Changes on the dairy, especially to rations, are often made with some apprehension, as their results can have a significant impact on profitability, says Elliot Block, senior manager of technology at Arm & Hammer Animal Nutrition. Utilizing the Income Over Feed Cost (IOFC) calculation when considering a ration change will help you determine whether the change will generate more income for the dairy, even if the initial investment is greater.
IOFC is calculated by subtracting the feed cost per cow per day from the daily milk production revenue. The resulting value can help identify the performance improvements needed to make the ration change profitable. As you look to make profitable ration changes on your dairy, utilize the following IOFC tips:
• Calculate IOFC for all herd groups. Determine IOFC for all herd groups to develop a more accurate picture of when additional income is most likely to be generated, and when profitable change is most often expected.
• Recalculate IOFC frequently. IOFC will change as frequently as milk price and feed costs do. Continue to monitor this number on a routine basis to set a baseline number and to use prior to future change.
• Look at other benefits. There’s more to IOFC than just milk and feed. Take into account additional factors, such as health responses and reproductive function, as they can have a big impact on herd performance.