Inventory Management

Profile Picture of Post's Author Erin Mosley | Posted July 11, 2022

On farm feeding software is an excellent resource to monitor a variety of data associated with feeding dairy cattle. While many platforms and versions are equipped to manage ingredient inventories, I rarely see that aspect of programs fully utilized. Purposeful evaluation of feed inventories can provide valuable information on feed utilization, feed cost, and feed shrink. The most popular feeding programs all monitor feed utilization based on feed loading and delivery. None require that positive feed ingredient inventories are maintained, however, depending on the software and version, operators do have the opportunity to track feed inventory in the feeding program.

If your feeding program does allow for inventory tracking, where do you start? First, a current feed ingredient list is needed, with accurate inventory, DM, and pricing values for each ingredient. Over time, this list should be maintained by adding new ingredients, deleting or archiving old ingredients no longer used, and routinely updating ingredient DM values, especially for forages and other wet ingredients. If applicable, vendor and contract information can be included.

If your feeding program allows, the next step involves setting feed inventories. This is not a one-time process. Every dairy has shrink that may vary over time. Assuming feed inventory will remain accurate over time without any adjustments for shrink will result in inaccurate inventories in the program. Shrink is measured by determining the difference between expected feed inventory after usage and actual feed inventory. This actual feed inventory value can be tricky to come up with sometimes. Estimated physical inventories of several truckloads of a commodity in a bay can easily be off by several tons, but sometimes that is the best option. If your estimate is similar to what the program has calculated, you may decide to defer to the program value for the time being. Some other strategies for recording accurate physical inventories include physically weighing any manageable amounts and enter a 0 value in the program for empty bays or bins, as well as remembering to use the date time stamp option if available. I use these types of entries as real values and feel comfortable using them as starting and ending values for calculating shrink. Perform physical inventories routinely, such as at the end of every month. Additionally, when the program identifies ingredients with low or negative values.

Feed inventory on a dairy is dynamic. It is impacted by feed coming onto the farm and feed leaving inventory when it is fed or used in another way, like straw for bedding. Most feed utilization is captured through loads in the feed program; After all that is its primary role. If available, correct or delete any loads or batches with loading data issues that may arise from aborted loads, incomplete data transfer or communication errors. This would be a primary source of inaccurate feed utilization data. Non feed usage of ingredients may be accounted for via a physical inventory change not attributed to shrink.

Yet, delivery trucks may come at any time throughout the day. When do you enter feed deliveries? If possible, entering delivery and pricing data daily with the date and time stamp at the time of delivery helps to create a “real time” inventory estimate and updated feed cost in the feeding program. If this option is not available or practical, perhaps consider entering all delivery and pricing data after feeding activities are completed each day. Some farms may only enter delivery data (on the correct date) once per week or month.

With a little work and when feed inputs and usages are accounted for, a current inventory report with shrink estimates may be generated. Over time, these estimates of shrink may aid in identifying high shrink ingredients. Just remember: when trying to tackle inventory management using your feeding software or other program, find a routine and process that best fits your operation.

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