Protecting Your Profits
Managing risk and protecting your profits on a dairy farm isn’t always easy, but it’s a necessary part of running your business. Welcome to the “Protecting Your Profits” podcast – a brief monthly update designed to give you the data, production trends, and national and statewide updates you need to manage your dairy’s risk management strategy.
Protecting Your Profits
PYP - Dairy Report Rundown 06.30.2025
In this June installment of the "Protecting Your Profits" miniseries, Dairy Report Rundown, we were joined by Dr. Brian Reed, DVM, MBA, to talk through the May 2025 Pennsylvania DHIA report. Dr. Reed offered his insight on significant and surprising trends in Pennsylvania's herd performance and reproductive health. He also provided advice and guidance on how individual farms can use their DHIA reports to improve their profitability and make informed decisions.
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Welcome to the Dairy Report Rundown, where data meets dairy. Each month we will dig into the reports that shape our industry, unpacking the trends and getting real-world insights from experts who live and breathe dairy. Practical takeaways and straight talk to help you stay ahead in an ever-shifting market. So join us as we dive into the most recent dairy reports together. Welcome everyone to this June episode of the Protecting Your Profits mini-series Dairy Report Rundown. I'm your host, Valerie Mason-Faith, the Center for Dairy Excellence's Risk Education Program Manager, and today I have with me Dr. Brian Reed. Thanks for being here, Dr. Reed.
SPEAKER_01:Sure, glad to be with you.
SPEAKER_00:Today, we're going to discuss the May, Pennsylvania DHIA report, what we can learn from it, and how dairies can use their individual reports to improve their herd health. And with that, let's get started. Dr. Reed, can you briefly introduce yourself and share some of your background in the dairy industry?
SPEAKER_01:Sure. Yeah, I grew up on a farm in Minnesota, went to vet school out at University of Minnesota, and then since that time, been in dairy practice for 37 years here in Pennsylvania, mainly working with small family farms in the southeastern part of Pennsylvania, along with the dairy practice for the last 20 to 25 years I've also been doing financial and management consulting along with farm transition consulting for dairy farms and other businesses after I went back to school and got my MBA degree back in 2001. And for the last year, I have retired from day-to-day practice and now I'm working full-time in consulting area with dairy farms and other businesses to help them improve their operations.
SPEAKER_00:Great. Thank you, Dr. Reed. It seems like you have an extensive background. So kind of diving into the DHIA report data, when you look at May's DHIA report for Pennsylvania, what kind of story does it tell about the state's dairy herds right now?
SPEAKER_01:Each month, you compile that report for the Center for Dairy Excellence, which is the benchmarking program, which is helpful. It allows you to compare the industry as a whole to past performance. So the numbers that I I'm referring to relate to average values for the Pennsylvania dairy herds that are represented in this DHA summary, which is made up in 2025 here. There's 22,121 herds that are represented in this. So it gives a snapshot, and we just have to recognize it's the average, not the top 10%, not the bottom percent, but the average number. So with that in mind, the things that stand out to me, first of all, it takes a lot of momentum to actually change numbers when you're looking at a large data set like that. Some of the trends continue that we would expect to see in 2025. In May, we had 51% of the Pennsylvania herds that had 80 plus pounds per cow per day. So that level keeps going up. A year ago, it was at 47%. So we are increasing production that continues. If you look at it from a rolling herd average, standpoint, that number has gone up about 1% over the last year, rising about 230 pounds up to the average in the state now is 23,814. So if dairy herd is kind of falling behind and they kind of have the old idea that, hey, a 20,000 pound herd is a good herd, well, they're actually a long ways behind the average right now. So it is important to realize how this these trends continue to move up as we go along. So that's positive. We also see that the trend towards more components is continuing. As I said, the milk production, when you look at it, rolling herd average is up 1% from a year ago. But if we look at total components, you know, which is the makeup of fat and protein, that's up 2%. So that trend continues as it has for the last several years as the components is going up. The