Countdown to dairy profits: 5, 4, 3, 2, 1 LLOYD HOLTERMAN - - PowerPoint PPT Presentation

LLOYD HOLTERMAN

Watertown, Wis. USA Unlock your herd’s potential Northern Ireland ~ Nov. 2019

Countdown to dairy profits: 5, 4, 3, 2, 1

1981

2019: 1810 acres / 720 hectares

Four partners

Overall goal

1.7 liters of milk per 1 kg dry matter total mixed ration fed to cows

Calves Genetics People Housing Nutrition Herd Health Milk Harvest Technology

milk from 1 Kg. DM

Countdown to profits

• 5. Great people
• 4. Measure, measure, measure
• 3. Finances & recordkeeping
• 2. Biosecurity & disease control
• 1. Genetic excellence

#5: Great People

#5: Great People

 Spend lots of time on new hires  Training, assimilate into our culture

 Written SOPs

Follow or CHANGE Other staff help train Safety, NO SHORTCUTS! Keep moving people up Teach new skills

#5: Great People

 Promote from within

 Internal growth allows culture to develop positively

 “I have a chance here”  “I’m appreciated for my efforts”  Cross-train employees within departments

 Emergency-ready  Appreciation for other team members, builds respect

#5: Great People

My golden rule: Pay everybody based

• n how easy they

make my life

# 5 Great People

Labor cost per cwt. $2.61 (£1.96/cwt or 3.9ppl) for 2018

• $0.42 benefits
• $2.19 labor
• £0.32 benefits
• £1.64 labour

#4: Measure, measure, measure

 Technology has a big return

 Afi-Milk (heat detection, milk weights) DairyComp 305 (herd metrics)

Afi-Milk

 Daily milk production per head  Milking speed  Conductivity, quality measure  Activity, pedometer

#4: Measure, measure, measure

 Technology has a big return

 Feed mixer, TMR tracker Scale Hawk  Driveway scale for commodities

TMR Tracker & Triotrac Mixer

 Pounds of each ingredient  Projects future feed use  Tracks deviations – actual vs. ration on paper  Self-propelled mixer saves $22,000 (£16,500)/year  Mixer costs less than machinery it replaced

#4 Measure, measure, measure

Cost per pound dry matter 10.3 cents/ lb. (4.0p/Kg/DM) Lactating feed cost $6.49/ cow/day (£4.87/cow/day) Milk sold per employee 1,204,971 lbs. milk FTE (530,000 l) Feed conversion 1.67 lbs ECM / lb. dry matter fed to milking herd 1.62 Kg ECM/Kg DM % forage in diet 46%

#3: Finance & recordkeeping

 Focus on long-term, incremental growth

 Provides more options  Goal: > 60% equity  Lock all long-term interest rates  3 different loans

Land, buildings 10 years Cows, machinery 5 years Operating 1 year

 Balance business growth, taxes and leverage

#3: Finance & recordkeeping

 Sharpen business acumen

 Attend classes, seminars; non-ag?  Read financial publications every day

Wall Street Journal, Fortune, Forbes

 Cornell University dairy peer group twice a year

Benchmark against similar farms

 Meet with financial consultants quarterly

#3 Finance & recordkeeping

 Great tax and accounting firm, people

 Quickbooks  Year-to-year comparisons  Partnership reconciliation

 Lender relationship

 Transparency  Plan ahead, be ready to buy  Loans set up $5M

Key financial measures at Rosy-Lane

Cost of milk production/cwt $14.48 (21 ppl)



Feed cost/cwt $7.64 (11 ppl)

Net herd replacement/cwt $0.88 ( 1.28 ppl)

Net herd replacement cost

(# animals removed x balance sheet value springer) minus all cow sales divided by cwt. of milk sold per year EX: (466 x $1800) Minus $555,088 Divided by 323,661

= $ 0.88 / cwt (1.28 ppl)

#4: Biosecurity & disease control

 Test all incoming animals for BVD type 2, Johnes  Buy from healthy, high-performing herds  Clean trucks and trailers  Calf barn entry

#4: Biosecurity & disease control

 Vaccinate for Johnes,

Brucellosis

 Test every animal at 9 weeks for

BVD type 2

 Close relationship with

veterinarian to design protocols

 Eradicate Staph aureus,

Mycoplasma bovis

 Monitor diseases with regular

testing of bulk tank, calves

#4 Biosecurity – what we do differently

 Vaccinate for Johnes  Monitor bulk tank Staph aureus, Mycoplasma  Deliveries only to farmhouse office, barns off limits

We are often asked…

“Why is Rosy-Lane able to achieve such high levels success/milk/management?”

