Custom TMRs can pay

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New Richmond, Wis., dairy producer Brad Afdahl has the best of both worlds - he feeds his cows a total mixed ration (TMR) blended to his specifications, without having to make a large capital investment to buy the equipment.

That's important to Afdahl who has only been dairying for four years and just purchased a 35-acre farm complete with dairy facilities. He had tried a few options for feeding the cows, including a haylage-based diet, but none allowed his cows to reach the milk production levels he thought they could achieve.

Now, Afdahl travels four miles each morning to pick up the TMR which brothers Arlen and Joe Strate, of Roberts, Wis., mix according to specifications from Afdahl's nutritionist. And although Afdahl has made some changes to improve cow comfort, he knows the custom TMR plays a big role in helping his 35 registered cows average more than 95 pounds of milk per day.

Afdahl is just one of a growing number of producers who have turned to custom TMRs. Circumstances differ - just starting out, expanding, or wanting to focus solely on cows - but, getting a custom-blended TMR can be a cost-effective option for some producers.

Quality control
The first roadblock to buying a custom-TMR is the issue of quality. Yes, you could run into someone who wants to pass off poor-quality feedstuffs as a quality TMR. But remember, most people who sell TMRs do it as a way to get a value-added price for the crops they produce or to help pay for the equipment they have purchased. It's in their best interest to deliver a quality product.

"We want to help other producers make money, and if they make money, we make money selling our crops through a custom-blended TMR," says Arlen Strate, a dairy producer who also sells TMRs.

At Jon-De Farms, Inc., in Baldwin, Wis., dairy producer Todd Doornink mixes TMRs for three other area dairy producers. "For us, starting a custom TMR business was a way to expand the overall dairy farm business without making additional capital purchases," says Doornink. The same forages and commodities used to feed Doornink's 600 cows are also used to mix the custom TMRs. Just as with his cows, quality is a must.

However, if your concern is that the seller of the TMR may not have a quality standard as high as yours, then set your criteria in advance, suggests Tim Engel, veterinarian in Roberts, Wis. Ask the seller what a typical relative feed value is for the alfalfa he produces. If it's below your expectations, then look for another source. Asking those types of questions up front can help you avoid problems later.

In addition, hire your own nutritionist to monitor forage quality and adjust rations when necessary to maintain milk production. Both Strate and Doornink provide routine forage analysis for their TMR customers. In addition, some of their customers' nutritionists have come and collected their own forage samples. Either way, monitoring quality is a consistent goal for all parties involved. And when a change in forage quality occurs, Strate and Doornink both notify their clients.

Regular delivery
Another concern producers voice about buying a custom TMR is losing control of when the cows get fed. But that doesn't have to be a problem either.

For example, Afdahl feeds the cows himself. Each morning he drives his pickup to the Strates, hooks up to a wagon filled with enough TMR for the day, and takes it home and parks it inside the feeding area attached to his tie-stall barn. From there, he uses an electric motor to unload the feed into a motorized feed cart that he uses to deliver TMR to his cows several times throughout the day.

Another way to control when the cows get fed is to specify delivery time as part of the agreement. Dairy producer John Afdahl of Roberts, Wis., gets his TMR delivered by the Doorninks. The goal, he says, is to have the TMR in front of the cows at the end of milking, usually around 8:30 a.m. Sometimes, it arrives later than he'd like - around 9:30 a.m. - but as long as it's within that window, it's not a huge problem because the cows also have hay available.

The goal, says Engel, is to specify terms up front. That way the seller can say "yes, I can meet those expectations," or "no, I cannot."

Additionally, make sure your TMR supplier has liability insurance. If a fire, flood or other disaster stops the production of the TMR, you will be able to get retribution for your losses.

Will free up time
When Brad Afdahl started dairying, he knew he was good with the cows. But he didn't have the labor or financing needed to take on the crop production and TMR equipment he wanted for the dairy. Buying a custom TMR allowed him to deliver a quality ration to the cows without having to split his time between the crops and the cows.

John Afdahl started getting a custom TMR after losing most of his alfalfa acres to winter kill in 1995. The Doorninks stepped in and helped him through a difficult period. However, with the help of his county agent, John penciled it out and found that it was a better deal for him to lease his crop land to the Doorninks and then buy a custom TMR back for the cows. Making that switch has allowed him to sell most of his cropping equipment and focus on building up his herd. Since switching to a custom TMR, he has converted most of his tie-stall barn to free-stalls, added tunnel ventilation, and expanded the herd to 125 cows. Milk production has climbed to a 20,000-pound average.

Not having to split your time between crops and the cows means you are always there to assist with a difficult calving, and you don't push vaccinations back for a week or two because you need to put up hay and then forget to give that booster shot. Getting a custom-formulated TMR allows producers to focus on the cows - and that's where the most money can be made.

Can be cost effective
Custom TMRs do the same for dairy producers as grazing does for other producers - it allows them to produce milk with limited overhead cost, says Engel. It's not just the cost of the TMR equipment which these producer save, but the cost of the equipment and labor to raise the crops as well. However, with a custom TMR you don't give up anything on production.

"We try to make the best purchases we can on the commodities and feed supplies we use," says Doornink. For example, the spot market in mid-December for cottonseed was $200 per ton. However, Door-nink had forward-contracted cottonseed for $169 per ton. Additional savings can be realized by buying by-pass protein and vitamin and mineral mixes by the semi-load instead of by the bag. These types of savings, he says, get passed directly onto customers.

In addition to the savings from volume discounts, Brad Afdahl says he likes the fact that he knows his feed price in advance. His supplier, Strate, sets a high and low price range for the year for each ingredient he supplies. Prices are adjusted within that range - based on the market value of the feedstuffs - each time Strate sends a bill.

Additionally, purchasing a custom TMR means you don't have to invest in TMR equipment, learn how to mix it yourself, or repair equipment when breakdowns occur. Depending on the type of equipment you'd want - vertical TMR mixer, wagon TMR mixer or truck-mounted TMR mixer - prices start at about $10,000 and go up from there. Although the investment in purchasing a TMR mixer can generally be quickly recouped from the increased milk production, dairy producers must be careful to avoid over-capitalization in order to remain competitive. Experts recommend not exceeding a cost of $350 to $500 per cow when purchasing TMR equipment. (For more on the cost of TMR equipment, see the chart at the top of this page.)

That's where custom-TMRs make sense - you get the increased milk production without the capital cost. However, you need to do the calculations to make sure that buying a custom-blended TMR is a cost-effective decision for you.

Brad Afdahl's feed cost has averaged $3.95 per hundredweight of milk produced for the first 10 months of 1998. That's just the cost to feed the cows, whose daily dry matter intake averages 53 pounds. By comparison, when you look at the total feed bill for a dairy that's raising heifers, about 25 percent of the bill is for youngstock. So, if you multiply Afdahl's $3.95 by 1.25, you get an estimated total feed bill of $4.94 per hundredweight of milk produced - well below the $6 to $7 range commonly found in the Upper Midwest.

Take a moment to pencil it out. You might be surprised to find that a custom TMR could work for you.


Buyers of custom TMRs should:
1. Check references.
2. Collect forage samples for analysis, or get results from the supplier.
3. Use their own nutritionist.
4. Stipulate the acceptable quality parameters up front.
5. Pay the TMR bill promptly.

Sellers of custom TMRs should:
1. Check references.
2. Ask other local suppliers if a potential customer's bills are current.
3. Always deliver a quality product.
4. Address customer concerns quickly.
5. Stipulate billings terms in advance.



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