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Stackyard News Jun 2012

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US Survey Highlights Falling Milk Price Lessons

With declining milk prices putting the focus firmly on managing costs to maintain margins this summer, milk producers are being urged to heed the warnings in a survey of animal nutritionists, vets and other professionals within the US dairy industry published by the University of Illinois.

photo © Jennifer MacKenzie

Milking parlour

The survey was carried out to determine the impact of a rapid 40% drop in US milk prices that occurred during 2009. And the results show that cutting back excessively on feed inputs had far-reaching and financially damaging effects on cow health, performance and longevity that clearly outweighed any short-term cost savings.

“Reducing or removing minerals and vitamins didn’t immediately reduce milk yield, for example, but mineral deficiencies six months later had the potential to reduce immunity, slow growth and decrease fertility,” explains KW nutritionist Mark Scott.

Rather than focusing on price, Mr Scott says farmers should instead focus on the return on investment for each input. Many of the most costly feed ingredients and supplements – such as yeasts, rumen buffers, rumen-protected fats and rumen-bypass proteins – typically produce additional income 3-6 times greater than their cost, so will continue to be profitable even at the lower milk price.

“The financial impact of higher somatic cell counts, more lameness and mastitis, extended calving intervals, higher culling rates, inadequately grown heifers at calving and lower milk output is not only substantial, but also very hard – and very expensive – to reverse,” Mr Scott states.

The survey also highlighted the biggest positive influences on overall profitability, which included maintaining high morale and a positive attitude in staff, grouping cows to allow more focused feeding and bringing heifers back to the farm for rearing. Other positive cost savings came from recognising the importance of good quality forage in reducing feed costs and fine-tuning rations to get better value without sacrificing nutrient content.

“One of the best options for next winter is to use bio-ethanol wheat distillers’ feed to replace a combination of soyabean meal and cereal,” confirms Mr Scott. “The result is a cost saving equivalent to around £30-50/t, and with no impact on ration nutrient levels or cow performance.”

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