It is now standard operating procedure for dairy producers to think about shrink in silages. This consideration is related not only to economics but is also important for inventory management. On a well-run dairy, the cost per ton of silage is always figured on the shrunk silage inventory. I think the industry currently gets an A or A+ grade on this practice.
A bad report card
The same report card for how our industry thinks about shrink on feed ingredients other than silage is probably more like a D+. It should probably be an F, but since producers know it exists and we use this general knowledge at some level in decision making, we barely get a passing grade.
Why the difference? We have complicated spreadsheets to calculate shrink on silages but rarely invoke even the calculator on our phone to consider the impact of shrink on grains, by-products, supplements, and mineral mixes. I expect some shrink considerations are given to stored dry hay but not with the precision dedicated to silage management. We can do better.
Dollars to dust
We are all aware of the dust that is created in and around a commodity mixing area on a dairy farm. I was at a farm recently and saw a large loader bucket of bulk-delivered and stored calcium salts of fatty acids. Though I knew the product was dusty and contained more fines than I would like, I must admit I was shocked at the dust cloud that enveloped the entire loader for several seconds after dumping the powdered fat into the mixer wagon. I looked at the dairy producer and said, “Goodness! That stuff costs $1,300 per ton! Is it always that dusty?”
Mineral-vitamin supplements can be equally dust prone. These ingredients, like the fat, are often some of the most expensive cost-per-ton feeds in the mix. When helplessly watching a giant dust cloud form around the mixer and loader as an expertly formulated product is loaded, I wonder if all the most expensive and important nutrients are the ones that are blowing away! Who could ever know?
Another example was from a dairy where dry grains such as corn and soybean meal, along with a powdery fat supplement, were premixed to improve accuracy and efficiency of loading. This mix had some liquid ingredients included, but when it was scooped and loaded, the dust still appeared. How can we keep this from occurring? What management strategies can we put into place at the farm level? We will have to go back to the drawing board.
A different type of shrink
To add a layer of complication to this dry feed shrink issue, let’s consider a term that I will call differential shrink. The concept here is to perhaps do a little estimation math that might describe the different shrink risk inherent to different ingredients. We can do this by looking at both ends of the spectrum from high-cost, high-risk shrink to low-cost, low-risk shrink.
An example of high-risk, high-cost shrink would be an ingredient like soybean meal, a powder that has a high cost per ton and a high feed rate per cow. An example of lower risk, low-cost shrink might be beet pulp pellets where the cost per ton is more moderate and the feed rate is lower. Nothing makes a nicer pellet than beet pulp!
The concept is to try and look at shrink risk based on three things. First, what are the physical properties of the ingredient? Is it powdery? What is the particle size and density? Loose soy hulls or wheat midds perhaps best describe this type of risk. The second consideration is feed rate. If you take a high-feed-rate ingredient, the resulting number of tons at risk of shrinking during a period of time would be higher. The third consideration is cost per ton of the ingredient. Some very low-cost by-products have an inherently high shrink risk, but feeding the ingredient might still be workable due to the lower cost of the lost product.
Consider the cost
When combining these three concepts into a “variable shrink-risk factor” we can then do some math on the details and manage the risk. I accomplished this in a spreadsheet to demonstrate the differences. In doing so, it was immediately apparent that when making choices about what to purchase for building rations, these things matter.
I suggest we take these variable influences, including inherent shrink tendencies, feed rate, and cost, and consider the combined impact of these on a per-cow per-day basis. The simple way to do this is to create your own spreadsheet or use a tool in the formulation software to include an estimated shrink percent for each individual ingredient on your farm. Then, when considering these ingredients via manual formulation, or even better, optimization, the cost will be correctly accounted for in the final total feed cost. This approach is better than taking the total feed cost and applying estimated global shrink to inflate the base cost to an actual cost that includes feed ingredients that were purchased but never put in the mixer.
On a per cow basis
When building my own tool for shrink evaluation, I made a few interesting observations. I wanted to note these because they may not be immediately intuitive.
The first of these is comparing two different processing options for corn grain. Depending on your geography and corn basis, corn can be moderate in price between cheaper by-products and more expensive protein supplements. Let’s consider ground corn to have a higher shrink risk than flaked corn when considering loss to wind and dust. These two ingredients also have a dry matter percentage differential of perhaps 4 points. And lastly, there is usually an approximate $5 per ton as-fed upcharge for the flaking process.
If we measured or estimated that ground corn would have a 10% shrink and flaked corn only 5% using a feed rate of 12 pounds of dry matter per cow, the unshrunk cost to feed the higher quality flaked corn is 9 cents per cow. However, when considering the shrink differential, the additional cost per cow to feed the often-preferred flaked corn is only 3 cents per cow. Thus, the shrink cost per cow differential is a significant 6 cents.
Ponder the powder
Shrink on an expensive and often powdery ingredient like a blended vitamin and mineral supplement often gains much attention on this topic. We often try and find ways to mitigate this risk by adding tallow or molasses to the mix. We also might add a protein or by-product with the mineral ingredients and make a pellet of that mix. This often adds cost as there is more of the cow’s daily feed rate going through a feed mill, absorbing the cost therein. However, I was surprised that this ingredient had a lower than expected shrink cost per cow of between 2 and 3 cents per day due to a lower overall inclusion rate per cow. An excellent way to reduce shrink on ingredients like this is to store them in a bin and add them to the mixer with a nice auger setup. However, the modest savings of 2.5 cents per cow might not pay off the cost of the feed bin, concrete pad, electrical set up, and most importantly, the ongoing cost of stinger versus regular truck freight as fast as you might think.
The last example to share was noted when considering several by-product-type ingredients, often called middle proteins. These ingredients are at times pelleted and at other times very powdery and present a big shrink risk. I recall a field trial I managed where an ingredient supplier delivered a commonly used by-product with a few different twists that had good potential to increase the feeding value. We were very surprised that after receiving the ingredient, it was so fine and powdery that it literally flowed out of the cracks in the wall of the commodity bay. The material that flowed out was blown away and instantly replaced by more material.
Though this was an extreme example, many dry by-products are highly processed, have low density, and are prone to shrink. Although there are several options where by-products are pelleted, these materials often don’t make a quality pellet and some fines are usually present. But, in most cases, with a likely feed rate upward of 5 pounds of dry matter and a moderate cost per ton, the risk is still worth considering once cost is figured in.
Shrink is farm specific
It is certainly arguable as to what the high and low shrink values should be in my calculation table. The real numbers will be different for every farm, dependent upon feed management strategies. In recent years, many dairies have invested in enclosed feeding facilities or at least added wind breaks. These capital investments, along with routine management practices, can be a significant help in reducing the cost of feed ingredient shrink. With these efforts, ration formulation should include an appropriate cost per ton of estimated shrink to add to the cost of each. When routinely pairing this step with the use of ration optimization, the most cost-effective ration can be delivered to the cows. This just seems like good business protocol!
