Managing Feed Costs and Milk Production for Financial Stability on Dairy Farms

Protecting both sides of the dairy margin, by realizing milking goals and maintaining feed costs, can strengthen a dairy for uncertain economic times.

Tim Beck, a Penn State Extension educator. Beck provided insight on prepping dairies for the unknown during an Extension on-demand webinar.

Meeting a farm’s goal for cows milking per year often has a greater effect on total outflow and cash surplus or deficit than other production costs and expenses, Beck said. Missing this goal causes greater negative margins that savings on other areas don’t compensate for.

“Even if we achieve a high tank average, if we fall short on our number of cows that we need to have milking throughout the year, we will sadly miss this large number here that we are shooting for in pounds of milk sold,” Beck said.

On the flip side of the margin, feed costs also greatly affect a farm’s opportunity for success.

Pennsylvania is a corn and soybean deficit state, Beck said. The commonwealth will constantly be importing these feed sources, so prices will always include transportation costs.

Growing one’s own feed, when possible, is an important step in overcoming the heightened rates, but farms must also evaluate yield potential to determine how much to invest. Some fields, no matter how much money is put into them, are unlikely to produce more than what is already being grown.

Beck suggested working with an agronomist to determine a soil’s probable yield to base investments accordingly.

Double cropping has grown in popularity among dairy farmers across Pennsylvania, Beck said. This method reduces perennial forages while increasing corn acreage and including cereal grains.

Double cropping requires additional seed, fertilizer and chemicals, but it reduces purchased feed. When double cropping, farmers should increase the corn silage in the feed, which also cuts back on required corn grain.

“We need to look hard at our cost of production to prepare for that — if milk price weakens and our feed costs continue to be high,” Beck said.

Overhead expenses and risk management can also be braced for uncertainty. Beck broke down the overhead category further and said farm insurance and hired labor see a wide spread of rates from top-performing dairies to the bottom ones.









Source: lancasterfarming.com

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