Risk management comes in several forms. Marketing and milk prices usually comes to the top of the list. Currently the USDA Farm Programs are focusing on reducing the risk of less than favorable economic scenarios on the farm.
In reality, there are many risks that can in one way or another devastate a dairy farm. Many of them relate to the feeds and feeding side of the operations.
Having an abundant supply of high quality forages is the foundation of a successful and profitable dairy operation. The essence of good risk management is figuring out how to grow, harvest, store and feed out lots of good hay crops and corn silage.
To many, when talking about the risk involved in harvesting good hay crops, the weather “risk” usually enters the conversation. On one hand, larger farms have more at risk due to weather, but in reality, they have figured it out by employing harvesting techniques developed during the past few years to make “hay in a day”; thus reducing the risk.
You don’t have to be big to learn how to reduce the haylage making weather risk and in the end make more, high quality forages. For many of our farms in the Northeast, this year has not been a stellar weather year. But many of them have made four cuttings on a 30-35 day schedule in spite of the weather; they just put it in their schedule and did it.
When purchasing feed, price and availability is always a risk. Knowing the feeding values of your own forages and your other home produced feeds and making some longer term feeding strategy decisions will allow you to develop a plan for how much and when you will need to purchase feeds. It is not difficult to find help to price and source feeds for the intermediate or longer term reducing price and availably risk, but you will first need to know how much and when.
Another important risk reduction practice is feed sampling and analysis. Money and time invested in sampling and testing is well spent. Lots of analysis of forages and other feeds that are known to have or are suspected of having significate variations will give you critical information to make feeding decisions. A two percent protein difference on a hay or haylage sample is quickly converted to saved cost or salvaged production.
It is important to have enough samples to know if there are real differences and to reduce the risk of making decisions on insignificant data. Do not make important decisions based on one or two samples. If you are in the habit of sampling once a month, reducing the interval to every two weeks will more than cut your chance of error in half.
The other aspect of a rigorous sampling and analysis program is to reduce the risk of missing the target with ration programing. Every year we are refining our ration programing with new criteria, techniques and programming to narrow the parameters for better performance and reduced impact on the environment. The research has been reviewed and replicated to focus more narrowly on what works.
The outcomes are better performance, less nitrogen and phosphorus wasted to the environment and hopefully more profitability. The downside is we are introducing an element of higher risk. That being, if our input data and operating assumptions are not on target, we stand to lose.
The bottom line is we can reduce risk by planning to implement good practices from the field to the feed bunk, by measuring the nutritional value our feeds with lots of analysis, knowing what we have available as inventory control and putting it all together to be on target to the cows. In the end a lot of little things add up to better managing the risk.
JIM PECK is an independent nutrition consultant based in Newark, N.Y. You can contact him at : jpeck@consulagr.com
