Managing Margins

Anyone who has been in dairy farming for twenty years or more knows full well, the margins we once had don’t exist today. What we thought were ‘tough times’, we now realise were luxury margins. When I started share farming in the early “70’s”, costs, including finance costs, were benchmarked at 30% of farm income.

The range of margins across farms has always been variable in line with management and debt, multiplied by a whole raft of variables beyond farmer control. We tend to focus far too much on the influences over which we have no control, weather and milk price being the dominant stressors. This leaves us with influences that are within our control.

I’ve have written many times, the two drivers of farm profit are feed and fertility. Feed drives milk production and income, and fertility drives a herd’s capacity to utilize feed in conversion to milk. This is determined by a herd’s average days-in-milk. Obviously the more fresh cows we have in a herd the higher the milk production will be, provided feed is offered to enable our cow to consume to capacity. This is compounded by cows in early lactation possessing greater feed conversion efficiency.

Below these two pillars of farm profitability lay a variety of ‘foundational’ issues we do have control over, to a large degree. Whenever I go to my banks teller machine to draw cash, it comes up with a statement that 37% of farmers, or a similar, agree agtech is the way of the future. I would question this statement. If we do not have these foundational issues under control, no technology under the sun is going to make one iota of difference to a downer cow!

I guess you know where I’m heading now. I’m no financial wizard to advise on slick accounting techniques to improve your margin.

Sick cows cost money. We track a number of performance indicators on our clients’ farms around feeding efficiency. As any of my nagged clients will tell you I get highly repetitive, especially on dry matter intake, as the key to all else. None of the indicators we study are visible through normal accounting analysis of farm businesses, and therefore, pass under the radar completely unknown, evaporating the gap between feed cost and milk income.

Although the sick cow is thought to be visible, with improved nutrition, especially in transition, clinical milk fever rates have plummeted over the last twenty years. This is very positive, but research knows full well, as is often the case in life, the visible issues were only the tip of the iceberg. Subclinical disease is by far the greatest thief of farm profit and attracts little interest because of its non-visible status.
The non-visible, subclinical milk fever, is usually where the ‘train wreck’ starts, then, precipitates a trail of further metabolic diseases, often referred to as the ‘cascade effect’ of milk fever. Some of these secondary diseases remain under the radar just holding back our cow from rapidly increasing DM intake immediately post-calving and induce ketosis.

By now we have a compromised immune system incapable to dealing with pathogen entering the mammary system even under normal farm conditions. Mastitis plays havoc with fertility due to systemic inflammation from mediators sent out by the immune system to address the infection. Immunosuppression enables metritis to establish. Compromised blood calcium status can trigger LDA’s.

Any or all of these disease scenarios will hamper feed intake, limiting milk production at a stage she was at her greatest potential for whole of lactation production. The likelihood of further disease limitation to both milk production and fertility are high. Subclinical ketosis is well researched as to increase risk factor to other metabolic disease, fertility and recent, although early work at Cornell (USA) indicates ketosis in this lactation will reduce milk production in subsequent lactations, and possibly, whole of life production.

Transition management has potential to make or break our margins and justifies every effort to micro manage cow nutrition through this phase. Following are some costings of disease, commonly seen around calving; 1) Mastitis $420, 2) Lameness $330, 3) Retained Placenta $320, 4) LDA $650, 5) Ketosis $180, 6) Milk Fever $250

From this list it would not be hard to list a few disorders that would completely wipe out a cow’s lactation margin.

Managing Margins is managing transition. Fertility will be a serendipitous outcome. That only leaves feed supply to meet our fresh cow’s appetite to complete successful margin management.

Dry cow/springer cow nutrition is number one in prevention strategies. Tools are available to assist, especially springer cow and fresh cow. Urine pH strips will tell you the springer ration DCAD is or isn’t correct. Milk Keto test strips to monitor for ketosis in fresh cows and alert to the need for treatment. These two on-farm tests can save thousands of dollars of farm margin.

John Lyne is a dairy production specialist with Dairytech Nutrition

Pregnancy Rate


As premature as this subject may seem in January, it has been well determined that the two drivers of farm profitability are; feed and pregnancy rate. The percentage of fresh cows in your herd each year will largely determine your milk production, assuming they have the feed to express their genetic potential and post-calving disposition to milk production.

The feed scenario we address in July/August for our clients in the form of a Feed Budget, carefully designed in consultation with the client, and based on the previous twelve months feed/production data. This article is focused on the pregnancy side of this dual profit driver. Once cows have calved, passed through the immediate post-calving phase and hopefully back in-calf, our focus then shifts to next lactation, without compromising the current one.

