In this dairy climate, the appeal of capturing the “easy money” items on a dairy is strong. And in some cases, it truly is easy money. But more often than not, these moneymaking or saving endeavors are harder to attain than they seem.

Let’s take a look at a popular one on farms — feed shrink.

Shrink is defined as the loss of an asset that cannot be used to generate revenue. Feed shrink can be categorized as any feed ingredient that loses quality or doesn’t reach the cow.

Commonly, this number has been placed around 15 to 20 percent on farms. Let’s say that another way: For every $100 spent on feed, $15 to $20 of it never makes it to the cow.

Virginia Cooperative Extension Agent Kevin Spurlin from Grayson County gave this advice for recapturing lost feed shrink dollars.

“Unlike reducing the cost of a ration as milk prices decline, which may negatively affect production and income, reducing shrink losses has virtually no downside,” he said.

That being said, an important place to start finding this easy money is to calculate the farm’s current shrink numbers. Although that’s a nearly impossible proposition to nail down perfectly, a farm can get a sense for it.

Spurlin went on to highlight common shrink averages for forages and other stored ingredient losses. When discussing forages, silage bunkers can have around 15 percent shrink, silage piles can reach 20 percent shrink, and bags or upright silos tend to have losses around 5 percent.

In the case of other commodities, storage in sheds can result in 8 percent loss while those stored in bins are around 3 percent.

Efforts to minimize shrink should also be considered before implementing strategies. How much extra labor will it take? Is a new storage facility warranted? How much can and will be saved?

Shrink is a huge opportunity on farms. During these tight financial times, can you capture the “easy money?”

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(c) Hoard's Dairyman Intel 2018
August 20, 2018
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