Recommendations for managing profitability with a poor corn crop

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Springtime excessive rainfall followed by summertime drought means Pennsylvania dairy producers are facing big challenges in corn silage production that extend beyond a decrease in its nutritional value.

“We’ve received a lot of calls from producers and nutritionists about how to deal with this year’s corn silage,” notes Virginia Ishler, nutrient management specialist with the Penn State Extension Dairy Team and manager of the Penn State Dairy Research Complex. From a nutritional standpoint, corn silage without ears is similar to feeding grass silage, explains Ishler. This coupled with low-quality hay crop forage means energy will be the biggest limiting factor from a nutritional standpoint.

But the implications of this year’s poor corn crop go beyond nutrition. Persistent drought conditions across the United States and spring flooding in the Midwest means potential lower inventories of forages, corn and beans. This will likely translate into high prices and a volatile market, which will affect overall farm profitability.

Ishler warns there is no one-step approach to ensuring profitability while facing the dual challenge of poor nutritional value and decreased quantity. “It is not going to come down to formulating a particular ration to solve the problem; there is a lot more involved,” she says, adding: “I know producers want that easy ‘one thing I can do’ approach, but it’s more complicated than that.”

Ishler and the Penn State Extension Dairy Team recommend producers take the following steps to meet the challenges of low quality and limited quantity:

Determine Need and Inventory:
Have your nutritionist work rations for all animal groups and evaluate whole farm feed inventory. Producers need to know now what they have and plan accordingly for any forage purchases or contracting feed. If dairies wait until February or March of 2012 to purchase forages, they either won’t be available or the prices will be very high. “Prices that reach $70-80 per ton for corn silage have the potential to put producers out of business, especially if they are still trying to pay off bills from 2009 and 2010,” warns Ishler.

Track Income Over Feed Cost:
Dairies must track Income Over Feed Cost (IOFC) because it is going to be more expensive to produce milk. Monitoring IOFC lets dairies determine if producing less milk is more economical than trying to get milk out of low-quality feeds or having to purchase a lot of feed. Currently some herds are close to $8 per cow feed cost and they will be in trouble if milk prices drop. Dairies need to know their breakeven margin, which means knowing their IOFC.

Scrutinize Byproducts
More byproduct feeds are going to come into the picture. This means more variability and sometimes questionable quality, which may result in paying a lot for inferior quality feeds. Quality control and testing of byproducts are critical.

“People are asking for blanket recommendations on feeding this year’s corn silage, but it really depends on what else the farm has to feed, the feed company they are working with, and the feed options available to them,” explains Ishler. “The bottom line is having a cash flow plan for your dairy that addresses IOFC and includes a feed and crops inventory.”

The Penn State Extension Dairy Team can help dairies calculate IOFC. Producers may contact their local Extension dairy educator; the Penn State Extension Dairy Team at( 888) 373-7232; or visit the Penn State Income Over Feed Cost Tool website at http://www.das.psu.edu/dairy-alliance/resources/income-over-feed-cost-tool

For more information on cash flow planning, visit the Penn State cash flow planning website at http://www.das.psu.edu/dairy-alliance/education/profitability.

Source: Penn State University



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