Operating Costs Up Slightly in April
USDA’s Economic Research Service (ERS) cost of production estimate put April operating costs at $13.33 per cwt, up 22 cents over March and 29 cents over February. The average for the first four months of 2017 is $13.16.
While the April 2017 estimates are up over previous months, cost of production is still trending lower than it has in several years. The April 2016 data puts the cost estimate at just about the same level, or $13.30 per cwt. However, cost estimates over the first four months of 2016 were 21 cents higher at $13.37 per cwt. And this year’s to-date totals are paltry compared to 2015, which averaged $14.90 over the first four months.
Looking at the trend since 2014, it’s clear that, according to USDA, dairy producers are enjoying relatively low operating costs, thanks largely to economical feed expenses.
USDA also looks at cost of production by herd size. Not surprisingly, the average cost of production drops as herd size goes up. According to USDA data, herd sizes with more than 1,000 cows have operating costs that average $5.50 lower than herds with less than 50 cows.