#1: Genetic excellence

 Traditional view

 Type  Milk  Fat  Protein  SCS

• TPI

 Today’s view

 Fat  Protein  Feed efficiency  PL, DPR  Mastitis resistance  Livability  Calving ease  Beta, kappa casein

 Net Merit

Long-term strategy to improve margins

#1 Genetic excellence

 No classification, genomic test all females  Focus on cutting costs, reduce:

 calving problems  displaced abomasums  mastitis  ketosis

 Reduce lameness

 Moderate foot angle, slightly spread toe

RosyLaneLLC Delta 10090-ET

#1: Genetic excellence

Reality check

• Milk price unlikely to increase
• Additional pounds of milk/cow too costly
• Expanding cow operating margins is our

greatest opportunity

• Focus on reducing maintenance &

replacement cost

$$$

#1 Genetic excellence

Dairy Wellness Profit from Zoetis (DWP$)

 Measures genetic resistance:

Scours, Pneumonia Livability Milk fever Ketosis Lameness Mastitis

Pounds milk per day lifetime

Lactation Lbs. Milk Days lifetime Lbs. Milk/Day Litres Milk/Day 1st 24,578 1055 23.3 10.3 2nd 29,978 1430 38.0 17.2 3rd 31,830 1805 47.9 21.2 4th 31,830 2180 54.2 23.8 5th 29,000 2520 58.4 25.7

Older cows return more milk & profit

Lactation Liters milk Net revenue Total net revenue 1st 11,172 $ 1413 $ 1413 2nd 13,626 $ 1723 $ 3136 3rd 14,468 $ 1830 $ 4966 4th 14,468 $ 1830 $ 6796 5th 13,182 $ 1667 $ 8463

#1: Genetic excellence

Reduce vet costs

 Do it yourself  Biosecurity  Farm sanitation  Genetics

 Breed for mastitis resistance, lameness resistance  Breeding for longevity indirectly reduces health costs

 2008 Rosy-Lane vet cost/cwt: $0.96/cwt (1.4ppl)  2018 Rosy-Lane vet cost/cwt: $0.34/cwt (0.5ppl)

$0.62/cwt…$197,160 (£147,870)/year difference

#1: Genetic excellence

Breeding strategy

 < 600 NM$ bred to Angus  600-700 NM$, high DPR, Holstein conventional  700-800 NM$ sexed semen 1x, Holstein

conventional

 800-900 NM$ sexed 2x, conventional Holstein  > 900 NM$ sexed semen 3x or flush

11 years progress at Rosy-Lane

2007 BST 2019 Cows 695 1079 Milk 12,953 L 13,948 L Fat 492 Kg 616 Kg Protein 374 Kg 457 Kg Vet EUR/45 Kg milk 1.8 EUR 0.60 EUR

11 years progress at Rosy-Lane

2007 BST 2019 Services/conception 3.1 1.7 Preg rate 18% 37% Dead on arrivals 8.6% 3.3% % milking herd treated 0.9% 0% Liters milk/Kg feed 1.62 1.68

Financial impact of feed conversion

 By improving from 1.62 to 1.68 kg/milk per kg/feed fed

to milking herd, gained $288,958 (£216,719) US per year 13,948 kg milk x .06 x .32 cents/L x 1079 cows

Summary: Countdown to profit $$

• 5. Great people
• 4. Measure, measure, measure
• 3. Finances & recordkeeping
• 2. Biosecurity & disease control
• 1. Genetic excellence

Which direction is your business headed?

Which of these 5 will you take action on? When?

P.S.

The price of inaction is far greater than

the cost of making a mistake. -- Meister Eckhart

Inaction creates nothing.

Action creates success. -- Stephen Richards