The day before the Central Plains Dairy Expo, I attended a Zoetis Dairy Wellness Meeting. I listened to Dr. Mike Lormore discuss the topic “What drives financial success on dairies?”. The answer we all expect to hear is energy corrected milk and maximizing marginal milk. The fun and exciting part of that talk were the factors that affect net farm income that I was not expecting to hear.
Dr. Lormore had data from AgStar from lots of herds and lots of cows from this part of the country. The top six things that positively correlated with net farm income were:
1. Energy Corrected Milk per Cow
2. Cow Death Loss
3. Heifer Survival Rate
4. Somatic Cell Count
5. Pregnancy Rate
6. Net Herd Replacement Cost
(# of removal x value of adult animal in the herd) – cull cow income) / cwt of milk
Four things that WERE NOT correlated were:
1. Dairy Size
2. Heifer Inventory
3. Total Milk Shipped
4. Labor Cost (That one is surprising; Dr. Lormore said they were looking more into that one.)
During tough economic times, every area on the farm is fair game to evaluate efficiency, cost vs. benefit, and performance. What I appreciate about this information is it gives dairy farmers a starting point as to what areas on the farm will give them the biggest bang for their buck.
Let’s take Somatic Cell Count for example. Dr. Lormore shared that the SCC for the farms with the lowest net farm income was 239,000 and the SCC for the farms with the highest net farm income was 196,000. There was a $1.14/cwt difference between those two groups of farms. Most people would say that there is no difference between a 239,000 SCC and an 196,000 SCC. This data suggests a HUGE difference in income and profitability. It makes me wonder what the difference would be between 300,000 and 150,000.
The data also showed that energy corrected milk was decreased by 5 pounds per head per day for every 100,000 increase in SCC. WOW! We have always known mastitis and SCC were expensive but this data highlights that it is REALLY expensive.
I know milk prices are not good but I also know you have made the choice to make dairy farming the way your support your family. Take a look at the six biggest impact areas on net farm income and let’s make a plan to improve one or two. We are so excited to be partners with you and are honored to have the opportunity to help you succeed!