Sticker shock, expected when pricing new trucks, is not expected when pricing a bag of milk replacer. Sixty dollars or more for 50 pounds? Why?
Demand for milk-based byproducts for food use (as in humans) has increased dramatically both domestically and internationally.
A good thing, this demand adds value to our milk. However, these same byproducts are used in the quality milk replacers we need to feed for good growth and health in our calves. Frustrating, because it also adds to the cost of milk replacer.
But, we can’t have it both ways. So, how do these milk replacer prices compare with feeding fresh milk? First, let’s run through a few calculations and look at the economic issues.
Math class
Milk at standard test is 3.5 percent fat, 3.1 percent protein, and 5.9 percent other solids, totaling 12.5 percent solids. To compare costs, we have to convert our fresh milk value to cost per pound of dry matter.
If your milk price was $15/hundredweight (or 15 cents per pound), then it was worth .15/.125 (dry matter adjustment) or $1.20 per pound of dry matter.
A bag of 20:20 milk-based milk replacer at $60 per bag is selling at $1.20 per pound before adjusting for dry matter (DM). That $1.20 per pound adjusted for roughly 96 percent DM (1.2 /0.96) equals $1.25 per pound of DM.
If we looked at a “tag” for fresh milk at standard test, like we look at a tag for milk replacer, we would find an analysis of 25:28 compared to the 20:20 milk replacer in our example.
Comparison
What does this mean? On a dry matter basis, a pound of solids from our fresh milk is 25 percent protein and 28 percent fat compared to 20 percent each of fat and protein from the 20:20 milk replacer.
So, fed equivalent amounts of milk or milk replacer, a calf will gain more on the milk than on the milk replacer.
At $15/cwt. for milk and $60/bag for milk replacer, it is looking pretty good for the fresh milk in this example.
Now what?
So, should we all bag the milk replacer and start feeding fresh milk? Not necessarily.
Each farm’s decision will be different, so let’s consider the factors:
— Prices change. For both milk and milk replacer. Is this is long-term change in the milk markets? Only time will tell.
When milk is $13 per cwt. and milk replacer is $50 a bag or less, the comparative cost of milk replacer will be less than or equal to the $13 milk. Long term, each farm pays different prices for milk replacer and produces milk of varying test and quality.
You have the equation, figure out the value of your milk. On the last milk check, our milk was 13.19 percent solids and had a value of greater than $18 per cwt.
Even considering the higher nutritional value, a high quality milk replacer is the better economic choice.
Other important noneconomic factors should also be considered.
— What is the health status of your herd? If Johne’s or other health issues are a consideration, only pasteurized fresh milk should be fed to calves.
Are you currently set up to pasteurize and feed fresh milk in a timely manner to the number of calves you have? Factor in the cost of a pasteurizer and the time and training needed to operate it regularly and consistently.
— How consistent is your supply of fresh milk (the nutritional analysis?) That is one benefit of milk replacer. When we buy 22 bags of 20:20, 22,20 or 26:28, we get 22 bags with exactly the specified nutrition. While the tag says “minimum”, I think it is pretty fair to say that the companies won’t be putting extra in at these ingredient prices.
Should you feed fresh milk? There are economic, health and handling issues that enter in to the answer to that question that will be different for each farm. For some farms, feeding fresh milk will make sense. For others, switching to fresh milk is a no-starter.
However, never, never, never “save” money by switching to poor quality milk replacer. If it is cheap, there is a reason, usually poor quality or the wrong ingredients. You might save some money up front, but your calves will pay the price.
