Buckeye Dairy News: VOLUME 26: ISSUE 4

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

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

    Milk Prices

    Class III milk closing price for June was $19.87/cwt, with protein and butterfat prices at $2.05 and $3.54/lb, respectively. The Class III closing price for May was $18.55/cwt, also lower than predicted in the last issue. Milk protein price has somewhat recovered from lows earlier this year. In this issue, the Class III future for August is $20.45/cwt and rising to $21.49/cwt in September.

    Nutrient Prices

    It can be helpful to compare the prices in Table 1 to the 5-year averages. The cost of net energy for lactation (NEL) has increased again by about 35% compared to May and remains lower than the 5-year average by about 10% ($0.09/Mcal). The cost of metabolizable protein (MP) decreased, and the cost  of physically effective fiber increased compared to May, both by about 18% ($0.44 and $0.08/lb, respectively). Over the last 6 months, the cost of NEL has climbed steadily while MP decreased, but effective fiber has remained relatively stable in price for 2024.

    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 the July 2024 issue, the income over nutrient cost (IONC) for cows milking 70 and 85 lb/day is about $13.50 and $13.97/cwt, respectively. Both estimates are higher than May and expected to be 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, July 26, 2024. 

    Economic Value of Feeds

    Results of the Sesame analysis for central Ohio on July 26, 2024 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 local 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, July 26, 2024.

    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 in oversized text. Conversely, feedstuffs that have moved to the left (i.e., decreased in value) are undersized text. 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, July 26, 2024.

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

    48% Soybean meal
    Soybean meal - expeller    

    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.

    Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, July 26, 2024.

     

     

  2. Sustainability Series III: What is the Deal with These Carbon Markets?

    Dr. Kirby Krogstad, Assistant Professor, Department of Animal Sciences, The Ohio State University

    The first, and most important, thing to recognize is that carbon markets are not a new concept. Carbon market systems have been around since at least 1997 when the first international carbon market system was established. Also, now that carbon markets are taking center stage, they will probably change rapidly as they mature and draw more participants.

    Carbon assets being generated are not like a tractor that sits in the barn, they’re not nearly as tangible. Tracking and calculating carbon credits will be challenging, but best practices will emerge and change as the markets continue to develop. In the meantime, there are 3 important fundamentals to understand, and I’ll detail them below:

    1. What are “scope 3” emissions? - Scope 3 Inventory Guidance | US EPA

           Large companies or corporations that are working to reduce emissions place them into three buckets: scope 1, scope 2, and scope 3 (Figure 1).

    1. Scope 1 are direct emissions from that company’s activities.
    2. Scope 2 emissions are controlled by the company, but they are indirect sources of emissions. For example, scope 2 includes emissions generated through utilities purchased from a utility provider by that company.
    3. Scope 3 are emissions that are not owned or controlled by the company but are emissions that are part of their supply chain – this is where dairy farms come into play for large corporations and milk users. When you hear “Scope 3”, it just means it is an emission in the supply chain of a company, but the company does not own or control the assets that generate the emissions.

    WRI/WBCSD Corporate Value Chain (Scope 3) Accounting and Reporting Standard
    Figure 1. A depiction of what is included within scope 1, 2, and 3 emissions. Adapted from the Greenhouse Gas Protocol (ghgprotocol.org).  

    For large milk ingredient buyers and users like Nestle, FairLife, Starbucks, or any other end-user, dairy farm emissions are scope 3 emissions. When calculating the carbon footprint of their business, the end-users include the carbon emitted during the production of milk on the dairy farm. The milk end-users (Nestle, Starbucks, DFA, etc.…) do not own the dairy farms or the cows, but they must include the emissions from the dairy farms into their greenhouse gas footprint, so they have a vital stake in the ability of dairy farms to reduce their carbon footprint.

    1. Inset vs offset?

    The next bit of vocabulary that will come to the fore is “insetting” and “offsetting.” The dairy industry, at this point, is generally focusing on a carbon “inset” approach. An inset means that the benefit of a carbon credit will stay within the supply chain which uses the product that was generated. Here is how that looks in the context of milk production – if you feed an additive that reduces enteric methane emissions from cattle, you can then sell those credits to your milk buyer who can then apply that carbon credit to their carbon footprint. The carbon credit which you generated on the dairy farm stayed within the supply chain that uses it; it is an inset. This is beneficial for dairy farmers because they can receive cash for the carbon credit and have a lower carbon footprint for their milk at the grocery store.

