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What to do when you are over quota

Ross Mitchell for Progressive Dairy Published on 04 September 2019

You have been over quota before; it’s not a big deal, right? You used incentive days coming along to absorb your over-quota balance. Well, it doesn’t look like there will be any this fall, and perhaps not for a long time. So, what do you do now? If you do nothing, you will end up dumping milk, or even worse, shipping it for nothing other than incurring transportation costs. At least for the moment, you are not incurring any greater penalty.

If you need less milk, how do you get there? You could try the following:

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  • Feed poorer feed
  • Reduce some of the care you provide to the herd
  • Just dump some milk and be happy you have that option
  • Heaven forbid, sell some cows or heifers, or raise fewer heifers

Let’s take a closer look at each of these options.

Feed poorer feed

After years of working on producing better forages by using superior genetics and more precise harvest timing, there just isn’t the poor-quality feed around that there used to be, especially on your farm.

There seems to be repeated articles on setting up your herd for maximum production. It starts with your calves and continues through your heifers. What will happen if they get some poorer feed as they grow, even before the first lactation? You are setting yourself up for lower peak production on successive lactations. Repeated research validates the health and growth rate of a calf has a demonstratable impact on her peak production in the milking herd. This may not be such a good plan; you really don’t want overall lower producing cows.

Reduce cow care

I have included this for completeness. It definitely is an option; however, it is an option that most dairy producers can quickly dismiss. This action does not follow what we have learned over years and tried to incorporate ourselves. It is definitely not acceptable generally among dairy farmers and especially within our enquiring society, and so I will leave it at that.

Dumping milk

This at least sounds better than the options of feeding poorer feed or reducing care for any animals. Here you are still maintaining your herd in top-producing form. The most successful farmers are those who are in the high range of production. This will help you continue that quest.

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What it doesn’t change is any of your operating costs. At least you don’t incur the shipping costs or any penalties. If you have a temporary situation where you are approaching your over-quota limit, this may work fine, depending on future production expectations.

Slightly better may be an option of engaging someone to produce cheese for your own consumption. This may be great, but you can only eat so much cheese.

Reduce herd size

It is a challenging thought to consider selling a cow, or several. You certainly have the space for them in the barn, and you may perceive there is no cost to most of the feed you produce yourself. But let’s think about that some more. Maybe there is some cost to the feed, even the part you produce yourself. As a minimum, you will have ongoing breeding costs – especially if you don’t use your own bull – hoof trimming and vet costs. There are annual costs per cow of $15 per A.I. with perhaps an average of two attempts; $150 for hoof trimming and vet costs; and the largest, even at $7.50 a day or $2,700 annually, is for feeding a low-producing cow.

On the other side, it is easy to support not selling the extra animals since the price you get is so depressed. True, but would you rather at least put that in your pocket now instead of incurring ongoing costs of maintaining that animal as noted above? The nice part about taking a risk of being under quota is that there is a supply of milk cows and heifers available at really reasonable amounts, if you have an open herd. If you have a closed herd, the under-quota balance carries forward, and you can catch up on it in the future. Nothing is permanently lost.

Buying or raising your own heifers is more of a direct cost, with current costs of $2,200 per heifer, or perhaps more in some situations. This is direct savings if it can be avoided. It may not be as immediate as selling a cow right now, but backing off on heifer production or using more beef semen in the lower portion of your herd has immediate cost savings or, alternatively, an improved revenue stream. It is also a great part of reducing an over-quota bubble in the future, if you can wait that long to fix your production.

Summary

How do we decide what to do? Remember, doing nothing is a decision, not necessarily the right decision, but at least a decision for the moment.

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In terms of establishing decision criteria, there are likely some givens.

  • Over-quota and under-quota are both balances that can be carried forward. It is only when we get outside of certain bounds, like more than 10% over quota, that it starts to matter. We can defer some of this decision if we are within that 10% boundary.

  • Even with our own bull, we are still looking at improving genetics in the milking herd. With A.I., we may be looking at even more improvement in the top half of our herd. Those genetics lead to higher production in each lactation and less culling from reduced illness and lameness. What this means is that we will need less heifers than we did even a few years ago for herd replacement animals. Not planning for that improvement only makes our over-quota problem worse.

  • Different, improved nutritional understanding and forage genetics will have the same impact on milk production as improved genetics. We will need less cows in the future than we milked in the past for the same milk production.

  • There are not any incentive days or quota increases on the horizon.

  • Cows will continue to produce more milk and stay in the milking herd longer.

I should also acknowledge the importance many farmers place on having a closed herd. While you may be able buy heifers more cheaply than you can raise them and definitely buy fresh cows more cheaply, with the biosecurity issues and specific genetic knowledge you have on every cow in your herd, you just don’t want to add an unknown or worse, take a risk of a new cow carrying some pathogen you want to keep out of your herd. That said, remember, you don’t lose your under-quota balance; you have time to catch up with it. You can still sell that milk, maybe even some time in the future when it costs you less to produce it.

In addition, you need to review the pregnancy records to know when you will have more cows freshening, and on which lactation. This may help you identify if your problem is going to get worse or that going under quota for a short time may be fine because the milking herd will catch up.

How immediate is your over-quota problem? Are you facing dumping right now?

If the problem is immediate, the solution needs to be the same way. If you have time, longer term planning on raising (or buying) heifers may be sufficient to balance your production.

Remember to consider your future production expectations. It is unlikely the problem will go away without you taking action. You are in this to make money; don’t lose track of that in your decision and the time frame you have to fix it.  end mark

Ross Mitchell is the president of Liquid Feeds International. Email Ross Mitchell.

 

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