Milk Prices Need to Rise $4 To Offset Higher Feed Costs

August 4, 2012 04:49 AM

Milk output will have to drop by 3% nationally to get the needed bump in milk prices to offset higher feed costs, says University of Missouri ag economist Scott Brown.

“We need an estimated $4 lift in the all milk price to offset the higher feed costs,” he says, which would be about a 25% hike. “I anticipate higher forage costs will drive production costs even higher.

“It is sobering to realize that 2013 feed expenses very well could be three times higher than the 1990-2004 average, and over 70% above the 2007-2010 average,” he adds.

Heavy culling is already occurring. For the week ending July 21, the United States Department of Agriculture reported that 60,300 dairy cows were sent to Federally inspected slaughter plants. That’s 11,000 more than the same week last year, or a 22% increase. Year-to-date, culling is up 4.2%. Both the Midwest and Southwest regions are reporting heavier than normal culling.



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Spell Check

8/5/2012 08:36 AM

  The culling is a smart move to make while beef prices are high, but another idea I would like to see looked into is getting cheaper feeds to feed the cows and while you would get less milk wouldn't you be sitting pretty next year with 85% to 95% of your herd intact and lower feed prices as well as high milk prices? The hotter feeds burn out the cows faster anyway, right? I would like to see somebody run the numbers on what type of production could be gotten out of cheaper feeds, which would especially be of interest to guys who had a bad corn crop locally, but have other types of feed available like cornstocks, or silage from corn, waste from fruit packing plants, straw, and so forth. How much could you lower your feed price and still keep 90% of your production?


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