Many dairies across the country are still feeding contracted or stored-on-farm feeds and forages. It’s a blessing given the upheaval in feed markets in the past months. Even so, those contracts and stored feeds will run out as the year progresses.

During the April 6, 2022, Hoard’s Dairyman DairyLivestream, Dairy Nutrition and Management Consulting’s founder, Steve Martin, detailed some of these feed stresses and encouraged dairy farmers to look specifically at the cost of the ration per pound of dry matter.

“The good point is that, as we’ve talked about, up until now milk prices have covered this, and I’d say that all of our clients at this point pretty much have the pedal down to make as much milk as possible,” Martin explained.

“Many of the rations we’re doing today, we’re still using contracted feed prices in our models so those are going to run out in the next three to six months,” he continued. “Certainly, I think no one would have stuff contracted past September except for feed that may be stored on farm.”

As these contracts expire and stored feed gets used, Martin recommended a multiple-decimal approach to nutrition. In other words, looking with a detailed perspective at opportunities to cut cents per pound of dry matter consumed by the cows.

A detailed approach

“The reason we have to look at cost per pound of dry matter in a multiple decimal approach is that going up 1 cent per pound of dry matter is 55 cents added to the feed cost on an average Holstein eating 55 pounds of feed,” Martin shared.

Conversely, some of the ingredient cost upticks in the past several months have spelled a 10-to-12-cent uptick in costs per pound of dry matter. While it’s impossible to predict the future of feed prices, most analysts anticipate elevated feed prices are not fleeting.

“When we talk about feed cost changes and we’re managing rations and trying to find opportunities to save feed costs, a lot of times we get really excited about some great idea we came up with for a client that’ll save 4, 5, or 6 cents per cow,” Martin said. “When you take those 5 or 6 cents per cow that we’re normally playing around with and trying to look for advantages, you might say that simply costs per pound of dry matter going from 10 to 12 cents adds over a dollar to total feed costs, it just dwarfs the normal advantages that we’re looking for.”

Attention to these details will be crucial as farmers adjust to higher feed prices, particularly if we see milk prices fail to keep pace with ingredient cost increases.

To watch the recording of the April 6 DairyLivestream, go to the link above. The program recording is now also available as an audio-only podcast on Apple Podcasts, Spotify, Google Podcasts, and downloadable from the Hoard’s Dairyman website.

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The next broadcast of DairyLivestream, “Will dairy demand hold throughout 2022?” will be on Wednesday, April 27 at 11 a.m. CDT.

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