DAIRY PROFIT MONITOR AND ACTIVITY ANALYSIS PROJECTS

Betsey Howland

blh37@cornell.edu

Cornell University PRO-DAIRY ProgramDepartment of Animal Science

College of Agriculture and Life Sciences

Jason Karszes

jk57@cornell.edu

TOPICS COVERED TODAY

• Dairy Profit Monitor

• Cost of Manure Application

• Cost of Raising Dairy Replacements

DAIRY PROFIT MONITOR

DPM provides a snapshot of key operating measures a producer has control over from month to month

Shows how different areas of the business are impacting and influencing one another on 1 report

Provides a great resource for tracking up to date performance

DAIRY PROFIT MONITOR: KEY MEASURES

Pounds of components per cow per day

Herd Performance Monitors

Transition Cow Management

Cull Rates

Milk Check AnalysisNet Marketing Margin

EfficiencyLbs. of milk per lb. of dry

matterLbs. of milk sold per worker

FinancialVet and Medicine CostsBedding Costs

KEY MEASURES: NET MILK INCOME OVER FEED COST

Highest correlation with return on assetsLast 4 years, Dairy Farm Business Summary data

Actual Milk Price

Fixed Milk PriceAverage of prices, last 3 years, Cornell DFBSEliminates variation of milk priceAny changes will be from changes in feeding

program

TRENDS

• How have key production and financial measures changed over the last 12 months?

• Why have they changed?

• 46 farms have data entered for at least 11 of the last 12 months

• 42 of the farms all 12 months complete• 4 farms missing something for just 1 month.

POUNDS OF COMPONENTS PER COW PER DAY

PREGNANCY RATE

FEED CONVERSION

COST PER LB. OF DRY MATTER

NET MILK INCOME OVER FEED COSTS

• Key financial index to track operating performance

• How is it changing over time

• Actual milk price vs fixed milk price

NMI OVER PURCHASED FEED COSTS: ACTUAL MILK PRICE

NMI OVER PURCHASED FEED COSTS: FIXED MILK PRICE FACTORS

NMI OVER TOTAL FEED COSTS: ACTUAL MILK PRICE

NMI OVER TOTAL FEED COSTS: FIXED MILK PRICE FACTORS

WHAT HAS THE GREATEST CORRELATION TO NET MILK INCOME OVER FEED COSTS?

QUESTIONS ON DAIRY PROFIT MONITOR?

COST OF MANURE HAULING AND APPLICATION

PRELIMINARY RESULTS

STUDY INTENT

Develop template that can be used to calculate cost of manure application utilizing farm level data.

Determine costs of utilizing tankers to transport and apply liquid manure.

Identify key factors that impact the cost to apply manure.

STUDY LAYOUT

27 participating farms

Hauling and spreading with same tanker

Tractor and spreader10 wheelerSemi-tractor and tanker

Hauling and Transfer

10 wheelerSemi-Tractor and tanker

STUDY METHODOLOGY

Farms tracked data for spring 2012

Per day per piece of equipment

Labor hoursFuel usageFields spreadDistance to fieldsTravel time

STUDY METHODOLOGY

For each piece of equipment

Investment levelRepair costsUseful life & salvage valueInsurance & registration

For each employee

Total cost per hour, including all benefits

STUDY METHODOLOGY

For each piece of equipment

Total cost calculated per period tracked by farm.

Cost per hour, gallon, acre, etc., determined by dividing by appropriate amount.

Costs for application of all manure not inherently captured

Bedded packsCleaning sand out of manure pits

HAUL AND SPREAD

Haul and spread manure with same piece of equipment

HAUL, TRANSFER AND SPREAD

Haul manure to field and transfer to spreader at field for application

KEY FACTORS

Key cost differences:

Spreading capacity

Distance traveled

Equipment utilization

QUESTIONS ON COST OF MANURE

APPLICATION?

COST OF RAISING DAIRY REPLACEMENTS

PRELIMINARY RESULTS

GOAL OF THE REPLACEMENT PROGRAM

The primary goal of all heifer programs is to raise the highest quality heifer who will maximize profits once she enters the lactating herd. A quality heifer is one carrying no limitations into the dairy herd that would hinder her ability to produce under the farm’s management system. Profits are maximized by obtaining the highest quality heifer at the lowest possible cost.

WHAT IS THE COST OF RAISING REPLACEMENTS?

Hard to know what the “Average” is

Conduct study every 5 years to capture costs on farms

17 farms have completed study

A descriptive study

COSTS FROM BIRTH TO CALVING

The following tables represents what the costs were for these 17 farms.

If all input costs and usage levels stayed the same over two years, this is what the cost would be.

Replacement Program AverageNumber of Heifers 636 333 1,305Age, Months 23.1 20.3 25.0Weight, Pounds 1,302 1,208 1,368Total Weight Gained, On Farm 1,163 956 1,272Average Daily Rate of Gain 1.74 1.58 1.96% Non-Completion Rate 10.62% 4.16% 17.66%

Selected MeasuresDairy Replacement Program

17 Northeast Dairy Farms, 3rd Quarter 201280th Percentile Range

Feeding AverageAverage Daily Rate of Gain 1.74 1.58 1.96Average Daily Dry Matter Intake per Animal 15.19 12.20 19.16Feed Conversion Ratio(Lbs. of Gain/Lbs. DM 0.12 0.09 0.15Feed Cost per Pound of Dry matter $0.112 $0.089 $0.142Feed Cost per Day per Animal $1.674 $1.423 $2.051Feed Cost per Pound of Gain $0.961 $0.845 $1.195Percent of Total

Grown Feed 63.5% 43.8% 76.9%Purchased Feed 36.5% 23.1% 56.2%

Labor AverageHeifers per Weighted Daily Labor Hour 39.4 26.4 57.6Pounds Gained per Weighted Daily Labor Hour 97.5 30.9 176.8

Cost per Heifer Per Day $0.378 $0.215 $0.511Cost per Pound of Gain $0.217 $0.124 $0.303Number of Annual Worker Equivalents 2.14 0.95 4.27Pre-Weaned Heifers per Hour 11.6 6.2 21.7

Post-Weaned Heifers per Hour 59.0 38.8 102.1Cost per Worker Equivalent $39,964 $27,655 $48,845

80th Percentile Range

80th Percentile Range

Breakdown of Costs of Raising Heifers by Stage of Growth 17 New York Dairy Farms, 3rd Quarter 2012, New York

Per Pound of Gain Stage of Growth Birth to 200 Lbs 201-700 lbs 701-850 lbs 851-Calving Feed $1.714 $0.678 $0.811 $1.122 Labor 0.805 .140 0.125 0.230 All Other Costs 0.610 .415 0.571 0.857 Total $3.128 $1.233 $1.507 $2.209 By Total Raising Cost Stage of Growth Birth to 200 Lbs 201-700 lbs 701-850 lbs 851-Calving Feed $188.5 $339.0 $121.7 $538.2 Labor 88.5 69.9 18.8 108.9 All Other Costs 67.1 207.4 85.6 405.7 Total $344.1 $616.3 $226.1 $1,053.1 % of Total Cost 15.4% 27.5% 10.1% 47.0% % of Total Growth 8% 38% 12% 35%

QUESTIONS ON REPLACEMENT COST

STUDY?

THANK YOU!BETSEY HOWLAND

BLH37@CORNELL.EDU607-592-6222

JASON KARSZES JK57@CORNELL.EDU

607-227-0694