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March 22, 2016

Western Corn Belt Dairy Budget Bleed Red

 |  By: Jim Dickrell

All dairy budgets, whether in freestall or tie stall barns, dipped into negative territory in February for herds in the western Corn Belt, reports Robert Tigner, an Extension dairy educator at the University of Nebraska.

“All the Nebraska-Iowa dairy budgets are now in the red. Last month’s 24,000 pound freestall budget was positive by 44¢/cwt but is now 3¢ negative,” he says.

The reason: A producer price differential, though still coming in at a postive 41¢/cwt, dipped 25¢ from January. Plus total feed costs jumped 25 to 30¢/cwt of milk produced in February with soybean meal up $9/ton and alfalfa hay up $10/ton.  ‘Thus, feed costs and lower milk income led to the drop in net income for all budgets,” Tigner says.

For a freestall herd producing 24,000 lb. of milk per cow per year, the return to management after all costs and labor are paid was -3¢/cwt in February, according to Tigner’s budgets. A 20,000 lb./cow herd was losing $1.74/cwt after all costs.

Farmers milking in tie stall facilities fared even worse because of higher labor costs. Herds making 24,000 lb./cow in tie stall barns were losing $1.19/cwt and 20,000 lb./cow herds were losing $3.05/cwt.