August 1999
Volume 2, Issue 5

Inside this Issue
Does it Really Pay to Test Forages, Normand R. St-Pierre
Cheese Inventories Dip - Cheese Prices Roar!, Cameron S. Thraen
Dr. H.R. Conrad
Erratum

Does it Really Pay to Test Forages?
Normand R. St-Pierre, Ph.D., Extension Dairy Specialist
Department of Animal Sciences, The Ohio State University

You are a dairy producer and you have your forages tested on a regular basis but you wonder if this is a wise decision based on sound economics.  Or else, you don’t have your forages tested because it is expensive, complicated and doesn’t seem to be worth much.  In essence, you just don’t know the value of a feed analysis program.  Would you believe that for a herd of 100 cows, a regular forage analysis program is worth almost $10,000 per year?

How did we get to this number?  Conventional ration formulation methods currently utilized by feed companies, veterinarians and extension personnel do not account for variability in the nutritional composition of feedstuffs.  We found a new method that does just that.  In a few years from now, it may become the standard method of ration balancing.  In the interim, our method provided us with a way to estimate the economic value of a forage analysis program.  To derive the value of such a program, one must first quantify the nutritional variation within each of the feedstuffs used in dairy nutrition.  After all, we are all aware that a feed analysis does not create or dissipate nutrients in the feed.  The amount of protein in your corn silage does not change whether the silage is tested or not.  But the knowledge regarding its true composition is greatly increased through an analysis done on a representative sample.  You still don’t know the exact composition of your silage even if you took a good representative sample and had it tested at a reputable laboratory.  However, the range of likely composition is narrowed considerably.  To quantify this knowledge, we used over 15,000 records of feed analysis from three laboratories, including REAL in Wooster.  In Table 1, we report summary results for corn silage, as an example.  The standard deviation is a measure of variation: the larger it is, the larger is the variation.  Statistically, approximately two thirds of all samples would fall within the average minus one standard deviation and the average plus one standard deviation.  Using the protein content of corn silage as an example, two thirds of all samples contained between 6.6% (7.9 – 1.3) and 9.2% (7.9 + 1.3) crude protein.  This also implies that one third of all corn silage samples had either less than 6.6% or more than 9.2% crude protein.  If we do not test the silage and used the average value of 7.9% to balance the ration, then one of three things would happen.  First, by chance, the true composition may be relatively close to the average of 7.9%, in which case nothing really happens.  Second, the actual protein may be substantially higher than the 7.9% average, in which case most of the excess protein is wasted away, a costly process both economically and environmentally.  Last, the actual protein may be much lower than the 7.9% average, resulting in under-fed animals and the associated loss in milk production.  This reasoning could be repeated using the net energy content of the silage as the variable of interest.

We estimated the economic value of a feed analysis program by comparing two separate strategies.  In the first case, we assumed that feeds produced on the farm were neither sampled nor tested.  Average (table) compositional values were assumed with their respective standard deviations.  In the second case, we again assumed average compositional values but reduced the standard deviations to 10% of their initial values, reflecting the effect of a feed analysis program on all farm-produced feeds.  In both cases, we balanced a total mixed ration (TMR) for a 1,400 lbs. cow with a potential milk production of 20,000 lbs/year (60 lbs/day) at an average butterfat of 3.5%.  Available feeds were: mixed grass-legume hay, corn silage, high moisture ear corn, 44% soybean meal and a commercial mineral/vitamin supplement.  Using a computer, we used a complicated technique called mathematical simulation to mimic what would happen if we had the luxury of running a large experiment with 10,000 cows.  Results of our study are reported in Table 2.  By design, the second strategy (multiple samples and feed analyses) improves the knowledge regarding the true composition of feeds.  Therefore, underfeeding happened less frequently with this strategy resulting in fewer cows producing under their potential.  Consequently, the average milk production was 1.1 lb./day higher with this strategy than with the one where none of the feeds were sampled.  At $13/cwt for milk, this translates to additional gross revenues of $0.14/cow/day.  Also, because there is more certainty regarding the composition of the ingredients making-up the TMR, the second strategy allowed for a reduction in the overage, also called safety factors, for each of the essential nutrients.  Therefore, the average TMR using the second strategy where all feeds were sampled and analyzed saved an average of $0.13/cow/day in feeding costs.  In total, income-over-feed-costs (IOFC) were improved by $0.27/cow/day by the feed analysis program.  Over a full year, this translates to $98.55/cow, or close to $10,000 per year for a herd of 100 milking cows.

How many samples and analyses are required to achieve these results depend on the level of feed variability on any given farm.  Large bunker silos that are filled up quickly with relatively uniform crops have lower daily variation in the composition of their dry matter because the variation is mostly horizontal while the feeding is made of mostly vertical sections.  Tower silos, on the other hand, offer the largest opportunity for large daily variation in the composition of their dry matter because feeding takes place in the same plane as the variation.  Thus, intuitively, producers with tower silos should sample and have their forages analyzed on a more frequent basis.  This derivation is true only for the composition of the dry matter.  The opposite is actually true for the amount of moisture in the forages.  Because large silage surfaces are unprotected from the elements, bunker silos can show substantial daily variation in moisture content.  Tower silos generally show less daily variation in moisture content.  Additionally, changes in moisture content occur more gradually in a tower silo.  Feed moisture can be easily determined on the farm using an accurate scale and a microwave oven, or a Koster drier (or other similar drying devices).  Contact your county Extension agent, a nutritional consultant, or a qualified feed sales representative if you need help with feed moisture determination on your farm.

