Get Ahead of Your Feed Bill with Inventory Planning
Get Ahead of Your Feed Bill with Inventory Planning
If there’s one part of your operation you don’t want to sleep on, it’s feed management. Feeding costs tend to be the single biggest operating cost for dairy herds of all sizes. But there’s more at stake than a healthy balance sheet. There’s also the reality that ingredient shortages and quality variability do have an impact on cow health and production.
Planning ahead on your rations can save a lot of headache and costly mistakes so that your budget and feed inventory stay on course.
Inventory Planning
The first step to staying ahead in your feed management is knowing exactly what you have on hand. This includes total dry matter, not just tonnage.
Too many dairies rely on rough estimates of bunker size or bale counts, which can be a risky gamble. The University of Wisconsin–Madison authors Jackie McCarville and Katelyn Goldsmith note that feed inventory calculations are foundational to avoiding shortages and making timely purchasing decisions, and they provide a Dairy Feed Inventory Calculator specifically to estimate available dry matter and project feed needs.
Tons of silage don’t tell you much without moisture data. For example, a bunker at 35% dry matter is a very different feed supply than one at 42% dry matter.
Inventory should be calculated as: Tons × Dry Matter % = Total Dry Matter Available
From there, match that to projected herd demand. Penn State Extension adds that feed inventories should be evaluated against herd requirements months in advance to allow time for adjustments if a deficit is coming. This is explained by authors Virginia Ishler and Tim Beck in their bulletin Feed Inventory for the Dairy Herd: Planning for Shortages.
Projecting should include the total number of lactating cows, dry stock, average daily dry matter intake and days until next harvest.
From there, you can calculate: Daily herd DM need × Days = Total DM required
The difference between what you have and what you’ll need is your risk gap.
Account for Shrink and Storage Losses
Feed shrink from fermentation issues, spoilage, handling errors, refusal and weather exposure can easily reach 10–20%, depending on storage type and management. The DAIReXNET feed center design guidance notes that poor storage and feed handling systems significantly increase shrink, effectively raising your cost per ton of usable feed.
That means if you think you have 1,000 tons of silage, you may only be feeding 850–900 tons of usable dry matter.
Serious feed planning builds shrink into projections. If you don’t, you’re building a budget on feed you’ll never actually feed. And if your projections show a shortfall, especially when done in the first half of the year, you’ll have time to redirect.
Think about issues like adjusting cropping plans, increased grazing is applicable and contract purchasing. Plus, you can always strategically modify your rations with your nutritionist.
Extension budgeting tools from the University of Missouri reinforce that feed costs should be projected alongside production and revenue expectations.
Make Inventory Tracking Routine
The most profitable dairies treat feed inventory like milk checks. Meaning that they are regularly reviewed as opposed to being guessed at once or twice a year.
Best practice includes measuring bunkers, updating projections and forage testing. Don’t forget to also recalculate dry matter supply during major ration shifts.
When inventory tracking becomes routine, surprises become rare. And in a dairy economy with ever tighter margins, fewer surprises mean fewer expensive decisions made under pressure. If you want to get ahead on feed planning for the coming year, don’t start with what you hope prices will do.
Maximizing Home Grown Feedstuffs
One of the best ways to control feed costs as best you can is by maximizing what you grow yourself.
Increasing the proportion of quality homegrown forage in the ration can reduce purchased feed costs and improve margin stability. The key word there is quality. Simply growing more tons isn’t enough, you also need to consider digestibility. (And that’s not even to mention cost of production considerations surrounding inputs, fuel costs and the like.)
Harvest timing, moisture targets, hybrid selection, and fertility programs all influence starch digestibility, fiber levels and ultimately milk production. Delaying harvest to gain yield can reduce digestibility and increase purchased concentrate needs. Growing your own feed ingredients affords price stability, but only if nutrient density supports production without excessive supplementation.
Rotational Grazing and Stockpiling Perennials
For grazing herds or dairies supplementing with pasture, proactive management extends forage availability and reduces purchased feed.
Rotational grazing systems allow pastures to recover and maintain higher productivity per acre. Monitoring pasture growth with visual tools helps keep grazing pressure on par with growth rate.
Stockpiling perennial forages for late fall or early winter grazing can also reduce harvested feed demand. The economics work best when forage fertility is managed and grazing protects longevity.
Your General Framework
So, what should a proactive feed plan look like? Of course it will involve a lot of nuances, but here are some barebones “to-dos” you might want to consider throughout the year.
Late Summer / Early Fall
- Conduct full feed inventory in dry matter
- Estimate herd needs through next harvest
- Identify deficits and contracting needs
Fall
- Finalize cropping plans for next year
- Evaluate forage test trends
- Budget projected feed cost per cwt
Winter
- Review shrink management practices
- Stress test budgets against milk and feed price scenarios, if possible
Spring
- Recalculate inventories
- Adjust ration strategies as new forage comes online
As always, don’t be shy about using extension planning budgets to build a feed worksheet that where you can put all of these measurements together.
Look for a worksheet that will allow you to track the following:
- Total projected forage production
- Purchased feed assumptions
- Shrink estimates
- Total feed cost
- Feed cost per cwt of milk
Ultimately, feed cost per hundredweight should be the overall baseline. If it’s drifting upward, something in production efficiency, shrink control, ingredient sourcing or forage quality needs attention.
May 2026
By Jaclyn Krymowski for American Dairymen
