The abnormal has become normal

Hoard's Dairyman: 

The abnormal has become normal

Date: 
Thu, 06/17/2010

It was interesting to try to get a handle on the mood of those attending the Four State Dairy Nutrition and Management Conference last week at Dubuque. The annual gathering has become popular for the nutritionists, consultants, feed sales reps, veterinarians, educators, media, and others. Attendance this year, around 450, was among the highest in the history of the event.

The last year and half has not been a good time for those who supply dairy farmers as well as for dairy farmers themselves. Everyone's business has been affected. Sales are down. Receivables are up. And the months ahead don't look much better. Yet, those attending the Dubuque meeting were not as negative as you might expect. They seem to be chugging along.

The thought occurred to us that the situation almost is one of "the abnormal has become normal." Somehow, people have adjusted to the troubling margins on the farm, and the businesses serving dairy farmers have changed, too.

One session at the conference focused on dairy farmers could and should adjust.
Doug Scheider, with about 600 cows at Freeport, Ill., talked about how his strategy has changed. He meets quarterly with his lender and is working towards supplying financial reports monthly.

He has tried to cut ration costs without negative consequences. He did not cut supplements but made better use of feed refusals. He kept up herd health checks and vaccination protocols but did less screening for mycoplasma and Johne's. He stayed with his synch programs, but is using more young sires, cut out sexed semen, and is culling poor-doing heifers rather than raising them to see how they turn out. He cheated some on fertilizer and borrowed money in order to take advantage of early-buyer discounts.

Jim Barmore, Verona, Wis., of GPS Consulting, covered strategies he thinks more dairy operators could benefit from. Cow care is "king" and he puts big priority on cow comfort (cooling, sand, non-slip flooring, ventilation). He continued that people must eliminate the stumbling blocks that are keeping pregnancy rates below 20 percent.

Barmore and other speakers stressed that high-quality forage is vital but that you have to know its cost if it is homegrown.

Tracking feed inventories, getting a handle on shrink, and using feed management software all are important.

On the financial side, Barmore emphasized focusing on managing for margin, not just higher income or low costs. Having a five-quarter plan on capital needs (new barns or a new loader, mixer, or chopper) really is beneficial during periods of low margins. In addition to assessing cropping costs, Barmore also said it is very important to know the costs of raising heifers. Behind feed, that usually is the second largest expense on a dairy.