The Florida Dairy Business April 1999

The Florida Dairy Business
(Acrobat version)

Volume 4 Issue 2

April 1999

It Doesn’t Just Happen

When trying to improve a herd’s performance, we tend to look at the cows, but what about inspecting the manure? No matter what they tell you, it doesn’t just happen. Combined with performance infor-mation, manure gives an excellent snapshot of what the cows actually ate, and what they did with their ration. Manure inspection is pretty straightforward: 1) see what it looks like where the cows are, and 2) see what’s in it. Walking out among the cows, if you see:

Manure is variable; loose and hard pies in same feeding group: The cows are picking through the feed and selecting their own ration. Cows may be going on and off feed. You have hired all cows as individual feed consultants.

Manure is bubbly – anything from shaving cream to larger bubbles: Microbes produce gas when they ferment feed. When feed is extensively fermented in the large intestine, the bubbles show up in the manure. In that case, the cow did not get full benefit of the feed. Can be a sign that feed is passing out of the rumen too quickly.

Fine particles of grain in manure: Grain may be passing through the gut too quickly. The white flecks have analyzed at 6 to 18% starch, representing feed that was wasted.

Coarse fiber in manure: This happens when fiber intake is low. One explanation is that there was not enough fiber eaten to make a good rumen mat that would hold forage and grain in the rumen for better digestion.

Mucous, "sausage casings": Tubes of mucous can be a sign that enough grain was fermented to acid in the large intestine that the acid damaged the gut. The mucous is the cow’s attempt to cover the damage.

The above signs typically come from cows eating too little effective, chewable fiber, and too much grain. It means that cows are sorting their feed, are choosing to eat more grain than roughage, or that there was not adequate fiber in the diet to start with. These symptoms are often seen during heat stress. Getting the cows to eat enough effective fiber can encourage rumination, hold feed in the rumen longer to be fermented, improve performance, reduce digestive upsets, and improve feed efficiency.

Next, get samples from different cow pies in a given group, and bring them back to where you have a hose and a fine mesh (~1/16" openings, 7-8" diameter) kitchen strainer. Place the manure sample in the strainer, and carefully rinse it until the water runs clear. If you see much fiber longer than ½", undigested corn stalks, much ground grain, whole cottonseed or hulls with the lint still intact, or undigested citrus pulp, the cows are having digestive problems. Often, it relates back to a lack of fiber. The "best" manure contains fine fiber particles and little grain. The fine fiber particles mean that the forage stayed in the rumen long enough to be ruminated and digested. With problem manure, the cows are challenging you to figure out how to get them to eat the balanced ration they need.

-Mary Beth Hall

Treatment Alternatives for Footwarts

There are at least 3 approaches to treatment of footwarts: topical treatment applied under a bandage, topical spray application, and possibly footbaths. Each has advantages and disadvantages.

Treatments applied under a bandage include various antibiotics (tetracycline, oxytetracycline, lincomycin, and the combination product lincomycin/spectinomycin). Clinical and anecdotal information suggests that most antibiotics are effective in the "under a bandage" application. However, only lincomycin has data to support an efficacy claim. The advantage of treatment under a bandage is that lesions extending into the interdigital space can be effectively treated. The disadvantage of antibiotic treatment is that it represents extra-label drug use, and as such can only be used under the order and guidance of a veterinarian. For this reason, the availability of non-antibiotic disinfectant-type compounds is desired, but to date there are none which have established efficacy as bandage treatment alternatives.

With regard to topical spray treatment, antibiotics as well as a few disinfectants appear to be effective based on studies here and elsewhere. This past March we reported on studies using "Victory" (a product marketed by Westfalia-Surge) in topical spray treatment of naturally occurring footwarts. "Victory" performed as well as oxytetracycline in the treatment of footwarts in our study. We concluded Victory to be a viable topical spray treatment option that poses no antibiotic residue risk. Other non-antibiotic alternatives with evidence of effectiveness in topical spray application include formalin (formaldehyde)," Hoof Pro Plus" (SSI, INC.), and "Restore" (WestAgro, Inc.).

The advantage of a footbath is that it provides for treatment of the interdigital space where the lesions of footrot, interdigital dermatitis, and footwarts often occur. But, there are no products with established efficacy in footbath application. Anecdotal and published information suggest that most antibiotics as well as non-antibiotic compounds are rapidly neutralized by the contaminated conditions that exist in footbath solutions. There is some suggestion in the literature that formalin may be less susceptible to neutralization in footbaths, but data establishing its effectiveness in footbath application is lacking. Furthermore, the use of formalin carries with it significant human health concerns. Therefore, its use must be considered very carefully.

Thus, treatment under a bandage coupled with topical spray application of effective antibiotic and non-antibiotic preparations will help to provide manageable control of footwarts. Use of a walk-through footbath may provide some additional assistance but only if solutions are changed frequently enough that there are able to maintain some level of antimicrobial activity.