other numbers that I found very interesting in the trends here is there's a few things that I would kind of relate to high prices for replacements, a lot of the beef on dairy happening in the industry, so people cutting down on their heifer pool. But some of these things that I'm seeing some maybe strains in the performance reflected here, such as the percent of the herds with a culling rate of between 20 and 35 percent. It's kind of a double-edged sword. That has gone up to about 52 percent this year, where it was about 46 percent last year. So in a way, that's good that cull rates are down, but there's also a concern that our cull rates down sometimes because we don't have the heifers to replace them, and purchasing replacements is expensive now, as anyone in the industry is aware. So that's a number that individual farms have to really watch because if we're not calling adequate numbers, we can start to fall behind and we're keeping cows around that we don't need or we aren't running our facilities at capacity, which can also be a problem. So there's a few things like that that show up. I think another tendency that maybe is related to that, that the average days in milk is running at 189 days this year, whereas a year ago it was 183. So that's just saying that our lactations are a little bit longer. Again, when we have pressure that we can't cull freely, maybe we're holding on to cows too long, maybe we're trying to breed them another time or two just because of the economics of everything, and that starts to stretch out. And that can, of course, lead to stretches out too far. That can lead to some poorer production and, again, holding on to cows that maybe aren't as profitable as they should be. So there's a few things like that that are just showing up this month that really stay out to me. The other thing is, you know, at this point now that the percent of the herds in the state with components over 1,650 pounds, that really shows up when we look at it from that parameter. We have now 70% of the herds in that range, whereas a year ago it was at 66. So again, that march towards higher components, productivity per cows continues. So that in a nutshell would be the things that really stood out to
SPEAKER_00:me. Great, thank you. So were there any surprises in this month's data? Anything that could indicate herd performance of Pennsylvania dairies?
SPEAKER_01:Surprises would be kind of related to some of the things I talked about with the call rates and relation to the repro. So that kind of surprised me that we're seeing that show up to the degree we do. When we look at the overall Pennsylvania dairy herd, it takes some real momentum to change numbers like that. So that was kind of surprising to me, some of those numbers. The other thing that unfortunately, I guess, surprises me a little bit is that our production is up about 1% over the last year when we compare that. And that's about a 1% increase, but that's equivalent to 230 pounds on a rolling herd average. That's good. We want to always be moving forward. The dairy herd needs to keep moving forward in Pennsylvania. On average, that's been moving up in that 200 to 250 pound per year range. Unfortunately, some of our dairy competitor states out there have been moving at a faster rate than Pennsylvania has. This is a trend that's been going on over the last 10 years at least. And that can make Pennsylvania dairies less competitive than our counterparts at various places around the country. So that's a number that the dairy industry as a whole has to really look at. And again, realizing that's an average number for the whole state. And if we look at where individual herds are, I mean, we have some just outstanding herds in the state of Pennsylvania. Let's say from a rolling herd average for milk production, we have herds that are above 30,000, 31,000, 32,000, which is tremendous. But the fact that the average is 23,800, and there are other states around the country that that average is closer to 26,000, 27,000. There's a lot of herds in Pennsylvania, if we look at all those numbers then, that are below the average. If you're at average, you have 50% of the herds are better and 50% of the herds are worse than you. But we have a lot of herds that are down below that 23,000 level and down below 20,000. And as I get around the state more and more, there's pockets of the state where we have, not pockets of the state, but individual farms within those pockets where there's some work to be done to bring things up to the current levels for where we need to be to be profitable as a family dairy farm.
SPEAKER_00:So when you look across all the herds represented, what's the one figure that you think producers should pay the most attention to?
