Reflexion on incentive days
With the recent news of the 1% quota allocation starting in September and the incentive days currently permitted, milk producers can earn additional income. Here are some best practices for filling them to make the most of this extra source of revenue for your farm.
“Incentive days are money on the table. You want to try not to leave it lying there,” says Nicolas Marquis, professional technologist and technical and financial expert at Sollio Agriculture.
According to data from Producteurs de lait du Québec, around 1,000 of the province’s dairy farms end up with non-deferrable quota, month after month. And many don’t take advantage of incentive days.
But that can be a mistake, since those extra days can make a big difference. For example, a 100 kg farm with a feed margin of $14/kg could potentially add $1,400 of margin per added day. For the ten incentive days announced between August and November 2024, that’s $14,000 up for grabs.
Two strategies for filling incentive days
“It may not be realistic for all farms, considering the intense period of heat stress, maximum potential milking cows or increased productivity per cow, as well as the lead time for announcements to prepare.” says Marquis. “For many farms, however, there is hope.”
There are two ways farmers can increase production to fill incentive days:
Buying more cows (space permitting): To find out whether this could work for your farm, consult your agri-advisor. They can use a specially designed tool to calculate the profitability of this option, taking into account your farm’s daily margin, variable costs, financing for the new cows, cull value, and more. This will give you the amount you’d need to spend to break even—the final cost after filling the incentive days and culling cows to make quota. Of course, you’ll have to be very careful about biosecurity. That’s why talking to your vet before buying cows is always a good idea.
Increasing productivity per cow: The best way to increase productivity with your existing herd is by improving your limiting factors, or weak spots. Teamwork is essential, so work closely with your agri-advisor. And be sure to get a good head start! Because this strategy is part of a longer-term management plan to optimize the farm's profitability.
How to improve your weak spots
According to Luc Gagné of the GGAO (Groupement de gestion agricole de l’Ontario), a farm management organization, many dairy farmers can do a lot to improve their limiting factors. Ask yourself whether your farm is operating at optimal productivity in terms of:
Lighting and ventilation
Water (quality and quantity)
Forage quality (at harvest and in storage)
Breeding of replacement cows
Transition programs
Equipment
Soil compaction and unnecessary equipment in the field
Human resources and management
Etc.
If you find that ventilation is where you’re most lacking, then that’s what you should work on first. If it’s your transition periods that are holding you back, focus on that instead. Just take it one step at a time.
By tackling your weak spots, you’ll have the best chance of increasing your production enough to fill those incentive days, as well as a good management strategy for the farm's overall profitability.
How to produce more without starting over
With interest rates high and the cost of materials and equipment soaring in recent years, the economy isn’t exactly primed for new builds.
“Given the situation, it might be better to expand from the inside,” says Gagné. For example, farmers can:
Renovate empty farm buildings
Opt for custom raising to make room for cows in production
Add a third daily milking
Upgrade your equipment (for example, reorganize stalls for greater comfort and improved productivity)
Your agri-advisor can work with other partners to help you find the most realistic solutions for your farm.
Remaining incentive days for 2024
From now until the end of the year, dairy farmers can add the following incentive days:
August: 2 additional days
September: 3 additional days
October: 3 additional days
November: 2 additional days
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