Catching The Next Wave
Catching the Next Wave
By Butch Cargile, DVM, MS
J.D. Heiskell & Co.
Although it may not seem like it, relief from the current dairy economy is just around the corner. Decreased domestic milk production has led to a significant increase in Class III futures for last two quarters of 2009 and well into 2010. Cash price for cheese will follow this trend as we deplete our overstocked domestic inventory. You may be asking, “Why discuss economics in a nutrition article?” Because the prevailing state of the domestic dairy industry dictates how well our dairy cattle are fed.
Over the last six months, sales of “foo-foo dust” have decreased dramatically. This mandated decrease in cost of production has been an incredible opportunity to separate ration ingredients into two distinct categories, 1. True foo-foo and, 2. Viable ration ingredients. As viable ingredients were removed, cow performance suffered and both dairyman and nutritionist were able to say “maybe we should put that back in”.
Catching the next wave of profitable milk means planning ahead to take full advantage it. Thanks to intensive genetic management today’s dairy cattle have an amazing capacity to respond quickly to nutritional and environmental changes. They are, however, still not light switches. In order to safely maximize milk production, time must be taken to increase startup milk followed by peak milk. So what are the ingredients, in order, that should go back into the ration?
Cotton seed feeding rate was reduced on many dairy rations well before milk price dropped last fall. With the price of whole cotton seed in the $500 per ton range here in Idaho for most of 2008, cotton was fed at a very low inclusion rate or not at all. However, cottonseed price has responded to external economic pressures along with all other commodities and some “value-added” ingredients. Whole cotton seed is especially useful when physically effective fiber and energy are lacking in a ration simultaneously.
This situation is common when corn silage is limited. Few other ingredients offer the combination of effective fiber and energy found in corn silage and its surrogate, whole cotton seed. This alternative will become even more important as corn silage feeding rates are reduced to stretch remaining inventory until new-crop corn silage is available for feeding. Many farms have been feeding corn silage at rates that are not sustainable.
Cash flow has been the overriding factor in many nutritional decisions for the last four to six months and on-farm inventories of corn silage and hay have been raided, hoping that milk price would rebound in time to purchase off-farm feeds during the second half of 2009. First cutting hay is only one to two months away, depending on your latitude, and will no doubt be considerably cheaper than last growing season. But corn silage that is ready to feed is still seven to eight months out. As cash flow allows, consider adding or increasing cotton seed feeding rate to stretch depleted corn silage inventory.
By-pass fat followed a similar pattern to that of whole cotton seed in 2008 causing its feeding rate to be reduced as its price surpassed $1000 per ton. Unfortunately, no other ingredient packs the energy found in by-pass fat. With energy being the first limiting nutrient in most milk cow rations, the price of milk increasing in the near future, and the price of by-pass fat down 20-30%, consideration should be given to increasing the feeding rate of this ingredient.
Just before the retail price of by-pass fat dropped, the price of tallow decreased. Tallow was used to replace a portion of the by-pass fat in many rations and the result was a decrease in milk production and butterfat. This effect was anticipated, but like so many other changes during this unprecedented time the decision was one of cash flow. In anticipation of profitable milk prices, and the need to take full advantage, consideration should be given to increasing by-pass fat feeding levels.
Canola should be a consideration for anyone with an open interest in their proteins. This ingredient is currently trading at a discount to soybean meal on a protein basis and is a viable source of rumen degradable protein. The only reason for mentioning such a basic ingredient is the fact that distillers grain was a discount to both canola and soybean meal on a crude protein basis for several months. As a result, distillers grain gained inclusion in many rations.
Looking to maximize milk production for the remainder of 2009 in order to take advantage of profitable milk prices means including ingredients to increase metabolizable protein. Behind starch from corn, canola and soybean meal are the most economical ingredients used to increase metabolizable protein. They also minimize the risk of butterfat depression from trans-fatty acids associated with feeding high levels of distillers grain.
There are also a handful of micro-ingredients that have been proven to be worthwhile even in the current dairy economy. Methionine, Omnigen, Rumensin and yeast are four ingredients that have proven to be “essential” in dairy rations in the last six months. These ingredients will be discussed in greater detail in a future article.
Using these suggestions will help position your dairy to better recover during the coming economic environment. By most predictions, this next wave of profitability will be larger and quite possibly longer than most historical upturns so ride it for all it’s worth.
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