SPEAKER_01:I think one of the things that really sticks out to me is the reproductive performance, because that has always been very important on dairy farms. But if I look at it Now, in conjunction with the value of replacements, the heifer inventory that we have, reproductive performance has really been magnified as a driver of profitability on the dairy farm. If we think about the beef on dairy that a lot of our industry is taking advantage of, that market has given us a gift in the dairy industry if we just want to take advantage of it. You know, you hear, and averages, but you also hear a lot of testimonials, you know, baby bull calves, you know, selling for$1,000,$1,200. That is a whole different financial situation than years past when maybe we were happy to sell a Holstein bull calf for$50 back a few years ago. And when replacement costs were$1,800 would buy a cow, something like that a few years back, now people are having to pay$3,000,$3,200,$3,500 for a good replacement, maybe more. Those type of numbers are really... rewarding the farms now that do a very good job with reproductive performance because we're getting more calves per cow per year and those farms that do a good job successfully raising those calves So we have good health in the calves the whole way up through, getting animals bred so they calve on time at 24 months or less. All of those things combined with having a lower days in milk, because if we have good reproductive performance, we have a lower days in milk. Therefore, the average cows in the same given herd will be milking more pounds per cow per day. All of those factors are really rewarding the farms that do a really good job maintaining reproductive health and all the factors that go into that. So I think that's one thing that is truly different and more magnified now than it was a few years ago before we had these changes in value of animals from baby calves up to replacements.
SPEAKER_00:Excellent answer. So kind of zooming in on an individual farm basis, if you were working one-on-one with a producer and going over their farm's DHIA records, where do you start the conversation? Well,
SPEAKER_01:in all my years in practice and then now also working with farms individually on more of a financial basis, but we have to remember The financial basis of farms goes back to what the production basis of those farms really is. So there's two components that I always tried to think of is, first of all, from the producer's perspective, what do they see as a problem that they're facing? Okay, because certainly we want to be, I've always tried to be helping farmers solve the problems that they see. Because they're there every day and they may have some frustration. So really helping them if they have a particular problem in a particular area of management, then helping them to use the data that DHA provides to give a better insight into, okay, how do they compare with others? What are some insights that they can do? What specific things? could they do? So it kind of comes down to that, using the records that we have to help them improve those numbers. And DHA is very useful in two ways. One way is with all of the individual animal data that's there. So there's just a huge amount of data you can pull up on individual animals to help from an individual viewpoint. So in culling, which animals should be culled, where are our particular problems in reproductive performance, or what age are our You know, the average heifer may be calving at 25 months, but if we have some in the herd that are 30 or 32, you know, how do we identify those animals? So there's a lot of data that helps us to manage individual animals. But then at the same time, we also have the ability to look at averages and, you know, trends in the herd. So it's very powerful that way. And then the second way, other than just what are the farm's concerns, I think as an outside set of eyes, as I do as a veterinarian and also our nutritionist lenders and all the other people that service farms can provide. You know, we can provide an overall view because we get on a lot of different farms, so we can kind of help the farmer to compare, hey, what are others doing that have successful numbers? So using the DHA numbers that we have in the reports to help them benchmark and figure out that, hey, they're doing pretty good in a lot of different things, but help them to identify, okay, what areas are are the real opportunities for you to improve on your dairy farm. Maybe you focus really good on repro, and you got all your repro numbers looking really good, but an outside set of eyes might say, hey, we have some work to do on mastitis, or we have some work to do on just... Capacity of your dairy. It says here that your number's milking each month. They've been going down over the last year. Just an outside set of eyes on some of those types of things just gives another perspective. So I find that useful as well.
SPEAKER_00:Perfect. So what are some common blind spots producers miss on their reports that could be costing them money or production efficiency?
SPEAKER_01:Well, this one might surprise you. listeners, but we always tend to focus on the production numbers, which DHA does an excellent job on. But one of the things, and I've focused on this more and more over the years, over the past decades when I've been doing more financial consulting with farms as well, is simply looking at inventory numbers. Not looking at production per cow or anything like that, but really seeing what the inventory numbers on the farm are. And that's two big groups. One is how many cows are milking in the facility they have and is that consistent because if we have let's say on a farm if we have 200 slots for productive milking cows to be on that farm and if we are not milking 200 cows every day of the year or as close to that as we possibly can and we're seeing Numbers of cows trending down from 200 down to 180 down to 160. I see these numbers and it just kind of happens over time. People don't really realize how much of an effect that has on the bottom line. And what that does is if we keep our capacity full in any business, we're spreading our fixed costs over more and more production in this case. And essentially allows farms to stay profitable and more profitable at a given time. price of milk by spreading their costs over more animals, more pounds of milk sold. The inventory numbers that are on there each month to see if we're consistently filling that that capacity up because that's where you're going to make the most profit. And then also on the inventory side, looking at the inventory of the replacements on the farm or assuming they raise their own replacements or have retained ownership of their own replacements. Because again, that can be a number that if that number is way too high, maybe they have a lot of costs in that reproduction or that replacement program. But right now that's fine. If you have more replacements, they're worth a lot of money. But just watching that heifering inventory and seeing how that is in relation to what your goals are for having adult animals milking in the herd are so important. So it doesn't have anything to do with production per cow or anything, but just how is the whole operation working to capacity.
