Buckeye Dairy News: VOLUME 23, ISSUE 2

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

    April F. White, Graduate Student, Department of Animal Sciences, The Ohio State University

    Milk prices

    In the last issue, the Class III futures for January and February were at $16.12/cwt and $15.56/cwt, respectively. Class III closed at $15.75/cwt in December, with protein maintaining lower than in the winter issues at $2.98/lb and milk fat at about half of that at $1.44/lb. The Class III future for March is $16.18/cwt, followed by an increase to $17.20/cwt in April.

    Nutrient prices

    It can be helpful to compare the prices in Table 1 to the 5-year averages. The price of metabolizable protein (MP) and physically-effective neutral detergent fiber (peNDF) are about 74 and 62% higher compared to the 5-year averages ($0.39/lb and $0.08/lb, respectively). Net energy for lactation (NEL) is about 39% lower than the 5-year average ($0.08/Mcal) and about 50% of the price reported in January ($0.10/Mcal). The price of MP is nearly double the price of MP in March 2020 ($0.36/lb), reflective of the increased cost of protein-rich feeds, including soybean products this year.

    To estimate profitability at these nutrient prices, the Cow-Jones Index was used for average US cows weighing 1500 lb and producing milk with 3.9% fat and 3.2% protein. For January’s issue, the income over nutrient cost (IONC) for cows milking 70 lb/day and 85 lb/day is about $8.38 and $8.87/cwt, respectively. Both estimates are likely to be at least marginally profitable. As a word of caution, these estimates of IONC do not account for the cost of replacements or dry cows, or for profitability changes related to culling cows.

    Table 1. Prices of dairy nutrients for Ohio dairy farms, March 26, 2021.

    Economic Value of Feeds

    Results of the Sesame analysis for central Ohio on March 26, 2021 are presented in Table 2. Detailed results for all 26 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. Feeds for which a price was not reported were added to the appraisal set for this issue.

    Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, March 26, 2021.


    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 based on current nutrient values 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 value) 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. Feeds added to the appraisal set were removed from this table.

    Table 3. Partitioning of feedstuffs in Ohio, March 26, 2021.

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

    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 Table 4 below.

    Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, March 26, 2021.

     

     

  2. Considering Corn Silage Cost of Production

    Dianne Shoemaker, Dairy Farm Management Field Specialist, Ohio State University Extension

    The cost of raising a ton of corn silage, like the cost of producing a hundredweight of milk, varies across farms and years. For example, in 2019 the 33 Ohio Farm Business Analysis corn silage enterprises reported an average yield of 18.8 ton/acre, but yields ranged from 10 to 25 ton/acre. Yields directly impact cost of production and subsequently feed costs. 

    When dairy farms participate in the Ohio Farm Business Analysis program, we do an enterprise analysis for the dairy, and most farms also complete enterprise analysis of their crop enterprises. Let’s take a closer look at corn silage production for the three-year period from 2017 through 2019 (Table 1).

    Table 1. Annual and average yields and returns per acre for corn silage grown on owned and rented land, 2017-2019.

     

    2017

    2018

    2019

    3-year Average

    Enterprises

    34

    26

    33

     

    Yield, ton/acre

    20.2

    22.3

    18.8

    20.5

    Value, $/ton

    $41.10

    $35.97

    $39.27

    $38.78

    Crop insurance revenue, $/ac

    $8.39

    $3.61

    $67.28

    $26.42

    Other crop income, $/ac

    $0.31

    $2.04

    $33.08

    $11.81

    Gross returns, $/ac

    $843

    $807

    $840

    $830

    Every year, at least a few of the farms experience poor local weather conditions, which explains much of the typical range of yields. On an annual basis, yield per acre ranged from 11 to 28 ton/acre in 2017, 17 to 28 ton/acre in 2018, and 10 to 25 ton/acre in 2019. While some corn silage yielded well in 2019, the $67 average crop insurance revenue per acre and lowest average yield per acre reflects 2019’s widespread weather challenges. 2019’s Market Facilitation Program payments are included in the “Other Crop Income” category whether they were received in 2019 or 2020 (the third tranche).

    In this 3-year period, the average total cost of producing corn silage was $746 per acre (Table 3). What inputs were the biggest contributors? The largest are shown in Table 2. Seed, fertilizer, custom hire, and the cost of land represented by either cash rent, or for owned land, the cost of real estate taxes and mortgage interest.

    Table 2. Five highest expenses per acre for corn silage grown on owned and rented land, annual and average for 2017-2019.

