How to Make a Family Dairy Farm More Profitable
If you lot are managing your dairy herd solely from the farm'south financial statements, you may exist missing opportunities to maximize profitability.
"Dairy farm finances come up every bit a outcome of managing the biology of the dairy cow well," explains Mike Lormore, head of U.Due south. cattle technical services for Zoetis. "That doesn't hateful you lot don't need to have a good financial program. In today'south market, you absolutely need to empathize how to use risk direction tools. Ultimately, your fiscal outcome is going to be the result of the performance of your herd."
Lormore says today'southward producers don't need to be 20% better than their competitors. "To have a profitability improvement, sometimes you need to merely exist 1% to 3% ameliorate in several different fundamental areas. Because that percentage is all at the margin in terms of your production, those are the most assisting outputs," he says.
Kevin Bernhardt, farm management specialist at the Center for Dairy Profitability at the University of Wisconsin, points to data collected from 2015 to 2018 throughout the state showing the significance of cost of product on a dairy subcontract'due south bottom line.
The data reveals a wide range between the costs of production for the height and the bottom tertiary of profitable dairies. For a herd size in a higher place 338 milking cows, the average cost of production in the top third of producers was $14.84/cwt. The average for the bottom third was $eighteen.96/cwt, a whopping $4.12/cwt deviation. In herd sizes from 73 to 129 cows, the boilerplate cost of production was $6.68 lower for the top third of producers compared to the bottom third.
"The deviation is tremendous," Bernhardt says. "This means the height 3rd of producers are putting a substantial additional amount of money in their pocket."
And so why do the returns differ so significantly? Bernhardt says the data do non provide the answer. "Withal, when looking at all the data, it was clear that the producers who were doing the all-time job at lowering their price of production were doing then across the board, indicating meticulous attention to detail," he says.
Profitability Drivers
To sympathize how dairy production measures correlate with the financial wellness of a dairy, Zoetis and Compeer Fiscal launched an ambitious study in 2014 that collected financial and production information from as far back equally 2006 to determine exactly which metrics have the highest correlation to profitability. The ongoing report has collected 702 subcontract-year records from clients in the Upper Midwest, representing 118 farms, 90 total product variables, and an average of nearly six year-end records per farm. The average number of lactating cows per farm in the study is ane,217.
Initially, Lormore was a chip skeptical well-nigh exactly what the information would show. "We all know the factors that make money on dairies: go a lot of milk out of your cows, keep your cows healthy, become your cows bred, and get your heifers bred," he says. "What the written report really has chosen out is the interrelationships betwixt product variables and how they ultimately roll up to financial success or lack of fiscal success.
"Milk production is more than than simply what happens today in the milking parlor and at the feed bunk. It is the culmination of genetics management and breeding, excellent dogie and heifer rearing, great health management, a focus on husbandry, and how to repeat those processes successfully over and over, every twenty-four hours of the cow's life," Lormore says.
Have heifer survival charge per unit, for case. "If your heifer survival rate on i farm is 94% and on another farm it's 93%, that deviation is non that big of a deal on a single-year footing. But if that performance level is maintained over a x-year catamenia, the dairy with the college survival charge per unit would have xi% more animals to deal with, and that means more total production power and more selection options," Lormore says.
The most recent data analysis has identified the drivers that straight impact net farm income. "What I need to stress is that all these factors are closely interrelated, and so there'southward non one unmarried action that'south going to heave the bottom line," he says.
Aggressively managing majority tank somatic cell counts (SCC) was a major factor in internet subcontract profitability. For every 100,000 cells/ml increase in bulk tank SCC, milk yield declines 5.seven pounds per moo-cow per 24-hour interval on all cows in the herd, according to the research. Herds with elevated bulk tank SCC had lower milk production, reduced pregnancy rates, and greater death loss.
Touch of Heifer Management
Healthy cows are more profitable cows, and the longer they stay in the herd, the more milk they produce. "The terminal pound of milk is ever the nearly profitable," Lormore says. "High ECM (energy-corrected milk) herds also had an improved 21-day pregnancy rate, lower feed cost per cwt of milk, fewer days open up, lower decease losses, and reduced majority tank SCC."
The study also indicates that both the summit and bottom one-third of herds had impressive heifer survival rates. Lormore says paying close attention to heifer management impacts the farm in both the short and long term. Pregnancy rate is a fundamental performance indicator for the reproductive operation in dairy herds. Herds with amend milk quality had improved pregnancy rates and fewer days open, according to the study.
Lormore says the toll of cow turnover isn't but the difference between replacement heifer costs and the value of a choose cow. "You also have to consider the productivity potential of the cow existence removed," he says. "Offset-lactation cows produce 15% less milk than 2nd-lactation cows and 25% less than 3rd-lactation cows. That means replacing an older cow with a first-lactation animal just because you have extra heifers represents a significant loss in productivity. Information technology can be a huge bleed on profits."
Having an active, engaged, and qualified workforce is imperative. "All information point to net subcontract income being positively influenced by a qualified, invested workforce capable of maintaining healthy lactating and replacement animals, maintaining efficient reproduction, and limiting involuntary alternative and death loss," Lormore says. The bottom line: Taking care of your about valuable asset – the cow – is disquisitional in determining farm profitability.
"There probably isn't a lot of information here that hasn't been shared earlier," Lormore says. "What really jumps out in our study is that each of these factors can have an impact on the others. Paying shut attention to each aspect of the cow's production cycle can have a significant bear upon on a farm's long-term profitability."
Source: https://www.agriculture.com/livestock/dairy/the-little-things-add-up-in-profitable-dairy-management
0 Response to "How to Make a Family Dairy Farm More Profitable"
Post a Comment