What a Difference a Year Makes in Milk Prices
While dairy farm budgets are still teetering between profit and loss, price summaries from July show marked improvement from 12 months ago—and even last month.
Take Central Federal Milk Marketing Order prices, for example. In July, the statistical uniform price came in at $17.64/cwt. That’s up 73₵/cwt from June and $2.86/cwt from July 2018.
Component prices are the reason why. In July of this year, butterfat was priced at $2.69/lb versus $2.53 a year ago. Protein was $2.40/lb last month, up nearly a dollar (92₵) from last July. Even the somatic cell adjustment rate was up, 0.00091 this July compared to 0.00074 last July.
The result was that Class I prices last month came in at $19.18, Class III at $17.55 and Class IV at 16.90. A year ago, Class I was at $17.36, Class III was $14.10 and Class IV at $14.14.
And while feed costs have been rising this summer, the rising price of milk has meant income over feed costs (IOFC) have also been improving. Penn State, which calculates both milk income and feed costs based on 75 lb of milk/cow/day, shows daily IOFC has been steadily rising over the past year. Based on this level of milk production, it calculated IOFC per cow per day was $9.56, or $1.86 higher in July 2019 than July 2018. That number has dropped back to $9.30 in August, due to a slightly lower projected August all-milk price and a tad higher feed cost.
But July and August were the only two months in the past 13 months that surpassed the state’s three-year breakeven daily Income Over Feed Price of $9.