-J K Shearer

PCDART for Windows Almost Ready

DRMS will be releasing PCDART Lite in late May. This new version will feature a "windows" environ-ment. While this new PCDART7 will offer easy integration with printers and other hardware, it will use the existing DOS database of PCDART6. This dual mode will allow users to switch back and forth between versions 6 and 7 as needed to provide for input and access to data as desired.

Along with version 7 will be a new feature to allow producers and consultants to receive their regular downloads via email. With this option, no speical dial-up will be required other than that necessary to check email. When the PCDART download is ready, it will be sent automatically.

Another new feature is the "view in grid" mode that allows immediate sorting of a report by any variable on the screen.

Also, users will be able to scroll up and down on any report being viewed.

Dan W. Webb

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Revenues: more than just cash in the pocket

An important component of dairy business management is managing for an acceptable return on investment. This includes making profitable investments, financing the business at a profitable level, controlling expenses, and ensuring the business is generating sufficient revenues. Revenues are a component of business management that are often overlooked because they are more difficult to control and understand. However, subtle differences in farm revenues often distinguish highly profitable dairies from those that are not.

Production agriculture economic concepts tell us that most dairy businesses are 'price takers'. This means that dairies do not have control over the price of milk. This is certainly true given the recent BFP crash. However, more factors than just the price of milk affect the revenues of the dairy business. Revenues represent the total amount of dollars generated from business activities. Overall farm productivity plays an important role in determining how much is generated. The portion of total revenues the business holds on to is retained as profit. Therefore, anything a manager can do to increase revenues while controlling expenses improves business profitability.

In order to demonstrate the effect that farm productivity has on revenues and overall dairy profitability, some financial performance information was examined from the Dairy Business Analysis Project. These 1997 fiscal year statistics were collected from participating dairies in Florida and Georgia. Those dairies that provided complete and verifiable information were sorted on the basis of net farm income from operations per cwt. milk sold and split into two groups. Selected statistics from this sort are displayed in the adjoining table.

The first observation from the table that should be noticed is the large difference in total revenues per cwt. milk sold between groups. The high profitability group (>$0.50 net farm income from operations per cwt. milk sold) had total revenues of $18.74 per cwt. milk sold. This was $1.06 above the $17.68 of the low profitability group (<$0.50 net farm income from operations per cwt. milk sold). This factor combined with lower total expenses drove the high group's net farm income from operations $3.10 per cwt. milk sold above the low group. This revenue difference needs further explanation.

In accrual adjusted accounting, revenues and expenses are affected by inventory changes on the balance sheet. This is a more accurate way of measuring business profits because distortions present in cash-basis accounting do no affect profits measured with accrual adjusted accounting. Additionally, this feature allows revenues to be separated between cash receipts and non-cash balance sheet adjustments.

You may ask, 'Why do I need to care about balance sheet changes when managing my dairy?' 'All I care about is the balance of my bank account at the end of the month.' Addressing these questions takes another look at the table.

The high profitability group had total cash receipts of $18.41 per cwt. milk sold. This was only $0.10 above the $18.31 of the low group. On a cash basis, there was not much difference between groups. However, when accrual adjustments for changes in accounts receivable and inventories of raised assets are figured in, the high profitability group increased by $0.33 per cwt. milk sold while the low group lost $0.62. On a percentage basis, this boosted the operating profit margin 2% for the high group while decreasing it 4% for the low group.

So what is driving these revenue adjustments? First, the high group gained in milk accounts receivable (i.e. the milk check owed to the dairy for the past month's production). This was only possible due to an increase in pounds milk sold at the end of 1997 since milk prices were lower at the end of 1997 than at the beginning. Second, inventories of raised animals (i.e. heifers and cows), on average, increased during the year for the high group and decreased for the low group. Differences in raised crop inventories also figure into this difference but were less substantial for this group of dairies.

It is apparent from these numbers that cash receipts are a large part of business profitability. However, revenues and subsequent business profitability depend on how productive the business is. These results show differences in business performance that may not show up in the checkbook, yet they still affect 'bottom-line' profits. Additionally, Marvin Hoekema and Russ Giesy productivity problems may jeopardize future profits and increase expenses in the long term. High productivity also boosts capital efficiency in the form of high revenues.

How well are you managing the productivity of your business? Are you achieving growth in inventories or are subtle productivity constraints diminishing business profits? A good way to tell is by regularly analyzing your business with two balance sheets linked with an income statement. This type of analysis is one of many tools that are available to those participating in the Dairy Business Analysis Project. Contact your extension agent or the department for more information.

Marvin Hoekema and Russ Giesy

Contributing authors include P. Miller, M. Sowerby, B. Tervola, D. Solger, P. Joyce, T. Seawright, C. Vann, and M. DeLorenzo. Also L. Ely, Animal and Dairy Science Department, University of Georgia.