In challenging economic times, dairy producers may consider cutting expenses to save a few pennies. The decision may not be wise. Chuck Schwartau, University of Minnesota Extension dairy specialist, reminds dairy producers of the dangers of becoming “pennywise, pound foolish.” Although milk prices were good in 2008, dairy farmers now face the lowest milk prices in five years. “Be wary about cutting costs just for the sake of cutting costs. Some of your costs of production may be good investments that more than pay for themselves,” Schwartau says. When milk prices are high, dairy producers make repairs and invest in infrastructure. When prices are low, dairy producers often find ways to make their operations more efficient. They use these times to strengthen their operations so they will run better when prices return to profitable levels. While these time-tested strategies have worked in the past, Schwartau wants to encourage producers to do more than just survive low milk prices. Here are some suggestions that can help dairy operations when milk prices are low. Test forages regularly. Work with your nutritionist, and keep rations well balanced, but simple and very productive. Balance rations as needed to maximize the use of farm-raised feeds while getting the optimal value out of purchased supplements. Look for signs of feed wastage. For bunker operations, be sure to keep the area of the silage pile that is being fed very clean. Clean up the face of the silage pile to minimize spoilage. Don’t drive over feed. Consider purchasing moderately priced semen. Getting enough semen in the cows at the right time to be sure the cows settle is more important than buying expensive semen and attempting to split doses. Heat detection is tricky work that requires dedication either by the dairy producer or an AI tech. If a producer is short on time, consider whether the cost of contracting an AI tech to do heat detection could bring more cows into the milking string sooner. Finally, Schwartau says the dairy producer needs to know the costs per cow per day. “If she is costing more to feed than the value of the milk she is producing, decide whether she should be sold, or maybe moved to a lower production group or in with the dry cows where it costs less to keep her,” he said. “Work smartly and you could earn yourself a few more dollars at the end of the month.” Chuck Schwartau maintains a blog at www.agbuzz.com. Please visit to see his column on “Making money the old fashioned way-Earn it!” located at AgBuzz.com. You can also read blogs from several other University of Minnesota Extension agricultural staff at AgBuzz.com.
