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By Henry Verhoog
Dairy Specialist
Grand Valley Fortifiers
As many of you are now aware, the DFO has recently dropped this SNF ratio down from 2.25 to 2.20 which in essence, better represents the current market status toward minimizing the amount of structural protein and skim milk surplus in our supply managed system.

In simple layman terms, at present we have a good strong demand for butter and butterfat products but due to recent trade regulations we do not have a good market for this extra protein. It is also important to point out that this may be a temporary dilemma. For those of us who have been around long enough, we remember adjusting feed rations to lower butterfat as much as possible to efficiently fill quota 20 years ago.

With these new rules in place each producer needs to assess their own situation to determine what game-plan makes the most sense. Without going into too many different scenarios I do want to discuss the options that I see on some very well managed herds.

Scenario 1: You have a well managed herd that is averaging 40 to 45 liters with an average 4.0%bf in the winter and 3.7%bf in the summer. This herd is probably milking 3x or have robotics. They have bred for years toward top production and want to keep challenging their cows. If I am helping to manage this herd, we are going to keep doing the same things they are doing now with a couple of consistent changes. We will look closely at those top 2yr olds that calved in recently and those with a lower than average bf will be sold to a reputable cattle dealer who will gladly buy them and sell them south of the border. You will also keep making top quality forages and restrict feeding too much starch in summertime to try and move the bf up gradually. We will also continue to use protected palm fats because we know by now that these help the herd reach its repro goals and help keep the bf up as needed. This formula for success also applies to producers who choose to milk 2x and are aiming for the same top production. The main difference is that any cow that milks 2x will always have a little higher bf % than when we milk her 3x or put into robot system to get milked 3 or 4 times in early lactation.

Scenario 2: You have a well managed herd with good genetic potential, but you are much more focused on trying to produce this high bf milk. If you are milking Jerseys today, you are already where you need to be! I would argue that some Jersey herds I have seen numbers on could actually breed for a bit more milk and sacrifice a bit on that 5.5 bf milk – personal opinion only. I am also aware of some Holstein herds that are now maintaining 4.5 to 4.8% bf year round. Most of these herds have bred for higher components for many years and are now reaping the full benefits from this.

Another common thread on many of these herds is the desire to feed more kgs of forage year round and not worry about getting that last litre of milk. These farms usually have a very good land base so growing extra forage and feeding home grown feeds is part of their way of life. And since most of this land was purchased long before prices hit 30 or 35k per acre this model still works fine. One key factor that remains the same in both scenarios above is that cows that naturally produce higher amounts of bf will be the easiest ones to work if this SNF game is your main focus. When producers give us a chance to feed cows that have been well bred, and put up top quality forages and well stored grains (no heating and no mold) obtaining this end goal of that ideal 2.20snf ratio becomes much easier.

With warm summer days coming, the main challenge of keeping these nice high bf tests is to keep bunks or silos nice and cool and minimize any pockets of moldy feeds. Well fermented feedstuffs go a long way to keep healthy rumens producing good quality milk. With high temperatures in summer time, adding extra rumen buffers or stabilizers like bicarb and yeast culture along with protected fats will pay back quickly with this new pricing model. Those who have made some top quality corn silage with loads of starch in it this past year, may be well worth looking at the option of adding a kg of dry alfalfa hay to the ration over the summer time.

In closing, I encourage producers to take a closer look at your recent milk cheques to get a good handle on what I call the 4 prices of milk.

  1. Within quota is highest and best priced milk. This will represent all the milk you shipped in category below 2.0snf ration. (this encompasses all Jersey herds and really high Holstein herds above 4.5%bf ).
  2. The next line is the market ratio where you get paid about 40 cents a litre. This will be the milk that falls between 2.0 and 2.2snf. Having some of your milk fall into this category is not terrible as it at least covers your production costs. Do keep in mind that having some milk fall into this category actually do maximize out your returns on a kg of butterfat quota which is a whole article in of itself. Suffice to say, no harm in having 5 or 10% of production fall into this category.
  3. The third category is call SNF ratio Cap. This will be milk over the 2.2snf ratio and even though producers aren’t paid for this milk, having some milk hit this category usually means that the kgs of butterfat quota were most economically filled.
  4. The fourth category is over quota and that comes with a big penalty of 25 cents per litre. This is where you definitely do not want to ship any milk in no matter what your butterfat level is.

I am hoping by now that I have not completely confused everyone. What I would encourage producers to do is to spend a bit of time going over their recent milk cheques to compare all prices this past year and get a good handle on understanding where this pricing is all coming from.

This article was written for the Spring 2023 Dairy Eastern Dairy Grist. To read the whole Dairy Grist, click the button below.