Cheese Inventories Dip - Cheese Prices Roar!
Cameron S. Thraen
AED/ The Ohio State University/ OSUE
Dairy Economist / Extension Specialist

Holy Hot Cows! High heat and humidity throughout most of the United States is slowing the torrid pace of milk production this summer.  The latest USDA July 15 milk production report shows production gains, while still high, are off in most of the high producing states.  In the 20 state total overall milk production for June was up 3.4% over last year.  Out West, for the month of June, California up 9.0%, Arizona up 5.2%, Idaho up 8.6%, New Mexico up 6.3% and Washington up 2.2%.  Only Texas posted a decline of 1.7%.  Closer to home, Wisconsin production was up 2.1%, Minnesota up 2.3%, New York 3.0%, Pennsylvania up 2.7%.  Ohio posted an increase of 1.3% on the strength of more output per cow but fewer cows.

The Cheese Market is all the Rage in this market!

The current market is being driven by inventory concerns in the cheese market.  According to the latest USDA Cold Storage report, inventories of American cheese declined in June.  Demand for cheese is strong and those that have it are hanging on to it - confident that the price will continue to rise for the present.  Heat and humidity are cutting cheese yields at the plant and will continue to do so through July.  Those in the know are suggesting that cheese prices could rise has high as $2.00 on the Chicago Mercantile Exchange.   The July 23rd Dairy & Food Market Analyst reports a cheese price high between $1.80 and $1.90 is very likely over the next 45 days.

Look for the bang in milk prices, but be alert for the bust!

Trading on the CME futures market for the week ending July 23 showed the strength in the cash cheese market.  Cheddar blocks averaged $1.6755, barrels $1.6145.  The butter market softened with AA Butter retreating 4.17 cents to $127.33 per pound.  The reaction to the bullish cheese inventory report sent the nearby and outlying BFP contracts soaring.  The August, September and October contracts all settled over $15.40.  This is bullish for milk producers.  The July BFP should be in the range of  $13.15 to $13.35.  With the built in lag in NASS survey prices, look for these higher cheese prices to show-up as another $2.00 jump coming in the August milk check!  But beware, we saw a similar marketing year develop in 1996 and cheese prices came tumbling down very quickly after Labor Day - so now might be a very good time to lock in your milk price for some of your late fall and winter milk production.

Dr. H.R. Conrad - Fellow of the American Dairy Science Association

Dr. H.R. Conrad, Professor Emeritus of Dairy Science, OARDC and OSU, was honored as a Fellow of the American Dairy Science Association at the annual meeting in Memphis, TN, 20 June 1999.  It recognizes members of 20 years or more who have made exceptional contributions to the dairy industry, to a dairy-related discipline, or to ADSA.  It is one of the highest distinctions an ADSA member can achieve.
 
Dr. Conrad was cited for his productivity in research and his mentoring and development of outstanding young scientists.  His research areas included early contributions to theory of feed intake regulation in dairy cattle, studies of energy and protein metabolism, and important leadership in studies of vitamin and mineral metabolism in dairy cattle, particularly of selenium and vitamin relationships.

Dr. Conrad is a Navy veteran of WWII, received his undergraduate degree from the University of Kentucky, and graduate degrees from the Ohio State University.  He joined the OARDC research faculty in 1952, served at all academic ranks, and was Associate Chair of Dairy Science and Associate Director of OARDC.

Dr. W. J. Harper, holder of the Parker Chair in Food Science and Technology at OSU, was also honored as an ADSA Fellow for his 50 years of contributions in dairy products research, especially of cheese quality.

ERRATUM
Volume 2 - Issue 4
Article: Wet Conditions Increase the Chances for Pesticide-Contaminated Forages

Unfortunately a printing error occurred on page 6.  The text should have read:

…soil cores may be submitted for analysis.  Unfortunately, a lot of samples may be necessary to appropriately represent large fields or pastures.  Volatilization traps, consisting of paper strips that are saturated with ethylene glycol and suspended in plastic jugs that have the bottoms removed, can be placed in strategic locations in the field or pasture.   …

Calendar of Events

Annual Summer Picnic of Progressive Dairy Producers of Ohio
August 11, 1999
Ed and Jenny Pfeifer's Farm
Contact: Debbie Ayers 419/938-6270

Dairy Field Day
August 17, 1999 (note the date in the newsletter is wrong)
Indian Run Dairy (The Elliott's)
Contact: Mark Armfelt
              740-668-4831 at the Licking or Knox County Extension Offices

Dairy Cattle Skillathon
The Dairy Cattle Skillathon is open to all Ohio 4-H and FFA members visiting or exhibiting
at the Ohio State Fair.
   *Friday, August 6, 1999, 1:00 PM - 4:00 PM
   *Saturday, August 14, 1999, 1:00 - 4:00 PM
   *Friday, August 20, 1999, 1:00 PM - 4:00 PM

Inaugural Tri-State Dairy Management Conference
November 10-11, 1999
Fort Wayne, Indiana