Mt. Vernon, Lawrence County
Tomato Field Day
Ag. Education Day
* September 11, 2014
* September 12, 2014
SW CTR Grazing Dairy
Email: Carla Rathmann
Email: Andy Thomas
14548 Highway H
Mt. Vernon, MO 65712
Southwest Center RUMINATIONS
April - June, 2001
Vol. 7, No. 2
SW Center Dairy - Is Seasonal For You?
The Southwest Center Dairy is well into its third season of milking with about 90% of our cows fresh as of the beginning of April. Started in 1999, the seasonal, pasture-based dairy's goals are to look at alternatives to conventional dairying that might help producers remain profitable and sustainable.
Why go seasonal? How can a dairy survive economically with milking only 10 months out of the year? Wouldn't it be better to have the dry period during the summer months? These are all good questions. The decision to go seasonal must take many factors into consideration.
Forage growth is seasonal, and so breeding cows to calve in late winter to early spring matches the cows' requirements with the forage. Cows that calve in Feb-Mar reach peak production when our cool season forages are at their peak of quality and yield. Production can be maintained through the summer by switching to high quality warm-season grasses and summer annuals. So far we have tried bermudagrass, caucasian bluestem, Red River crabgrass, grazing maize (corn), sorghum-sudan, and alfalfa for summer grazing. Fall regrowth of cool-season forages carries the cows through until they are dried off just before Christmas. Use of winter annuals can help increase the quality and quantity of forage available from late fall to late spring. All cows are then dry from that point until they freshen again in Feb-Mar of the following year. The winter dry period matches the time when forages are least available and generally lower in quality.
"But I won't be getting a milk check for two months!" you might worry. Consider this: in a conventional dairy with a 12 month calving interval, each individual cow is only being milked 10 months out of the year; every cow is (or should be) dry for the other two months. So a seasonal dairy is not necessarily milking any fewer days, it's just that all of our dry periods occur at the same time rather than scattered throughout the year as with a conventional (non-seasonal) dairy. Yes, it will take a change in financial management so that you build up cash reserve for the two dry months, but is this any different than the strategy used by beef producers who might get a check one or two times a year when they sell their calves?
An important question you might ask is "What season of the year is best to begin calving?" Just as there are beef producers who calve in spring, summer, winter or fall, there are reasons why a seasonal dairy may want to consider different seasons. Fall calving has the advantage of generally higher milk prices in the fall, cows are dry during the hot summer months, and breed back more easily in the cooler fall months. These advantages may be largely offset by higher feed costs to maintain peak lactation through the winter months. For this reason, we choose to calve in February to March, getting breeding cows before the heat of summer, and more closely matching forage availability and quality to the animals' requirements. The decision you make will depend on your own individual situation and goals.
Seasonality also brings with it a change in lifestyle. Conventional dairying is a 365-day a year commitment. Seasonal dairying can allow for some "down time" to get away, take a vacation, upgrade equipment and facilities, or whatever else you'd like to do. Newer style parabone, swing-line milking parlors allow rapid cow through-put and can literally cut hours a day off of milking time. Dairying can become less of a drudgery and more enjoyable. These are things that we can not place an economic value on, but are nonetheless important in the overall sustainability of a family dairy operation.
So, what was the bottom line with our seasonal, pasture-based dairy? Economic data for 2000 are provided below. Realizing this is a University dairy in a research setting, we made every effort to ensure that figures represent "real world" values. We did this by using data collected from cooperating dairies to supply numbers that we did not have actual values for (ie: insurance, taxes, labor, vehicle and equipment).
Total cost to produce milk was $1175 per cow or $8.20/cwt milk. Feed costs (grain, hay and pasture) accounted for 57% of total cost to produce milk. Total sales including milk, cattle and other, amounted to $2,126 per cow. Subtracting expenses from sales leaves an operating margin of $987 per cow.
| ||$/cow||$/cwt milk
|Total feed costs||$671||$4.69
|Total sales (milk, cattle, etc)|| 2,126
* Figures based on actual producer-supplied information. What is this operating margin? It is the amount returned to the dairyman, after all production expenses, to pay interest and principal, income taxes, capital expenses, and for family living. Because every's situation is going to be different, it needs to be evaluated individually.
For example, let's assume a dairyman owes $80,000 on land worth $100,000 (20% equity), has 50% equity in $60,000 worth of cows, and invests $60,000 in a milk barn and $30,000 in other startup costs. His total debt load is $200,000, with 25% equity. His total P&I payment would be around $28,595 per year. For a 60 cow dairy, 60 x $987 = $59,220 minus $28,595 P&I = $30,625.
For an 80 cow dairy, we may need additional land (assume he owes $96,000 for land worth $120,000), and our cow equity is now 50% of $80,000. P&I is now $32,918; so, 80 x $987 = $78,960 minus $32,918 P&I = $46,042. Changing debt loads and cow numbers can help an individual make decisions based on his or her specific conditions.
Is $30,625 a reasonable family income? How about $46,042 a year? There are a lot of people who work jobs in town who make less than that. Plus, the dairy would be building equity, while at the same time providing the family with a lifestyle that may be more important to you than income alone. It all depends on what your goals are.
Look for more articles on other aspects of seasonal, pasture-based dairying in future issues of Ruminations.
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