10 profit priorities

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Given the slow recovery of milk prices, it is difficult to suggest in this column “how to improve profits.”  The slumping dairy economy has forced all dairy producers to enter survival mode. This makes it more important than ever to keep your eyes on the things that will keep your dairy afloat and enable you to be profitable when milk prices increase.

Here are 10 points to consider.

  1. Optimize pregnancy rate.  Get cows inseminated in a timely fashion, find open cows quickly and get them rebred. A reasonable goal is a pregnancy rate greater than 20 percent. Remember that the future result of this will be more calves on the ground, which will increase heifer-rearing cost (not an excuse to let pregnancy rate slide).
  2. Decrease calf mortality.  Calf losses are unacceptable on many dairies. Strive for a dead-on-arrival loss of less that 4 percent and a pre-weaning death rate less than 3 percent. These goals are achievable with proper care and nutrition.
  3. Optimize milk components.If your bulk tank average is not at least 3.5 percent fat and 3 percent protein (5.5- to 6 pounds of solids per cow per day), then your cows are telling you something. Ration formulation, forage quality and feed delivery are obvious places to start, but don’t forget about cow comfort and heat stress.
  4. Increase marginal milk.  The last pound of milk is where the profit (or at least extra money) lies. Strategies like 3X milking, shorter dry periods, recombinant bovine somatotropin (if your processor accepts its use) and Rumensin all allow for this immediate return. The last pound of milk produced does not cost the same as the first pound!
  5. Evaluate ration cost.Produce and feed the highest-quality forages to cut purchased-feed cost. As always, the least-expensive ration may not be the most economical. Calculate income-over-feed cost on a monthly basis. Evaluate additives and supplements carefully. Does research exist and are you really getting a return on their use?
  6. Decrease “broken cows.”  Review your involuntary cull rate for the first 60 days in milk. Is it greater than 6 percent?  Transition is the most vulnerable time for cows, but we still see unacceptable levels of metabolic disease. Work to improve nutrition and cow comfort to reduce — versus treat —disease. 
  7. Remove low-profit cows.  Given the low milk price, this is an opportune time to evaluate which cows are worth keeping. Cull low-producers or dry off some cows early. You are likely losing money feeding some cows a lactating ration. In many instances, reducing overcrowding increases overall herd production and health. Don’t keep cows around just for numbers.
  8. Maximize comfort.  Stall design, bedding, stocking density, heat abatement and feeding management are the aspects of a dairy that make the real difference. Embrace the current concepts not only from a profitability standpoint, but also to maximize cattle welfare. You will see the immediate returns of increased production, increased components, reduced disease and lameness and overall improved longevity.
  9. Manage and train employees.  Allow your employees to strive for success. Institute training in proper techniques for all aspects of your dairy. Set goals to reduce employee turnover, improve efficiency and ensure proper welfare for your cattle. But, don’t be afraid to cull. A bad employee can ruin your operation.
  10. Find the bottlenecks.Find the rate-limiting steps that prevent you from reaching performance goals. The bottlenecks will be found in one of three areas: equipment (barn, stalls, feed and cows), people (lack of skill) and policy (lack of written or unwritten farm policy). Use an advisory team to help prioritize opportunities.

Of course, this list can go on and each dairy is unique. These points provide a place to start. What are top profit priorities on your dairy?

Mark J. Thomas is a veterinarian and partner in Countryside Veterinary Clinic, LLP in Lowville, N.Y.       



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