    Offsets, on the other hand, are carbon credits which are applied outside of the supply chain for which they were produced. In the dairy context, this would be like generating carbon credits by feeding an enteric methane mitigating feed additive and then selling those credits to Delta Airlines, Google, or Microsoft so that they can use the credit to offset their company’s carbon footprint. A farm would still receive financial benefit of having sold the credit, but they can no longer claim the carbon mitigated because it was sold to someone else to apply to their footprint. We can’t double count emission reductions!

    1. Are credits being created, bought, and sold right now?

    Yes! The carbon market for dairy carbon mitigating practices is growing and credits are being generated, bought, and sold. Actually, Dairy Farmers of America bought the first feed additive carbon credits from a livestock carbon market place which were generated on a dairy farm in Texas. The carbon credit marketplaces are facilitated by carbon market platforms that verify carbon mitigation practices, such as feeding enteric methane reducing feed additives, are being employed correctly. The platforms will also do the accounting to estimate the amount of carbon mitigated and will facilitate the selling of the credits which have been generated. For this service, they will retain a portion of the revenue of each carbon credit sold.

    The other important item to note is, currently, there is no regulatory authority overseeing these marketplaces. There are 3rd parties who provide verification and review the scientific research for new carbon mitigating practices, but there is no government regulation of these markets. It is reasonable to presume this may change with time.

    What is the bottom line?

    The main thing to be conscious of is that our dairy carbon credit system is growing quickly. It will most certainly change rapidly as it grows. Also, the demand for credits will be there so long as companies and governments stick to their carbon or greenhouse gas commitments. Stay informed, reach out if you have questions, and please share information as you learn it as well. These carbon markets are going to grow in the number of credits generated, and hopefully, their value will increase as well.

     

  3. Fall Forage Management

    Dr. John Yost, Extension Educator, Agriculture and Natural Resources, Wayne County, Ohio State University Extension

    The fall is a critical time in our yearly forage management calendar. Regardless of how the growing season has progressed, your fall management practices will set the stage for getting the next spring off on the right foot. In this article, we will give some recommendations on soil fertility, fall planting of new alfalfa stands, and when to take the last forage harvest for the season.

    Your soil fertility program is far and above the most critical component of your alfalfa management. While current weather conditions and harvest timing will most influence the quality of a single cutting, a well-balanced fertility program will ensure that the plant has the available resources to perform within its environment. Again, the goal is to finish the growing season with a healthy plant that has had sufficient time to accumulate top growth that will protect the crown from cold temperatures during the late fall and winter. Allowing for enough top growth will also allow the plant to increase its energy reserves to initiate rapid growth in the spring.

    We have to begin any soil discussion with a reminder to soil test. As you implement your testing procedures, remember that you are submitting a few ounces of soil to the lab, and you will take those results and develop recommendations that will apply to the whole field. You need to have a high level of precision between sampling years so that you can accurately track your progress. Whether you use whole field, grid, or zone sampling, incorporating GPS technologies to mark sampling locations will help increase your accuracy. At a minimum, you should be collecting 15 cores for every 25 acres. These cores can be combined to create one pooled sample for submission to the lab. To determine soil nutrients, you need an 8-inch core, or if you are only interested in pH, you can sample the top 4 inches. Remember to remove the surface layer of soil so that crop debris is not included. Soil sampling should be done at least every 5 years, and recommended fertilization can be estimated off crop removal rates. For every ton of alfalfa harvested, you are removing approximately 12 pounds of P2O5 and 49 pounds of K2O. The recommended soil test ranges for phosphorus and potassium are 30 to 50 ppm and 120 to 170 ppm, respectively. Subsoil pH should be approximately 6.8.

