Feed Prices

Feed Handling Hiccups Hit Hard

Mon, 20 Apr 2026 21:27:23 GMT

Feed is likely the single largest expense on a dairy, whether it is grown on farm or purchased from outside suppliers. Because of that, even small inefficiencies in storage, handling or mixing can quickly become expensive.

When feed accounts for close to half of a dairy’s total costs, managing it well becomes one of the biggest opportunities to improve profitability. Feed management goes well beyond ration formulation. How feed is stored, tracked, mixed and delivered can have just as much influence on the true cost of feeding the herd.

Shrink Starts Before the Bunk

Feed loss often happens unnoticed. Unlike milk production or reproduction metrics, shrink is not always measured directly. Yet it can occur at multiple points between harvest and the feed bunk.

Commodity sheds, silage piles, storage bags, loading areas and mixing processes all create opportunities for loss. Without a system to track or control it, small inefficiencies can build over time and eat into profitability.

Mike Brouk, Ph.D., professor and Extension specialist in the Department of Animal Sciences and Industry at Kansas State University, says minimizing shrink is one of the most overlooked economic opportunities on many dairies.

Designing Storage with Loss in Mind

When building or upgrading commodity storage, the design of the structure can have a long-term impact on feed retention and efficiency. Many sheds are poorly protected from wind and moisture or are not sized appropriately for the ingredients they hold.

Over time, exposure to weather can degrade feed quality and increase losses.

Producers planning new storage facilities should think carefully about several design factors. Sevel tips include:

• Match the number and size of bays to actual feed use patterns
• Locate sheds where they are protected from prevailing wind, rain and snow
• Grade the site so water drains away from the storage area
• Allow easy access for loaders and mixing equipment

Brouk notes that some facilities end up using less than half of their physical storage space effectively because of poor layout or design limitations.

commodity barn

(Farm Journal)

Managing Feed Inside the Shed

Infrastructure is important, but daily management also plays a major role in how much feed is ultimately preserved.

One of the most important principles is maintaining proper inventory rotation. Without it, older feed can accumulate in the back of bays where it loses quality or becomes spoiled.

Good feed management starts with simple practices.

• Use an all in, all out approach whenever possible
• Push older feed to the front before unloading new deliveries
• Keep batches separated so their nutrient values remain accurate
• Avoid unintentionally blending old and new ingredients

“Otherwise, you’ll end up with a back end containing feed that is months or even years old, lower quality and potentially spoiled,” Brouk says.

When outdated feed works its way into the ration, it does more than create physical loss. It can also reduce ration consistency and make it harder for nutritionists to predict cow performance.

Weather and Wind Losses Add Up

Environmental exposure is another common source of feed shrink that is easy to overlook.

Wind can carry away fine particles from dry commodity ingredients during both storage and loading. Rain and snow can also lead to spoilage along the edges of piles or near open shed entrances.

Several simple adjustments can help limit those losses.

• Install roll down curtains or tarps on open shed sides during periods when the building is not in use
• Use stacked bales or barriers to block wind from entering the structure
• Position loading areas where they are shielded from direct wind exposure
• Consider partially enclosed loading systems where possible

Even when feeding activity stops overnight, leaving commodity sheds wide open can allow wind to remove a surprising amount of feed by morning.

Mixing TMR - Bridgewater Dairy.jpg

(Farm Journal)

Loading Matters More than Expected

Another area where feed loss can occur is during the loading process itself.

When ingredients are loaded into mixers outdoors or in windy conditions, fine particles can easily be blown away before they ever reach the ration. Brouk says the load out location and technique can have a noticeable impact on feed retention.

“Load out itself is a critical control point where feed is lost if it is conducted out in the open,” Brouk adds.

Daily operating practices can also influence how much feed is preserved.

• Train feeders to avoid taking oversized scoops with loader buckets
• Watch for spillage along bucket edges during loading
• Use windbreaks near commodity sheds when possible
• Clean up spilled feed quickly before it spoils

Some dairies use power broom attachments on skid loaders to recover spilled feed and keep traffic areas clean. While the recovered feed may not always return to the ration, it prevents unnecessary waste and keeps work areas safer.

Managing Feed as One system

Reducing shrink is only one part of a larger shift in how many dairies are approaching feed management. Increasingly, farms are looking at feeding as a connected system rather than a series of separate steps.

That process often begins with better inventory tracking. Simple tools that monitor feed supplies and link them to ration requirements can help producers understand how long feed inventories will last.

By connecting inventories to herd size and ration formulation, producers can identify potential shortages earlier. That information can guide purchasing decisions, help plan crop acres and reduce the risk of emergency feed purchases later in the year.

Feed alley.

(Trey Cambern)

Accuracy and Consistency

Once feed is properly stored and protected, the next step is making sure it is delivered accurately.

Small inconsistencies during batching can create ration variation that adds up over time. While shrink is often discussed in terms of physical loss, variation in ingredient loading can have similar economic consequences.

Some dairies are turning to automated batching systems that control ingredient loading with greater precision. In some cases, these systems have reduced deviations to very small margins. Improving batching accuracy not only reduces waste but also helps ensure cows receive the ration the nutritionist intended.

Feeding Systems are Becoming More Continuous

Feed delivery strategies are also evolving. Instead of delivering one or two large loads each day, some farms are shifting toward more frequent feeding.

Automated feeding equipment can mix and deliver smaller loads throughout the day, keeping feed fresher and more evenly distributed along the bunk. More frequent feed delivery can reduce refusals and encourage more consistent eating patterns. In some situations it also allows producers to manage bunk space more efficiently while maintaining stable intakes.

Small Improvements Can Have a Big Impact

The tools used to improve feed management vary widely from farm to farm. Some start with simple inventory tracking, while others invest in new storage facilities or automated feeding systems. Regardless of the approach, the underlying principle is the same. Small inefficiencies in feed handling can compound quickly when feed represents such a large share of total farm expenses.

Improving feed management does not always require major capital investment. Often the first step is simply measuring more carefully, managing storage more intentionally and tightening daily feeding practices. Over time, those incremental improvements in storage design, shrink reduction and batching accuracy can add up to meaningful gains in both efficiency and profitability.

The 11th-Hour Trigger: December DMC Delivers the Only Payment of 2025

Mon, 02 Feb 2026 16:08:06 GMT

For the U.S. dairy producer, the 2025 calendar year was relatively stable, at least according to the Dairy Margin Coverage (DMC) program. For 11 consecutive months, the margin stayed above the $9.50 Tier I coverage level, leaving the program’s safety net untouched. But as the year drew to a close, the market finally blinked.

According to the USDA National Agricultural Statistics Service (NASS) ag prices report released Jan. 30, the December 2025 margin finally dipped to $9.42 per cwt. This 8¢ difference below the $9.50 trigger level officially established the first and only indemnity payment of the 2025 program year.

Math of the Margin

The December drop was driven by a significant softening in the all-milk price that outpaced a slight decline in feed costs. The U.S. average all-milk price for December fell 70¢ month-over-month to land at $19 per cwt.

On the other side of the ledger, total feed costs offered a small amount of relief, falling 8¢ to $9.58 per cwt. While soybean meal saw a healthy drop of nearly $19 per ton and dairy alfalfa hay fell by $5, corn was the lone outlier, rallying 12¢ to hit $4.10 per bushel.

When USDA applied the DMC formula — weighting corn, soybean meal and alfalfa hay — the resulting $9.42 margin left producers enrolled in Tier I coverage with an 8¢ per cwt payment. While the payment is modest, it is subject to a 5.7% sequestration deduction, and USDA has yet to announce a specific timeline for when these funds will hit producer bank accounts.

Stable Year in the Rearview

The fact that December provided the only payment of the year highlights how different 2025 was compared to the volatility of 2023 and 2024. For most of the year, the margin above feed cost remained healthy enough to keep the safety net from triggering. However, experts warn that this 8¢ payment shouldn’t be viewed as a fluke but rather as the canary in the coal mine for what is coming next.

