Buckeye Dairy News: VOLUME 21, ISSUE 4

  1. Milk Prices, Costs of Nutrients, Margins, and Comparison of Feedstuffs Prices

    Alex Tebbe, Graduate Research Associate, Department of Animal Sciences, The Ohio State University

    Milk Production is Stagnant but Prices are Rising

    In the last issue, the Class III futures for May and June were at $15.76 and $16.44/cwt, respectively. The Class III component price for May closed about $0.60/cwt higher at $16.38 and then became slightly lower in June at $16.27/cwt. The Class III future for July is similar to June’s component price at $16.13/cwt followed by a jump to $17.37/cwt in August. Overall, milk prices are getting better and continue to be on the rise.

    An explanation for the continued rise in milk prices seems to be from increased demand and not supply. According to the USDA, monthly milk production in 2019 and in the major 24 milk producing states has been nearly identical to their respective months in 2018. However, product sales and dairy exports are both experiencing growth and making the overall price increase. Some economists are even suggesting the increase in demand could push Class III milk prices over $18/cwt before the end of 2019.

    Although total milk production is stagnant, production per cow continues to be increasing but at the same rate that US cow numbers are decreasing. According to the USDA, 2019 milk production per head was up about 0.8% compared to 2018. Conversely, cow numbers in the major 24 states were down around 60,000 head compared to one year ago (July 2018: 8.84 million head). Given the long lag time it takes for cow numbers to respond to milk prices, I would expect cow numbers to continue decreasing for at least another 6 months. Nutrient prices are also on the rise (see below), which should start causing US cow numbers to drop even faster than the current rate. Considering these aspects together, we can probably expect total milk production to decrease in the near future, and the resulting drop in supply should also help the Class III price surpass $18/cwt.            

    A Bad Spring Equals Worse Nutrient Prices

    The weather conditions that farmers experienced during spring of 2019 have been nothing short of a disaster, and later planting dates and poor forage crop harvests are already taking a toll on commodity prices. For alfalfa, prices have increased 5% since I wrote this column in May. For soybeans, prices have increased over 7%. For corn and cottonseed, the price hikes are even worse at 17% and 26%, respectively. As expected, the cost to feed cows the nutrients required to produce milk is also getting worse.    

    As in previous issues, feed ingredients commonly used in OH were analyzed using the software program SESAME™ developed by Dr. St-Pierre at The Ohio State University. The resulting analysis can then be used to appraise important nutrients in dairy rations, estimate break-even prices of ingredients, and identify feedstuffs that are significantly underpriced as of July 29, 2019. 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.  

    Based on July’s appraisal, the cost to feed protein continues to drop as the cost to feed energy continues to increase. For MP, its current value is down nearly $0.04/lb since May ($0.27/lb), whereas the cost of NEL has gone up 2¢/Mcal (May: 9.2¢/Mcal). The price of e-NDF has also increased $0.04/lb, whereas ne-NDF has decreased about $0.05/lb since May. Overall, the total cost of feeding lactating dairy cows is up about 10% since May.

    To estimate profitability at these nutrient prices, the Cow-Jones Index was used for average US cows weighing 1500 lb and producing milk with 3.7% fat and 3.1% protein. For July’s issue, the income over nutrient cost (IONC) for cows milking 70 lb/day and 85 lb/day cows is about $9.17/cwt and $9.67/cwt, respectively. Although this is about $0.80/cwt less than estimates from May ($9.97/cwt and $10.38/cwt, respectively), July’s IONC are still profitable for Ohio dairy farmers but barely. However, these estimates of IONC do not account for the cost of replacements or dry cows, which would likely make profit margins even slimmer.

    Table 1. Prices of dairy nutrients for Ohio dairy farms, July 29, 2019.

    Economic Value of Feeds

    Results of the Sesame analysis for central Ohio on July 29, 2019 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 those for which we didn’t have a price or were adjusted to reflect their true (“Corrected”) value in a lactating diet. One must remember that SESAME™ compares all commodities at one specific point in time. 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, July 29, 2019.

    For convenience, Table 3 summarizes the economic classification of feeds according to their outcome in the SESAME™ analysis. Feedstuffs that have gone up in price or in other words moved a column to the right since the last issue are red. Conversely, feedstuffs that have moved to the left (i.e., decreased in price) are green. These shifts (i.e., feeds moving columns to the left or right) in price are only temporary changes relative to other feedstuffs within the last two months and do not reflect historical prices.

    Table 3. Partitioning of feedstuffs in Ohio, July 29, 2019.