     

    2017

    2018

    2019

    3-year Average

    Seed

    $124

    $91

    $122

    $110

    Fertilizer

    $100

    $104

    $111

    $105

    Custom hire

    $113

    $95

    $111

    $103

    Land rent1

    $99

    $94

    $108

    $100

    Real estate taxes & mortgage Interest2

    $83

    $100

    $117

    $100

    1Rented land only, 2Costs associated with land ownership, interest estimated.

    For these dairy farms, home grown forage is “sold” or charged to the dairy enterprise at the total (direct + overhead expenses) cost of production per ton. Some farms also sell corn silage to other farms above their cost of production. 

    Once the crop is in the ground, the biggest factor impacting the farm’s cost of production per ton is the final yield. Keeping in mind the range in yields helps to explain the range in cost of production in 2019, from less than $18 per ton to more than $100 per ton. While some of the cost of the $100+ per ton corn silage might be offset by crop insurance revenues, low yields and the need to purchase replacement forages will impact those farms’ finances well into the future.

    Table 3. Annual and average direct and total costs per acre and per ton for corn silage grown on owned and rented land, 2017 - 2019.

     

    2017

    2018

    2019

    3-year Average

    Direct costs, $/ac

    $621

    $570

    $610

    $600

    Direct + overhead costs, $/ac

    $747

    $704

    $787

    $746

    Direct costs, $/ton

    $30.70

    $25.64

    $32.46

    $29.60

    Direct + overhead costs, $/ton

    $36.90

    $31.59

    $41.77

    $36.75

    Cost of feed impacts dairy enterprise profitability. Input costs and yields impact costs of feed. In 2019, the median cost of production for corn silage was $37.32/ton. That means that half of the corn silage fed cost between $18 and $37.32/ton to feed, and half cost between $37.32 and $100+/ton to feed. Which side of $37 are you on? Which side do you want to be on?

    If you want to choose sides, enroll in the 2020 Ohio Farm Business Analysis Program. Farms can enroll now and work with their technician to complete their analysis by the May 27th deadline. The information you receive from your analysis will tell you where you were in 2020. Integrating that information with your agronomic decisions will help you choose sides and line up for a profitable future.C ontact me at shoemaker.3@osu.edu or 330.257.3377 to discuss analysis for your farm.

  3. USDA Projects Dairy Production to 2030

    Chris Zoller, Tuscarawas County Extension Educator, Agriculture and Natural Resources, Ohio State University Extension

    The United States Department of Agriculture (USDA) recently released the interagency report: USDA Agricultural Projections to 2030. These long-term projections include several assumptions related to the Farm Bill, macroeconomic conditions, farm policy, and trade agreements. While long-term projections are based on assumptions and many unknowns, they do provide a glimpse of how U.S. farm commodity prices may perform over the next several years. Anyone interested in reading specific details is encouraged to see the report available here: https://www.ers.usda.gov/webdocs/outlooks/100526/oce-2021-1.pdf?v=3513.2. The following paragraphs and figure are taken from the report.

    Milk production is projected to rise at a compound annual growth rate of 1.1% over the next 10 years, reaching 248 billion pounds in 2030. With slow growth in domestic demand as the economy recovers from the pandemic, the dairy herd will remain relatively flat in the middle of the decade but grow in the latter years. In 2030, milk cows are projected to number 9.43 million head. Economies of scale trends are expected to continue, leading to further farm consolidation. Technological and genetic developments will contribute to increasing yields. In 2030, milk production per cow is projected to average 26,295 pounds.

    • Commercial use of dairy products is expected to rise faster than the growth in the U.S. population over the next decade. Demand for cheese is expected to rise because of continued greater consumption of prepared foods and increased away-from-home eating. Butter demand is also expected to grow significantly. The decline in per capita consumption of fluid milk products is expected to continue.
    • Global demand for U.S. dairy products is expected to continue to grow over the next 10 years, with the largest increases being in exports of products with high skim-solids content, such as dry skim milk products (nonfat dry milk and skim milk powder), whey products, and lactose. By 2030, U.S. dairy exports are expected to be 4.0% of milk production on a milk-fat milk-equivalent basis and 22.6% on a skim-solids milk-equivalent basis.
    • The all-milk price in 2021 is expected to be lower than 2020 as milk production increases significantly. At the time the projections were made, some Government purchase programs were scheduled to be discontinued at the end of 2020. Feed prices are expected to increase from 2020 to 2021. Milk production in 2022 is projected to grow at a rate slower than in 2020 and 2021 because of lagged supply response to relatively low milk prices and relatively high feed prices in 2021. With slow milk production growth in 2022 and an increase in demand as the economy is recovering from the pandemic, the all-milk price is projected to increase in 2022. As the industry adjusts, the-all milk price dips to lower levels in 2023-2025. The all-milk price then increases in nominal terms later in the decade.

