted the importance of training people well enough so that they could work somewhere else, but treat them well enough that they don’t want to.

She stressed the importance of orientation and onboarding as part of the hiring process. Good job descriptions and analysis is very important.

Ration dry matter and feed costs

Salfer said higher-profit farms generally have lower feed costs. Feed shrink is a hidden cost because it is feed that was paid for, but the cows never consumed. Keep watch for inaccurate weighing, mixing of ingredients and chop length. Managing the bunker face, removing moldy feed and monitoring dry matter content at least weekly can also add up to decreased feed costs. Dry matter testing should also be done when the weather changes and when opening new bags or bunkers.

“Determining dry matter content of forages is important. When balancing rations, changes in dry matter content of feed can result in over or underfeeding of nutrients,” Bentley said.

Optimize reproduction

Reproduction rates which are less than optimal can also have an impact on the bottom line. “If your pregnancy rate is not at least 22%, you need to be working on it,” Salfer said.

Culling for reproductive issues is the single-highest reason cows leave the herd, Bentley said. If producers are able to reduce the number of cows culled for reproductive reasons, lameness or somatic cell counts, they can instead cull for low production.

Other reproductive benchmarks on the operation should include:

  • A heat detection rate of more than 65%
  • A conception rate of more than 35%
  • Cows pregnant by 150 DIM 70%
  • Lactating herd confirmed pregnant more than 50%
  • Cows culled for reproduction at less than 5%.

Manage heat stress

Bentley said recent studies have shown that heat stress on dry cows has more of an impact than most people realize. Calves born from dams which experienced heat stress have lower birth weights and compromised transfer of immunity from mother to calf. “Heat stress conditions at conception or late gestation will reduce daughters’ future milk production,” she said. “Cooling cows during late gestation is effective to lessen impacts of heat stress in calves.”

Salfer said the rules for dairy operations being profitable have changed over the decades. In the 1960s and 70s, hard work was enough. In the 1980s and 90s the focus was on high-quality forage and then milk quality. In the 2000s the focus was on cow comfort, and now the last decade has been reproduction. He said he believes in the next decade being profitable will require a focus on labor and asset use efficiency.  end mark

PHOTO 1: Jim Salfer

PHOTO 2: Jenn Bentley

Kelli Boylen is a freelance writer based in northeast Iowa.

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