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Hutjens talks dairy feeding economics at ISDA meeting

By Jean Caspers-Simmet

Date Modified: 01/27/2014 10:10 AM

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WAVERLY —If his presentation gave them a dime per cow, he would consider it a success, Mike Hutjens, University of Illinois emeritus professor and Extension dairy specialist, told Iowa State Dairy Association members at their recent annual meeting.

While farmers can't control the milk price, they can control the cost of dry matter and how they feed and manage their cows, he said.

Some feed ingredient prices will drop in 2014, but others like high-quality alfalfa are likely "to remain stubborn," Hutjens said. Chicago Mercantile Exchange futures show milk prices in the $18 per hundredweight area by May. Corn prices will stay in the $4.30 to $4.45 per bushel range and soybean meal will be in the $411 to $429 per ton range for the first quarter of 2014.

"We're going to see lots of milk in 2014 because the milk to feed ratio is as good as it's been in the last four years," Hutjens said. "If we're going to see more milk, we better sell it, and that's going to come through exports. For November/December, 17 percent of our milk solids left the country."

Hutjens said 2013 presented farmers with numerous challenges. More than 1.7 million acres of Midwest alfalfa winterkilled. A wet spring delayed corn planting, replacing alfalfa and cutting alfalfa. There were dry areas in August and September and immature corn in October. Despite that, corn production was up three billion bushels and soybean production was up slightly from 2012. For dairy producers who feed cottonseed, the crop was down, as were acres.

Lab analysis of 2013 hay and haylage shows fiber is lower in digestibility, Hutjens said.

"I'm hearing that production is down two to four pounds per cow in the Midwest," Hutjens said.

Producers used spring cereal grain, late-planted corn silage and fall cereal grain to generate additional forage. Other feed alternatives were corn stalks and straw.

Shredlage is receiving attention, but the equipment is expensive, Hutjens said. Before producers set aside kernel processing, they need to make sure they are doing the best job they can with their current silage harvesting.

University of Wisconsin research shows that 10 percent to 20 percent of silage samples received an excellent kernel processing score, 48 percent to 76 percent were adequate and 15 percent to 42 percent were poor.

"That means that 80 percent are not set up properly," Hutjens said. "It also means that those with an excellent score were getting two pounds more milk. Those with the poor scores were leaving four pounds of milk on the table."

Hutjens told farmers to test silage and manure to see if their silage has been processed properly.

"You should have less than 5 percent starch in your manure or you are leaving milk on the table," he said.

Every dairy farmer should own a Penn State Particle Separator or have access to one to make sure corn silage is processed correctly. There should be 10 to 12 percent in the top box, more than 50 percent in the middle box and less than 35 percent in the bottom box. If the TMR doesn't have these numbers, producers should add hay or straw to correct the ration.

"I'd question if every Iowa dairy should go to shredlage when we don't have our current technology working right," Hutjens said.

Farmers need to make sure that they aren't giving up milk, Hutjens said. A pound of dry matter should cost 12 cents. With a milk price of 20 cents per pound and good cows producing two pounds of milk per pound of dry matter, farmers are looking at 28 cents profit per cow per pound of dry matter. Making sure fat and protein are where they should be can provide additional profit potential.

Hutjens calculates 2014 feed prices of $4.50 per bushel corn, $45 to $50 per ton corn silage, $250 per ton alfalfa hay, $400 per ton for soybean meal and $200 per ton for distillers grain. He uses the prices to build a feed benchmark of $6.18 per 50 pounds of dry matter. At 80 pounds of milk, that is $7.73 per hundredweight feed costs with $11.27 income over feed costs and 1.6 feed efficiency.

All dairy producers should know their feed costs and if they're hitting the benchmark, Hutjens said. They should know their feed efficiency, and it should be 1.5 or more.

Hutjens urges farmers to use FeedVal 2012, a computer program developed by the University of Wisconsin. The program allows producers to use local prices and select nutrient values. They can get to the software spreadsheet at Select tools, select feeding and click on FeedVal 2012.