Balchem Corporation · NASDAQ:BCPC
Balchem — Conference Presentation (November 2024)
28 slides from Balchem's conference presentation, November 2024
Slide 1: Improving Dairy Profitability
6/30/20 Improving Dairy Profitability Mike Hutjens 1 Today’s Program • Lessons learned with Covid-19 • Today’s changing Covid-19 dairy industry • Managing milk volume—what you need to know and consider • Smart strategies in today’s Covid-19 dairy market 2 1
Slide 2: Change is Happening
6/30/20 Change is Happening 3 Changing Dairy Industry Covid-19 4 2
Slide 3: Changing Milk Prices
6/30/20 Changing Milk Prices Milk prices Dec, 2019 May, 2020 Class III--cwt (cheese) $20.20 $12.14 Milk fat (lb) $ 2.20 $1.38 Milk protein (lb) $ 3.30 $2.09 Base excess programs being implemented 5 Dead Cat Bounce • Are the trends real or not real? • Grocery store sales up 20% (normal 50%) • Recessi
Slide 4: Strategies in June, 2020—Covid-19
6/30/20 Strategies in June, 2020—Covid-19 • Protect milk price on the down side – Margin protection contract § 2019 was 39 cents / cwt for all milk at $9.50 level § 2020 can be 66 cent / cwt for all milk at $9.50 level – Government direct payment: $1.50 / cwt ($6.20) – Hedging (government program or
Slide 5: A Change: Selz-Pralle Aftershock 3918
6/30/20 A Change: Selz-Pralle Aftershock 3918 365-day milk production record 78,170 lbs. of milk 3,094 lbs. of fat 2,393 lbs. of protein 9 So We Changed 10 5
Slide 6: Reducing Milk Volume
6/30/20 Reducing Milk Volume Covid-19 11 Choices and Risks—You Need to Understand • Factors that may impact your clients and dairy farm managers • Ranking factors to consider –Green is recommended –Orange is caution –Red is not recommended 12 6
Slide 7: Important Questions I Can Not Answer
6/30/20 Important Questions I Can Not Answer • How long will base excess milk production continue (from zero to 15 percent)? • Will the demand for dairy products respond to January, 2020 levels? – Will you be able to respond? – Do you have heifers available? • Will export markets grow (exporting 16%
Slide 8: #2. Extend Dry Period Length
6/30/20 #2. Extend Dry Period Length • Dry off cows earlier with longer dry days (from 50 to 120 days) • Reduces feed costs (dry cow ration at 30 lbs. of dry matter-- $2+ /day vs. 40 lbs. dry matter of lactating ration--$4+ / day) • Risks heavy cow and increased metabolic disorders • Put these “long
Slide 9: Tools With Dry Cows > 3.25 BCS
6/30/20 Tools With Dry Cows > 3.25 BCS • Rumen protected choline (liver protection) • Organic chromium (glucose and insulin) • Propylene glycol / glycerin (glucose precursor) • Monensin / Rumensin (propionate increase, lower ketone levels, and/or protein sparing effects) • Rumen protected niacin (re
Slide 10: Raw Niacin and RPN Equivalency Calculation
6/30/20 Raw Niacin and RPN Equivalency Calculation Item Raw Niacin Rumen-Protected Niacin (NiaShure™) % Niacin 100 65 % Rumen Degradation 95 12 % Rumen Stable 5 88 % Intestinally Available 100 70 % Metabolizable Niacin 5 40 Relative Potency of Raw Niacin and 8 times potent NiaShure 19 Feeding Guidel
Slide 11: Advantages of RPN vs. Raw Niacin
6/30/20 Advantages of RPN vs. Raw Niacin • More consistent, predictable delivery of niacin to the small intestine • More predictable animal response (bioavailability) • Encapsulation – Less dusty – Prevents reactions to niacin (flush) in feed manufacturing facility – Masks taste and smell of niacin
Slide 12: #4. Feeding Surplus Raw Milk
6/30/20 Table 1 Holstein Component Profiles Fat % Fat/Prot Protein % Lact Milk Milk # (lbs) 1-40 41-100 101-199 200-305 1- 40 1-40 41-100 101-199 200-305 (kg) 19,000 2.9% 3.0% 3.5% 3.7% 1.32 2.2% 2.4% 2.8% 3.0% 8,618 23,000 3.4% 3.3% 3.6% 3.8% 1.36 2.5% 2.6% 3.0% 3.1% 10,433 1 26,000 3.8% 3.5% 3.6%
Slide 13: #5. Shift from 3X milking to 2X milking
6/30/20 Nutrients In 16 Pounds of Holstein Milk Nutrient Percent Pounds Water 87.5 14.0 Protein 3.1 0.50 (30 cents) Fat 3.8 0.61 (37 cents) Lactose 4.9 0.11 ( 5 cents) Total solids 12.5 (5.08/cwt) 25 #5. Shift from 3X milking to 2X milking • Research suggests a potential drop of 4 to 8 pounds of mil
Slide 14: #6. Institute a low group
6/30/20 #6. Institute a low group • 10 to 20% of cows could be included • Shifting these cows may lead to a drop of 4 to 6 pounds of milk (herd specific) • Lower feed costs by removing protein, additives, and less dry matter intake adding forage / fiber • Facilities may not allow • Caution 27 #7. Re