    Planning

    There are many things that can/will change these projections, but they do provide one source of information dairy farmers can use to evaluate long-term plans. Based on these projections, what can you continue doing to be successful? What might you need to change to improve your success?  I encourage you to work closely with your Extension Educator and other advisors to chart a course for long-term success.

  4. Ventilation System Maintenance Is Critical to Keeping Cows Comfortable

    Jason Hartschuh, Extension Educator, Crawford County, Agriculture and Natural Resources, Ohio State University Extension

    March is one of the most challenging months on the farm to keep barns properly ventilated. We often see temperatures in the teens and less than a week later see highs in the 70’s. Our ventilation system recently roared to life as temperatures in the barn crossed 65°F, reminding me that we still had not gotten around to winter fan maintenance as belts squealed and louvers hung half shut.

    Fan maintenance is critical to keeping your cows cool and saving energy. Ventilation systems often consume between 20 to 25% of the total energy used on the farm. Lack of cleaning can reduce fan efficiency by as much as 40%. Meaning that your electric bill stays the same, but less air is moving through the barn. Monthly maintenance through the summer is critical to keep fans clean. Even a thin layer of dirt on the fan blades, shutters, and protective shrouds decreases air movement and increases the power requirements from the fan. Heavy cleaners and a pressure washer work well to remove dirt from the fans.


    Dirty fans in need of cleaning.

    Be sure to disconnect the power supply before washing the fan and be extra cautious of water entering unsealed motors. After washing, allow fans to dry and grease bearings before turning the power back on. During washing, inspect the fans closely using the following maintenance checklist:

    • Do all shafts turn smooth; are bearings showing wear?
    • Inspect impeller for cracks.
    • Are belts worn?
    • Are pulleys still aligned?
    • Bolts and set-screws tight.

    While monitoring fan performance and wear can be challenging, there are a few tools that can help you. Fans should be monitored on a routine basis, such as every month in the summer or on the manufacturer’s recommended grease internal.

    Logbook - If you assign a number to each fan on the farm, it will help track the maintenance cost of each individual fan. The logbook allows you to monitor when a fan is having increased belt wear or motors that are not lasting as long as they should, which is a sign of greater problems occurring. Recording air velocity also helps to notice wear issues before they become major problems.

    Digital Anemometer - A anemometer is used to measure the air velocity to determine if fans are operating properly. Be sure to record these values in your logbook so that you can find changes in fan performance. Lower air velocity is often caused by either dirt build up or improper belt tension, allowing for slippage. Ideal wind speed through the barn is 5 mph.  

    Digital Tachometer - A tachometer is used to help determine why your fan may not be producing enough air velocity. This can be used to help determine the RPM of both your fan and the motor. When the motor is running at the correct RPM, but the blades are not, it may be due to poor belt tension, damaged or worn pulleys, or poor belt alignment.

    Groove Gage - This can be used to identify pulleys that are worn and need replaced. Worn pulleys increase belt wear and slippage and decrease fan RPM. Belts should ride at the top of a pulley and not sunken into the pulley. The gage should fit tightly; if more than 1/32 inches of wear can be seen, poor belt life can be expected. If the gauge hits the bottom of the pulley, it is worn out.


    Source: Dayton motor

    Belt Tension Tester - This can be used to measure the force required to move a belt 1/64inch per inch of span. It helps troubleshoot fans that are turning slower than they should. If tension is correct but fans are turning too slow, pulleys or belts may be worn out. If belts with spring tensioners cannot be tensioned correctly, it may be a sign that the spring tensioner is weak or that belts are stretched or improperly sized. 

    Multi-Meter - This allows you to check the amperage draw of the fan motor; high amperage draws waste electric and can lead to premature motor failure. This can be caused by too high of belt tension, dirt build-up on blades and housing, or bearings that are binding and need replaced.

    When adding new or replacing ventilation fans, it is important to look at more than the price. Many motors have electric efficiency ratings; the higher efficiency motors have more copper windings, increasing their cost. High efficiency motors usually pay for themselves with decreased electric consumption within one to three years. When adding or replacing fans, it is important to not buy the cheapest but also consider the fans efficiency rating for lifetime electrical use.

    When inspecting ventilation systems and placing new fans, it is important to check air speed throughout the barn. The minimum cooling airspeed at cow resting height is 2.25 mph, which can be measured with an anemometer with little additional cooling effect found from air speeds over 4.5 mph. When measuring air speed throughout the barn, be sure to check for dead zones caused by fans having less air throw than expected. For example, depending on fan velocity, 36-inch fans may have to be placed every 24 feet instead of 30 to 32 feet. While large or more efficient fans can push air further; every cow acts as a baffle that disrupts air flow.

