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Dairy Focus: Cutting Feed Costs Has Consequences

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J.W. Schroeder, NDSU Extension Service dairy specialist J.W. Schroeder, NDSU Extension Service dairy specialist
Relative Costs and Values of Selected Energy and Protein Feeds Relative Costs and Values of Selected Energy and Protein Feeds
Dairy producers need to weigh the pros and cons before altering their cows’ feed ration.

By J.W. Schroeder, Dairy Specialist NDSU Extension Service

Editor’s note: This is the fifth article in a series on the impact of the growing ethanol industry and rising feed and fuel prices on the region’s dairy farmers.

Skyrocketing feed costs and limited feed availability have producers looking for ways to cut feed costs.

Feed represents the greatest portion of input costs to produce milk, so saving money depends on several factors.

The first thing to evaluate is the dry matter (DM) or moisture content of alternative feeds. Paying for water is pointless. Compare all feeds on a 100 percent dry-matter basis. For example, corn distillers grains with 90 percent DM at $175 per ton calculates to $194 per ton of DM ($175 divided by 0.90), or 9.7 cents per pound of DM. Wet corn distillers grain with 30 percent DM at $70 per ton is $233 per ton of DM, or 11.7 cents per pound of DM. Corn grain at $5.50 per bushel ($196 per ton) and 88 percent DM is 11.2 cents per pound of DM. At these prices, the distillers grains cost 12 percent to 18 percent less than corn grain.

The second consideration is how much useable energy is in the feed. For lactation rations in the U.S., net energy for lactation in megacalories (Mcal) is used. The net energy for lactation values of feeds cannot be measured accurately, but there is no question that energy intake is a major determinant of the amount of milk a cow will produce. Thus, the feed cost per Mcal of net energy for lactation is a better way to compare feeds than simply the cost per pound of DM.

If a new ration can be formulated that costs less per Mcal net energy for lactation than the ration being fed, and if cows eat the same amount of net energy for lactation per day and produce the same amount of milk with the new ration, then profit also should be greater with the new ration. Corn grain at $5.50 per bushel ($196 per ton) and 0.88 Mcal net energy for lactation per pound costs 12.7 cents per Mcal of net energy for lactation. Dried corn distillers grains at $175 per ton and 0.82 Mcal net energy for lactation per pound cost 11.9 cents per Mcal of net energy for lactation. With these prices, the distillers grain is 6 percent cheaper than corn grain.

The third consideration is protein. This is where calculation gets complicated because feed protein supplies both energy and digestible protein for the cow, so we cannot simply consider the cost per pound of protein. One way nutritionists have evaluated the cost of feeds for both energy and protein is by asking, “How much corn and soybean meal could be replaced by this feedstuff?” The resulting “corn-soy value” of a feed is calculated based on the economic value of energy and protein using the current prices for corn and soybean meal.

If you can purchase an alternative feed for considerably less than its calculated corn-soy value, you probably should consider buying it. For example, using prices for corn at $5.50 per bushel and 48-soybean meal at $340 per ton, the corn-soy value for dried distillers grains is $252 per ton. If it can be purchased for $175 per ton, then it costs only 69 percent ($175 divided by $252) of its corn-soy value. In other words, it is 31 percent less expensive than a corn and soy blend providing the same amount of energy and protein.

The limitation with using corn-soy values is that we often choose feeds in ration formulations for several reasons other than just the economic value of energy and protein, according to Michigan State University dairy researchers.

Here are some questions producers should ask before purchasing an alternative feed:

  • How much feed must the cow eat to obtain the energy and protein?
  • How much long fiber is in the feed?
  • What is the source of the energy (starch, sugar, fiber, fat or protein)?
  • How much of the protein will be degraded in the rumen? How much will bypass?
  • Does the feed contain valuable minerals or vitamins?
  • Will the feedstuff alter appetite?

Most of these questions can be included in an assessment of the economic value of an alternative feed by including the new feed into the formulation of a new, well-balanced diet. This can be done using a computer ration evaluation program. However, even checking the value of feeds in a ration program is not a complete and accurate answer.

Because we cannot predict accurately the impact of most ration ingredient changes on feed intake and partitioning of nutrients to milk, predicting whether an alternative feed will be profitable often is difficult. For example, if you feed a diet with less corn grain and more distillers grains, the diet will be cheaper per pound using these prices. If the cows produce the same amount of milk, you will make more profit. However, if the cows eat less and produce less milk, this potential profit might not be realized. Thus, monitoring feed intake and milk production responses before and after a diet change is essential.

Without monitoring actual intake and milk production, you never will know if the new feed ingredient was profitable. Corn distillers grain may look like a great buy on paper, but it has 10 percent oil. Higher ration oil content often reduces feed intake and in the end may decrease profits.

So, what could happen when replacing expensive corn grain with an alternative feedstuff? It’s not easy to know for sure. Chances are that the cows will not eat more of a ration with the alternative feedstuff. They also might eat the same or even eat less. The only way to know for sure is to monitor what happens before and after the ration change.

Feeding a ration that is cheaper may lower feed costs, but if it lowers milk yield, that could be an expensive mistake. When milk prices are low, you can afford to lose a little milk production for a substantial savings in compared feed costs. However, when milk prices are high relative to feed costs, you are usually better off focusing attention on how to produce more milk rather than on how to cut feed costs.


NDSU Agriculture Communication

Source:J.W. Schroeder, (701) 231-7663, jw.schroeder@ndsu.edu
Editor:Ellen Crawford, (701) 231-5391, ellen.crawford@ndsu.edu
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