Bleak Forecast for 2026

If December was a warning, the projections for the first half of 2026 are a siren. The latest price predictions updated Jan. 30 suggest a sharp economic turn is underway.

January’s margin is currently expected to plummet to $7.57 per cwt, a staggering $1.93 below the $9.50 trigger level. If this forecast holds, it will represent the lowest margin the industry has seen since August 2023. Current projections indicate margins will remain underwater, staying below the $9.50 Tier I level through at least July 2026.

While markets are famously unpredictable, the current data suggests that the quiet year of 2025 is over. The 2026 program year is shaping up to be one where the DMC program will be called upon frequently to provide much-needed liquidity to dairy operations.

The enrollment deadline for the 2026 coverage year is Feb. 26.

Your Next Read: The 2026 Dairy Outlook: Navigating Volatility, Genetics and the Beef-on-Dairy Revolution

Single Mom's Dairy Success: Juggling 4 Kids and 1,500 Cows

Tue, 23 Dec 2025 18:30:00 GMT

Growing up, nobody ever told Mitzie Blanchard she couldn’t do something simply because she was a girl. And although Mitzie’s father discouraged her from moving back to the family farm thirty years ago, that had nothing to do with the fact she is a woman. His deterrence was fueled by the fact that the dairy industry is a tough business to be in, and his farm’s facilities were aging fast. Speared by her spitfire and hardworking personality, Mitzie was determined she would prove her father wrong and own and operate her own dairy.

Early Beginnings

Starting with 45 cows on her Charlotte, Iowa farm, Mitzie grew her herd one step at a time. Today, along with her four sons, Mitzie milk 1,300 Holstein-Jersey crossbreds and farms an equal number of acres, raising mostly corn, alfalfa and triticale, of which all goes back to feed the herd.

Mitzie is no stranger to hard work. She was raised on her family’s farm, and in 1986 her father, Ron Ketelson, decided to sell his herd in the whole herd government buyout program. With his entire herd going to slaughter, Ron figured that would be the end of any cows being milked on his eastern Iowa dairy farm.

Mitzie had other plans. Five years to the day after her father’s cows left, she moved back to the family farm with a small herd of cows and her sons.

Today, three of her four sons, along with a nephew who Mitzie essentially raised as a son, work full-time on the family farm, Blanchard Family Dairy, LLC.

Like most farm kids, Mitzie’s boys were expected to help with the work. And that they did. Mitzie credits much of her success to her boys constantly being by her side. The ‘boys’ are now grown men – BJ, Seth, Brian and Brent – who saved their own money earned from working at the dairy to buy their own cows.

Her oldest son, BJ, says he knew from an early age he would follow in his mother’s footsteps. Like his mother, BJ is a natural-born leader and has taken on the roles of monitoring feed, managing manure and overseeing the crops.

“I just like working outside,” he shares.

Her other sons who work on the farm help in different capacities. Seth works as a general laborer, Brian oversees the shop and maintains equipment, and Brent is being groomed to take over his mother’s role as a herdsman.

Expansion Over the Years

Nearly 20 years ago the Blanchard’s put up a 500-cow barn, their first major expansion. At the time, they formed an LLC when Mitzie’s sons were between the ages of 13 and 21 years old. Under the advice of the farm’s accountant, the sons became official co-owners of the farm.

In 2012 and 2014, additional 500-cow barns were added, along with expanding the milking parlor in 2014. In 2017, growth came to a halt, as their milk cooperative instituted a production cap.

Growth has always been Mitzie’s mantra, but she also has put a keen focus on high components and solid reproduction to help dial in on efficiencies and profitability.

Reminiscing, Mitzie knows her father is proud that the family dairy legacy continues, and she recalls that he often would stop by the dairy to take it all in. Her father was proud, not only of his daughter for being determined to make it work, but of her boys for following in their mother’s shadow.

Joy and pride are also found in Mitzie’s heartbeat, as she has been able to watch her boys grow with responsibility. Each has taken on pivotal roles that have shaped the dairy for success. She recalls back to 2009, and while most producers remember it as one of their worst years, she remembers it differently. She says it was one of her best, as her boys had been educated on some tough lessons.

“They learned early on how to refinance loans and cut costs,” she says. “It was wonderful to watch my boys come into their own as young leaders.”

Mitzie says she has no regrets, even though the journey over the last three decades hasn’t been an easy one. Together, as a family, they have figured it out, using each expansion as a learning curve and a steppingstone for success.

This past summer Mitzie turned 60, and the boys and their families celebrated their heroic mother by taking her off the farm to go on a trip to Colorado. The once nonstop worker admits she is starting to slow down and confesses that she doesn’t worry about the future of the farm she fought hard for.

“I’m reassured by my son’s ability to run every angle of the dairy,” she says. “Undoubtedly it will take hard work. If I have taught them anything, it is how to work hard.”

Whiskey and Cows: An Unlikely Duo in Kentucky's Heartland

Tue, 04 Nov 2025 17:11:03 GMT

When you think of whiskey, cows probably aren’t the first thing that comes to mind. Yet, on a picturesque Kentucky farm, there’s a surprising link between these two seemingly unrelated entities. Thanks to the innovative practices of a family-run dairy, the traditions of bourbon-making and dairy farming come together in a remarkable way.

A Legacy in Campbellsville
Cowherd Dairy, located in the scenic Campbellsville, Ky., stands proud of its rich heritage. With 430 cows and 700 acres of farmland, this family-owned dairy is now managed by its fifth generation, co-led by the passionate Caden Cowherd. For Caden and his family, dairy farming is more than just a job. It’s a rewarding lifestyle.

“This is an industry where you put in maximum effort and maximum time, and you get the results that you put into it,” Cowherd explains.

(Cowherd Dairy)

With a surname like Cowherd, dairy farming was a fitting choice for the family business. Cowherd co-owns the farm alongside his father and grandfather, and his responsibilities range from fieldwork — planting, spraying, and shelling corn — to managing the herd’s feeding routines. Each day, he is involved in the intricate dance of maintaining a productive and efficient farm that can support both his family and his community.

Cowherd’s passion for farming is evident. The young Kentucky farmer says there is nothing more rewarding than owning and operating a dairy farm.

“There’s no other job where you get to see the literal fruits of your labor come to life,” he says, reveling in the satisfaction of watching crops grow and contribute to producing milk.

Adapting and Innovating
The Cowherd family is always on the lookout for new ways to enhance their operation. The farm emphasizes the importance of three essential factors: genetics, cow comfort and feed quality for optimal production.

Byproduct feed isn’t just a means of nutrition. It also reinforces environmental sustainability. The nutritional analysis of dairy cows in the U.S. unveiled that byproducts contribute significantly to their diets, providing much-needed nutrients while also curbing food waste. Feeding byproducts to livestock ranks highly on the EPA’s Food Recovery Hierarchy, further proving the practice’s sustainability.

(Cowherd Dairy)

This is one reason Cowherd Dairy feeds several biproducts to their herd. According to Cowherd, their ration includes soybean meal, soy plus fine ground, corn, citrus pulp, distiller syrup, wheat silage and corn silage, along with vitamins and minerals.

Cowherd herdsman, Billy Wilcher says: “I don’t know another industry that is more environmentally conscious than farmers,” noting farmers are always looking at how best to care for their land, cattle and the environment.

The Perfect Upcyclers
Cows are nature’s upcyclers, capable of transforming almost anything into valuable resources. At Cowherd Dairy, one of the unique byproducts fed to the cattle is syrup from the whiskey-making process. Delivered by tanker truck, this syrup is a sweet treat for the cows.

“For the cows, the syrup is like ice cream to a kid,” Cowherd explains.

Alongside this syrup, the farm also includes other byproducts like citrus, soybean meal and cottonseed in the cows’ diet, showcasing an efficient and environmentally friendly approach to farming.

“We quit feeding dried distillers grain years ago, and then started feeding a liquid distiller syrup,” Cowherd shares. “It just got to be extremely readily available because of all the growing distilleries in our area.”

