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Strategies for 2016 Milk and Feed Price Scenarios

March 17, 2016
Contact: Shelly Mayer
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Strategies for 2016 Milk and Feed Price Scenarios

Profit is all about managing margins when running a successful dairy operation. And with so many tools available and scenarios to consider, what are the best strategies to manage income over feed costs? Dr. Mike Hutjens addressed different ways for profitability during the Professional Dairy Producers of Wisconsin (PDPW) annual conference. As a professor emeritus at the University of Illinois' Department of Animal Sciences, he said in though markets like these, dairy farmers need to pay attention to the small stuff.
“With milk prices hovering around $16 per hundredweight, farmers need a way to lower their inputs, which means they have to find ways to make feed costs cheaper,” Dr. Hutjens stressed. “The export market is not expected to rebound anytime soon, the U.S. dollar is strong, and the value of bull calves going back down. So the only thing you can control is your cost of production.”
Hutjens says there are plenty of low quality haylage options with a $100 spread between high vs. low quality. He also notes that soybean meal is still cheaper than fuzzy cottonseed.  Corn by-products are increasing in cost, but can still be considered a good value.

One of the factors a good herd manager should be looking at is feed additives for lactating cows. Hutjens says knowing how much monensin, silage inoculants and trace minerals are being fed in the ration is important, because if they are applied properly, they can help boost milk components—which makes the premium payments on the milk check go up.

He also reminded farmers to never forget one of the most important rules in dairy nutrition: be sure to get that cow to each as much dry matter as possible.

“My take home point to all farmers in today's environment is to remember exactly what you are putting into each cow—both in costs and ingredients—and be sure to watch your lab tests to see if your milk quality is reflecting your ration,” he says.

And he pointed out that proper care of dry cows will help them, and their calves, after they give birth and begin their lactation.