Dairy Sense: Milk Income and Ration Perspective for Milk Fat

Jersey dairy cows at the Avi-Lanche Dairy near Dalhart feed in front of a Saudi-style barn

Milk fat depression is a common occurrence not only during the summer months but at other times of the year. There is an added frustration to the producer because of the positive impact milk fat has to the milk price/cwt. Over the past few months there have been discussions about focusing on increasing the milk fat as high as possible to get the higher milk price/cwt. Then there is the group who focuses heavily on the ration starch level to get the highest milk production that sometimes compromises components. So, the question becomes: what is the best strategy to optimize milk income?

The Extension dairy business management team has been working intensively with a group of progressive producers of varying herd sizes for the past two years. Seventeen of the twenty-seven operations were sampled during either June or July 2018. Table 1 shows the farms divided into three categories: low, medium, and high milk fat percent. If the objective is to achieve the highest milk price/cwt then maintaining high components meets that goal. The Pennsylvania All Milk Price for the same months averaged $16.60/cwt, so there was a $0.60/cwt advantage. However, the missing part of the equation is the milk pounds, which also influences milk income. Based on these seventeen herds the middle group achieved the highest income by balancing both production and components. A common metric being used is to monitor the pounds of components, with a goal of greater than 5.5 pounds. The middle group is the closest to that goal and reflects a good metric to measure.

Corn silage starch level and its digestibility along with the ration starch are often the first places consultants investigate when there is milk fat depression. For this project, corn silage was analyzed by wet chemistry for starch and 7-hr starch digestibility through Cumberland Valley Analytical Lab. Producers provided their feeding information on sampling day, so the ration fed and TMR sampled would match. Table 1 illustrates the ration dynamics related to production and components. An interesting observation is the low-milk fat testing herds were feeding the highest amount of corn silage dry matter, which also matched with the highest starch and digestible starch pounds. In addition to feeding high amounts of digestible starch from corn silage, five of the six low milkfat herds were also feeding high moisture corn. The rate and speed of starch digestion delivered along with the quantity could be one of the culprits impacting milk fat. The herds with the highest components were feeding the lowest amount of corn silage dry matter. However, when examining the total starch level in the diet there was very little difference between the groups. It also appears that feeding higher corn grain levels on a lower corn silage ration showed a trend for higher percent milk fat.

As with any small data set, be careful not to read too much into these results. However, with the details collected from these farms there definitely is a take home message: BALANCE. Over the years results have shown again and again that the best or the highest, regardless of the metric measured does not always garner the optimal financial outcome. Trying to aim for the highest components at the expense of volume does not necessarily achieve the ideal income. Goals should be set for production and components with milk income being the best measure, not milk price alone or milk fat percent alone. It does appear that the amount of corn silage fed, and its starch make-up is an influential factor with components. For herds currently struggling with low milk fat this might be an area to investigate.

Table 1. Milk fat perspective based on milk price and the ration starch level.

Milk Fat % Low < 3.55% Medium 3.56 – 3.75% High > 3.75%
No. of farms 6 6 5
Milk price/cwt1 $15.69 $16.65 $17.20
Milk lbs. 77.5 80.8 74.9
Milk fat, % 3.40 3.70 3.89
Milk protein, % 2.90 3.00 3.00
Components, lbs. 4.89 5.35 5.17
Milk income/cow $12.17 $13.45 $12.89
Ration perspective2
CS DM lbs. 23.0 20.7 13.1
CS starch lbs. 8.90 8.30 4.46
CS digestible starch lbs. 6.90 6.10 3.58
TMR DMI lbs. 50.2 53.0 50.0
TMR starch lbs. 14.4 15.3 13.6
Corn grain lbs.3 7.28 8.92 12.1

1Milk pricing and components reflect the June/July sampling period for the Crops to Cow project funded by Northeast SARE.

2Data comes from the TMR analysis and the batch weights and refusals at time of sampling.

3The low fat group had 5 farms feeding high moisture corn and 1 feeding fine ground corn; the medium fat group had 5 farms feeding fine ground corn and 1 farm feeding high moisture corn; and the high fat group had 3 farms feeding high moisture corn and 2 farms feeding fine ground corn.

Note: Average Pennsylvania All Milk Price/cwt for June and July was $16.60.

Action plan for low milk income.

Goal – Set a minimum standard for milk volume and components to achieve the milk income required to cash flow the operation.

  • Step 1: Develop a cash flow plan to assess the current milk price and evaluate the pounds of milk needed to cash flow the farm’s expenses.
  • Step 2: If milk production or components are not where they need to be evaluate the current herd dynamics using records from DHIA or Dairy Comp 305 or another data collecting system.
  • Step 3: Evaluate feeding management practices along with forage quality for bottlenecks to optimizing animal performance.
  • Step 4: Working with key advisors, implement practices to improve production and/or components.
  • Step 5: Monitor bulk tank weights and components on every pick-up. Make changes sooner versus later if milk pounds drop or if components start to slip.

Economic perspective:

Monitoring must include an economic component to determine if a management strategy is working or not. For the lactating cows income over feed costs is a good way to check that feed costs are in line for the level of milk production. Starting with July 2014’s milk price, income over feed costs was calculated using average intake and production for the last six years from the Penn State dairy herd. The ration contained 63% forage consisting of corn silage, haylage and hay. The concentrate portion included corn grain, candy meal, sugar, canola meal, roasted soybeans, Optigen® and a mineral vitamin mix. All market prices were used.

Also included are the feed costs for dry cows, springing heifers, pregnant heifers, and growing heifers. The rations reflect what has been fed to these animal groups at the Penn State dairy herd. All market prices were used.

Income over feed cost using standardized rations and production data from the Penn State dairy herd.

Note: Penn State’s September milk price: $16.97/cwt; feed cost/cow: $4.97; average milk production: 80 lbs.

Feed cost/non-lactating animal/day.