Located only 30 miles from the Bourbon Trail, distiller syrup is available year around.

“It is very affordable,” he shares. “We only have to pay the hauling bill, which is around $500 for a tanker load.”

Every animal fed TMR gets the syrup in her diet. Cowherd shares the distiller syrup is a good source of inexpensive protein.

“I think it is like 20% protein,” he says. “We like it because it’s sticky and acts like a binding to the forage and prevents cows from sorting.”

The farm purchased and cleaned out old crude oil tanks to store the liquid syrup in. Although Cowherd shares they go through a tractor trailer load in about three days.

(Cowherd Dairy)

“The cows just love it,” he says. “Like those citrus pulp pellets, that’s the waste from them squeezing out the juices from the oranges and lemons. They pelletize that, and it’s an excellent source of fiber and vitamin C for the cows.”

Cowherd says if farmers didn’t use byproducts to feed their cattle, he is unsure where those products would end up.

“I know, at one point, local distilleries were trying to find an outlet for the distiller syrup and distillery byproducts,” he says. “We are happy to use the syrup to feed our cows and prevent from being wasted.”

Dairy farmers like Cowherd are mindful of their resources available and always examine costs, especially when it comes to their No. 1 cost: the feed bill.

“You are foolish not to use what is available,” he says.

The Impact of Byproducts on Dairy Production
Having delved into the vast field of U.S. dairy nutrition, there’s a fascinating trend emerging in the dietary strategies used on farms today. From 2019 to 2024, extensive research has illuminated the growing importance of byproduct feeds in dairy cow nutrition. This transition marks a remarkable shift in how nutritional needs are being met within the dairy sector.

Dairy farmers and their nutritionists are now leveraging byproduct feeds to enhance the dietary intake of their herds. Such feeds have become significant contributors to meeting the protein requirements of dairy cows. In fact, byproduct feeds now account for up to 60% of the protein needs for lactating cows.

Byproducts — such as soybean meal, corn byproducts and corn distillers’ grains — occupy top positions in dairy cow diets across the United States. These findings underline the essential role that diverse byproducts play in maintaining a balanced and nutritious diet for dairy cows.

At the same time, a report put out by Dairy Management Inc. found many stakeholders and most consumers are unaware of the fact that dairy cows recycle valuable nutrients from feed byproducts into nutritious milk.

That’s why Cowherd works with The Dairy Alliance to help tell his dairy story.

“The modern consumer is three generations removed from the farm,” he says. “And, you’re 60% more likely to purchase a product from someone you trust. So, I had an idea to kind of shoot some videos on my dairy and put some posters with QR codes up in the local Walmart to show people where their food comes from. To show them that we’re a family owned and operated business and to put a face with the product.”

(Cowherd Dairy)

The multi-media campaign that resulted was very well received, and Cowherd says showcasing how they feed their cows and the sustainable message of farming is important to let people know about.

“We produce a great product that I’m proud to talk about,” he says. “Dairy farming is not just a job; it is a lifestyle. It’s what I wake up to. It’s what I go to sleep thinking about 90% of the time. It’s our livelihood, and I’m blessed to have what I have here. I think that we’re blessed to be able to produce this quality product. I think that as farmers, we do an incredible job of making a good and reliable and safe product, but we don’t do the greatest job in pushing this message out.”

The unique relationship between Cowherd Dairy and the Four Roses Distillery reflects a creative approach to agriculture that champions sustainability and efficiency. It’s a testament to how two distinct industries can come together to benefit the environment and uphold agricultural traditions.

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Why More Dairy Farms Are Using Drones to Manage Feed Inventories

Fri, 31 Oct 2025 15:06:47 GMT

In the rapidly evolving world of agriculture, technology continues to play an indispensable role in boosting efficiency and accuracy. One such innovation making significant strides in this industry is drone technology. Derek Wawack, an on-farm specialist with Alltech, has been at the forefront of using drone technology to measure feed inventories, helping farmers streamline operations and optimize resources.

Technology and Feed Inventory Management
Wawack’s journey with Alltech spans nearly 15 years, focusing on forage management and feed quality. From the beginning, accurate feed inventory management has been essential. For the past eight years, Wawack and his team have employed drone technology coupled with cloud computing to accurately measure stored forages and feedstuffs.

“Prior to that, we were using scales, chopper numbers, estimating shrinkages, tape measures, wheel measurers, lasers, footsteps and spray paint — about everything to guess what was in forage piles,” he says.

(Provided Photo)

Though various technologies like GIS, GPS, and satellite imagery were explored, drones emerged as the most successful tool for feed inventory management.

“Our drones have been the most successful,” Wawack says, noting they have been told by many customers how accurate they get to run-out dates year after year.

Drone-Assisted Measurement Process
Wawack explains the process as starting with an application to lay out a flight plan for the drone, ensuring specific parameters are set for optimal accuracy. The drone then autonomously flies the predetermined route, captures images and lands. These images are subsequently stitched together in a cloud application to create a comprehensive 3D map of the feed pad. By annotating pile locations and understanding floor dynamics, they calculate cubic volume, dry matter and density to determine tonnage. Measurements typically occur annually after silage season, but some farms opt for more frequent assessments, especially during challenging years.

“Sizes of farms don’t matter too much. As long as there is a bunker or pile of a feedstuff for us to measure, we are able to work with them,” he says. “The program can’t measure vertical silos or bags necessarily. With bags, though, we can measure the lengths and use the bag calculators to get a close tonnage if needed. The best and most accurate measurements are on drive-over piles, and both open- and closed-ended bunkers.”

Inventory Data in Dairy Farming
The data collected from drones serves various purposes on dairy farms. It aids in planning the necessary tonnage for feeding, assessing harvested tonnage and influencing decisions related to future harvests and crop planning.

“Each farm utilizes the information differently, but many use it to plan for tons needed or tons that can be fed for the year,” he says. “The farms and nutritionists seem to use this information the most for planning, but sometimes bankers and insurance companies like to see how much is there too.”

The Superiority of Drone Technology
Wawack advocates for the widespread adoption of drone technology for feed inventory management. Unlike traditional scales, which are susceptible to human error, drones account for the complex geometries and variations of feed piles, offering a precise measurement every time. This ability to accurately cater to the complexities of piled feed makes drones a preferred method over older techniques.

“By measuring all the feedstuffs at once in a pile, and multiple times throughout the feed out, it allows [the farmer] to better manage and understand shrinkage loses. Scales are great, but how often are trucks missed and calculations done wrong? Guessing on shrinkage once stored is a total guess and every year will be different,” he says.

As drone technology continues to evolve, it’s poised to transform how dairy farms manage their feed inventories, optimizing efficiency and productivity across the industry.

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Insightful Strategies to Help You Navigate the Financial Tides

Thu, 30 Oct 2025 16:25:51 GMT

Dairying is becoming increasingly complex, as fluctuating market conditions and rising operational costs put pressure on producers to stay profitable. Gary Siporski, an independent dairy financial consultant, emphasizes the importance of knowing your breakeven point — a foundational step for any successful dairy operation.

Back in 2016, the average cost of production in Midwest herds was $16.50. However, by 2023, inflation has driven that figure up to $20.25.

“Feed is a big rolling factor when in most dairies it is 30% to 50% of the cost of operation,” Sipiorski says.

Influential Factors on Dairy Profitability
Every dairy operation receives a basis over their Class III or Class IV prices, typically ranging from $1 to $5, depending on the milk plant. As we move into 2024, real numbers from coast to coast reveal the production cost for 100 lb. of milk has surged past $22 for some producers.

“That is all costs, including depreciation and heifer buying or raising costs,” he says.

A critical question arises: How low milk prices can feasibly drop? With a Class III price of $16, adding a $5 basis results in a potential minimum of $21. At these levels, dairies will struggle to cover depreciation and must brace for challenges, such as delayed capital improvements and mounting payables as bills extend beyond 30 days. Such pressures inevitably turn each month into a financial strain.

“Every dairy is different,” Sipiorski says. “There will not be enough to cover depreciation so capital improvement will not be made.”

