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Rt. 272 South ngm
14 Herrvllle Road
Willow Street, PA 17584
Ph. 717-464-3321 or H
Toll Free 800-732-0053 _ UPS
' Shipping Point
Mon.-Fri. 6:30 am to 8 pm
Sat. 7:30 am to 6 pm 7/4
Sun. Cloaad
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«Parts & Motors
The Competitive
Edge
“Smart system”
eliminates guesswork,
Previous articles looked at how farming methods and size of business affect farm profits. How well you
manage the herd also has a major impact on profits. Focus your management efforts first on those
practices that have the potential for returning the greatest profit. Table 1 is an example of some potential
impacts.
Table 1. Some Profit Boosters (assumes 18,000 lb. of milk per cow per year.)
Reduce debt per cow $ 1000
(Average term of loan is 15 yr. at 8%. See Article 3.)
More milk per cow (2000 lb. per yr. or 6-7 lb. per day)
($5 profit per additional cwt.milk x 20 additional cwt. milk.)
(Gain 3-6 lb. per day with better genetics, care and feeding.)
(Gain 3 lb. by-tlropping SCC from 800,000 to 200,000. )
Sell more cows for dairy purposes and less as culls
(assume a 25% cow turnover rate)
(half are sold for dairy at $1200; half are culled for $400)
($BOO difference on half of the cows slod / 4 yr. life = $ 100 )
Fat test increased 4 points without loss of milk
(180 cwt. x 4 points x $0.13 per point)
Reduce feed cost $0.50 per cwt. - - without loss of milk
Reduce calving interval by 1 month (30 days)
(Daily income over feed for Ist. 305 days = $4.80)
(Income over feed per day beyond 305 = $2.30)
(30 days x $2.50 less profit for each day beyond 305 days)
Reduce cull rate from 33% to 25%
($l2OO heifer - $4OO cull = $BOO net cost of replacement)
($BOO x 0.33 = $267 replacement cost per year)
($BOO x 0.25 = $2OO cost per year, a savings of $67)
SCC (milk quality) bonus of $0.30 per cwt. x 180 cwt.
SNF test increases 2 points
(180 cwt. x 2 points x $O.OB per point)
Reduce calving age by 2 months (60 days)
(60 days x $1.50 cost per day + 4 yr. in the herd = $23)
Total impact
Compare to a milk price change of $ 1.00
Compare to the profit margin you need per cow (see Article 1.)
The cumulative impact of all the above changes could be about $747 change in profit per cow! That’s
equivalent to $4.15 per cwt. of milk! We can talk a lot about milk prices, but we have little influence over
the prices we receive. However, we can sharpen our herd management practices in an effort to offset the
negative impact of milk price declines, as illustrated in the table, above. In doing so. we also enhance our
competitive position in the industry and help to insure the future viability of our business.
Locate the most serious bottle necks that are hindering production and profits. Fix these big problems
first, before doing the easy fixes on the minor problems. Fixing minor problems may have little or no
beneficial impact until the major bottleneck is fixed. For example, treating coliform mastitis will have no
lasting effect until you provide cows with clean dry stalls and maternity areas, and having clean dry
udders. And, if the cows.aren't fed right, milk production may not show much of an increase, even
though you cured the mastitis and corrected its cause.
A LESSON
WELL
LEARNED...
LANCASTER
FARMING’S
CLASSIFIED
ADS
GET RESULTS!
• Ppge Field Day]
BAGS Research Farm
Springville Road
Ephrata, PA 17522 717-859-3276
S Agri-Business Reps to Answer
♦ Fertility Trials ♦ Herbicide Trials
♦ Variety Trials ♦ Herbicide-Resistant Crops
♦ Pesticide Trials ♦ Row Width - Population Trials
Marl; Your Calendars Now!
BAGS 20th Nutrient Hgt Soybean & Corn Hgt. Corn & Soybean
Anniversary! Field Day Field Day Variety Trials
Ang. 12 August 25 Sept. 1 Oct. 1
11:30 - 1:00 11:30 - 1:30 10:00 - 3:00 PM 10:00 - 3:00
Randall G. Renninger
Certified Public Accountant
Specializing in agriculture and construction industries
“We help business people discover ways to cut costs, save
taxes, and be more profitrole”
Call about our FREE seminars
535 W. Orange Street, Lancaster, Pa. 17603
(717)299-6480 ♦ Fax (717) 299-6390
Lancaster Farming, Saturday, July 11 1998-A37
Rt. 272 North through Ephrata,
Turn left on Schoeneck Road.
Go to the second stop sign
Park at church,
°°^ ,e «
Example Yours
115
100
100
747
180