The event featured keynote speakers Dr. Mike Hutjens from the University of Illinois at Urbana-Champaign and Steve Bodart of Lookout Ridge Consulting.
Dr. Hutjens, a dairy specialist, centered on how farmers can refine their forage strategies to get the best forage and forage quality they can for their animals.
"My challenge is to give you one or two key ideas that may go back to your farm or your clientele at a very exciting time in the dairy industry," Hutjens said.
His first key idea was the introduction of what he calls the "Hutjens 50:35:15 Rule." This rule combines what and how much of a certain product a farmer should be feeding his or her cows.
When farmers are thinking about where they are going to build their feed program for the 2011/2012 feed program season Hutjens said to base feed off of this ratio.
"It says 50 percent of what you're going to feed that cow is going to be forages," Hutjens said. "Another 35 percent is going to be your concentrate, your snaplage, your protein supplement, minerals and vitamins and then the swing 15. The swing 15 says depending on your strategies, your forage qualities, your level of milk production that could be more forages, could be more byproduct or it may have to be grain because you have some poor quality forage."
Hutjens continued by saying basically 60 percent of this is forages and about 35 percent is byproduct feeds.
His next main point was about Sesame comparison. Sesame is a software program that comes from Ohio State University and looks at 27 different feedstocks. Sesame then calculates the value of each feed and compares it to the others.
Hutjens used examples from Aug. 2 for central Illinois feed prices. He focused on what the actual price of the feed was compared to what Sesame predicted it to be.
For corn grain the actual price was $265, while the predicted price was $242. That's $7.42 a bushel compared to $6.78 a bushel. For corn silage the actual price was $60, while the predicted price was $90.
"Your take home message guys and gals is to buy corn silage," Hutjens recommended.
The Sesame program is able to help farmers decide when to buy or lock-in prices for a specific feedstock. This program is available at
www.sesamesoft.com.
The seminar's second keynote speaker, Steve Bodart, senior agribusiness consultant and dairy industry specialist with Lookout Ridge Consulting, discussed how farmers need to look at feed costs and how it matters.
"The big question," Bodart said, "is do feed costs really matter? Yes, it does."
Bodart says the farmer needs to pay attention to a second question as well, "Is feed cost the primary line to evaluate when looking at your nutrition program from a financial perspective?" He says no.
When looking at income over feed costs Bodart said the margin between feed and overall milk price must be evaluated. He said feed efficiency is key, and four main points must be referred to in order to have a better understanding of income over feed costs.
The first is to understand your feed efficiency. Second, is to critically review discretionary ingredients. The third is to look at least cost ration versus profit maximizing rations, and lastly, know your numbers prior to change.
"I'm looking at this from a finical standpoint," Bodart said. "I'm looking at this from a bankers standpoint. I'm the end result. The scorecards we look at aren't exactly the same scorecards your nutritionist is looking at."
Bodart made his point to the audience that feed costs versus income over feed costs do matter by displaying the differences in two 1,000-cow dairy herds. Ultimately showing an annual difference of $105,850 between the herds.
"Income over feed costs is where we need to be at," he said. "That's where we need to start to evaluate."
Bodart included four more main factors that impact this: Milk price, milk production, feed intake and feed price. Bodart said farmers need to know where they are at before making changes.
He made a point saying farmers also need to look at how many cows they are feeding who aren't producing milk, the cows in the treated pen for instance and factor those cows into the equation as well.
"Cost occurs when feed is pulled out of the feed bins, out of the bunker. That's where feed cost occurs," he said. "It's not based on how much the cow initially consumed. The other factor we're looking at is pounds of milk actually sold."
Bodart wrapped up with advice not to cut corners when it comes to making decisions in feed costs over income and not to under estimate the value.
"We need to understand where we're at, understand our decisions we're making today, understand that those decisions have long term impacts. They're not just going to be short term, they're not just going to be something that effects us today."