According to Brad Herkenhoff, senior dairy lending specialist with Compeer Financial, it is difficult to speculate how low milk prices will go due to so many variables — like trade policies, domestic and international demand, increased domestic growing supply as cow numbers have increased, etc.

“One key factor we see is a wide variation in the basis from processor to processor, so with Class III looking to be in the $16/cwt. range, that basis will start to be extremely important as that mailbox price will fluctuate around producers’ breakevens,” he says.

Herkenhoff notes the focus shifts to higher components for superior energy corrected milk that will remain important. Echoing Siporski’s sentiments on knowing your cost of production, he says it is essential to:

Regularly review operating costs and look for areas of potential savings.
Be open to diversification or value-added products to increase revenue streams.
Stay informed about market trends and adjust production strategies accordingly.
Engage with your lender and consultants for guidance.

“Ultimately, staying informed and proactive in financial and operational management is key to navigating periods of low milk prices,” Herkenhoff says.

Beef Market Dynamics
With the national beef herd at the 1951 level and consumer demand remaining robust, selling crossbred calves even at a week old can significantly benefit a dairy’s finances.

“Beef-on-dairy has been a valuable tool for dairy producers to enhance profitability and financial resilience,” Herkenhoff shares. “In some of the numbers we have looked at, we are seeing a $2.50/cwt. up to $4/cwt. addition over and above milk prices from cull cows and bull/beef-cross calves.”

Putting it in a different context, Herkenhoff says prior to this beef market rally, for a dairy producer that didn’t sell excess crop or finish steers out, they would typically see their milk check represent about 93% of their overall income on average.

“The other 7% was cull cows, bull calves, misc. government payments, etc.,” he says. “Today, we are seeing milk represent closer to 75% to 80% of total income, and these cull cows and bull/beef-cross calves represent closer to 20% to 25% of overall income.”

As we get closer to year-end, Herkenhoff advises to continue to be cognizant of tax planning strategies.

“With the first half of 2025 being relatively favorable with profitable milk prices and above historical averages of beef-on-dairy sales, income tax strategies will be important again this year,” he says. “Be sure to meet early with your financial advisers and consultants to discuss strategies — whether that is deferring some income, prepaying expenses or possibly some capital expenditures. Make sure your financial team is on the same page with understanding your farm’s strategy.”

Each dairy operation is unique, and its financial strategies must be tailored accordingly. By understanding the economic landscape, engaging with financial partners, and exploring diverse revenue streams, dairy farmers can navigate the challenges ahead with greater confidence and resilience.

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Transforming Dairies: 5 Steps to Set the Stage for Financial and Operational Success

Tue, 16 Sep 2025 15:05:40 GMT

Transforming struggling dairies’ management styles and finances often spells success in other areas of the operation. Pauly Paul, a dairy farm and agricultural business consultant at Complete Management Consulting has exemplified this transformative approach, turning struggling dairies into profitable enterprises. Drawing from years of experience, Paul has developed strategies that tackle challenges from operational inefficiencies to financial instability.

“I tell everyone we’re a boots-on-the-ground consulting business,” Paul explains, emphasizing the hands-on nature of his work, which involves engaging directly with farm employees to enact change.

A Case Study in Transformation
Paul recently shared one compelling story of a 2,000-cow dairy farm facing imminent foreclosure at the 2025 Dairy Financial & Risk Management Conference in Harrisburg, Pa.

“[Manure] pits were full. They had no feed on-site. Everything was just set up for disaster. The lender said: ‘We need to either get this turned around by Dec. 1 or all the cattle were going to go,’” Paul says, noting the first thing he did was look for a place to get rid of the manure. The second task was finding where to get feed from neighbors.

Paul’s knack for strategic thinking and community collaboration resulted in a miraculous turnaround. By optimizing barn operations and securing resources creatively, the dairy was back in the black within months. This scenario highlights the importance of adaptive thinking and the ability to see opportunities where others see problems.

The Nuts and Bolts of Dairy Auditing
Paul’s methodology involves an exhaustive audit process, scrutinizing every aspect of dairy operations from feeding practices to financial management. By spending significant time on-site, he draws actionable insights that result in immediate and long-term improvements. One such improvement involved correcting inconsistencies in feed mixing, which subsequently led to healthier cows and improved milk production.

Innovation in Dairy Operations
In his transformative efforts, Paul often challenges conventional practices. For example, when consulting for a dairy using robotic milking systems, he restructured pen management to drastically cut labor costs and increase efficiency. Such innovations demonstrate the consultant’s ability to adapt modern technology to existing farm structures, maximizing productivity.

Paul doesn’t go in to help rescue dairies by being nice. He says: “I’m going to nitpick everything.”

Every operation is unique, so there is no one-size-fits-all way to improve a dairy’s bottom line, but Paul says there are several common areas where there is room to grow — or in some cases shrink. He highlights five key areas producers need to focus on.

Increase Laying Down Time

One crucial area Paul mentions is increasing the laying down time for cows.

“If you know what cows do, when they lay down, they make milk,” he says. Improving parlor efficiency is instrumental in increasing this valuable laying time, which can substantially impact milk production.

Keep the Parlor Busy

A bustling parlor is a profitable parlor.

“How big is your parlor? If that thing’s sitting idle and not getting milk run through it, you’re losing money,” Paul says, noting farms on the brink of bankruptcy can boost cash flow by simply selling more milk, which could mean milking more often throughout the day. While long-term strategies might involve expanding the herd, a quicker solution is increasing daily milkings. For thriving dairies, periodic renovations can accommodate more cows or additional milkings, maximizing the capacity of the operation.

Assess Labor

A strong staff is fundamental to more frequent milkings. Paul suggests a merit-based approach: compensate well but expect results. Non-performing employees should be let go, and staff should be assessed regularly to ensure efficiency. Paul also advises cross-training employees, reducing dependency on specific roles and thinning out less productive team members while supporting the best performers.

Analyze Feed

As the top expense in dairy farms, feed presents an opportunity for cost-cutting. A farm’s nutritionist should evaluate forage value and adjust accordingly. Overemphasis on expensive feed additives or poor feed mixing can hinder profitability. Paul highlights the importance of effective feed management, avoiding the pitfall of “empty bunk syndrome” where animals aren’t fed adequately.

Consider Breeding

Breeding programs should be carefully assessed, focusing on conception rates.

“I think the No. 1 thing to look at on every dairy right now is your conception rate,” he says. “Making sure you’re getting every cow pregnant.”

He stresses days in milk shouldn’t exceed 170, as it directly ties to calf income — a significant financial consideration given the current high value of black calves. Sometimes, having an external expert evaluate a farm’s breeding program can unveil inefficiencies or missed opportunities that internal teams might overlook.

Ultimately, Paul underscores the value of having a fresh set of eyes review operational strategies.

“Get a second look at everything,” he recommends, advising against complacency. Through targeted efforts and embracing change, dairy farms can thrive financially, regardless of current standings. Adopting these expert-recommended approaches could lead to significant improvements in both efficiency and profits, securing a prosperous future for dairy operators.

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Founded on Faith: The Copper Cow Creamery Fulfills the Dream, Sustains the Dairy

Reading Your Farm’s Crystal Ball

Wed, 14 May 2025 21:13:43 GMT

What will the dairy of the future look like?

It doesn’t have to be new, shiny, or even large. But it does have to be efficient, sustainable, and cow-centric, according to Pennsylvania dairy farmer Steve Harnish.

Harnish and his family run Central Manor Dairy, a third-generation, 200-cow operation in Pennsylvania’s Lancaster County. On a recent episode of The Dairy Podcast Show , Harnish described “The Dairy of the Future.”

“The farm of the future is one on which you are able to meet the demands of cows, meet the demands of labor, and ensure that you’ve got market access for your milk,” Harnish stated. “Those demands have changed over time in the past, and I’m absolutely certain they’re going to continue to change in the future.”

