Cows at bunk
May 26, 2016

April Dairy Budgets Improve Slightly

 |  By: Jim Dickrell

Western Cornbelt dairy farmers’ April budgets actually improved a smidgen, even though milk prices declined a few cents from March. The reason: A 15¢/cwt improvement in the Producer Price Differential, higher cull cow prices and lower alfalfa costs.

That’s according to budgets prepared by Robert Tigner, a University of Nebraska Extension dairy educator.  Nonetheless, all budgets were still bleeding red, just less so than March.

The break-even prices, when all costs including labor and management were included, were at $15.25/cwt for freestall herds making 24,000 lb./cow and $16.96/cwt for freestall herds producing 20,000 lb./cow. Tie stall herds were running about $1.50/cwt higher than that because of higher labor costs. The April milk price was $14.98.

“Total feed cost dropped by $46.92 /cow/year with that drop coming from a decline in hay price even though corn and protein prices increased,” says Tigner. “The 20,000 pound freestall budget ends up with an improvement in net full economic return by ending up -$397.47 in April compared to -$483.94 in March [on an annual basis).”

Note: Feed costs are calculated for the whole herd, including young stock and dry cows. As such, feed costs for the 24,000 lb. freestall herd were running at $9.93/cwt of milk produced in April compared to $10 in March. For the 20,000 lb. herd, feed costs were $10.87/cwt in April and $11.09 in March.

Corn prices in April were budgeted at $3.55/bu, up from $3.47 in March. Soybean meal in April was $343/ton, up considerably from March’s $254/ton price. Alfalfa hay dropped $20/ton in April to $180, and cull cow prices were up $11/cwt to $80 in April.