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Reducing the out of pocket costs of purchased feed Minimize

One of the reasons we have been successful to this point in our transition to grazing is that we have worked very hard at keeping our costs low.  Even though we’ve been in a low cost feed grain ratio for a few years, most years the highest single cost item on a dairy is feed grain costs.


I keep financial records along with a group of grazing dairymen and purchased grain costs for 2000 range from a high of $$4.58 per cwt. milk sold to a low of $0.84 per cwt. We were at $1.41 per cwt.


Our grain processing system is a rather elaborate operation. But some of the equipment was already on the farm from our old conventional days. I had a 5-hp. Electric hammer mill and four 8-ton bulk bins, which we now use to supply grain to the hammer mill and hold processed feed. My elaborate purchases included $10,000 for a horizontal mixer, scale and computer and $2,000 for a good used 50-foot grain leg. The reason for the grain leg was so I could unload a semi load of grain rapidly, thus encouraging farmers to deliver to me for a slight premium over the local grain terminal.  We also built a 16 X 32 foot building for about $4,000 to house the mixer and store bagged ingredients.  Having the leg erected and down spouts installed cost an additional $5,000 and we spent about $3,000 to do all the electrical installation. So for about $24,000 we had a complete system.  However it would have cost $10,000 to purchase the components we already had.  The only labor we hired was for setting the leg and installing the down spouts and that was included in the installation.


The computer system allows us to enter what ingredients we want in each batch of feed and not have to be there the entire time it is processing. So labor is at a minimum.


We purchase our grain in volume and the only protein supplement we use is for the calf starter ration we make.  When the cows are milked on stored feed the hay or baleage usually tests between 18 & 24 % protein and pasture is always that high so we don’t feed any protein to the milking herd.


I realize that many nutritionists might challenge my system but we have carried out many experiments to check the economics of our system and it works well and is profitable for us.


We only feed about 150 tons of grain to the entire herd counting young stock in a year but our average savings has been $8,000 & $10,000 each of the last two years. Most would say there isn’t that much margin in processed feed but there is.  We can purchase a 38% pellet with a cocsidiastat and still produce our calf starter for 1/3 the cost in 50 pound bags.  With high levels of liquid molasses, feed will go out of condition rapidly.


We can still use high quality liquid molasses and we don’t need preservatives to keep it fresh as we can make it on a semi-weekly schedule.  The same holds true for our cow feed.  One of our biggest challenges when purchasing complete feed in the past was ordering a large enough volume to get a fair price and then keeping it from going out of condition before it is fed.  We put an average of 300 pounds of liquid molasses to a ton of feed, slightly higher for the calf starter. Cows eat fresh feed much better than feed that has sat in a tight bin for two weeks.


The big winner is my sharemilker Scott.  In our agreement he provides ½ of all the grain fed to the entire herd.  The purpose was to keep him efficient with low grain feeding for the herd.  Feeding more grain might increase his return if I was buying all the feed.  The same goes for our calf starter; there is no point in feeding calves any more grain than is essential to get them off to a good start.  His only input besides ½ the feed ingredients are the labor to grind and the electricity.  I provided all the equipment investment so it will take at least 5 years to pay out for me but it will last much longer than that without any replacement, and the higher quality feed is well worth the investment.  At about 5000 bushels of corn a year we’re not high volume users.  That leads me into another controversial issue, which we practice on our farm.


Low grain feeding


Our grain experiments are carried out for a full lactation before we try something new.  When we began grazing in 1992, we didn’t have a feed system in our parlor.  We fed a grain mix that was 16% protein and tried to feed 24 pounds per head per day in the old fence line bunks from our conventional operation.  This required the cows to spend too much time away from the pasture as it took a long time to consume that amount of grain.  In 1993 we installed a flex auger feeding system in the parlor.  To get that much grain into the herd we fed four times a day, feeding range cubes under the fence twice a day, with the balance at milking.  The cows continued to be extremely loose.  In 94 we reduced it to 20 pounds a day and reduced the protein to 12%. In 95 we got caught with purchasing high priced corn so the experiment for the season was to reduce the grain to 12 per head per day, to see if the cows could get by on that level.  We were able to eliminate the high priced range cubes as the cows could consume the 12 pounds at milking time.  We were amazed at how much better the cows grazed and the manure was much firmer than in the past. Having better breeding success than in the past we felt the lower grain might be the reason based on research we saw from Ireland.


In 1996 we reduced the grain further and removed all the added protein, only adding essential minerals and molasses to the grain mix.  The feed mill didn’t appreciate the fact that we weren’t purchasing any of their high priced protein and so increased the grinding and delivery charge 3 fold.  Since we had the bulk bin capacity we increased our deliveries to 20-ton loads but then we experienced problems with feed going out of condition before a bin was empty.  By 98 we began planning our feed processing system and have used it now for three seasons.


When I tell people that our cows won’t eat more than 3 pounds of grain each milking they scoff and say anyone else’s cows would eat more but the fact is, feeding 3 pounds each milking to all cows that enter the parlor will cause us to need to clean out the feeders after each milking.  Our cows are quite content grazing and as long as we give them all the grass they can eat they don’t desire additional grain. I would estimate that most milkings we clean out 50 pounds of feed before we flush out the feeders with high-pressure water. When people scoff I just invite them to come and observe. That proves the point.