Harnish said dairy businesses are usually shaped around the constraints of their particular geography. In California, it might be water access. In New York, it’s likely labor laws. Like a limiting nutrient in a dairy ration, those constraints are what must be considered first when planning a dairy’s future.

Central Manor Dairy has made labor efficiency one of its driving principles, due in part to the fact that land values in that region are currently upward of $30,000 per acre. Because that constraint makes it challenging for the farm to add acreage or cows, they instead choose to keep labor costs low and manage the land and cows intensely.

All of their feed, including silage, is contained in upright storge, which is both a space and time saver. “When it’s time to mix feed, we push buttons, and feed comes out,” he explained.

The farm also employs rumen boluses to ensure a “no cow left behind” approach that protects the health and productivity of every animal. While Harnish said he still has not been able to completely eliminate fresh-cow diseases and metabolic disorders, the boluses serve as a valuable bellwether in signaling early disease symptoms.

“I liken it to growing a field of alfalfa,” he noted. “You don’t want to wait until the leafhoppers have eaten all the leaves off to go treat it. You want to know when they first arrive so you can take appropriate actions and preserve the profits there.”

Grant funding also can shape the way evolutionary decisions are made on dairies. Many of the dairies in southeast Pennsylvania utilize slatted-floor barns, a trend that was driven in part by funding for the Chesapeake Bay Watershed that required six months of manure storage capacity. Because those barn foundations doubled as manure storage, new facilities could be constructed with the costs partially offset by grant support.

Looking ahead, Harnish predicted that the carbon intensity of the milk produced on farms will be a driving factor in their success. He said a helpful metric is carbon intensity per pound of milk produced. While carbon-based pricing is still an immature market, Harnish predicted that “low-carbon milk” is a trend that is not going away.

“For future projects, if your management goals align with a significant carbon reduction process and you can lower that score, do it,” he advised. “I think you should strive to be in the lower half of carbon intensity to guarantee future market access.”

On-farm manufacturing, direct-to-consumer marketing, and agritourism may be successful models for future dairy farms, depending on their size, geography, and owner preferences. Harnish advised looking long and hard at what you really enjoy doing and are good at when projecting a farm’s future.

He said seriously considering whether your greatest preference is managing people, cows, crops, marketing, talking to consumers, or something else will be a primary driver in building a future dairy business that is successful, sustainable, and fulfilling.

Your Next Read: Exploring the Future of Dairy Farming: Expansion Strategies for Small Farms

The 5 Big Market Trends Dairy Farmers Need to Keep Their Eye on this Year

Fri, 28 Mar 2025 19:10:59 GMT

Dairy farmers are facing a fast-changing market in 2025, with trade wars, tariffs, and export shifts shaking up the industry. From fluctuating feed costs to unpredictable milk prices and new cheese processing capacity, one thing has become clear in the first quarter—staying flexible is key to managing risk and finding opportunities.

Sarina Sharp, a dairy market analyst for the Daily Dairy Report, emphasizes the challenges ahead.

“These are pretty wild times in markets of all kinds, and the dairy markets are not immune from that,” she says.
Sharp, along with Katie Burgess, director of risk management at Ever.Ag, breaks down the top five market trends dairy farmers should keep an eye on for the rest of the year.

Feed Costs: An Opportunity to Lock in Prices
With spring planting on the horizon, feed costs have been an area dairy farmers are switching their focus towards. According to Sharp, corn acres are expected to increase while soybean acres decline.

“Corn should be relatively inexpensive, but in these wild markets, I would advise dairy producers, when they do see prices start to fall back, to just start buying some of next year’s corn, get those prices locked in,” she suggests.

Soybean and soybean meal prices are currently at multi-year lows, creating an opportunity for producers to secure affordable feed.
“I am relatively bearish on the soybean markets, but we do have lower acres,” Sharp adds. “It’s wise to start buying some soybean meal now while prices are favorable.”

Feed costs are one of the largest expenses for dairy producers. While 2025 is expected to bring opportunities for cost savings in feed, farmers should remain cautious about market volatility. Weather conditions, global trade policies, and geopolitical issues can still disrupt these projections. Farmers who secure their feed needs early may have a competitive edge if markets become unpredictable later in the year.

Class III Milk Prices: A Risk of Decline
Milk prices, particularly in the Central Plains, are another area of concern. Sharp warns that Class III milk prices could see a significant setback.

“We are starting to see cow numbers and milk production climb, and a lot of that milk is going into cheese, particularly cheddar, which is the price that determines our Class III milk” she notes.

The fate of cheese exports will also play a crucial role in determining milk prices.

“We’ve got a lot of uncertainty on the trade front. We need big cheese exports if we’re going to make more cheese. If we start to lose those, then the cheese and Class III prices will probably drop back,” Sharp explains.

Dairy farmers who rely on Class III milk pricing will need to keep a close eye on cheese demand and exports. With more processing capacity coming online, increased milk production could lead to an oversupply if consumer demand does not keep pace. Risk management strategies such as hedging and forward contracting may help farmers mitigate potential losses.

Cheese Production: A Pivotal Year Ahead
Burgess highlights the critical role of cheese exports in 2025.

“For this year, exports are going to be so important because we have increased processing capacity,” she explains. “By the end of the year, we will have significantly more cheese production, so we need consumers to help us eat all this cheese.”

Forthcoming or recently completed capacity investments (2023-2026.)

(National Milk Producers Federation, Unitied States Dairy Export Council)

However, domestic cheese demand has shown signs of weakening.

“It’s getting really expensive to go out to eat, so restaurant traffic has slowed,” Burgess adds. “Grocery store cheese sales remain steady, but consumers are looking for value rather than high-end specialty products.”

With domestic demand struggling, strong cheese exports will be crucial to stabilizing the market. Adding to the uncertainty are potential trade disruptions.

“Last year was a record year for exports,” Burgess notes. “We’re off to a good start in 2025, but where we go from here will be a major driver of prices.”

This increased production capacity in the U.S. dairy industry could be a double-edged sword. While more processing plants can help create new market opportunities, it also means there is more supply to move. If global trade disputes or economic downturns reduce demand for U.S. cheese, the industry could face a supply glut, further pressuring prices.

Beef Markets: Strength with Some Vulnerabilities
Dairy producers have been benefiting from historically high beef prices, as the beef-on-dairy trend continues to add value to calves.

“I think something that’s really hopeful for dairy producers is all the income that they’re getting from the beef market,” Sharp says. “When they sell their cull cows and crossbred calves to the beef industry, it just puts a floor under the value of every animal on the farm. That’s really helpful for their bottom line, especially if we start to see the feed versus milk margins start to shrink. Having that higher beef income can backstop some of what might be red ink on the farm.”

While prices are likely to remain elevated for the foreseeable future, there are some risks on the horizon.

“If we enter into a recession, beef prices are already so high that consumers might start to feel stretched,” Sharp warns. “They may be less willing to pay top dollar for beef, which could cause markets to inch down from their lofty levels.”

Milk Supply and Risk Management: A Strategic Approach
Burgess also points out that U.S. milk production is rising.

“In February, milk production was up 1%, the strongest growth we’ve seen in a while,” she says. “Production is growing in areas with new processing capacity, but there’s also some uncertainty with ongoing animal health concerns like influenza.”

Given these moving pieces, Burgess stresses the importance of risk management.

“We don’t know what’s going to happen but protecting your bottom line through strategic planning will be critical,” she advises.

With increasing milk production, farmers should consider the impact on milk prices and the importance of risk management tools such as Dairy Margin Coverage (DMC), Dairy Revenue Protection (DRP) and Livestock Gross Margin (LGM) insurance. These programs can help mitigate price swings and provide stability in an unpredictable market.

Looking Ahead
With so many variables in play, Sharp and Burgess advise dairy farmers to be proactive in their financial and operational strategies throughout the remainder of the year.

“There’s a lot of uncertainty, but smart purchasing decisions, especially on feed costs, and keeping an eye on export markets will be key factors in staying profitable through 2025,” Sharp says.

As dairy producers navigate these challenges, staying informed and adapting to market shifts will be critical for success in the year ahead.

