Cows at bunk
August 1, 2016

Low Beef Prices Hitting Dairies’ Bottom Line

 |  By: Jim Dickrell

Low prices for dairy cull cows and bull calves are having a significant impact on dairies’ bottom line, says Rob Vandenheuvel, general manager of the California Milk Producers Council.

“In the first half of the year, a dairy with a 1,000 cows and a 35% cull rate earned roughly $170,000 less for its cull cows and bull calves than it took in during the first half of 2015,” he says. “That’s equal to a drop of $1.24/cwt for a dairy with a daily average production of 75 lb. of milk production.

“[That’s] a significant strain to finances during a period of already depressed revenue,” says Vandenheuvel.

California’s all-milk price for June was $13.82/cwt, the second lowest all-milk price reported by USDA of the top 23 major dairy states. (Michigan had the lowest reported all-milk price at $13.70.) The U.S. all-milk price average for June was $14.80.

The good news is that beef prices are showing some signs of life in the latter half of 2016, with futures prices up.