Dr. Normand St-Pierre, Dairy Management Specialist, Ohio State University
Everything seems to be getting cheap this fall. Finally, by-product feeds have followed the substantial drop of the corn and soybean markets. Based on average nutritional composition and prevailing market prices in Ohio in the second week of November 2004, commodities can be partitioned as follows:
|
Bargains
|
At Breakeven
|
Overpriced
|
|
Bakery byproducts |
Alfalfa hay Blood meal Brewers grains, wet Whole cottonseed Gluten meal Soybean hulls 48% soybean meal Tallow Wheat bran |
Beet pulp |
Details on the estimates of nutrient costs, break-even prices of commodities, and break-even prices of forages, as calculated by the software Sesame V3.01, are provided in Tables 1, 2, and 3.
Table 1. Estimates of nutrient unit costs.1,2
| Nutrient name |
November 04
|
September 04
|
November 03
|
| NEL - 3X (2001 NRC) |
0.072
|
0.086
|
0.085
|
| RDP |
-0.066
|
-0.051
|
-0.011
|
| Digestible RUP |
0.180
|
0.227
|
0.168
|
| Non-effective NDF (ne-NDF) |
-0.022
|
-0.041
|
-0.041
|
| Effective-NDF |
0.060
|
0.061
|
0.085
|
1NEL = Net energy for lactation, RDP = rumen degradable protein, RUP = rumen undegradable protein, and NDF = neutral detergent fiber.
2Estimates are for $/lb except for energy which is at $/Mcal.
Table 2. Estimated break-even prices of commodities - OH.
| Name |
Actual ($/ton)
|
Predicted ($/ton)
|
Lower limit ($/ton)
|
Upper limit ($/ton)
|
| Alfalfa Hay, OH Buckeye D |
110
|
107.10
|
89.78
|
124.40
|
| Bakery Byproduct Meal |
103
|
114.08
|
106.24
|
121.93
|
| Beet Sugar Pulp, dried |
145
|
104.02
|
92.62
|
117.43
|
| Blood Meal, ring dried |
325
|
303.16
|
282.56
|
323.77
|
| Brewers Grains, wet |
26
|
24.21
|
21.49
|
26.93
|
| Canola Meal, mech. extracted |
129
|
105.41
|
95.20
|
115.62
|
| Citrus Pulp, dried |
140
|
99.83
|
93.13
|
106.52
|
| Corn Grain, ground dry |
79
|
118.42
|
110.92
|
125.92
|
| Corn Silage, 32 to 38% DM |
30
|
44.56
|
39.06
|
50.06
|
| Cottonseed, whole w lint |
142
|
160.44
|
140.32
|
180.56
|
| Distillers Dried Grains, w solubles |
109
|
124.28
|
113.89
|
134.66
|
| Feathers Hydrolyzed Meal |
185
|
222.56
|
208.55
|
236.56
|
| Gluten Feed, dry |
77
|
105.35
|
97.56
|
113.16
|
| Gluten Meal, dry |
247
|
255.05
|
239.84
|
270.26
|
| Hominy |
90
|
103.70
|
96.93
|
110.48
|
| Meat Meal, rendered |
185
|
171.15
|
157.32
|
184.97
|
| Molasses, sugarcane |
113
|
80.62
|
74.26
|
86.98
|
| Soybean Hulls |
82
|
68.45
|
50.73
|
86.17
|
| Soybean Meal, expeller |
203.50
|
215.98
|
205.18
|
226.79
|
| Soybean Meal, solvent 44% CP |
159.50
|
135.99
|
122.26
|
149.74
|
| Soybean Meal, solvent 48% CP |
168.50
|
160.18
|
148.08
|
172.28
|
| Soybean Seeds, whole roasted |
216
|
201.11
|
189.19
|
213.04
|
| Tallow |
295
|
293.98
|
268.56
|
319.40
|
| Wheat Bran |
58
|
70.20
|
58.28
|
82.13
|
| Wheat Middlings |
60
|
79.92
|
69.51
|
90.34
|
Table 3. Break-even prices of forages - OH (mg = mostly grass).
| Name |
Predicted [$/ton]
|
Corrected [$/ton]
|
| Grass Hay, immature, <55% NDF |
119.55
|
131.54
|
| Grass Hay, mature, >60% NDF |
131.08
|
74.05
|
| Grass Hay, mid mature, 55-60% NDF |
121.60
|
105.07
|
| Grass Hay, all samples |
128.56
|
86.40
|
| Grass-Leg Hay, mg, immature <51% NDF |
119.46
|
115.57
|
| Grass-Leg Hay, mg, mature >57% NDF |
125.53
|
75.75
|
| Grass-Leg Hay, mg, mid mature 51-57% NDF |
122.77
|
98.58
|
| Grass-Leg Hay, 50/50 mix, immature |
111.92
|
122.73
|
| Leg Hay, immature, <40% NDF |
102.08
|
129.30
|
| Leg Hay, mature, >46% NDF |
101.02
|
76.75
|
| Leg Hay, mid mature, 40-46% NDF |
98.25
|
102.12
|
Using these nutrient prices, we can calculate nutrient costs, milk gross income, and income over nutrient costs. The benchmarks published in this column are for a 1350 lb cow producing 75 lb/day of milk at 3.6% fat, 3.1% protein, and 5.9% other solids. Component prices are those paid for the previous month because we don't know yet what component prices will be for November 04. Results of our calculations are presented in Table 4. Gross income from milk is slightly higher than in September and slightly lower than in November 03 (notice the substantial change in the relative value of milk fat and milk protein). The substantial decrease in the cost of nutrients from September 04 is primarily due to a substantial drop in the cost of energy in dairy diets. Total nutrient costs dropped by $0.92/cow/day from September to November 2004. Consequently, income over nutrient costs currently is a healthy $7.68/cow/day. Nutrient costs represent 30% of gross milk income, a substantial drop from the 39.4 and 37.5% two months ago and a year ago, respectively. With proper nutrition, there is a lot of money to be made milking cows right now. Make sure that you use these extra dollars wisely.
Table 4. Nutrient costs, milk gross income, and income over nutrient costs - Ohio.1
| Nutrient |
November 2004
|
September 2004
|
November 2003
|
|
------------------------------ $/cow/day --------------------------------
|
|||
| Nutrient costs2 | |||
|
2.49
|
2.97
|
2.94
|
|
-0.35
|
-0.27
|
-0.06
|
|
0.41
|
0.49
|
0.38
|
|
-0.10
|
-0.19
|
-0.19
|
|
0.65
|
0.67
|
0.92
|
|
0.20
|
0.20
|
0.20
|
|
3.29
|
4.21
|
4.19
|
| Milk gross income | |||
|
5.14
|
4.84
|
3.39
|
|
5.54
|
5.55
|
7.63
|
|
0.30
|
0.30
|
0.14
|
|
10.97
|
10.69
|
11.16
|
| Income over nutrient costs |
7.68
|
6.83
|
6.97
|
1Costs and income for a cow producing 75 lb/day of milk, with 3.6% fat, 3.0% protein, and 5.9% other solids.
2NEL = Net energy for lactation, RDP = rumen degradable protein, RUP = rumen undegradable protein, ne-NDF = noneffective neutral detergent fiber, and e-NDF = effective neutral effective fiber.