Your Next Read: From Classroom to Cows: A Kansas Dairy Farmer’s Heartfelt Return to Her Roots

What to Do and Not to Do to Endure Financial Tough Times

Thu, 20 Jul 2023 17:54:20 GMT

Producers are challenged paying the bills with the lack-lusting prices that have shown up on milk checks so far this year. Independent financial consultant, Gary Sipiorski, shares six tips to focus on during financial tough times.

Conduct family and staff meetings so everyone understands what’s going on. Be realistic, not pessimistic about your dairy’s financial situation.
Reconsider all expenses.
Cows don’t understand that milk prices are considerably less. Keep taking care of your cows. Now is not the time to make shortcuts.
With the high price of beef, take a hard look at culling that will take a minimum hit to the bulk tank.
Gather with your lender to talk about finances. Have the funds approved for an operating loan, even if you don’t need them right now. Make sure you bring a financial projection for the remainder of 2025 to the meeting.
Keep on leading. The owner sets the atmosphere for all.

“It is hard to say how long milk prices will be low, where the bottom is and how long before markets turn up,” Sipiorski says.

Curtis Gerrits with Compeer Financial concurs with Sipiorski, adding the importance of staying connected with your professional team.

“Have continued discussions with your veterinarian, nutritionist, commodity broker, and banker on how to continue to improve your operation,” he says. “With these discussions keep margin management at the front of mind on any operational adjustments you may be considering.”

Gerrits adds to keep looking towards the future.

“Look out 12-18 months for areas of opportunity with managing your margins,” he says. “DRP, LGM, DMC and other hedging strategies may present opportunities to capture some positive margins even when prices are low today as you look out into the future. Review your dairy’s budget for this year and think through your budget for the rest of 2025 and into 2026. Explore areas of opportunity to lower your cost of production whether that be on the income or expense side of your operation.”

What Not to Do

Wayne Knoblauch, professor in the Dyson School of Applied economics and Management in the SC Johnson College of Business and the College of Agriculture and Life Sciences at Cornell University adds the following 11 things to avoid when dairy farmers are facing financial difficulty.

Making decisions that will cause the problem to be worse a week, month, or year down the road.
Continuing the same practices simply because you’ve always done it that way.
Neglecting needed accounting tasks because there isn’t time right now.
Utilizing farm-produced feeds so rapidly that they are used up without a replacement plan.
Reducing purchased feed just to save money.
Purchasing products that promise to be a cure-all unless you have hard data and the experiences of others to confirm.
Making capital investments to reduce tax liability or because “it is a good buy.”
Borrowing money unless the profitability of the farm is reasonably expected to increase in order to provide for repayment.
Neglecting the details; cleaning and maintaining equipment, detecting heats, etc.
Using alcohol to excess. Alcohol and other drugs can make a tough situation even worse.
Assuming a management strategy that worked for one farm will be effective on yours.

Dairy Report: Global Milk Production Costs, New Whole Milk for Healthy Kids Act

Wed, 29 Jan 2025 12:00:00 GMT

Global Milk Production Costs

A new report says milk producers around the world are seeing an increase in production costs. The report comes from Rabo Research.

It says dairy farmers across eight regions including Argentina, Australia, California, China and the Netherlands, have seen total production costs surge by 14% from 2019 to last year. with over 70% of the increases happening since 2021.
Researchers say the majority of the cost increase has been in farm working expense rather than debt or taxes. They report feed and fertilizer costs increased at the farmgate along with interest rates increasing and inflation. Feed expenses have been the largest culprit in cost increases.

Whole Milk for Healthy Kids Act

There’s a new bipartisan effort to get whole milk back in schools. The Whole Milk for Healthy Kids Act is aimed to allow both unflavored and flavored, whole and reduced fat milk to be served to students.

Lawmakers say milk is crucial in providing essential nutrients that greatly benefit young Americans. Republican Representative “GT” Thompson said, “Milk provides 13 essential nutrients that supplement growth and health, two key factors contributing to academic success. The Whole Milk for Healthy Kids Act of 2025 provides school the flexibility they need to offer a variety of options while supporting students in America’s hard working dairy farmers.”

It’s reported, nearly 75% of kids do not receive their recommended daily dairy intake.

Take our 2025 State of the Dairy Industry Survey

Your Next Read: Navigating 2025: What Lies Ahead for the U.S. Dairy Industry?

Feed Prices Dip Lower After Release of WASDE

Fri, 11 Oct 2024 21:18:19 GMT

CME barrels reversed the recent downward trend and climbed $0.0225, while spot blocks shed $0.0425. Both finished the week at $1.8875 per pound. Seven loads of blocks and two of barrels changed hands. Spot butter slipped to $2.6250, down 1.5 cents, with 26 lots trading. That brought the week’s butter volume to 90 loads, the most since August.

USDA’s World Agricultural Supply and Demand Estimates report leaned bearish for both corn and soybeans, with yield, production and ending stock estimates ahead of pre-report expectations. Corn yield estimates of 183.8 bushels per acre and soybean yields of 53.1 bushels per acre, if realized, would both be record highs. Corn production estimates reached 15.203 billion bushels, up from 15.186 billion in September, while soybean production was pegged at 4.582 billion bushels, down from 4.586 billion the previous month.

Grain markets dropped lower post-WASDE. The December corn contract slipped to $4.1575 per bushel, $0.0275 lower, and March futures declined to $4.3300 per bushel, shedding $0.0325. Nearby soybeans fell to $10.0550 per bushel, giving up $0.0925, while the January contract decreased to $10.2100 per bushel, losing 10.5 cents.

Ever.Ag - The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

New $20 Million Feed Mill Expansion Unveiled in Idaho

Mon, 09 Sep 2024 15:34:21 GMT

Beef and dairy producers throughout Idaho may soon be receiving steamflaked corn and calf grains from a newly expanded feed facility in the state. Scoular, a global agribusiness company based out of Nebraska, recently completed a $20 million expansion of its state-of-the-art feed blending facility located in Jerome, Idaho.

According to the company, the expansion adds a 120-feet high concrete feed mill, boosting the facility’s production capacity by 35% and delivers a 40% increase in storage capacity.

“Scoular’s mission is to deliver safe, reliable and innovative solutions to our feed and food customers around the world,” Scoular CEO, Paul Maass, said in a company. “This new investment is a perfect example of meeting our customers’ demands and bringing forward the ideal solutions. We are thrilled to continue to make growth investments in this important region and industry.”

Updates to the facility will help provide two new capabilities, including:

A steamflaking process that processes corn and barley into flakes and makes the feed more digestible for cattle. The corn is steamed, heated, then pressed into a flake.
A pellet mill to make feed pellets. Pellets are easy to transfer, handle and proportion for optimal nutrition. Feed pellets are typically used for feeding calves and beef cattle.

“The expansion shows Scoular’s customer-focused approach,” said Jeff Ackerman of Bettencourt Dairies. “Scoular is helping us provide the right nutritional profile to the animal at the right time. Tailor-made feed blends are essential.”

As the dairy sector continues to grow in the state, this expansion will provide both beef and dairy producers with an additional resource for purchasing feed.

“To see a company like Scoular expand means good news for producers,” added Rick Naerebout, CEO of the Idaho Dairymen’s Association. “It gives producers more options for how they want to handle feed on their farms.”

This expansion not only provides more choices for producers but also reinforces Scoular’s commitment to bolstering the local agricultural community.

“Agriculture drives the Magic Valley’s economy, and Scoular has made it a priority to support the industry through innovation, state-of-the-art facilities and programs that support local producers,” said Andy Hohwieler, a Scoular Regional Manager based in Twin Falls. “With our latest investment, we look forward to creating new feed products that create solutions for end-users.”