    When considering a fall alfalfa seeding, it is important to have pH and soil nutrients at the recommended levels. This will facilitate rapid stand establishment, so that the plants are prepared for the coming winter. Most importantly, if soil pH is below a 6.5, you may need to consider making your lime application and delaying planting until next spring. If soil fertility is adequate, a fall seeding of alfalfa can be the most productive. In the fall, there will be less weed pressure and a nurse crop is generally not recommended as compared to the spring.  Weeds that emerge with the crop are the most damaging. Your goal should be for the first 60 days after planting to be weed free. If you will be no-till seeding, it is important to control existing vegetation prior to planting, especially perennial weeds. You can determine which herbicides to use, based on your existing weed populations, by consulting the 2024 Ohio, Indiana, Illinois Weed Control Guide. Seeding rates can range from 10 to 20 pounds per acre depending on planting method and soil type. If no-till seeding, you should be in the 15 to 20 pound range, and when seeding into a prepared seedbed, you can reduce seeding rates to 10 to 15 pounds per acre. Your planting depth should be ¼ to ½ inch. When no-till seeding, make sure that your no-till coulter depth is not deeper than your seed placement depth.

    It is unlikely that you will have an opportunity to harvest your fall seeding prior to winter dormancy. The recommendation is to complete planting 8 weeks prior to the first expected frost.  In established stands, the last cutting should be made no later than 6 weeks prior to the first frost. For most of northern Ohio, the first potential frost date is October 6th. Once the plants have entered winter dormancy, they have stopped photosynthesis, and it is possible to take a post dormancy harvest. This isn’t recommended for newly seeded stands. As mentioned previously, it is important to ensure that there has been sufficient growth to help the plant overwinter and initiate growth next spring. Sufficient top growth will help protect the crown from heaving. The added benefit of the top growth is supporting any snow load, which can insulate the crown when temperatures drop below 25oF.

  4. Corn Silage Pricing

    Jason Hartschuh, Assistant Professor, OSU Extension Field Specialist, Dairy Management and Precision Livestock, Ohio State University Extension

    Pricing Corn Silage

    Corn silage is the most economical forage ingredient in dairy cattle diets based upon Sesame ingredient pricing. Corn silage constitutes from 35 to 60% of the total ration intake and is 25 to 40% of the total lactating cow feed cost. A proper economic value to corn silage is important to optimize farm income.  

    Three ways to price corn silage. Actual production expense (fixed land cost & variable inputs), alternative ingredient market value, or an agreed upon cost from a neighbor for standing corn silage.  This article will cover these three alternatives.

    Actual production cost

    The actual production expense provides a method to account for the variable costs (seed, fertilizer, chemicals, machinery, labor, insurance, etc.) and fixed costs (land, taxes, etc.) associated with the effort to plant, grow, harvest, and feed corn silage.  The Ohio State Extension 2024 corn budget calculator values 183-bushel corn grain variable costs at $550/acre and fixed land, labor, and management costs at $444/acre for a total cost of $994/acre to grow and harvest corn grain. Corn silage yield of 23 ton/acre calculates to a value of nearly $43/ton standing in the field with a range of  $26 to 46/ton varying by tonnage harvested. Your specific fixed and variable farm costs can be used to find your farm corn silage cost. The 2022 OSU Extension silage budget allows users to input their specific farm costs and can be downloaded at: https://farmoffice.osu.edu/farm-management/enterprise-budgets. 

    Corn silage total cost into a ration requires adding the harvest, haul, pack, inoculate, storage losses (shrink), and feed out costs. The OSU Extension 2024 custom rate survey (https://farmoffice.osu.edu) provides the range for chopping, hauling, and packing costs at $8.25 to $15/ton.  Industry costs for inoculant range from $0.50 to $1.50/ton, storage shrink $4 to $8/ton, and feed out costs of $0.60 to $2/ton.

    Corn market price

    Another option is to use the OSU corn silage pricing tools which assist in calculating corn silage value based on market prices, which can be found at: https://go.osu.edu/cornsilageprice. This tool allows you to enter your yield estimates and corn grain market price to arrive at a price per ton and per acre. The tool then also allows the users to include the harvest cost of grain and silage to arrive at a fair market price for both the buyer and the seller. At Poet in Marion, OH, the current new corn crop price for October/November is $3.83/bu. With current corn prices, the market value of the corn silage ranges from $27 to $47/ton as fed. When including the harvest cost that the seller doesn’t incur, the bottom value of the corn silage is $27.50/ton as-fed, while the upper value for the buyer based on feed value is $42/ton as-fed.

