Cows at bunk eating.
December 15, 2016

November Dairy Budgets Improve Slightly

Top Story  |   |  By: Jim Dickrell

Higher component prices in November resulted in a 40¢/cwt increase in milk prices in the western corn belt, buoying returns to management by about 20¢/cwt after all costs were netted out, reports Robert Tigner, an Extension dairy educator with the University of Nebraska.

“Income from butterfat rose to 31.3¢ per cwt, protein income rose $1.74 per cwt and other solids income rose 23¢ per cwt,” he says The biggest drag on profitability was a negative Producer Price Differential, which came in at -1.36. That’s $1.89/cwt lower than the October PPD of +53¢.

Tigner estimates a freestall herd producing 24,000 lb of milk per cow returned $1.84/cwt over all costs in November, up from $1.64 in October. Freestall herds making just 20,000 lb of milk per cow saw net returns of just 18¢/cwt in November. In October, these here were essentially a break-even on all costs plus labor.

In higher labor tie stall herds, farms with a 20,000 lb herd average lost $1.20/cwt in November. Herds producing 24,000 lb per cow netted 63¢/cwt.

The estimates are based a $16.94 milk price in November. Corn was pegged at $3.02/bu, soybean meal at $296/ton and hay at $175/ton. Cull cows were valued at just $48/cwt.

Total herd feed costs in November for a 24,000 lb. herd were calculated at $9.03/cwt, and for a 20,000 lb herd, $9.97/cwt.  That’s a slight increase over October, when feed costs for a 24,000 lb. herd were $8.99/cwt and for a 20,000 lb herd were $9.50/cwt.