Your Next Read: Beef-on-Dairy: How to Make Successful Semen Selection Strategies

‘Cheap’ Corn: Economists Encourage Producers to Pack the Bunkers and Plan Ahead

Wed, 28 Aug 2024 21:35:08 GMT

Experts are predicting that Dairy Margin Coverage (DMC) will average between $11.85/cwt and $12.20/cwt during 2024. If this projection holds true, it will mark the highest average margin for a calendar year under the DMC program and the highest since margin protection became the foundation of the federal safety net program for dairy in 2015. For some perspective, the DMC for 2023 averaged significantly lower, at $6.70/cwt.

Katie Burgess, dairy market advising director with Ever.Ag, says their model is also forecasting an annual margin around $12/cwt for 2024.

“Although that number is moving around a bit given all the recent volatility in milk prices,” she says. “Milk and grain futures are currently projecting that on-farm margins stay strong into 2025 – our model currently averages around $12/cwt for next year, too.”

With relatively ‘cheap’ corn prices, Dan Basse, president of AgResource Company, advises dairy producers to chop as much corn as possible and consider managing feed costs strategically. He specifically recommends purchasing December corn call options and selling puts before mid-September.

“We think that DMC margins hold, but at slightly lower levels,” Basse notes. “Feed prices should bottom in the next 30 days and trend higher into year-end on strong U.S. corn export demand.”

Expected Trends in Feed and Corn Prices
According to Basse, these trends suggest that the DMC could decline slightly due to rising feed costs, with the milk market holding within a broad range. This nuanced outlook on the feed market brings into focus the balance between managing input costs and maximizing output revenue for dairy producers.

“We doubt that September or December corn can trade too far below $3.50-$3.60 longer term support,” Basse says. “So, pack the bags, bunkers and bins with cheap feed. Note that we feel that soymeal prices can decline further – so this is more about rising corn than soybean meal.”

In essence, while corn prices are expected to increase, soymeal prices might continue to decline, thus requiring a vigilant approach to feed management for optimal cost efficiency.

Utilize Risk Management Tools
One thing that top dairy producers do is follow, understand and utilize risk management programs. Leland Kootstra with Frazier LLP recently told Peggy Coffeen, the host of UpLevel podcast, that producers spend too much time thinking about the cost of some of those [risk management] tools versus what that cost actually buys.”

Particularly, he notes the value of dairy-specific tools that limit exposure, like DMC and Dairy Revenue Protection (DRP).

“These operators have spent so much time, so much effort, so much money making sure that they are as efficient as possible, that they’re controlling as much of the volatility as they can,” he says. “Why would they expose themselves to volatility outside of their control?”

Burgess shares a few key points that producers should keep in mind:

Right now, futures are projecting strong margins into 2025 – but markets are volatile, so make sure to play some defense.
Feed costs are currently cheap – look for opportunities to lock in lower priced feed and take advantage of those markets this fall.
Most importantly, as feed costs are getting set for the year ahead, also consider protecting milk prices. DRP insurance is a great way to do so – you can put on floor under milk prices to protect the milk-over-feed margin that is available today. And, then if milk markets remain strong into next year, there’s still the opportunity to capture even larger margins.

Six Steps to Help Maximize Dairy Profit Margins

Mon, 26 Aug 2024 21:24:10 GMT

The formula is finally in favor of the dairy producer as milk prices inch upward after months and months of lackluster prices. Coupled with low grain prices, this upward trend brings a much-needed respite and the potential for profitability. However, to fully capitalize on this opportunity, producers need to make informed and strategic financial decisions. Independent financial consultant Gary Sipiorski offers actionable tips on how to take advantage of these improved profit margins.

Milk Prices on the Rise
“It does look like there should be some margin in milk based on cow numbers being down, heifers that are pricy, lower feed costs along with dairy products moving well domestically and globally,” Sipiorski says.

Utilizing Risk Management Strategies
For producers who work with a broker, Sipiorski advises using their services to stay educated on risk management and future market positions.

“If a producer works with a broker they have been working with and have educated themselves on risk management, future market positions can be watched and considered,” he explains. Understanding market trends and employing risk management strategies can help producers make more informed decisions.

Financial Priorities
Sipiorski emphasizes the importance of making prudent financial decisions as profits start to increase.

“Remember, this ultimately is always the owner’s decision,” he says. He suggests prioritizing the repayment of supplies once there is more money in the checkbook. This helps in maintaining good vendor relationships and ensuring smooth operations.

Reducing Debt
Next, Sipiorski recommends paying down lines of credit to prepare for potential future downturns in the dairy economy. Lowering debt levels can provide financial flexibility and stability in times of economic uncertainty.

Investing in Infrastructure
“Replacing and upgrading machinery, milking parlors, and cattle housing will be needed for the long term,” he advises. Investing in infrastructure improvements can enhance efficiency and productivity, leading to better long-term profitability.

Tax Planning and Cash Flow Projections
Lastly, Sipiorski underscores the importance of tax planning and cash flow projections. He advises producers to schedule an appointment with their accountant in October or November for year-end tax planning.

“Tax planning advice is always needed long before year-end,” he recommends, adding that it’s crucial to prepare cash flow projections for the next year to plan with some optimism.

While rising milk prices present a significant opportunity for dairy producers, it is imperative to make strategic financial decisions. Making strategic next steps, producers can navigate through the current favorable conditions with confidence and lay a strong foundation for future growth.

The “Feed-Saved” Trait Helps Breed for Feed Efficiency

Fri, 23 Aug 2024 21:25:04 GMT

Feed usually represents the greatest cost to dairy farms. Cows that milk the same amount or more, while eating less feed than their counterparts, are both desirable and profitable. So, is there a way to “make” such cows?

That strategy has become possible in recent years, with the introduction of the feed-saved (FSAV) trait by the Council on Dairy Breeding in 2020. FSAV estimates the difference between the amount of feed individual animals consume, after accounting for milk production, body weight, and body condition.

The trait is actually a combination of two factors:

Feed saved when a cow is smaller; and
Feed saved when a cow has a Lower Residual Feed Intake (RFI)>

FSAV is expressed in pounds of dry-matter intake saved.

“Because this trait requires individual feed intakes of cows, data must be collected from research herds with that capability,” noted Dr. Isaac Salfer, Assistant Professor of Dairy Nutrition at the University of Minnesota. “This means it is not measured across a diverse range of commercial environments and includes fewer total cows in its evaluation compared to data collected for traits such as milk production, confirmation, or daughter pregnancy rate.”

Currently, the trait is only available for Holstein males and females. But genetic researchers hope it can expand to other breeds as more data becomes available. In addition to the potential to achieve greater milk production with less feed, creating more feed-efficient cows also could help dairies conserve feed resources, and reduce the amount of waste produced per pound of milk.

Salfer said estimates suggest FSAV is about 19% heritable, which is lower than production traits, but higher than health traits like somatic cell score and daughter pregnancy rate. FSAV was pioneered by researchers at the University of Wisconsin and Michigan State University.

The 5 Spectacular Perks of Cottonseed for Dairy Heifer Feed

Mon, 19 Aug 2024 14:57:12 GMT

It has long been the darling of the lactating cow ration. Dairy nutrition research dating back as far as the 1920s touts the multitude of benefits that cottonseed delivers to milking cows.

But don’t forget about cottonseed for heifer feed. Depending on price and other feedstuff availability, cottonseed can be a versatile staple for heifer rations, too. According to Cotton Incorporated , the commodity research and marketing organization for U.S. cotton growers, more than 50% of the annual supply of whole cottonseed is consumed by dairy cattle.

The beauty of whole cottonseed for dairy rations of all kinds lies in its “triple-20” nutrient profile. It contains 20% or more protein, fat, and fiber on a dry-matter basis. In one unique package, it contains the chemical composition of forage, grain, and protein supplements, and can be substituted, within limits, for any of these ration components.

What’s more, the fat in whole cottonseed is rumen-protected, so it will not interfere with fiber digestion like free oils and fats. Its lower heat increment compared to starch-based ingredients makes it a popular energy source to support heat-stress abatement. And some research has shown that the fat in whole cottonseed also improves reproductive performance, a benefit for growing heifers.

Cotton Inc. notes that the crude protein in whole cottonseed is a “true protein,” which makes it superior to non-protein nitrogen (NPN) in high-forage diets.