    Alternative market ingredient value

    Alternative ingredient market value (Sesame) calculates an economic value for corn silage based on market costs of ground corn grain, alfalfa hay (silage) and various co-products. The Buckeye Dairy News regularly publishes and archives historical ingredient values and calculates predicted prices of various ingredients.  Corn silage value per ton in recent years has been predicted at $73, 92, 100, and 85/ton in years 2020, 2021, 2022, and 2023, respectively. Corn grain ($/bu) and 48% soybean meal ($/ton) in those same years was $3.70/$300, $6.00/$376, $6.45/$470, and $6.60/$435, respectively. “Home grown” corn silage is an economical and valuable ingredient into dairy cattle rations. Get it grown, chopped, and packed properly.  

    Pricing Standing Corn Silage

    Purchasing standing corn indicates that current silage inventory is limited, and more forage is required. Prior to buying standing corn, evaluate these options for alternative forages:  1) Plant a fall or winter cover crop. Spring oat, spring triticale, and annual/Italian ryegrasses are options for early August plantings. Oat and triticale can produce 2 to 2.5 ton /acre DM yield by mid-October in boot stage or possible 3 ton/acre at head stage in early November. 2) Reduce current corn silage usage and replace with optional economically priced co-products. A dairy nutritionist educated in ration software optimization can provide “best cost” pricing of byproducts that could supply cost savings over purchasing standing corn silage. 3) Reduce lactating or replacement herd inventory. Cull inefficient low-producing cows and reduce replacement heifer inventory to 75% of mature cows if expansion is not in the future.  

    Purchasing standing corn for silage can be accomplished in multiple ways. The agreement must be fair for both buyer (dairy farmer) and seller (crop farmer). Purchasing standing corn silage starts with determining the yield of grain of the standing corn. Then a grain price can be figured out by local cash markets, forward-contract, or delayed pricing. Add on the value of the silage fodder that is removed and deduct a harvest charge the seller will not incur. Each aspect of this pricing will be reviewed.    

    Determining the grain yield of standing corn can be estimated in several ways. Grain yield can be estimated in multiple ways: 1) Leave multiple test blocks in each field that can be harvested as dry corn grain for yield. 2) Use the grain yield estimate calculated by crop insurance. 3) Harvest the standing corn as silage. Obtain tonnage and moisture at time of chopping. Adjust total silage tons to a 35% dry matter basis. Calculate the bushels of corn grain in each ton by using the equivalent factor of 0.15 tons of corn silage harvested equals one bushel of corn grain. Another general rule is each ton of corn silage contains 7 bushels of dry shelled corn.  

    Add the stover value of the corn silage removed. Corn silage has roughly 50% stover on a dry basis. Value the stover based upon good quality grass hay. Every ton of harvested corn silage would remove about 400 lb of stover on a dry hay equivalent basis (15% moisture). The 400 pounds of grass hay at $120/ton market price would equate to $24 value of fodder per ton of corn silage removed. 

    Remove the dry grain harvest cost for the seller since the grain producer will not be harvesting the crop as dry corn. The OSU Ohio custom rates survey has a value of $10.50/ton to harvest, haul, and fill a corn silage bunker.

    Example. Standing corn silage that yields 25-ton/acre corn silage (35% DM). The 0.15 factor equates to 167-bushel corn grain. This factor may be low in high-yielding grain corn where a ton of silage may contain 8.6 bushels of corn.  Corn price of $3.80/bu generates $635/acre for grain yield. The $635 divided by 25-ton corn silage equals $25.40/ton for corn silage. Add the $24 value of fodder and subtract the $10.50 harvest charge. Final price of corn silage: $25.40 + $24 - $10.50 = $38.90/ton.

    Summary

    Corn silage is a critical and key part of the production and economic return for your dairy farm. Prepare the equipment, set and monitor the correct chop length and kernel rolls, put people safety first, and review equipment safety and update as needed. Continuously scout silage fields for proper fungicide application. Communicate with silage contractors and neighbors on establishing the corn silage price. Have a safe, abundant, and blessed silage season.    

  5. Corn Silage Harvest Safety Should Be Priority One

    Jason Hartschuh, Assistant Professor, OSU Extension Field Specialist, Dairy Management and Precision Livestock; and Chris Zoller, Interim Assistant Director, Agriculture and Natural Resources, Ohio State University Extension

    Corn silage harvest is a busy time of year, with the quality of corn silage determining your ability to produce milk for the next year. During this busy time of year, safety is critical with equipment moving all over the farm and harvest causing many long days and short nights.  