    Bargains At Breakeven Overpriced
    Bakery byproducts Alfalfa hay - 40% NDF Beet pulp
    Corn, ground, dry Gluten meal Blood meal
    Corn silage Soybean hulls Mechanically extracted canola meal
    Distillers dried grains 48% Soybean meal Citrus pulp
    Feather meal Soybean meal - expeller 41% Cottonseed meal
    Gluten feed Whole, roasted soybeans Fish meal
    Hominy Whole cottonseed Molasses
    Meat meal Wheat bran Solvent extracted canola meal
    Wheat middlings   44% Soybean meal
        Tallow

    As coined by Dr. St-Pierre, I must remind the readers that these results do not mean that you can formulate a balanced diet using only feeds in the “bargains” column. Feeds in the “bargains” column offer a savings opportunity, and their usage should be maximized within the limits of a properly balanced diet. In addition, prices within a commodity type can vary considerably because of quality differences as well as non-nutritional value added by some suppliers in the form of nutritional services, blending, terms of credit, etc. Also, there are reasons that a feed might be a very good fit in your feeding program while not appearing in the “bargains” column. For example, your nutritionist might be using some molasses in your rations for reasons other than its NEL and MP contents.

    Appendix

    For those of you who use the 5-nutrient group values (i.e., replace metabolizable protein by rumen degradable protein and digestible rumen undegradable protein), see the Table 4.

    Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, July 29, 2019.

     

     

     

  2. Management Strategies for Limited Forage Supply on Dairy Farms

    Dr. Maurice L. Eastridge, Professor and Extension Dairy Specialist, Department of Animal Sciences, The Ohio State University

    With the excessive rainfall in 2019, forage harvests were delayed which reduced supply of high quality of forage, excessive heaving during the winter devastated many alfalfa fields which has severely reduced forage supply, and late corn plantings leave many dairy farmers with the uncertainty of yields and extent of ear development by time of frost. It is an understatement that forage yields and quality have been compromised for 2019. Thus, management strategies on the farm need to be initiated now to deal with these situations. Some suggestions include the following:

    1. Work with your nutritionist to re-formulate diets with lower forage levels. Diets typically contain 21 to 23% forage neutral detergent fiber (FNDF), but diets with as low as 16% FNDF can be fed with proper balancing of the diet for starch (20 to 25% of dietary DM), adjusting diet formulations for degradability of the grain sources (such as dry ground corn versus high moisture corn  versus other types of processed corn or other cereal grains), and providing for adequate particle size of forage for stimulation of rumination. Addition of a buffer to the diet to help maintain rumen pH is advised. Additional suggestions have been provided in the article titled “What can I do to stretch forage supplies at my farm?” (https://dairy.osu.edu/sites/dairy/files/imce/PDF/Feed_PDF/Stretching%20forage%202019%20weiss%20FINAL%20B.pdf).
    2. Reduce shrink of forages harvested and stored on the farm. Reducing shrink (wastage) of forages should be a focus during harvesting (field losses), storage (rapid filling and proper coverage of silage), and during feeding (losses from feed bunk and minimizing refusals).
    3. Sale unprofitable cows, extra heifers, and cows in the dry pen that are not pregnant. The focus here is to remove excess animals from the farm to reduce the forage demand. Many farms have an excessive number of heifers in inventory. Generally, 0.85 to 1.0 heifer for every cow is sufficient on the farm, but some farms carry 1.2 heifers for every cow. In certain situations, reduction of herd size for lactating cows may be necessary, especially if barns are overstocked.
    4. Feed low quality forages and feeds with variable composition in low quantities. The low quality forages on the farm should be fed primarily to the dry cows and heifers, but a small amount of low quality forage can be added to lactating cow diets to provide some of the FNDF. Also, use of various byproduct feeds can help reduce feed costs and manage low inventories of forage, but those with variable composition should be fed in low amounts.
    5. Plan to plant some cereal grains in August for Spring harvest as forage; see article titled “Forage Production Options for Ohio”
      (https://dairy.osu.edu/sites/dairy/files/imce/PDF/Feed_PDF/Summer%20Forage%20Options%20late%20June%202019%20Final-b%20Branded.pdf)
    6. Begin making plans for harvesting additional corn silage this fall, possibly from neighbors with corn not well-eared.  This could be done in current storage space or plan for putting corn silage in bags. Actually, diets with corn silage as the sole forage can be fed, but you will need to work with your nutritionist for careful balancing of the diet and monitoring cow responses. Some additional information on harvesting corn for silage that may be useful in making these decisions are:

      a.  Corn silage yield can be estimated from grain yield using the following equation:  Grain yield (bu/acre) divided by 7 = silage yield (ton/acre; 35% DM)

      b.   See article on “Pricing Standing Corn for Silage” (https://dairy.osu.edu/sites/dairy/files/imce/PDF/Feed_PDF/Pricing%20silage%202002%20Final.pdf) and adjust the prices found in the article with the prices in the July 2019 Buckeye Dairy News.

    Management of these aspects of feeding dairy cows will hopefully assist in your weathering of the 2019 forage crisis and aid in improving profitability of the farm.