SPEAKER_00:Perfect. So to, say, bridge the gap between seeing a number and truly understanding it, how can producers start thinking more critically about what their results say about their cows, man management practices and let's say goals?
SPEAKER_01:Yeah, that's a really great question because I think a lot of farms, in my experience, a lot of times like with our summary sheets that we look over, we kind of quickly glance at it sometimes each month when we get our tests back and we just kind of see how we're doing. And then we just kind of file it away and say, hey, we're doing pretty good here and hey, we've got a little work to do there. But to really make them useful, you have to look at different numbers that are related to each other. As I just did back a couple of questions on the how these things relate to the value of cull cows and bull calves that we're selling and things like that, how the different factors really interact. But then even more importantly than that, on any one factor or any group of factors that we identify in any record system, but especially DHIA, the key is what are you going to do about it? And digging down to not just understanding, hey, this is a strength or a weakness on my farm, but to then keep asking, I sometimes call it pretending your three-year-old you know anyone who has three-year-olds knows what they do they just keep asking why to the point of just getting irritating after a while you can't come up with another why answer you know and that's the attitude we need in a dairy farm is just keep digging deeper and asking yourself and your advisors why Why is this number off? Or why can't I get to the next level? And then by asking that question, you keep going, well, maybe my, let's say, for example, maybe my feed didn't, I don't have really good quality feed this year. Okay, well, to just leave it there, it didn't solve anything. Dig in deeper. Well, why didn't we have good quality feed this year? And it just forces you to keep going in to deeper and deeper and deeper until you get to some solvable solutions that you can do to make sure you're improving in the future. So I think it just comes down to that state of mind to open yourself up to realizing nobody's perfect. There's always room for improvement. And just... digging deeper and deeper like the you know like like an onion you know the layers on an onion until you get at the core focus of okay what is at the core of this why can't I do better on this on my farm or how can I just reach even higher levels you know because I see the farms that are already doing a really good job they're oftentimes that's why they're why they're at where they're at they're always doing those things they're always critical of themselves of the numbers they have whereas a farm that was maybe average or below average in parameter they're just accepting of that. But to really get to those higher levels of performance, a farmer just has to be open to the criticism and open to just accepting that, hey, what else can I do? How can I get better? So I think a lot of it is just an attitude what we do with the data.
SPEAKER_00:Great answer, Brian. So, you know, looking towards improvement, can you give us an example of a farm that used the data from their DHIA report to change their practices and saw real results?
SPEAKER_01:Yeah, I'm thinking of– that's a good question. I'm thinking of a farm that it really came down to reproductive performance. We were working on– and, you know, there's a program that they had in place using various– breeding programs, you know, off sync type programs. I won't get into specifics on this particular farm, but it came down to the realization when we really looked into the records and looked at the consistency of their reproductive program. And you can see that on that, you know, there's individual monthly data on the summary sheets for different reproductive performance for the different months. And there's always going to be some variation in seasons of the year. You know, it's always harder to get cows bred during the hot, humid months of summer. But on this farm, And in addition to that, there was real ups and downs in the reproductive performance through the course of the year. And, you know, that was kind of brought out in the records. And really, when you started questioning it, it was more that the consistency of their reproductive programs, they weren't getting it done all the time. During the busy times of the year, when they had shifting in personnel, family programs, personnel, maybe going back to college or not. You know, there's things like that that happened in the real world. And they weren't consistently doing their reproductive program every week of the year, you know, on a weekly schedule. And it really showed up in the performance and they were really slipping on that. But really from analyzing that data, pointing it out to them, we were able to build a more, I would say, a simpler program that was going to get done. Plus they realized the importance of getting it done on a regular basis. And they then over time saw much better reproductive performance. Because really, good reproduction, it just requires relentless attention to detail and making sure that we're consistently doing the programs that we want. And again, that's a good example of a DHA data analysis. working to serve as a monitoring program to give you feedback on how you're doing as a farm. So that would be one area that would be kind of a consistent, a common thing that you would see DHA records to help on.
