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Dairy Focus: Dairy Producers Compete with Ethanol for Corn

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J.W. Schroeder, NDSU Extension dairy specialist J.W. Schroeder, NDSU Extension dairy specialist
Historical monthly base price (Class III) U.S. dairy farmers received for milk. Historical monthly base price (Class III) U.S. dairy farmers received for milk.
The ethanol industry's demand for corn is driving up feed costs for dairy producers.

By J.W. Schroeder, Dairy Specialist

NDSU Extension Service

Editors note: This is the first article in a weekly series on the issues facing the region’s dairy farmers, particularly the impact of the expanding ethanol industry.

Milk prices finally are improving after a year of a down market. So why aren’t dairy producers feeling up?

Feed accounts for 50 percent to 60 percent of the cost of producing milk. Escalating feed costs, fueled by the growing demand for corn to make ethanol, have eroded potential profits. Not until recent days has the value of milk actually moved up to profitable levels.

Corn can make up more than 30 percent of the total ration dry matter in typical Midwestern dairy diets. So changes in corn price have a significant impact on total feed costs. A $1 increase in the bushel price of corn will increase the cost of a lactating cow's diet from 27 cents to 34 cents per day.

We can use many other grains besides corn, but we may have to give up some milk production. While cost per hundredweight of milk is key to the bottom line, many of these other feeds also have risen in cost, based on planting intentions and the competition for acres with corn. No wonder nutritionists are working hard to take another 25 cents (or more) per hundredweight out of feed costs.

So what can dairy producers do now? Take the following measures to reduce the amount of corn grain in the diet:

  • Calculate the level of starch in the ration and determine if it is in the optimal range of 21 percent to 28 percent starch.
  • Feed alternative starch sources, such as barley, corn gluten feed, milo, wheat or wheat middlings, if they are more economical.
  • Offer a blend of two-thirds corn and one-third barley to balance starch availability.
  • Feed corn grain and silage that has been processed in a manner that makes starch more available for rumen fermentation and small-intestine absorption, such as finely ground corn (1,100 microns), steam-flaked corn and high-moisture corn.
  • Screen manure to observe if corn is present. If it is, determine the source and adjust the processing to avoid this loss.
  • Increase the digestible fiber in the ration by feeding soy hulls, corn gluten feed or beet pulp. This increases the rumen-fermentable carbohydrates and reduces the need for corn grain.
  • Include a source of sugar, such as molasses, whey or bakery waste, to a level that is 4 percent to 6 percent of the ration’s total dry matter. This can stimulate rumen microbial growth, raising milk production and/or protein yield.
  • Add monensin to the ration to reduce corn requirements by 1.2 to 1.8 pounds per day because this product improves rumen pH and feed efficiency.

In preparation for the ration this fall, dairy producers who grow their own feed may want to devote more acreage to corn for silage this spring, and dairy producers who purchase their feed may want to contract more corn silage.

Corn silage is not only a good source of fiber, but it also contains 25 percent to 35 percent starch and, therefore, decreases the amount of starch from corn grain that is required in the diet. In the Midwest, where little corn is raised for grain, more corn silage is being fed and being supplemented with steam-flaked corn with other byproducts.

Eventually, as the market adjusts to corn-based ethanol, one of the benefits will be the availability of distillers grains (DG). Distillers grains are widely available and relatively inexpensive in the Midwest, where most ethanol facilities are concentrated.

Distillers grains are the “hot” new alternative feed for dairy cattle, but must be incorporated in the ration correctly to be effective. Distillers grains are a protein substitute, not a starch substitute. Most of the starch has been removed from the product in the production of ethanol. On a dry-matter basis, DG contain 30 percent protein and less than 5 percent starch. Contrast this with corn, which contains 70 percent starch and about 9 percent protein.

We will cover distillers grains in more detail in another article. For now, just know that these prices mean more planning, especially with regard to forages. High-quality forage still is paramount and the quality of the forage is what determines just how much of the corn grain in the diet can be replaced with other feeds. The higher the forage quality, the less grain is required.

High-quality forage optimizes rumen carbohydrate digestion and fermentation and reduces the need for grain. Sixty-five percent of the ration dry matter should consist of high-quality forages.

Finally, cheaper isn’t always better. Before you change any ingredient in the ration, consult with a nutritionist and evaluate its true cost to make sure it is a good value. Feeding a less expensive ration doesn’t always mean you’re saving money. Some dairy producers may be tempted to substitute corn gluten feed when it is $160 a ton and corn grain is $180 a ton, but the corn grain actually may be a better value, based on the cost per unit of energy.

Keep in mind that you can’t continually change the diet because something gets cheaper or more expensive. Cows like consistent diets. If you do make changes, make them as gradually as possible. If you’ve never fed distillers grains, don’t suddenly add 20 percent to the diet. Start with 10 percent, evaluate performance and then add the other 10 percent two weeks or a month later.

As for the long-term farm-gate price farmers receive for milk, this looks like an interesting summer.


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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