Spreadsheet helps keep track of prices, improves communication

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Editor's note: This Practice Builder was provided by Dennis Crawley, dairy nutritionist from Nixa, Mo. He is affliated with the Compass Nutrition Inc., of Stephenville, Texas.

With the volatility in milk and feed prices in the last few years, my dairy clients regularly ask me where we can cut feed costs. Or, when a particular ingredient like corn takes a run-up in price, they ask how little can we feed and what will replace it.

I needed a tool to help us track feed changes and accurately determine if, when we save 10 or 15 cents in ration cost, did it save money or did we lose so much milk and components that the savings actually was a cost. But the question is more complicated than what happened with milk production, milk fat, and milk protein. If dry matter intake increases or decreases, the answer changes.

Another factor is the value of fat and protein in the milk. In the last year, the producer pay price for a pound of butter in the West Texas market ranged from $1.44 to $2.44, and from $2.05 to $2.88 for milk protein. And the month fat was at the low point, protein was at the highest value for the year.

To deal with all of these variables, I made a spreadsheet that I update on each of my bi-weekly visits. The spreadsheet uses current production and milk components, actual dry matter intake as recorded on the farm, feed costs, and current milk and component pricing to calculate Income Over Feed Cost. If we make any ration change, whether to lower ration cost or to increase production, we have information that can help us determine if the change was profitable. I have also been able to use this spreadsheet to establish the cost in lost production when a pile of poorly processed corn silage was opened and ended up replacing well-processed corn silage in the ration.

Last fall, when milk fat and protein were at a very high price, using Energy Corrected Milk to determine the value of higher components underestimated the real value of those components. With my spreadsheet, we were able to look at the real impact of the high components on Income Over Feed Cost.

This spreadsheet has increased communication between me and my dairy clients and has helped them more accurately see and understand how feed changes and forage quality can affect their profitability.

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