    Through proper fan maintenance, we can keep ventilation systems working at maximum efficiency, keeping cows cool and comfortable. The ideal ventilation system will provide between 40 and 60 air changes per hour.   

  5. Forage Planting – How to Do It Well

    Dr. Mark Sulc, Professor and Extension Forage Specialist, Department of Horticulture and Crop Science and Jason Hartschuh, Extension Educator, Agriculture and Natural Resources, Crawford County, Ohio State University Extension

    Early spring provides one of the two preferred times to seed perennial cool-season forages, the other being late summer. The outlook for this spring is for probabilities of above average precipitation in April and May. Planting opportunities will likely be few and short. An accompanying article on preparing now for planting, along with the following 10 steps to follow on the day you plant, will help improve chances for successful forage establishment.

    1. Check now to make sure soil pH and fertility are in the recommended ranges.  Follow the Tri-state Soil Fertility Recommendations (https://forages.osu.edu/forage-management/soil-fertility-forages). Forages are more productive where soil pH is above 6.0, but for alfalfa, it should be 6.5 – 6.8. Soil phosphorus should be at least 20 ppm for grasses and 30 ppm for legumes, while minimum soil potassium should be 100 ppm for sandy soils less than 5 cation exchange capacity (CEC) or 120 ppm on all other soils. If seedings are to include alfalfa and soil pH is not at least 6.5, it would be best to apply lime now and delay establishing alfalfa until late summer (plant an annual grass forage in the interim).
    2. Plant high quality seed of known varietal source adapted to our region. Planting “common” seed (variety not stated) usually proves to be a very poor investment, yielding less even in the first or second year and having shorter stand life.
    3. Calibrate forage seeders ahead of time. Seed flow can vary greatly for different varieties and depending on the seed treatment and coatings applied. A good video on this entitled “Drill Calibration” is at https://forages.osu.edu/video/.
    4. Prepare a good seedbed as soon as soils are fit in April. The ideal seedbed for conventional seedings is smooth, firm, and weed-free. Don’t overwork the soil. Too much tillage depletes moisture and increases the risk of surface crusting. Firm the seedbed before seeding to ensure good seed-soil contact and reduce the rate of drying in the seed zone. Cultipackers and cultimulchers are excellent implements for firming the soil. If residue cover is more than 35%, use a no-till drill. No-till seeding is an excellent choice where soil erosion is a hazard. No-till forage seedings are most successful on silt loam soils with good drainage and are more difficult on clay soils or poorly drained soils. You will want no-till fields to be smooth because you do not want to bounce over them for all the years of this stand!

    Try to finish seeding by the end of April in southern Ohio and by the first of May in northern Ohio. Timely planting gives forage seedlings the jump on weeds and the forages become established before summer stress sets in. Weed pressure increases with later plantings, and forages will not have as strong a root system developed by early summer when conditions

  6. Gearing Up for Spring Planting

    Dr. Mark Sulc, Professor and Extension Forage Specialist, Department of Horticulture and Crop Science and Jason Hartschuh, Extension Educator, Agriculture and Natural Resources, Crawford County, Ohio State University Extension

    The current weather outlook for early spring planting season is starting to sound like a broken record of the last few years – a wetter pattern than normal for Ohio and the Great Lakes region, along with a warmer than average pattern. So, it is more important than ever to be ready to take full advantage of any short windows of opportunity we will get to be in the fields this spring. This is particularly important because most forages should be planted earlier rather than later, the exception being the warm-season grasses like sorghum-sudangrass.

    Start preparing by imagining your first day of planting forages. What will you do the day you plant? It might even help jog your thoughts to physically “walk through” those activities. List every single activity needed to get the whole job done.

    Then ask the question, “What can I do NOW that will make that first planting day go smoothly?”

