Dairy Profit Monitor and Activity Analysis Projects

1. Dairy Profit Monitor and Activity Analysis Projects Betsey Howland blh37@cornell.edu JasonKarszes jk57@cornell.edu Cornell University PRO-DAIRY Program Department of Animal Science College of Agriculture and Life Sciences

2. Topics Covered Today • Dairy Profit Monitor • Cost of Manure Application • Cost of Raising Dairy Replacements

3. 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

4. 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

5. 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

6. 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.

7. Pounds of Components per Cow Per Day

8. Pregnancy Rate

9. Feed Conversion

10. Cost per Lb. of Dry Matter

11. 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

12. Nmi over Purchased Feed Costs: Actual Milk Price

13. Nmi over Purchased Feed Costs: Fixed Milk Price Factors

14. Nmi over Total Feed Costs: Actual Milk Price

15. Nmi over Total Feed Costs: Fixed Milk Price Factors

16. What has the greatest correlation to Net Milk income Over Feed costs?

25. Questions on Dairy Profit Monitor?

26. Cost of Manure Hauling and Application Preliminary Results

27. 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.

28. 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

29. 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

30. 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

31. 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

34. Haul and Spread • Haul and spread manure with same piece of equipment

37. Haul, Transfer and Spread • Haul manure to field and transfer to spreader at field for application

40. Key Factors • Key cost differences: • Spreading capacity • Distance traveled • Equipment utilization

41. Questions on cost of manure application?

42. Cost of Raising Dairy Replacements Preliminary Results

43. 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.

44. 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

45. 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.