Options to consider when reducing milk production
Dairy farmers are used to juggling a lot of issues and challenges on farms, but a pandemic and cutting milk production in spring in a year that started out hopeful for dairy prices is a new challenge for everyone.
While COVID-19 has placed producers in unprecedented times, it's not the first time farmers have had to make financial decisions during stressful times filled with incomplete information.
Trying to remember key farm management concepts and decision making is critical during such times, Jason Karszes, with Cornell University, said during Hoard's Dairyman DairyLivestream on April 30.
Karszes said it's important to take time for management decisions and set time aside to work through decision making processes so decisions aren't made in haste or made based off emotions or at the spur of the moment.
"Certainly here during financial stress or this reduction incentive programs or us being asked to reduce production, our goal is to minimize the negative impact on the business to minimize loss, not to minimize cost," said Karszes. "Sometimes those can be two different things."
Next Karszes said producers will need accrual based financial data for making budgeting decisions — financial statements to provide an accurate picture of where the business has been for earnings, what the cost structure is.
"We have to put numbers to the options," Karszes said. "We're gonna have incomplete information. There's a lot of unknowns, but we still have to put some numbers to it to help frame the conversation, help us identify what might be key things that we want to focus on."
Additionally, compare alternative options, have more than one solution to the problem. Karszes also recommended having a sounding board, someone to bounce ideas off of. During uncertain times it's important to remain nimble and flexible.
"What's the exit strategy from these decisions," said Karszes. "Again, not a new management concept, but how do we exit back out of these if the rules change?"
When making management changes, Mike Hutjens, from the University of Illinois, talked about the two key philosophy. The first key is timeliness — how long is the situation going to last, weeks, months or years? The second key is targeting - how much is a farmer being asked to cut back?
In trying to determine how to reach the targeted number of pounds reduced on a farm, one solution would be to cull cows to reduce the pounds of milk coming from a farm.
"The question is what happens in three months from now, if your coop says, hey, we're business as usual, restaurants are opening, we're off and running," Hutjens asked. "They're gone. So the question is do you have heifers on the farm to backstop this or are you just going to buy some heifers, which are fairly economical right now."
If culling cows isn't a good solution, the next question would be, what about drying off early?
"The good news there is the pounds are still on the farm," said Hutjens.
If the decision is made to dry off cows early to reduce milk production, Hutjens recommends not mixing them with other dry cows, but putting them in a separate lot.
Another option to consider is going from milking three times a day to two times a day. Hutjens said data suggests this would result in six to eight less pounds of milk.
"We're cautious on that one primarily because I'm not going to mess up my first cows and lactation cows because they're the ones making the most money," Hutjens explained. "They are the most efficient on the farm. I'm not going to handicap those cows. I have to have those cows ready to breed to stay healthy."
Hutjens said options to pull back on nutrients "scares" him. "We're going to go and we're going to pull protein out, we're going to limit energy in the feeding program that really scares me."
There is also the option of feeding back excess milk to the cows.
"We've done some pushing on these numbers here. It looks like the sweet spot is about 16 pounds you can feed back in the TMR maintaining a dry matter and that's hopefully going to be no wetter than 60% moisture," said Hutjens.
In a Dairy Girl Network webinar on Shifting Mindset and Strategy in the Face of COVID-19, Richard L Wallace, Senior Manager at Zoetis, said producers want to make sure they are reducing production without incurring any penalties.
"The profitability of dairy farms is everything you do on your operations, to improve profitabiliy," said Wallace. "But to have another negative cash flow hit you because now you're being charged to discard milk that got sent to the processor - that's a double whammy."
Wallace recommended maintaining adequate cow numbers "so that when we get through the dark tunnel we're flowing through right now and the lights start showing at the other end of the tunnel, producers can "efficiently and rapidly gear back up to the profitability they need.
Wallace said going from three times a day milking down to two has to be done with a well thought out program. Dropping some high producing cows down to milking twice a day "is a recipe for mastitis and cell count issues."
"We need to think strategically, if we can do this on a portion of the herd or whether we need to do it on the whole herd," Wallace said during the webinar. "If you actually dropped back some late lactation cows from three X to two X, you'll probably drop significantly more than seven to eight pounds."
Another consideration if the plan is to reduce a number of cows from three X to two X is mid to late lactation cows that don't have as much udder fill, those cows can probably handle a twice a day milking.
With many farms probably having calves on the way, Wallace said drying cows off early is "going to be really difficult." He also stressed not extending the dry out past 70 days.
"I've looked at a lot of data here recently and cows that have been dried off longer than 70 days are twice as likely to be culled in the first 60 days after calving," said Wallace.
Long dry periods can work, Wallace explained, "as long as we maintain body condition on these cows and they don't gain an excess amount of body condition."
Another option for excess milk production is feeding calves more whole milk for longer - up to three gallons a day for three months if the farm has space for housing the calves.
Reducing energy density of cow rations to reduce milk production "probably isn't the best way to go," according to Wallace. He recommends working with a nutritionist to make sure you're doing the right thing.
Wallace said he has multiple concerns with this use of excess milk because of the logistics of handling the milk coming out of the bulk tank, having bacteria, listeria or salmonella from the milk being in the bunk.
Mike Lormore DVM, Director of Zoetis, said processors are looking for reductions of 5% - 25% through May as the dairy industry looks to sell 8% - 13% less total products than last year.
"The good thing is we're still going to sell a lot of product," said Lormore. "The bad thing is we have a lot of milk flowing back into our system."