As distant as next joining maybe for many farms, our success with pregnancy rates, and viability, begins once our cow is confirmed pregnant this lactation. Planning now, as to how we are going to execute a breeding program, will include decisions regarding heat detection, choice of timed AI or natural presentation, nutrition, both pre and post calving and prevention/management of metabolic disorders at calving. A well-documented plan can contribute very significantly to a successful joining. In fact, these issues are quoted as contributing up to 96% of conception variations.

Obviously, our cow needs to dry-off in calving BCS. This means, no weight gain or loss during the dry phase. Recent research opinion has stated shorter dry periods (30 to 40 days) do produce earlier first heats and improved fertility. Long dry spells (greater than 100 days) are associated with poorer fertility. From personal experience, you must be very confident of calving dates to optimise shorter dry periods.

Much has been written, by me and many others, on transition nutrition. Best practice in this area has not changed a great deal for many years, verifying its validity. Maximising dry matter intake of a well-balanced diet fortified with sound mineral balance, calcium especially, and managed for Dietary Cation Anion Difference (DCAD). In regard to fertility, we have seen dramatically improved conception rates under controlled calcium nutrition through both the dry period and transition.

Sound nutrition and environmental conditions at calving can minimise uterine infection and dystocia which research has identified as possibly causing 60% of lost pregnancies in the first 60 days of gestation. High Rumen Degradable Protein (RDP) diets are also a cause of early fetal death.

Post-calving metabolic disorders certainly influence fertility and pregnancy rate. Milk fever/ketosis, but far more importantly, sub-clinical milk fever/ketosis, will hand string milk production dramatically, let alone conception. We have for a number of years drenched every cow at calving with propylene glycol, and our testing of milk with ketos test strips has validated this procedure as very effective.

I am impressed with controlled breeding through timed AI programs. It leaves little to chance and human observation as guidance to breeding, and coupled with 42 day post-insemination pregnancy testing are a powerful tool to manage pregnancy rate. Postnatal vet checks to ensure cows are clean and cycling we’ve done since the 1980’s.

If farmer insemination is part of either timed AI or natural presentation, much can be said for refresher courses on technique and semen handling. A client of ours attended a fertility course in the USA and was shocked by ‘marginal’ variations from protocols having significant effect on conception.

Many farms now use software to manage farm data, but especially breeding details. Most programs are capable of extracting performance data on breeding. This information is essential for review of procedures when less-than-optimum results occur.

Mastitis between calving and joining is well researched as a cause of conception failure. Mastitis between insemination and 42 days post-insemination has a very high mortality rate on early term pregnancies. Transition nutrition and calving environment play major roles, combined with dry cow therapy and teat seal in minimising post-calving mastitis incidence. Milking machine maintenance has also revealed on several farms its impact in mastitis control.

Good fertility breeds good fertility, and many other profit benefits. The client with the highest fertility, averaging around 60% conception on one insemination, soon had abundant replacement heifers. Over the last couple of years of high beef prices, and abundant young stock, he has culled ruthlessly, any repeat breeders, repeat mastitis, repeat lameness, and done quite nicely in his beef (culling) marketing enterprise. As one of my sons says; we are beef farmers who milk cows to pay the bills. Our profit is determined by a cow’s exit value!

A recent article from the USA on a dairy enterprise that has adopted a program of using sexed semen on all heifers, due to greatly improved conception rates, and beef semen on all third, fourth and greater lactation cows. They market the beef cross calves to a lucrative, high demand, grower market.

At my age, “To Do Lists” are as much a part of my life as eating and breathing. Failure of the to-do-list has about the same effect as not eating or breathing. The fertility issue is equally important to your farm’s viability and a well thought through and written plan can make a world of difference. We will address many of these issues in more detail in future articles. The other half of the profit matrix, feed, we’ll also address in regard to Feed Budgets in July/August.

John Lyne is a dairy production specialist with Dairytech Nutrition

Does Nutrition Influence Profit?


There are three aspects associated with dairy farming that can elevate or decimate farm profits, and individual cows especially. Feed, Fertility and Lameness. All three are highly related, outside environmental causes to lameness. So, the answer is YES!

FEED: As obvious as it may seem, feed and fertility are well research-proven limitations to farm profit. Based on the Australian 305 day lactation average milk production, clearly we are underfeeding our cows by at least 4+ kgs DM daily. We have bred cows through genetic advancement that have far greater capacity for converting feed dollars to milk dollars, yet we have not taken advantage of our investment in genetics when our national average milk production is half that of the USA.