    Below are some examples of preparations to do now:

    1. Make sure your fuel supply is full and fill the tanks of all tractors that will be used. Service all tractors.
    2. Get any needed fertilizer on hand or order it to be spread as soon as the field is fit (hopefully you pulled a soil sample last fall, and if not, do it ASAP and send to the lab).
    3. Calibrate the fertilizer spreader.
    4. Buy the seed (including any companion crops you will use) and have it on the farm, if not done already.
    5. Buy inoculant if seed is not pre-inoculated.
    6. Service all tillage equipment that will be used and have it ready to go, including hooking it to the tractor if possible.
    7. Get the drill/planter out, service it, and set the planting depth so it is ready to go. Arrange for equipment you will rent or borrow. Consider contingency plans for your borrowed equipment if used to also plant forages on other farms each spring.
    8. Calibrate the drill to the desired seeding rate using the seed that will be planted and then don’t touch the drill settings. Watch this video about calibrating drills: https://forages.osu.edu/video/drill-calibration?width=657px&height=460px&inline=true#colorbox-inline-239078345).
    9. If contracting planting, get agreements and expectations in place now.
    10. Finally, list the field work tasks that you will need to do when the weather and soils are fit, then prioritize them. Think through the tough choices you might have to make between competing activities. Think through contingency plans if each specific activity cannot be completed in a timely manner, or if it can’t get done at all this spring because of wet weather.

    This last #10 item is the hardest. When the windows of opportunity are shorter than the list of work that can be accomplished, then tough choices are necessary. For example, how do you prioritize planting forages versus manure spreading in the spring? It will likely depend on the specific situation.  If the manure is stored in a lagoon, then when the lagoon is full, the manure must be pumped out and spread on the field rather than planting forages, so the forage planting might have to wait. But planting forages too late in the spring brings a lot of risk to stand establishment and low yields (maybe only one cutting). If forage planting will be delayed past May 10, it might be better to plant a summer annual for a couple cuttings, then kill it and plant the perennial forages in August. But if the manure is a dry pack, perhaps it is better to take those first days of field work to plant the perennial forage and spread the manure later on other fields. Thinking through these choices and establishing a game plan will help you be more efficient and not waste time with indecision or making a less than optimal choice for the situation.

    We surely all hope for good opportunities for planting this spring, but climatologists are forecasting another possibly challenging planting season. Do what is in your control now to prepare as much as possible for when planting time comes. You do not want to waste hours of potential field planting doing stuff you can do today. Try to be completely ready, as if you will be planting tomorrow morning…which we hope will be true one day very soon!

  7. Beef Sire Selection for the Dairy Herd

    Allen Gahler, Extension Educator, Agriculture and Natural Resources, Sandusky County, Ohio State University Extension

    Creating half-blood bull calves with sexed beef bull semen can increase profitability on the dairy farm. By some estimates, fed cattle that include dairy genetics make up something in the neighborhood of 25% of the U.S. beef supply. With improvements in the utilization of male-sexed beef bull semen, many dairy farmers are choosing to utilize beef genetics to add value to their calf crop.

    On March 10, Al Gahler presented via Zoom during the OSU Extension Beef Team’s 2021 winter beef school on making beef cattle sire decisions for the dairy herd. Al covered Expected Progeny Differences (EPD’s) and traits to consider in order to maximize the value and marketability of crossbred beef on dairy calves. The session begins as OSU Extension Beef Field Specialist Garth Ruff introduces Al Gahler to discuss effectively utilizing beef sires to add value to the dairy based calf crop. The presentation can be viewed at: https://u.osu.edu/beef/2021/03/17/beef-sire-selection-for-the-dairy-herd-2/

  8. Multi State Dairy Beef Program Being Offered

    Garth Ruff, Beef Field Specialist, Ohio State University Extension

    Dairy producers over the past few years have faced a variety of challenges: low milk prices, increased feed costs, and often a surplus of heifers to enter the herd. In an effort to manage heifer numbers and add value to bull calves, breeding dairy cows to beef sires has become a more popular and common practice than ever before.

    Join Ohio State University (OSU) Extension and Michigan State University (MSU) Extension on April 21, 28, and May 5 at 12:00 p.m. EST, for a series titled “Management Considerations for Beef x Dairy Calves.”

    Dairy steers have been an important part of the beef supply chain for some time. This program will cover a variety of topics related to marketing, genetics, and management of crossbred beef x dairy cattle.

    On April 21, Larry Rose, Head of Regional Cattle Procurement for JBS will be discussing marketing options and how crossbred dairy calves fit into the beef production system.

    The April 28 meeting will feature Chip Kemp, Director of Industry Services at the American Simmental Association. Chip will be discussing which beef cattle expected progeny differences (EPD) and traits to consider to maximize the value and marketability of crossbred beef on dairy calves.

    Jerad Jaborek, Beef Feedlot Systems Educator for MSU Extension and Garth Ruff, OSU Beef Cattle Field Specialist, will cover farm management strategies for dairy beef calves on May 5.

    This webinar is free to anyone interested in the topic and we ask that you register online at go.osu.edu/beefmanagement. If you have any questions about registering for the program, contact OSU Extension Beef Cattle Field Specialist, Garth Ruff at ruff.72@osu.edu.