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Dairy Profits Possible In July

July 30, 2011

Dairy farms in the Midwest could be returning to profitability in July, with even a positive return to management, according to analysis provided by Robert Tigner, an Extension dairy specialist with the University of Nebraska.

His June dairy budgets show 24,000 lb. freestall herds were already netting $1.31/cwt based on $20.69 milk, $7.10/bu corn and $326/ton soybean meal prices. Lower producing freestall herds and smaller herds in tiestalls still weren’t in the black, however.
Tigner estimates that budget breakevens, given these feed prices, are $21.41 for 20,000 lb. freestall herds, $20.72 for 24,000 lb. tie stall herds and $23.03 for 20,000 lb. tie stall herds.
If $6.65/bu corn prices are pegged into the budget, top producing freestall herds net $1.66/cwt even at a milk price of $20.69. The only herds that don’t produce a positive return to management are Tigner's 20,000 lb. example herds.
But stronger milk prices and lower feed prices could potentially push most herds into the black later this summer, Tigner’s budgets show. USDA has pegged the July milk price at $22.10/cwt, up 90¢ from June.

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