“Make money the old-fashioned way: Earn It!!”

A slight variation of that phrase was used by a brokerage firm in their advertisements in years past. While they are part of a struggling financial system, at least they are still in business today. Maybe there are lessons we can learn.

Dairy farmers have always worked hard to earn their dollar, but when milk prices are as low as they are now, it’s tougher. I saw a note in a dairy publication this morning stating at the current milk-to-feed price ratio, a hundredweight of milk will buy around 20 percent less feed today than the last time milk was this low in 2003. It is time to look for extra places to earn the dollars you need. Hard work won’t do it. It takes smart work as well.

A line I have used in some of my presentations around the state is, “Regardless of our occupation, nearly every one of us knows more about performing our job well and at a higher level of quality than we practice. Why?”

Nearly every farmer I know will admit to taking some shortcuts that are less productive than if they did something exactly the way they know it should be done. Those shortcuts might be the difference today between holding your own or losing money in the business.

• Are you testing forages regularly and rebalancing rations to make best use of home-grown feeds and optimizing the purchase of supplements?
Work with your nutritionist and be sure your ration is tuned but as simple as you can keep it while still being productive.

• Are you feeding any supplements because they are the ‘hot item’ these days, but you are not too sure they are really making you any money?
Well-balanced, simple rations may help you through some tight cash flow times.

• Are you buying expensive semen and splitting ampules when maybe you should consider more moderately priced semen and focus on getting enough semen in the cows at the right time to be sure you get the cows bred?
Long calving intervals that involve long dry periods are expensive. Get the cows bred!

• Are you trying to do the heat detection yourself and missing too many heats because you don’t spend enough dedicated time in the barn?
Either dedicate more time to the heat detection or consider whether the cost of contracting an A.I. tech to do heat detection might actually be a good investment to get cows bred and in the milking string.

• Are you experiencing feed wastage because you don’t spend time dressing or cleaning the bunker face and drive over feed that should be put in front of the cows?

• Are you milking cows that aren’t paying their way just because you want cows in the barn?
This one is admittedly tricky. One former economist used to say with his New England twang, “A cow in the stall is better than no cow at all.” That cow needs to be paying her way, though. Know your costs per cow per day and push your pencil. 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 group of cows where it costs less to keep her (lower production group or dry cows).

These are just a few of the questions to ask yourself. Sit down with the rest of your team on the farm and do some brainstorming. Consider almost anything that might save you a few dollars but still keep returns up to par. Work smartly and you could earn yourself a few more dollars at the end of the month.

Be wary, however, 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. Don’t cut off your foot just because it will save wear on one shoe!  PD

—Excerpts from University of Minnesota Ag Buzz, February 2009

Chuck Schwartau
Extension Educator
University of Minnesota
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