Milk tankers
January 19, 2018

Western Corn Belt December Dairy Margins Decline

 |  By: Jim Dickrell

While net revenue declined by almost $1/cwt in dairy budgets calculated by the University of Nebraska in December compared to November, three of the four budgets calculated were still cash flowing. Half of the decline in net revenue came from rising feed costs.

Robert Tigner, a University of Nebraska Extension educator, calculates dairy budgets for 20,000 and 24,000 lb./cow herds in both freestalls and tie stall barns. Only the 20,000 lb. herd in tie stalls showed a return to management that was negative in December, losing 55¢/cwt. The 24,000 lb. herd in freestalls was still showing a return to management of $2.68/cwt, says Tigner.

The budgets were based on a milk price of $17.44, corn at $3.24/bu, soybean meal at $282/ton and alfalfa hay at $178/ton. Cull cow prices were budgeted at $64/cwt. Labor costs in tie stall barns, budgeted at $13/hour, were running $1.20 to 1.43/cwt higher than in the freestall barns.

The budgeted breakeven milk price was $14.53/cwt in the 24,000 lb/cow freestall barn; $16.53 in the 20,000 lb/cow freestall barn; $15.98 in the 24,000 lb/cow  tie stall barn and $18.06 in the 20,000 lb./cow tie stall barn.