Northwest Iowa Dairy Operation Improves Cash Flow and Quality of Life

January - March 2003

Chris Mondak , dairy, dairy/beef and forage field specialist

Situation
The owner/operators of a 50-cow dairy in northwest Iowa were concerned about decreasing milk production, difficulties in paying the loans for the dairy and stress load involved in trying to run a profitable dairy operation that would support the couple and two children.

Response
After visiting with the couple to determine their concerns and goals, and after reviewing DHI production records, extension coordinated the formation of an advisory team for this dairy to troubleshoot the problem from all angles. The assembled team, composed of the nutritionist, milk plant field supervisor, veterinarian, farm accountant, banker and extension specialist, met during the winter of 2002 to analyze all aspects of farm production. The team identified four priority areas to target in the spring and summer of 2002 and proposed an action plan to the owners.

Throughout the summer, the couple installed fans and added waterers to decrease heat stress, implemented a pre-calving close-up group and transition ration, worked with their veterinarian to identify and sell non-pregnant and non-profitable cows, took advantage of an opportunity to obtain some new cows from a neighbor, worked with their veterinarian and AI representative to implement an AI and synchronized breeding program and continued working in close contact with the milk plant field rep to monitor herd SCC & milk quality. The couple also decided to try a new milk marketing strategy offered through their milk plant.

Impact
The couple accomplished all the goals set in the their advisory team discussion meetings and in less than one year achieved significant improvements in herd productivity, cash flow and quality of life. Through replacing non-profitable cows with fresher cows and achieving success in cow cooling, herd production increased, bringing the herd from a 18,000 pound average to 22,000 pound production level. The cow cooling efforts, good stall hygiene and good milking procedures improved herd SCC and avoided the SCC spike seen in previous summers. This also earned the owners extra income from quality bonuses. The new AI and synchronization program is getting cows bred back regularly and on time, resulting in assurance that this farm will have adequate number of replacement heifers. Through the encouragement of the advisory team and contacts with a local dairy peer group, the couple has located and trained a local high school student to help with chores and allow some off-farm time for the owner. The combined herd management improvements, quality and volume bonus, MILC payment and milk marketing contract have improved cash flow significantly. In a year when the base milk price was in the $9-$10/cwt range, this couple was earning a mailbox price between $13-$14/cwt. The improved cash flow and part-time hired labor have decreased the stress load and improved this farm family's quality of life.

Page last updated: July 9, 2006
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