I’ve been told for 40 years we are a different industry from the USA. Problem is; we are competing on the same world markets against more efficient milk production systems. Further, cows are cows and feed is feed, irrespective of delivery system; grazed or TMR. Producing more milk from the same fixed costs (land and cow maintenance energy cost), increases our competitiveness, but more so, our profit.

Having the feed to optimise our cows’ capacity for converting it to milk dollars is a multifaceted issue we’ll look more closely at next month under the heading of Feed Budgeting. Suffice to say, as all my consultancy clients know, number one is allowing cows access to feed per se. From there we look to planning the growing of forages that are highly digestible. We can fill a cow to contentment with hay, but she will not convert that hay to much milk. Worse still, the conversion of hay dollars to milk dollars is not profitable due mostly to very slow digestibility rates that limit daily dry matter intakes.

From here we look at energy and protein densities. How much energy and protein is in each kg of dry matter consumed by our cow. She has a physical limit to DM feed intake, so the higher the energy and protein in each kg DM of feed, the higher the total energy/protein intake will be, and obviously, how much milk she will produce daily.

We run a ratio in our diet analysis program of energy to maintenance and production. This ratio is critical in determining feed cost per litre of milk produced. Further, as this ratio shifts according to feed intake, digestibility and energy density, the cost of producing a litre of milk rises or falls rapidly. There is a multiplier effect occurring in the shifts of this ratio; for better or worse.

Feed intake, digestibility and energy/protein density are the ‘macros’ of dairy nutrition and production. However, the next plane is mineral nutrition. Our forages are a ‘mixed bag’ of minerals, some excessive and some deficient. For example, our forages tend to be between excessive, and highly excessive in potassium – fertilizer dependant. Our cows have a massive requirement for calcium, and pastures are very low in calcium; likewise, magnesium. It is essential we supplement our cows to regulate excesses and supply deficiencies. Cows also have a high salt requirement.

Next we need to consider trace minerals. Although they are supplemented in very small amounts, they are highly essential to many biological functions of dairy cows, including our opening claim of feed, fertility and lameness. Trace minerals are not very bioavailable from plant tissue, and hence must be supplemented via mineral premixes in grain.

Following are the critical roles of commonly supplemented trace minerals and vitamins. Copper, Manganese and Zinc play important roles in protein synthesis, vitamin metabolism, the growth of ligaments and immune function. Cobalt is essential to B12 vitamin production in the rumen, and if not limited, will supply all the cows’ need for B12. Vitamins A & D are commonly supplemented despite their natural availability from green forages and sunlight respectively, to ensure no compromised requirement.

There are two other essential supplements that I have left until we look at fertility, as they are critical to that major profit driver. They are; the trace mineral selenium and vitamin E. Both have vital roles in uterine health the therefore fertility. Further, both are antioxidants which have important roles in stabilising fatty acids and soluble vitamins. Their role in reducing toxicity of fats is very significant in our grazing based system as pasture has very high fat. The obvious sign of excessive dietary fats from pasture is suppressed BF%. Antioxidants also prevent the formation of free radicals affecting digestion of feeds and animal health.

Fertility then becomes a natural and serendipitous outcome of a fresh cow that has not suffered excessive negative energy balance from underfeeding, or pre-calving nutrition, has her mineral and vitamin requirements met, and then, a healthy and vital uterus. The one issue that can decimate all the above, is lameness.

Lameness prevention has specific nutritional needs, all of which are mentioned above related to milk production and fertility. However, to highlight a few very necessary preventative measures, we ensure adequate zinc is fed for formation of sound hoof material. Limit weight loss post-calving which can reduce the fat pad and its ‘shock-absorber’ function in the heel, and of course, feed buffering agents and adequate effective fibre for good rumen health and mitigation of sub-optimal ruminal pH (SARA).

Supplementing Biotin in mineral mixes added to grain has significant benefits to hoof integrity.

Addressing environmental causes to lameness such as track maintenance, minimising sharp turns on concrete (exiting rotary platforms especially) or covering with rubber mats will reduce injury and ware to hooves. Applying zinc sulphate and copper sulphate solutions alternately via absorbent mats while exiting dairies are beneficial in drying and hardening soles during wet conditions, reducing risk of stone punctures and bruising.

Despite our best efforts in all the above, I cannot stress enough that failed transition nutrition, which I’ve written on numerous times over the past few months, will severely reduce our ability to enhance our cows’ capacity for profitable lactations through feed, fertility and the absence of lameness. A recent report highlighted the fresh cow’s energy need as being similar to a human running two marathons daily. Nothing impacts post-calving energy (feed intake) like transition nutrition.

Nutrition provides a massive ‘window of opportunity’ from dry-off to pregnancy for highly profitable dairy business.