Dakota dairy sells rations to neighbors.
No one can fault dairy producers for wanting to maintain as much control as possible over their total mixed ration (TMR) feeding programs. Sometimes, though, it makes sense to turn TMR chores over to someone else, say Greg and Jim Moes, Goodwin, SD.
Along with operating a 300-cow (soon to be 1,400 cows) dairy, the Moes brothers are also managing partners in MoDak Feeds, Inc. As one part of that business, they currently deliver complete TMRs to a half-dozen dairies, ranging from 90 to 400 cows, in eastern South Dakota.
“Land base is a consideration for many of our customers,” says Greg Moes. “They don't have the acreage it takes to supply the forage for doing a TMR on their own. We put up haylage and corn silage on about 2,500 acres.”
For other customers, labor savings is a major consideration. “Having someone else do the TMR means they don't have to worry about whether or not the feeder is going to show up for work on a Sunday morning,” says Moes.
Reduced capital investment can be another motivating factor. “If you have someone else delivering your TMR, you don't need to invest as much in storage facilities and/or feeding and mixing equipment,” he points out.
Buying a complete ration enables producers with smaller herds to share in volume discounts on individual ingredients.
“For products like cottonseed or wet distillers grains, you have to buy in quantity to qualify for any kind of discount,” says Moes, noting that MoDak offers 17 individual commodity ingredients to customers. “But if you're not milking that many cows, it usually doesn't make sense to buy an ingredient a semi load at a time. We can buy in larger quantities and spread the costs over several herds.”
That was definitely a selling point for MoDak customers Dave and Shawn Howe, owners of 400-cow Lazy Lot Dairy near Castlewood, SD.
“We get to pick and choose from a wider variety of feeds to include in the TMR, and we know we're getting quality feeds,” says Dave Howe.
The Howes have been buying TMRs from MoDak since moving into the area from Canada in 2003.
“Dairy farming is just so capital-intensive,” says Howe, who milked 90 cows, farmed and also ran a custom harvesting business in Ontario. “When we were getting ready to make the move, we decided we didn't want to invest in a full line of machinery. We wanted to invest in more cows. That's where money is made on a dairy.”
Turning cropping and feeding duties over to someone else also frees up additional time for managing the cow herd, says Howe.
“They (MoDak Feeds) have a person mixing feed full time,” he says. “He's very thorough and precise. If we were doing the mixing here, it would be a fill-in chore, something we did between other jobs. I doubt that it would get done as well.”
The fact that the Moes are dairy producers also played a role in the Howes' decision to sign on with MoDak.
“They understand our business because they're in it,” says Howe. “They know how nutrition can affect herd health and overall milk production. We have confidence that, when they make up a TMR for us, the quality is as high as what they're feeding to their own herd.”
Quality of service is a key component of making this kind of agreement work, says Greg Moes. MoDak's TMR customers are within a 13-mile radius of the Moes' dairy. During good-weather months, MoDak delivers TMRs once a day. In winter, when feed has a longer shelf life, they back off to every-other-day deliveries.
MoDak delivers the feed to farms and customers are responsible for getting it to feed bunks.
Communication with each client and the client's nutritionist is extremely important.
“Right now, all of our customers are working with the same nutritionist,” says Moes. “That streamlines things quite a bit. The most important thing is to make sure feed samples are accurate so you maintain consistency. Dairy cows don't like change.”
MoDak pricing is based on the cost of individual ingredients in the customer's TMR. For forages, the Moes set a price just before harvest for each new crop. Commodity prices are adjusted to reflect moves in the market. This year, MoDak also had to adjust prices for mixing and delivery because of rising fuel prices.
“They had stayed the same for about two years,” says Moes. “Now it seems like we're changing on a weekly basis.”