When is milk replacer the right price?
With the latest turn of events for the dairy industry due to COVID-19, many producers implemented strategies to feed tank milk to their calves to avoid dumping or receiving no payment for their product. Fortunately, the milk futures market has been improving, so we pose the question: What should producers be feeding their calves? What is the best economic decision for dairies? In this article, we will address these questions and discuss the economics behind such feeding strategies.
Many factors to consider
There are many factors to consider when choosing to feed milk replacer or whole salable tank milk. Some of these factors include:
- distance of transportation for feeding, cost and maintenance of a pasteurizer system, tank milk cleanliness and percent solids, and nutrient availability and/or deficiency. Surprisingly 6 important nutrients that support the growth and health of the calf are deficient in whole milk. Calf milk replacer (CMR) is nutritionally complete and has the proper ratio of protein to fat, which will improve average daily gain, mammary and tissue development, starter intake at weaning, and decreases overall mortality and morbidity rates. If properly mixed, CMR also provides consistent solids levels and is free of harmful bacteria and pathogens.
Farms are struggling financially
It is no secret that farms everywhere are struggling financially and we need to also address the economic advantages of feeding CMR. Below is a chart that illustrates the break-even price to feed CMR versus tank milk based on the current milk price per cwt and percent solids of the tank milk.
For example, at 12.5% solids and $18/cwt milk price, it would be economically more beneficial to buy a bag of CMR as long as it is under $72/bag. That being said, if you purchase CMR for $65/bag and plan to feed for a high-performance level at 2.5 lb. of solids per day for 8-9 weeks (3 × 50 lb. bag of CMR per calf) you would be saving $21/calf (3 × $7 difference). If the milk price is down to $14/cwt, however, the price per bag would need to be under $56, but if milk hits $20/cwt again, this increases to $80/bag.
Solids data from farms
How does the percent solids of the tank milk affect this scenario? After collecting percent solids data from 16 dairy farms in Western New York the average percent solids fed to calves for salable tank milk was 12.5%. Only one dairy averaged 13.5%, this was a Jersey herd! This is important to determine how much money you could save feeding milk replacers.
Again, at $18/cwt and 12.5% solids, the break-even price per bag is $72, but if the farm tests lower at just 11.5% solids in their tank milk, the break-even price per bag increases to $6/per bag. If your milk solids and mailbox CWT price break-even point ends up in the green (figure 1), it is economically more beneficial to buy a bag of CMR (at $65 per 50 lb. bag), than feeding whole salable milk, in addition to all the other aforementioned benefits of CMR.
Therefore, it is vital to know the percent solids of tank milk on your farm to effectively use this chart. Either a digital or optical BRIX refractometer can be used to determine the solids. The percentage solids calculation for tank milk = BRIX reading + 2 (for example, if the BRIX is 10, the tank milk has 12% solids). Please contact your regional Denkavit professional for assistance, we are here to help.
Economics has and will continue to play a role in the decision-making on farms. Discussing break-even CMR price will hopefully allow producers and consultants to make better buying decisions when it comes to the nutrition of their calves.
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