  3. Foliar Fungicides for Corn Silage: A Benefit or an Expense?

    Mr. Jason Hartschuh, Extension Educator for Agriculture and Natural Resources, Crawford County, The Ohio State University Extension

    2019 has been a difficult year in much of Ohio might be an understatement. We have corn tasseling in one field while right next to it in another field, or even in the same field, it is 2 feet tall. Many of the fungal corn disease we battle in Ohio show up late enough in the season that they cause little damage. With the late planting and harvest this year, how will that be different and what effect might it have on corn silage digestibility and mycotoxins. To learn more about Delayed Corn Planting the Disease Risk in Corn, visit last week’s CORN newsletter at: https://agcrops.osu.edu/newsletter/corn-newsletter/2019-23/delayed-corn-planting-disease-risk-corn.

    When a fungal disease infects the plant, you often see a natural response to the disease of an increase in lignification of the fiber, which results in decreased NDF digestibility. The other challenge with fungal infections is that they may bring high levels of mycotoxins into the feed, but interestingly, the level of visual fungal disease symptoms does not correlate to the level of mycotoxins present. A study from the University of Illinois looked at treating silage corn with Headline or Headline AMP at V5 or R1 and the performance of Holstein cows compared to untreated corn. They used best management practices for disease selecting a corn variety with high levels of disease resistance. At the time of fungicide application, there were no diseases detectable. At harvest, mycotoxins were detected in the silage across all treatments, but levels were reduced for the fungicide applications, with greater reductions at the R1 treatment timing.  Milk production was the same among treatments, but feeding the corn with lower mycotoxin concentrations (treated with fungicide) resulted in increased energy corrected milk and better feed efficiency due to lower dry matter intake when the corn for silage was treated with a fungicide.

    Deoxynivalenol (DON) is one of the primary toxins of concern. It is caused by the fungus Fusarium graminearum and causes both Gibberlla stalk rot and Gibberlla ear rot, making it of concern for both the quality of the grain and forage.  Over the last two years, Wisconsin has been working to better understand DON concentrations in silage. Interestingly, when they use a high quality BMR hybrid, they did not see any improvement in digestibility with the fungicide. The first year under low disease pressure, they saw that in all cases but one that an application of fungicide at R1 reduced DON concentrations by at least 50%. This R1 application window is from the start of silking until 10 days after. The trial was then expanded for 2018, which was a high disease pressure year with DON concentrations as high as 17.9 ppm in one hybrid and 30.3 ppm in the other hybrid. Again, fungicide had little effect on these two BMR hybrids yield or forage quality, but a few products did consistently lower DON concentrations. Interestingly the timing of application was not the same this time across all effective products. Proline at R1, Delaro at R2, and Miravis Neo at V6 all lowered DON concentrations, but concentrations were still over 7 ppm. The study also compared DON concentrations in the ears and the stalk. Interestingly the two hybrids were not the same; one had higher concentrations in the stalk and the other had higher concentrations in the ear. The ability to have high toxin level in the stalk means we will need to scout even late planted corn that may have low grain yields.   

    What does all this mean? First, there is still a lot of work needed in this area, but for DON control, the most common beneficial timing is R1 stage of growth. Scouting will be important in 2019, especially for late-planted fields, as there is increased potential for disease development, especially of diseases that do not over winter locally.

    References

    Smith, D., B. Mueller, and J. Goeser.  2018 Corn Silage Fungicide Trial Results: A Story of Vomitoxin
    https://badgercropdoc.com/2018/10/12/2018-corn-silage-fungicide-trial-results-story-vomitoxin/

    Haerr, K.J., N.M. Lopes, M.N. Pereira, G.M. Fellows, and F.C. Cardoso. Corn silage from corn treated with foliar fungicide and performance of Holstein cows. Journal of Dairy Science 98:8962-8972.                         

     

  4. Addressing 2019 Agricultural Challenges -or- Dealing with the Impacts: Q&As for a Weird Weather Year

    Mrs. Dianne Shoemaker, Farm Management Field Specialist, The Ohio State University Extension

    To help address emerging issues and questions evolving from 2019’s challenging weather and market conditions, the College of Food, Agricultural and Environmental Sciences has convened a task force charged with providing answers to help farmers address wide-ranging issues.

    Visit this web site https://u.osu.edu/2019farmassistance/home/ to find science-based answers to frequently asked questions about:

    • Federal assistance programs
    • Cover crops on prevented plant acres
    • Cover crop selection and management
    • Livestock and forages
    • Manure management
    • Agronomic crops
    • Farm stress

    New Q&As and webinars are added as needs are identified.  Have a question?  Is there another issue that should be addressed?  Click the “submit a question” tab and let us know what you are thinking about.

    Check out other helpful sites, including your OSU Dairy Industry Resources Center at https://dairy.osu.edu/, Ohio Ag Manager at https://u.osu.edu/ohioagmanager, the C.O.R.N. Newsletter at https://agcrops.osu.edu/newsletter/corn-newsletter, and the OSU Beef Cattle Newsletter at https://u.osu.edu/beef.