How sustainability impacts your bottom line
Thursday, December 12, 2019
Posted by: Maria Woldt
By Ryan Sirolli, global row crop sustainability director, Cargill
Any discussion of sustainability and its promise for farming needs to begin with a question. What exactly is sustainability? For many years, its definition has been influenced by verification and certification.
But, as 2020 approaches, we’re seeing a shift. Sustainability is increasingly being judged by outcomes. What is the impact of your efforts? Sustainability is also being connected with animal health and well-being and performance. This provides an opportunity for dairy farmers. It supports the pursuit of products and practices that have concurrent economic, social and environmental benefits. And it allows us to discuss sustainability in a practical and inclusive way.
Build sustainability from the ground up
Sustainability on a dairy farm begins from the ground up. When we embrace soil health best practices, we unlock that trifecta of economic, social and environmental benefits—a win-win-win. The basic principles of soil health call for keeping the soil covered, reducing or eliminating tillage, increasing crop diversity, maintaining living roots in the soil and integrating livestock where relevant. Where better to apply these strategies than dairy? Planting triticale or cereal rye, for example, after the corn silage harvest not only maximizes land use by providing a cover crop that can be harvested for forage; it can reduce soil erosion, provide a natural means of suppressing soil diseases and create habitat for wildlife, including beneficial insects, according to the U.S. Department of Agriculture (USDA).
Reducing or eliminating tillage can also lead to better soil health with higher biological activity and more organic matter; fields with higher water holding capacity; and reduced input costs, including labor, fuel and equipment maintenance. The addition of manure brings improved microbial activity to the soil and may lessen, or in some cases eliminate, the need for synthetic, nitrogen-based fertilizers—which can help farmers’ bottom lines.
Once crops make it to the feed storage pad, we want to maximize their efficiency in producing milk. The more efficient a herd is at turning pounds of feed into pounds of milk components, the more sustainable—both economically and environmentally—it is.
Look at feeds in terms of nutrients, not ingredients—since cows rely on nutrients to fuel their milk production. Cows are biologically complex. If they aren’t getting the right nutrients, such as starch, fiber and protein, for their stage of lactation, they may not produce as much milk or milk in the right components. This can hurt the financial sustainability of the herd and release waste unnecessarily into the environment.
Want to know how a herd is doing? We recommend calculating its component efficiency; i.e., how a cow on a given diet performs in the herd environment. Elite dairy farms have a component efficiency of around 12%. To calculate component efficiency, simply divide the herd’s pounds of milk fat and protein production by the herd’s average dry matter intake—and multiply by 100.
It’s a simple metric but one that can be tremendously powerful given three key facts:
1. A dairy is limited by the number of cows it can feed and house
2. Milk gets its value not so much from its amount, but by the quantity of milk fat and protein; and
3. Diet costs constitute about 60% of a dairy’s operational costs.
A farm’s profitability, therefore, hinges on maintaining a herd that is efficient at producing components—with feed playing a major role. Moving a herd’s component efficiency up one percentage point can result in a measurable increase in profit per cow per day.
Here’s an example to show the importance of component levels versus milk production. Herd 1 has higher milk production but lower component levels. The cows in herd 1 are eating five more pounds of dry matter to produce the same volume of components as herd 2. The result is a lower income over feed cost—and a less sustainable operation.
Many of you will be facing tight forage inventories in the coming year, due to late spring planting, early frost and snow, and a number of other adverse conditions Mother Nature has delivered. As you plan for the year ahead, think about how sustainability could play a role on your farm. Not only will this be good for our environment, it can boost your bottom line as well. Looking to learn more? Visit our new platform, cargill.com/feedingintelligence for the latest information celebrating you, our heroes who nourish, and providing tools and resources to support your success.