By Connor Lynch
WOODSTOCK — When Woodstock-based dairy consultant Jack Rodenburg walked to the front of the room, he looked around. Then he shrugged. He was pleased to have been invited, but wasn’t quite sure why the farmers had invited him. He was going to ruin their day.
His message was grim: The local dairy market will likely not be growing over the next decade, so if you want to stay in business, you’ll have to learn to do more with less.
That was Jack Rodenburg’s message for dairy farmers at the Eastern Ontario Dairy Days on Feb. 14. Rodenburg has run DairyLogix, his consulting firm, since 2008, after a 34-year career with OMAFRA.
Dairy farmers can expect no quota increases or incentive days for at least the next five years, said the dairy consultant. Producers who want to stay in business or make more money will need to become more efficient, cut costs where possible and stop doing unprofitable things. The Dairy Farmers of Ontario need to back them up. Said Rodenburg: “Current DFO rules sacrifice efficiency in the interest of preserving political clout. After three bad trade deals and the food guide, you should know you don’t have any (political clout).”
So, how do you do more with less? According to a joint study by two American ag giants, a vet medicine supplier and a major ag financier, there are six factors on a dairy farm that account for 85 per cent of the variation in profitability between operations. Manage those and increase your profitability, Rodenburg said. They might seem obvious, but the key, Rodenburg said, is they have to be measured to be managed. A program like CanWest DHI can cost as much as $3,000 a year, but it’s a good investment in benchmarking.
Knowing how you compare to other farms tells you where you need to improve the most, and your worst-areas are likely the easiest to improve. The six areas are:
• Somatic cell counts (get them under 200,000)
• Milk production per cow (the more, the better)
• Mortality rates (the fewer, the better)
• Net herd replacement costs (the fewer involuntary culls, the better)
• Pregnancy rates (the higher, the better)
• Heifer survival (the higher, the better)
The dominant theme is that producers want to be milking more mature cows, Rodenburg said. Mature cows produce more than they did when they were younger; a mature cow will make 25 per cent more milk than she did as a two-year-old. Keeping older cows healthy and productive makes your operation more efficient.
Feed is often considered one of the largest expenses on the farm, and alfalfa is often held as the gold-standard for feed, he said. Rodenburg challenged both ideas. In his experience, “the most profitable herds feed more than 50 per cent corn silage.” Storing corn silage takes space, but Rodenburg said that space pays for itself, as long as you don’t feed the silage for at least two months. The corn needs that long to ferment and break down the sugars; otherwise, those sugars can be a big source of rumen acidosis. He also recommended adding an afternoon feeding and making sure about 5 per cent of feed is left over by the next feeding; both help boost milk production.
While feed is the major out-of-pocket expense, it’s not the biggest cost. Your labour is. It can be an invisible expense, but as far as Rodenburg’s concerned, it’s almost always the biggest expense on the farm. In Ontario, on average, it took a producer 74 minutes of work, including caring for the animals, bookkeeping, and managing the crops, to make one hectolitre of milk, according to a 2017 review by the Ontario Dairy Farm Accounting Project. In a small tie-stall operation, that could jump as high as 141 minutes, and a large freestall could push it as low as 35. One Western Ontario robot dairy farm pushed it as low as 16.7 minutes. “Our best parlour herds use double this amount of labour.”
On average, robots were better than freestall or parlour operations, but not by much.
Many farmers switch to robots as a lifestyle option. It gives them more time for friends and family. Though plenty of producers have decried being on-call all the time, it does give a lot more flexibility in the schedule. But Rodenburg cautioned against switching to robots for the lifestyle choice because it won’t make you more money. “You can’t take a lifestyle choice to the bank,” he said. If your goal is to earn more money, the robot will achieve that for you because it frees up time, allowing a farmer to invest in alternate sources of income. “Get a job,” start doing custom work or raise dairy-beef animals, he suggested.
Meanwhile, some tasks on a dairy farm simply won’t make any money, and producers should limit them as best they can. Raising heifers was a big one. Based on rough estimates, he put the cost of raising a Holstein heifer at about $2,000. With zero demand for those heifers since there’s no market growth, that’s purely lost money.
The solution? Figure out how many replacement heifers you need, breed your best cows to produce that many, and breed the rest to beef sires. That can double or even triple their value, he said.
Finally, producers need some support from their organizations. Farmers need flexibility, such as relaxed rules around moving quota, to take advantage of partially empty barns or letting producers share facilities. That will let them take advantage of economies of scale.