Monday, January 22, 2018

Components Make Money

Two prior posts - October 22, 2017 and October 29, 2917 - and one article in Progressive Dairyman have recently emphasized the financial benefits of feeding to maximize components.  When prices are low, some producers and their nutritionists try to reduce feeding costs wherever possible regardless of the impact on milk components.  Other producers and nutritionists try to "chase the market" by trying to feed to emphasize one component.  In both cases, this means that their herds are fed a very inconsistent diet with inconsistent results on component productivity.  Guessing where the prices of cheese, butter, dry whey, and nonfat dry milk are going and trying to feed to benefit from these changes is impossible.  Two many factors overlap in their impact.  What are global events doing that impact exports?  What is domestic demand for various dairy products doing?  What are processors emphasizing in production?  What positive and negative component changes occur when feeds are changed.  Controlling costs is difficult, but running a dairy to maximize profit is more difficult.

While this is all somewhat complicated, what has been emphasized in the above linked articles is that the best strategy is to feed to maximize components all the time.  This post contains quotes from some of the leading dairy nutritionists who are leading the efforts to properly and economically feed for components.  Approximately one quarter of U.S. dairy cows are fed these diets.  That means that three quarters are not.  This is a great opportunity.  Income can be increased by $1 per cwt. or more,  and more cwt. can be produced.  Financially positive results can be attained regardless of where the commodities prices go.

Tables I and II show the the positive benefit of a nutritionally balanced diet at both high and low commodity prices.  While the benefit is larger when commodity  prices are high (Table II), the benefits are still well positive at low commodity prices (Table I).

Table I - Benefit of a Balanced Diet at low Component Prices
Table II - Benefit of a Balanced Diet at High Component Prices
Below are quotes from six experienced leaders:

Brian Sloan, PhD – Global Ruminant Business Director for Adisseo - “If care is taken to not over supply some key nutrients and if the power of non linear optimizers in modern software programs are used, it will ensure that revenue will increase sufficiently to provide a positive and continuing increase in cash flow.”

Franck Gaudin - Dairy Business Director at Big Gain Feed – “It has become difficult to argue with new heights in milk production and tremendous components combined with incredible gains in cow health.”  

Chuck Schwab, PhD – Principal, Schwab Consulting, and Professor Emeritus of Animal Sciences, UNH – “Dairy nutritionists that became aggressive years ago in formulating for key nutrients to maximize milk components have never looked back, regardless of milk prices.  Their producers don’t want them to change; they see too many side-benefits of animal performance that affect dairy herd profitability.” 

Gary Foster – “Over the last few decades of genetic selection, dairy cow potential has advanced far faster than dairy cow nutrition. Consequently, in many instances today’s genetics are still being fed yesterday’s diets. Amino acids, as key nutrients, have enormous potential to turn the genetic key and show what today’s dairy cows can really do.”

Jessica Tekippe - Ruminant Product Manager for Ajinomoto Heartland - “We have entered a new era in the dairy industry. We are now going to be looking at a time when pounds of solids will be more important than ever before due to production limitations set by processors and the ever-increasing need for more butter and cheese in the American diet. This makes it vital for producers to re-evaluate their feeding strategies to ensure that they are capitalizing on all the proven technologies they have available to help them reach higher component levels.

Robert Patton, PhD - Owner, Nittany Dairy Nutrition, Inc. - “Research continues to show that the best nutritional strategy to increase milk protein yield is to provide sufficient energy from carbohydrate sources, and to provide adequate amounts of amino acids, particularly greater amounts of methionine. Likewise, the best strategy for producing milk with higher milk fat is to provide adequate forage NDF and to reduce levels of linoleic acid in the diet to under 400 g per day.”

Technology changes can bring amazing results.  Computers and software advances used in conjunction with new scientific advances are revolutionizing all industries.  The dairy industry is not different.  Evolving application of new technology is a must for survival. 

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