DAIRY PROFIT MONITOR AND ACTIVITY ANALYSIS PROJECTS Betsey Howland blh37@cornell.edu Jason Karszes jk57@cornell.edu Cornell University PRO-DAIRY Program Department of Animal Science College of Agriculture and Life Sciences 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 Analysis Net Marketing Margin Efficiency Lbs. of milk per lb. of dry matter Lbs. of milk sold per worker Financial Vet and Medicine Costs Bedding Costs KEY MEASURES: NET MILK INCOME OVER FEED COST Highest correlation with return on assets Last 4 years, Dairy Farm Business Summary data Actual Milk Price Fixed Milk Price Average of prices, last 3 years, Cornell DFBS Eliminates variation of milk price Any 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 spreader 10 wheeler Semi-tractor and tanker Hauling and Transfer 10 wheeler Semi-Tractor and tanker STUDY METHODOLOGY Farms tracked data for spring 2012 Per day per piece of equipment Labor hours Fuel usage Fields spread Distance to fields Travel time STUDY METHODOLOGY For each piece of equipment Investment level Repair costs Useful life & salvage value Insurance & 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 packs Cleaning 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. Selected Measures Dairy Replacement Program 17 Northeast Dairy Farms, 3rd Quarter 2012 Replacement Program Number of Heifers Age, Months Weight, Pounds Total Weight Gained, On Farm Average Daily Rate of Gain % Non-Completion Rate Average 636 23.1 1,302 1,163 1.74 10.62% 80th Percentile Range 333 20.3 1,208 956 1.58 4.16% 1,305 25.0 1,368 1,272 1.96 17.66% Feeding Average Daily Rate of Gain Average Daily Dry Matter Intake per Animal Feed Conversion Ratio(Lbs. of Gain/Lbs. DM Feed Cost per Pound of Dry matter Feed Cost per Day per Animal Feed Cost per Pound of Gain Percent of Total Grown Feed Purchased Feed Labor Heifers per Weighted Daily Labor Hour Pounds Gained per Weighted Daily Labor Hour Average 1.74 15.19 0.12 $0.112 $1.674 $0.961 80th Percentile Range 1.58 12.20 0.09 $0.089 $1.423 $0.845 1.96 19.16 0.15 $0.142 $2.051 $1.195 63.5% 36.5% Average 39.4 97.5 43.8% 23.1% 76.9% 56.2% 80th Percentile Range 26.4 30.9 57.6 176.8 Cost per Heifer Per Day Cost per Pound of Gain Number of Annual Worker Equivalents Pre-Weaned Heifers per Hour $0.378 $0.217 2.14 11.6 $0.215 $0.124 0.95 6.2 $0.511 $0.303 4.27 21.7 Post-Weaned Heifers per Hour Cost per Worker Equivalent 59.0 $39,964 38.8 $27,655 102.1 $48,845 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 Labor All Other Costs $1.714 0.805 0.610 $0.678 .140 .415 $0.811 0.125 0.571 $1.122 0.230 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 Labor All Other Costs $188.5 88.5 67.1 $339.0 69.9 207.4 $121.7 18.8 85.6 $538.2 108.9 405.7 Total $344.1 $616.3 $226.1 $1,053.1 % of Total Cost 15.4% 27.5% 10.1% 47.0% 8% 38% 12% 35% % of Total Growth QUESTIONS ON REPLACEMENT COST STUDY? THANK YOU! BETSEY HOWLAND BLH37@CORNELL.EDU 607-592-6222 JASON KARSZES JK57@CORNELL.EDU 607-227-0694