    Hazards of Silo Bag/Bunker Gases

    While silo gases are the most dangerous, these same gases are trapped in closed bags and bunkers during fermentation. These deadly gases, nitrogen dioxide and carbon dioxide, are a natural result of ensiling. Nitrogen dioxide is heavier than air and may be seen as a reddish to yellowish-brown haze. Since it is heavier than air, it can be found near the base of a recently filled silo. It has a bleach-like smell, and you will experience a burning sensation in your nose, throat, and chest. Instant death may result from nitrogen dioxide inhalation.

    Carbon dioxide fills the headspace of the silo, replacing the air. Exposure to these two gases happens most often in the first three weeks after the silo is filled. Tower silos and areas around stored silage should be treated as confined spaces. Due to this risk of exposure, it is suggested that you stay out of the silo for the first three weeks, unless wearing a self-contained breathing apparatus.

    Besides holding deadly gases, silos can also become the sites of fires and explosions. Silo fires often result from ensiling feeds too low in moisture, usually below 45% moisture. The heating of the materials in combination with air leaks in the silo structure can allow a fire to start anywhere within the structure and to continue burning for long periods of time. Once a fire starts, it is very difficult to control or stop.

    Safety Around Machinery

    During silage harvest, there are risks of mechanical injuries around equipment, falls, roadway accidents, and crushing. To help prevent these injuries, be sure all shields and guards are always in place on equipment. Repairing a broken shield is as critical as replacing a broken chain. While you can have the best of intentions to not get caught in moving parts, all it takes is one slip or trip for major injuries to occur. Also be sure PTO shields are in place on silage wagons; the operations levers are only inches away from that shaft. Silage harvesters have many fast-moving unguarded parts around the head and the velocity of the silage leaving the chopper alone can cause injury. Make sure the machine is turned off when leaving the seat and that all moving parts have stopped before beginning repairs. Also, never allow anyone else near the chopper while it is running.

    Be very cautious of falls. These can happen when climbing a silo, covering a bunker, or repairing a piece of equipment. Use ladders when climbing and look for ways to use a safety harness when over 6 feet in the air. In other industries, the Occupational Safety and Health Administration (OSHA) requires fall protection practices to be implemented when working over 6 feet in the air.

    Often during harvest, silage is hauled down the road. Now is the time to inspect lights and turn signals on tractors, trucks, trailers, and wagons. Also be sure any slow-moving vehicle (SMV) is equipped with a highly reflective SMV sign. During harvest, be sure to wash SMV signs and lights so that they can easily be seen. Also make window and mirror washing on all equipment a daily requirement. If tractors do not have a left-hand mirror, look for a way to add one so that you can easily check for motorists that may be passing you while you are trying to turn left.

    With all the additional moving equipment around the farm, be cautious of people walking around moving equipment. First be sure everyone is aware of the additional equipment moving around the farm. If backup beepers have been turned off or disabled in any way, now is the time to turn them back on or repair them. While they are loud and annoying, they do save lives. One additional safety strategy is to have everyone wear bright colors so that they can be easily seen, especially if working after dusk. The addition of reflective vests improves visibility.

    Rollover Safety

    Tractor rollover is a concern when packing silage piles and bunkers. According to the National Ag Safety Database, tractor overturns account for an average of 130 deaths per year in the U.S., with 80% of overturns occurring by experienced operators and one in 10 operators will overturn a tractor in their lifetime.

    A properly sized tractor must be equipped with a rollover protective structure and a seat belt. Rollover protective structures became available in the mid-1960s. These structures were not available for all new tractors until the mid-1970s. They were not standard equipment on new tractors until 1985. But these structures and seat belts are 99.9% effective in preventing deaths due to tractor overturns.

    Summary

    Silage harvest is a busy time and brings with it potential hazards that can cause injury or death.  We encourage you to take the time now to inspect equipment, make needed repairs or adjustments, and use extreme caution. 

    Additional resources are available from the Ohio State University Extension Ag Safety and Health Program at: https://agsafety.osu.edu/.