When it comes to herd and farm management metrics, there are a plethora of figures that can be generated and compared. Commonly measured metrics are Milk from Forage, Pence Per Litre (ppl), Purchased Feed Costs, Feed Rate per kg of milk sold and Margin Over Purchased Feed. All of these and the many more figures that can be generated, have a place and can highlight some bottlenecks on farm, but when benchmarking, or using to make certain management decisions, they can be very misleading.
Metrics that work for all
Although metrics need to best capture what is happening on farm, we are all selling the same product, all have to compete for land and all buy the same feed and fertiliser, so metrics must be relevant to every system. Many high yield per cow systems won’t use milk from forage, at the same time, many grass based systems won’t use margin per litre, opting for margin per cow figures. With all dairy systems essentially operating in the same market, we must use metrics that are applicable to all to be truly representative of farm performance. Below are three key metrics that I believe do the best job of capturing farm performance.
- Forage utilisation (Litres per Ha)
Milk from forage, although being a good guide to feed use and forage quality, tells you nothing about how well the land is being utilised, or the profit achieved on farm. For example; on a farm with a low stocking rate, it will often be more profitable to milk more cows on a set farmed area, increasing purchased feed and reducing forage fed to that cow. This would see a reduction in milk from forage and an increase in overall farm profitability. Also, if poor silage is made, it will be cost effective to buy feed in to maintain milk, reducing milk from forage but mitigating any loss in profitability. What is vital, on every system is making the most milk out of your farmed area. This is where Forage Utilisation per Ha comes in. By simply working out milk sales generated from farmed land, we capture how productive the land is, how well forage or grazing is managed, and how well the herd is managed. If you decide to increase feed rate to capture marginal litres, or reduce feed rate to reduce feed purchase costs, this figure will remain a true reflection of forage and herd management.
- Margin over all feed per day
Margin over purchased feed per litre or margin over purchased feed per cow, both can be misleading in a couple of ways. It is dependent on cow numbers and yield, when all that really matters is the hard count of how much money you make. Also, it ignores one of the most variable and undervalued costs on farm; forage costs. When forage can cost £130/DM and makes up the biggest proportion of the ration, it needs to be factored into feed costs accurately. By simply working out the total cost of the ration as fed and the margin made over that cost in milk sales as a total for the day/month, on farm comparisons can really highlight weaknesses and opportunities. This figure is dependent on accurately costing forage, which can often be more complicated than it sounds, once feed shrink, refusals, and feeding inaccuracy are calculated
- Herd depreciation
By taking average herd exit price from heifer rearing costs/buying costs, we can work out the herd depreciation. If calculated on a pence per litre basis or per cow in the herd, it can really highlight the value in well bought or reared heifers against poor ones, along with the value of longevity and timely culling. It also highlights the importance of good heifer rearing and puts into context the savings made when trying to rear heifers cheaply. When done on herds that have invested in heifer rearing, it really shows the payback and is a better metric than simply heifer rearing cost per head/per litre
The old adage of ‘measure to manage’ will always ring true but make sure you are measuring what really matters on farm. If you would like these figures calculated for your business, please get in touch with a Wynnstay Dairy Specialist.