SPEAKER_00:Brian, what's some advice that you would give to a dairy farmer who feels overwhelmed by their report and doesn't know exactly where to start?
SPEAKER_01:Yeah, that's a really good question too, because if you look at the herd summary that farms get, you know, it's a front and a back of a sheet there's I don't know how many hundreds of individual numbers on that on that report there's just I love those sheets because I look at them every time and you can get into really in depth on that but it can be overwhelming it's just a lot of numbers you know you just stare at it and I think that two things I'd say one is that it's kind of organized in key areas you know of performance so maybe just pick an area that you think maybe there's some something you'd like to learn more about on your herd on that maybe it's reproductive performance maybe it's milk quality maybe it's some of the production data maybe it's the inventory maybe it's the calling you know there's different areas on that report and just that month just take a few minutes sit back and try and absorb what those numbers might mean for your operation you know and it might be five or 10 or 15 numbers at the moment and kind of see how they would paint a picture for you. And then you can also compare some of those numbers to averages that are out there for the industry. So you can kind of compare to that. But I'd also really stress that sometimes if you're just getting started on that, really wanting to learn more, use your advisors. That's what they're there for. When your nutritionist comes out to go over things with you, they're used to looking at your DHI records. When your veterinarian is there working with you on your herd. Take some time and ask them about that. Because sometimes, as a farm advisor, I know this over the years, sometimes you feel like you do need some permission from the farmer to take time to really dive into those records. And you want to make sure as a farm advisor that, hey, are people willing to, do they really want criticism that day or not? You know, you almost have to have a green light to go onto their farm as a guest and then to, you know, say, hey, you know, you got some real work here to do on this area or that area. So I think having some open conversations with your advisors and a lot of them can help teach you how to use those DHA numbers that you have to the betterment of your farm. And again, just depending on how you're using DHA, if you have one of the DHA personnel comes to your farm to get all the data and weigh the milk and all the data, they can be of help as well to point out some of those numbers and also let you know how you can pull averages and summary information from other dairy farms and provide some benchmarking information for you. So those would be all ways that you can really start Start to use them for all that you can. And I've always said for people, it's like you're paying for the DHA data. Why don't you use it? It's really important data, but some farms certainly use it more or less than others.
SPEAKER_00:Excellent answer, Brian. So just to leave our listeners with one last thing, if you could leave dairy farmers with one message about DHA reports and their importance, what would it be?
SPEAKER_01:Really, this is a simple answer. Use them. You're paying for those records. You're putting a lot of work into it. Use them for all they're worth. And then really use them with a feeling of how do I... And that can be a tough mindset because you're seeing areas that maybe you're not doing as good a job as you possibly could now. But that's what every business has to face is... The world keeps moving forward. If we think we're just keeping pace with what we've done in the past, in a lot of ways, we're probably falling behind the industry. So we just have to be open to ideas and always moving forward. And the DHA records can be a key to giving you the information that you really need.
SPEAKER_00:Thank you, Dr. Reed. So that wraps up today's Dairy Report Rundown. Thank you again, Dr. Reed, for sharing your knowledge and helping us decipher DHA reports, how to determine their value. And thank you to everyone who tuned in. If you enjoyed this mini, so subscribe or share it with others. If you've got questions or reports you'd like to see covered in the future, drop your ideas in the comments. Until next time, stay informed and stay engaged.
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