Grain Feeding

David Balbian, Area Dairy Specialist
Central New York Dairy and Field Crops

Last Modified: May 1, 2014

The milk feed price ratio that is used today (since 1985), that uses the price of corn grain, soybeans, and hay in it's calculation is 1.29 for July (the lowest since it's been calculated this way). I don't want to belittle how bad the current economic situation is, but the old milk feed price ratio is not as relevant today as it once was. Today we are looking at net milk income after feed costs as a measure to key in on. It's what's left over (per cow/day or per cwt.) after we pay for feed costs.
Penn State tracks those numbers monthly. For July 2012 they list Income over Feed Cost (for a 65 lb. cow) at $5.63 per cow/day. Compare that to $10.17 for September of 2011. On a per cwt. basis they list income over feed cost at $8.66 for July 2012. Compare that to $15.65 in September of 2011. It is not a good situation (as you know). It tells us that there is about half as much money left over after paying feed expense than there was in September of 2011.
Most people have a negative cash flow right now. After paying for feed there is simply not enough money to pay other expenses.
No matter how you look at it or evaluate things, it's a very bad situation economically.
If you have your own high moisture corn you should feel real good about things. For this fall's harvest be sure you have taken care of your forage needs first, before considering your corn grain needs. Some people will need to convert corn originally planted for grain to corn silage.
Don't cheat the cows. It's tempting to pull way back on grain feeding, but it will likely cost you in the long run (assuming you are allocating grain as appropriately as you can right now). Saving $1.00 and losing $1.50 or $2.00 is bad business.
Realize that if you pull back on grain the cows will consume more forage. If you're tight on forage supply this will only worsen that situation.
We've seen this situation in the past (or at least very similar situations). Cows that are shortchanged lose weight, do not breed back, and drop in production. When things turn around (milk & feed prices) you simply cannot turn on the switch to bring production back. It often takes the next lactation to return things to normal.
Take care of the basics. Meet energy and protein needs. With properly balanced rations there is still a return for feeding grain. It may not be very good, but there is still a return.
Work with your nutritionist to be sure your ration is on track. Scrutinize any extras you have in the ration and be sure they still pay.
Reduce shrink any way you can. This is spilled, wasted, or spoiled feed. You can no longer afford excessive shrink.
Talk to your lender. Their interest rates will be better than with your feed supplier. Hopefully you can tap into a line of credit that will allow you to get through this situation. Believe me, it will turn around. It always does.
I wish I could tell you when and by how much, but I simply do not know. 
I hate to say it, but the current strategy is to operate in a way that minimizes loses. Those who lose the least over the next several months will come out of this better than others. A profitable environment will exist sometime in the future. 


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