Slide 15: Positioning Your Feed Additives With Covid-19
6/30/20 Positioning Your Feed Additives With Covid-19 29 Remove all feed additives • Reduce feed costs (38 cents vs. $6.50 per cow) • Some feed additives may increase milk yield (biotin, rumen protected choline, and/or buffers) • Other additives improve immunity, fertility, rumen health, feed effici
Slide 16: U.S. Feed Additive Use
6/30/20 2019 Buffers 38 U.S. Feed Yeast/yeast culture 29 Additive Rumensin 24 Mycotoxin binders 24 Use Probiotics 11 2019 Hoard’s Niacin 10 Market Survey Omnigen 8 Don’t use 7 Feed bunk stabilizer 2 31 Roles of Feed Additives Energy Balance Calcium Balance Immune Function Rumen Enhancers • Propylene
Slide 17: Benefit to Cost Ratios—Show Me The Money
6/30/20 Benefit to Cost Ratios—Show Me The Money Buffers 8 : 1 Biotin 7 : 1 Yeast products 5 : 1 Ionophores 5 : 1 Silage inoculant 3 : 1 Rumen protect choline 3 : 1 33 Additives Recommended for Lactating Cows • Rumen buffers • Yeast culture/yeast products • Monensin (Rumensin) • Silage inoculants •
Slide 18: Additives Recommended for Close Up Dry and Fresh Cows
6/30/20 Additives Recommended for Close Up Dry Cows • Yeast culture/yeast products • Monensin (Rumensin) • Silage inoculants • Organic trace minerals + chromium • Rumen protected choline • Anionic product 35 Additives Recommended for Fresh Cows • Rumen buffers • Yeast culture/yeast products • Monens
Slide 19: Covid-19 Peak Milk
6/30/20 Covid-19 Peak Milk 37 Lactation Curve Rules • Peak milk sets the lactation curve—you only get one chance each lactation • High producing cows are most efficient and profitable • Never give up milk – One pound of DM costs 11 cents – One pound of DM can support 2 pounds of milk – Profit of eac
Slide 20: Holstein Peak Milk and Production Profile
6/30/20 Table 2. Holstein Peak Milk and Production Profile Lact Peak Days in Milk # Milk* Milk Milk/Peak 1 - 40 41 - 100 101 - 199 200 - 305 19,000 68 279 56 62 59 53 23,000 79 291 63 72 70 64 1 26,000 90 289 67 81 81 76 30,000 98 306 70 87 91 85 19,000 84 226 72 76 67 55 23,000 99 232 84 91 81 66 2
Slide 21: Right Sizing The Heifer Enterprise
6/30/20 Right Sizing The Heifer Enterprise 41 Total Cost to Raise a Dairy Replacement from Birth to Freshening $3,000 Heifer $2,427 $2,510 $2,148 Calf $2,000 Calf Value $1,360 $1,000 $0 1999 2007 2013 2015 42 21
Slide 22: Right Sizing The Heifer Enterprise
6/30/20 Right Sizing The Heifer Enterprise • Track the cost of raising replacements • Calculate the number of heifers needed – Culling anticipated rate (30 or 40%) or expansion – Adjust for losses: 89% born live (3% pre-weaned calves, 2% older heifers, and infertile heifers-6%) – Consider genomics (
Slide 23: Feed Efficiency (FE)
6/30/20 Feed Efficiency (FE) Pounds of 3.5% FCM divided by pounds of DM consumed Group FE Example: High group, mature cows >1.7 75 lbs. of 3.5%FCM High group, 1st lactation >1.6 divided by Low group, all cows >1.2 50 pounds DM One group TMR herds >1.5 = 1.5 lbs. milk per Fresh cows (< 21 days) <1.5
Slide 24: Economics of Feed Efficiency
6/30/20 Economics of Feed Efficiency (70 lbs. milk and $0.10 cent / lb DM) Feed Efficiency DMI Difference (lbs. milk/ lb DM) (lbs./day) (savings/day) 1.3 53.9 $0.40 1.4 49.9 $0.33 1.5 46.6 47 Management Changes Impact Feed (Energy) and Protein Efficiency Energy Protein Base FE for whole farm 21% 28%
Slide 25: What is Shrink?
6/30/20 What is Shrink? • The quantity of feed fed that the cow doesn’t eat • Varies from 1 to > 20% of available feed • Cost 10 cents to 15 cents per cow per day 49 Moldy Feed Feed refusals Spilled W et Feed Visual Invisible Wind Birds Scale Accuracy Tires & Errors Mixing Tracked F eed Barmore, 200
Slide 26: Weigh Back Considerations
6/30/20 Weigh Back Considerations • 1-2% of total dry matter offered (steers 1st choice) • > 5% weigh backs must go to cows • 50% of feed available at each feeding with 2x delivery • Evaluate sorting (+/- 5% each box) • Remove each day (each feeding?) • Feed stability (propionate additive) • Adding
Slide 27: Hutjens 2020 Covid-19 List (continued)
6/30/20 Hutjens 2020 Covid-19 List (continued) • Implement a fresh cow group (for 10 to 21 days) • Use of calcium boluses for at risk cows (50 grams with Ca chloride, propionate, or sulfate) • Supplementing organic trace minerals (Zn, Cu, Cr, and Se) • Heat stress abatement for all dairy cattle (dry
Slide 28: Questions?
6/30/20 C: 2) < 2 ww 2) cd) =) «| 28