Only Top Herds Seeing Positive Returns

Only Top Herds Seeing Positive Returns

Even though feed prices have softened, Midwest dairy farms are struggling to show positive net returns when all costs are included and feed prices are included at market levels.

Nebraska Extension educator Robert Tigner says only freestall herds producing 24,000 lb. of milk per cow are showing a positive return—and that’s at just 64¢/cwt and less than $200 per cow annually.

Lower producing herds are generating positive numbers only if you don’t include labor and management in the calculation, he says. A herd averaging 20,000 lb. per cow is showing a profit of $1.51/cwt before labor and management is accounted for. But when you subtract labor costs of $2.55/cwt ($13/hour labor), the return to management turns red and becomes a minus $1.00/cwt.

Feed costs included in the March budget are $3.81/bu for corn, $320/ton for soybean meal and $215/ton alfalfa. The mailbox milk price was estimated at $16.66/cwt.

Tigner estimates the breakeven budget mailbox price for a 20,000 lb./cow herd is $17.85/cwt. For the 24,000 lb./cow herd, it’s about $16. 

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