Example
Farm A Farm B
Cows in the herd 100 1100
Feed costs, $/cow/day :...66 :3.00
sMilk, l 50 :70
Milk price, $/cwt 13.00 :13.00
Feed costs, $/cwt milk .5.32 4.29
Some overfe edcosts/cow, $ 84 6.. ...........
Many dairymen use feed costs per cow per day as a measure of profitability. Let us take the case above where Farm A has a lower feed cost per cow than Farm B. Is Farm A more profitable? Farm A has a lower milk production average than Farm B. Farm A has a feed cost per cwt of $5.32 ($2.66/.5 cwt) as compared to Farm B with a feed cost per cwt of $4.29 ($3.00/.7 cwt). Therefore, even though the feed cost per day was lower for Farm A the feed cost per cwt was lower for Farm B. The milk income minus feed costs per cow for Farm A ($13.00/cwt x .5 cwt $2.66 = $3.84) is less than for Farm B ($13.00/cwt x .7 cwt $3.00 = $6.10). Farm B had an income over feed cost/cow of $2.26 more per day than Farm B. In this example, where cow numbers and milk price were the same between farms, both the feed costs per day and the production level of the cows were needed to determine true profitability.
Dairy producers, when deciding to change anything in their feed program, should set goals for themselves and monitor the results. It is necessary for the producer to determine the amount of extra milk they must produce in order to pay for the difference in cost of the new ingredients (break even), and follow up after a set period of time to assess the success of the new feeding program. There are some very expensive rations being fed in the industry that contain high-priced ingredients that do not increase milk production enough to justify their use. Therefore there are some dairies that do an excellent job at managing the facilities and cows and produce high volumes of milk but are not monitoring the results of some of the ingredients in their "high production" dairy rations. Those dairies could actually be less profitable than a dairy with less milk production but a more cost-effective ration.
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