The mindset is the same from coast to coast, cows must pay their way. This especially holds true in years when milk prices are less than stellar. Because of today’s market conditions, producers are capitalizing on strong beef prices, so it is no surprise that more cows went to slaughter in March 2023.
The USDA estimates more than 300,000 dairy cows went to slaughter in March, up 38,600 from February and 8,900 year-over-year. This is the highest total since 1986, the year of the whole-herd buyout program.
Culling Considerations
According to Jim Salfer with the University of Minnesota dairy extension, as margins get tighter, producers need to think about reducing the number of non-productive animals on their farm.
“As cull cow prices are higher and if replacement heifer prices remain reasonable it is more profitable to increase your cull rate, especially any problem cows,” he says.
Salfer encourages smart culling decisions on cows and says higher cull prices mean it may be more profitable to cull a cow early instead of treating her.
Also “With a more historical feed cost of 11 cents per lb. of dry matter and milk at $20.00 cwt. per cow – the amount of milk to cover feed cows is about 33-37 lbs. per cow per day,” he explains.
Now with a more current feed cost of 14-15 cents per lb. of dry matter and milk still around $20.00 per cow, Salfer says the amount of milk to cover feed cows is about 47 lbs. per cow per day.
“For every $1.00 per cwt. change in milk prices the breakeven for milk increases a couple of lbs.,” he shares. “For example, if milk is $22 per cwt., the breakeven milk drops to about 44 lbs.”
True evaluation
While every farm has an optimum number of cows for the number of stalls and with their barn environment and management style, Salfer says that the higher milk prices that we saw in 2022 encouraged overcrowding.
“You cannot afford to lose any milk when the margin over milk is decreased,” he says. “It pays to ponder and evaluate if selling cows may improve total farm profitability.”
Sarina Sharp, an analyst with the Daily Dairy Report, says culling cows appears to be one way dairy producers have been dealing with negative margins, which allows them to manage cash flows and pay bills.
Salfer reminds producers to also review all animal inventories, including heifers.
“If feed costs remain high, it’s important not to raise too many heifers, too.”
