Custom TMRs can work, but it must be a two-way street

Hoard's Dairyman: 

Custom TMRs can work, but it must be a two-way street

Date: 
Tue, 01/26/2010

Custom operators who also serve as feed suppliers was the topic at the January 26 panel discussion of the Wisconsin Custom Operators Symposium held at the Wisconsin Dells. Two panel members who actively sell feed as well as TMR mixes shared their thoughts on the process.

Daryll Woldt of Woldt Harvesting LLC, Brillion, Wis., has been selling TMR for nearly a decade to herds ranging in size from an Amish-dairy with 20 cows all the way up to a 200-cow dairy. At the present time, Woldt has four dairy customers. Woldt believes feed stored in silo bags is key to making the system work. Once feed is in the bag, it is very stable. The feed is stored in 12-foot by 500-foot or 12-foot by 300-foot long bags. Woldt crops some 3,000 acres.

"Once we take the forages out of the bag and haul it to the mixing pad, it is critical that we prevent the feed from getting rained on," says Woldt who mixes multiple TMRs for his clients. "If it doesn't get rained on, we have little issues with heating," he said. "In winter, our TMR mixes can last a week without heating. As we move into spring, TMR mixes last about four days. And on hot, humid summer days, the longest we push a mix is two days," says Woldt who has had one customer 60 miles away and took feed delivery once a week.

In addition to the custom TMR business, Woldt also has a bagging business and rents out 10 bagging machines that are run by tractors. They also have 2 self-propelled machines.

Outside of one customer who went out of business unexpectedly last spring, Woldt says accounts receivable have not been a problem. To get paid in a timely fashion for what can be the biggest expense on the dairy, he works with partnering dairies to either pay for feed on delivery or to get payment as part of a milk assignment.

Chris Hartleben of Hartleben's Custom Cropping, Wittenberg, Wis., sells TMR mixes and direct forages like haylage and corn silage. He said he has some customers who rented their land and let Hartleben handle the cropping operation.

"The customers who rented us ground and purchased back the TMR have done better financially," said Hartleben. "In most of these cases, producers were short on labor and didn't have time to manage inventories," he said. "Customers who kept an equipment line, ran some ground, and only purchased TMR when they needed it didn't fair as well because they kept assets they were not seeing maximum use. "

"When running a business like this, you are becoming a business partner," said Hartleben. "If you are delivering feed, you need a milk check assignment," he said. As for handing the cropping enterprise, “It only works if you are in the general radius of the partnering dairy." Hartleben commented that a 15-mile radius is the best fit for their operation.

The Symposium is held jointly each year with the Midwest Forage Association and the Professional Nutrient Applicators Association of Wisconsin.

Click for more information