Dr. Normand St-Pierre, Extension Dairy Management Specialist, Department of Animal Sciences, The Ohio State University
A good portion of the corn harvested for silage in Ohio has now been chopped and ensiled. Early reports are that both yields and quality varied from good to excellent. With December futures hovering around $4.50/bu, we will soon be feeding corn silage with a corn-based value at the mixer wagon in the $50 to 55/ton range as opposed to the mid to upper $70s experienced last year. Cash corn grain and other energy feeds should be dropping substantially throughout the corn cropping season. Although milk prices are not expected to remain at current levels, we still expect feed costs to drop more rapidly and extensively than milk prices, at least until Christmas. On the feed side, commodities will be jockeying for a place at the “cow table”. Expect much movement in all markets, which means that there should be some good bargains to be found and bought.
For now, feeding balanced diets based on economically priced feed ingredients can help in maintaining positive margins. The idea is to maximize the use of underpriced feeds and to minimize the use of overpriced ones.
As usual in this column, I used the software SESAME™ that we developed at Ohio State to price the important nutrients in dairy rations to estimate break-even prices of all major commodities traded in Ohio and to identify feedstuffs that currently are significantly underpriced as of September 22, 2013. Price estimates of net energy lactation (NEL, $/Mcal), metabolizable protein (MP, $/lb – MP is the sum of the digestible microbial protein and digestible rumen-undegradable protein of a feed), non-effective NDF (ne-NDF, $/lb), and effective NDF (e-NDF, $/lb) are reported in Table 1. Compared to its historical 6-year average of about 10¢/Mcal, NEL is still a highly priced nutrient at 17.9¢/Mcal. This is important because a cow producing 70 lb/day of milk requires in the neighborhood of 33 Mcal/day of NEL. For MP, its current price (42.8¢/lb) is also greater than its 6-year average (28¢/lb). Whereas the dietary energy price should drop substantially throughout the fall, I am very uncertain as to what to expect for the protein. In short, we are still in a period of very high dietary energy and protein prices. The cost of ne-NDF is currently discounted by the markets (i.e., feeds with a significant content of non effective NDF are price discounted), and the discount of 16.5¢/lb is significantly better than its 6-year average (-9¢/lb). Meanwhile, unit costs of e-NDF are about at their historical average, being priced at 1.5¢/lb compared to the 6-year average (3.3¢/lb). So, rumen-effective dietary fiber is currently not a significant cost factor from a historical standpoint.
Table 1. Prices of dairy nutrients for Ohio dairy farms, September 21, 2013.
Economic Value of Feeds
Results of the Sesame analysis for central Ohio on September 21 are presented in Table 2. Detailed results for all 27 feed commodities are reported. The lower and upper limits mark the 75% confidence range for the predicted (break-even) prices. Feeds in the “Appraisal Set” were deemed outliers (completely out of price). One must remember that Sesame compares all commodities at one point in time, early fall in this case. Thus, the results do not imply that the bargain feeds are cheap on a historical basis.
Table 2. Actual, breakeven (predicted) and 75% confidence limits of 27 feed commodities used on Ohio dairy farms, September 21, 2013.
For convenience, Table 3 summarizes the economic classification of feeds according to their outcome in the Sesame analysis.
Table 3. Partitioning of feedstuffs, Ohio, September 21, 2013.
Alfalfa hay – 40% NDF