Economics of Feed Efficiency

One way to maintain profitability without sacrificing milk production or health of your herd is to increase the feed efficiency. If a herd of cow produce 80 pounds of milk while consuming 57 pounds of DMI, the feed efficiency is 1.40. If another herd produced the same amount of milk but consume 50 pounds of DMI instead, the feed efficiency will be 1.60. If the feed cost is $0.07 per pound of dry matter, this means the second herd of cow has a lower feed cost of $0.49 per cow per day. Besides having lower feed intake and higher feed efficiency, the cows will also have lower nutrients in fecal material. As a general rule of thumb, for every increase of 0.1 unit in FE, there will be an increase in income of 15 - 22 cents per cow per day.

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In order to increase milk production, DMI must increase. Take Holstein cows for example, each additional pound of DMI consumed will lead to an additional two pounds of milk. If one pound of dry matter costs 7 cents, two additional pounds of milk produced can be worth 30 - 36 cents more income or 23 - 29 cents more income over feed costs. This is only true if: 1) Ration digestibility is constant (in general, digestibility decreases when DMI increases) 2) All the nutrients consumed are used for milk production. 

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The composition of diet (forage to grain ratio) and DMI (multiples of maintenance) have effects on the digestibility and subsequent energy values. Diets that do not help with the optimisation of rumen fermentation will cause an overestimation of energy values.