Imagine receiving income from various sources without recording where it came from or how much came fro
m each source, and then paying it out and likewise not recording how it was spent. You would simply end the year wondering why you did not have much left to show for all the work you did. Sound familiar? In many ways that is the approach the majority of dairy producers take when it comes to managing their feed production and utilization, which arguably accounts for the majority of variable costs, and in many cases is the single-largest component of annual dairy cash expenditures.
The Dairy Farm as a ManufacturerA dairy farm can be viewed as a manufacturing operation with feed as the primary input and milk as the primary output, or product. The feed is produced “in-house,” purchased or both, and then inventoried and subject to storage and feeding losses (shrink and waste). It is then used for manufacturing other “inputs” (i.e. replacements) – predo minantly a cost or production of a marketable output (i.e. milk) – the primary source of income or revenue. In the manufacturing sector, inventory control and monitoring efficiency of use of key inputs are essential to both productivity and profitability. It is the one thing we have substantial control over.
It is no different for a dairy farm, yet estimates are that less than 10 percent of all dairy farms employ feed management, defined as at least tracking daily feed allocation. With today’s feed costs and slim margins, it is arguable that use of feed management technology (the cost side) should be as widespread on dairy farms as is milk recording technology (the revenue side). As occurred historically with milk recording, it may be that many are unaware of the feed management technology available today, how easy it is to apply and how cost-effective it can be to help dramatically decrease feed cost, as well as improve productivity and feed-related health problems.