Midwest Dairy Returns Go South
Midwest dairy producers began losing money in December due to lower milk prices and rising feed costs, according to budgets prepared by Robert Tigner, a University of Nebraska Extension educator based in Imperial.
Tigner estimates a 75-cow tie stall herd producing 20,000 lb. of milk/cow had a breakeven cost of $20.25, and was losing $3.55/cwt. A similar herd producing 24,000 lb./cow was still losing $1.68/cwt. Both herds were still showing positive returns over variable costs; $3/cwt for the 20,000 lb. herd, $4/cwt for the 24,000 lb. herd.
These estimates are based on a mailbox milk price of $16.46, corn at $5.69/bu, soybean meal at $345.90/ton and hay at $132.50/ton.
A 250-cow freestall herd was still losing $2.05/cwt if its herd average was 20,000 lb./cow. If the herd average was 24,000 lb./cow, the loss was 35¢/cwt. Returns over variable were similar to the tie stall herds.
Returns in November had already gone negative for the 20,000 lb/cow herds in both types of facilities. The 24,000 lb./cow herds were still making money, with the freestall herd netting $1.46/cwt. Milk price in November was $18.18 and corn was $5.30/bu.