Whole cottonseed also can serve as an excellent forage extender. The fuzzy, white portion of the seed – called linters – looks like leftover cotton fibers. But it’s actually cellulose, a highly effective fiber source.

In addition to whole cottonseed, additional components of the cotton plant can make worthy and economical contributions to dairy heifer rations. Cottonseed hulls and gin trash are high-fiber, low-nutrient-dense co-product options that can be swapped with straw to add bulk to heifer rations.

Cottonseed meal – the “leftovers” after oil is expressed from whole cottonseed – is a high-protein feedstuff containing about 40-45% protein on a dry-matter basis and 1.2% supplemental phosphorus. It can be a cost-effective substitute for soybean meal, but caution must be taken when feeding it to young heifers due to the potential for gossypol toxicity.

Gossypol is a naturally occurring insecticide in the cotton plant that can adversely affect red blood cells in cattle. For this reason, cotton products should not be fed to pre-weaned calves at all. That’s particularly true for cottonseed meal, which will contain higher concentrations of gossypol than whole cottonseed. Some nutritionists advise against feeding cotton products to calves 4 months of age and younger.

Extension dairy experts at University of Georgia recommended that a good source of available iron in the ration can reduce the risk of gossypol toxicity. They suggested young ruminants may safely be fed 5-10 mg. per pound of live weight of gossypol. As an example, a 700-pound heifer consuming 3.10 pounds of whole cottonseed per day would consume about 7 grams of gossypol.

As an on-farm commodity, the ubiquitous ration applications of whole cottonseed make it an attractive feedstuff choice for dairies seeking to simplify commodity sourcing details and storage organization. And its powerful nutrient package makes for easier ration building, particularly for heifer grower formulations.

Good buys on cottonseed can be snagged by nimble brokers who track its rapidly fluctuating values. The average price/ton of whole cottonseed currently ranges from about $300 in Alabama to $515 in the Pacific Northwest. But within the last 5 years, the price has been as low as $150/ton according to Cotton Intelligence Monthly , and values in the $200-300/ton range have been common.

The industry newsletter noted that, compared to the historical price relationship to cash corn, soybean meal or distillers dried grain, cottonseed values are often below average and competitively priced. Up-to-date marketing information and brokerage assistance for whole cottonseed can be found online at the Cottonseed Marketplace .

WASDE Report was Neutral for Corn and Bearish for Soybeans

Mon, 12 Aug 2024 20:45:33 GMT

It was green across the board today in Chicago, with the exception of whey. CME blocks broke through a psychological barrier, settling at $2.0000 per pound, up $0.0425 to the highest price since August 2023. At the same time, barrels jumped to $2.0900 per pound, tacking on $0.0850 and reaching a level last seen in May. Butter volume was heavy, at 17 lots exchanged. But prices still managed to rise to $3.1400 per pound, adding $0.0425. Whey prices remained steady at $0.5625 per pound with zero loads sold.

The latest USDA World Agricultural Supply and Demand Estimates report was neutral for corn, with new-crop corn ending stocks slipping to 2.073 billion bushels, down from 2.097 billion in July. But when added to large old-crop supplies, there should be plenty of corn to go around. WASDE was bearish for soybeans, with new-crop ending stocks pegged at 560 million bushels, up from 435 million bushels in July.

Corn futures climbed a little following new supply, demand, planting and acreage data, with September futures settling at $3.8325 per bushel, up 6.5 cents. The nearby soybean contract slipped to $10.1200 per bushel, giving up 16 cents.

Ever.Ag - The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

Will the Decline in Dairy Culling Continue?

Thu, 01 Aug 2024 21:56:19 GMT

Fewer cows went to their local sale barns in the month of June compared to months prior. In fact, through July 13, USDA Ag Marketing Service estimates indicate the number of dairy cows marketed for beef has now trailed year-ago levels for 45 consecutive weeks, dating back to Sept. 9, 2023, and was down about 332,000 from the same period a year earlier.

Phil Plourd, president of Ever.Ag Insights, attributes the slowdown in dairy cull cow marketing to several factors, including a smaller milking herd, limited availability of replacement heifers to maintain full barns and slight improvements in milk income margins.

“I believe the low slaughter figures reflect at least two different realities. First, we don’t have a lot of replacements and the ones we have are expensive. Second, I think that prospects for better margins are likely slowing the slaughter pace. If that’s true, I am curious to see the effect on productivity,” he says.

Robin Schmahl with AgMarket.Net says he believes culling will continue.

“It may not be lower month-to-month, but it will be lower than the previous year,” he says, noting that producers have been culling heavily for quite some time leaving fewer cows to be culled

However, Schmahl shares that two other factors are the greater issues.

Beef-on-dairy interest has generated a significant source of income for dairy producers. “This has limited the need to cull cows aggressively to add to income,” he says. “These calves bring substantially better income than dairy calves adding significantly to the farm’s bottom line. Many of my clients are breeding 50% of their herds to beef bulls. This leaves sufficient replacements for the dairy but does not allow for any to be sold as replacement heifers resulting in a tight heifer market and high prices. This also increases the desire to hold onto cows as replacements are difficult to find. This will continue as long as beef prices remain strong.”

Continued Lower feed prices. “The outlook is for continued low feed prices through the end of this year and into next year,” Schmahl says. “This lowers the bar for cows that may need to be culled.”

Schmahl highlights the year-over-year decline in grain prices that are welcoming to dairy producers, allowing for better margins.

- The average price for corn in June 2023 was $6.49 per bushel while the average price in June 2024 was $4.48 per bushel.

- The alfalfa hay price in June 2023 was $263 per ton compared to $195 per ton in June 2024.

- The All-milk price in June 2024 was $22.80 compared to last year when it was $17.80.

“This all lowers the bar of profitability for milk production per cow,” he says. “Cow numbers remain below a year ago but are slowly narrowing the gap. We should see reduced culling as long as these aspects remain in place.”

Feed Prices Continue to Plummet, Milk Markets Show Growth

Mon, 15 Jul 2024 20:57:56 GMT

The CME block/barrel spread returned to inverted territory, as spot blocks slipped three cents to $1.8600 per pound and barrels rose 1.5 cents to $1.8650 per pound. Five loads of blocks and eight lots of barrels traded. On the butter side, spot prices climbed to $3.1225 per pound, up $0.0225. Trading volume was heavy, with 24 loads changing hands, the largest single-day volume since August 2023.

Grain futures continued to drop, with nearby contracts breaking through key levels. September corn tumbled 11.5 cents to $3.9050 per bushel. August soybeans fell below the $11 mark, shedding 27 cents to land at $10.7800 per bushel. September and November beans settled at $10.3375 and $10.4000 per bushel, respectively, down $0.2475 and -$0.2525 versus last Friday.

As of July 14, USDA rated 68% of the U.S. corn crop in good/excellent condition, unchanged on the week and up from 57% last year and 62% on the five-year average. Soybeans were also 68% good or excellent, flat on the week and well above 2023’s 55% and the five-year average of 59%.

Milk Prices Have Been Better Than Expected: Will It Last?

Thu, 11 Jul 2024 19:01:17 GMT

Milk prices are better than expected early this year, but higher prices are certainly welcomed. The June Class III milk price of $19.87 was the highest since December 2022 and the highest since June 2022. The same was true for Class IV milk with a June price of $21.08 the highest since December 2022 and the highest June since 2022. The income over feed price continues to improve with the May price at $10.52 and is the best income over feed price since November 2022. Grain prices are under significant pressure which could improve income over feed significantly as we move through the next few months. Eventually, this will provide a great opportunity to lock in profitable feed prices for the upcoming year.

The May Dairy Products report showed American cheese production 5.7% below May 2023 totaling 488.188 million pounds and nearly the same level as May 2022. American cheese production has been below the previous year since January. It is uncertain as to the reason cheese production has been running lower. The easy explanation would be that milk production has been below a year ago this year. However, U.S. milk production has been running below the previous year since July 2023, yet American cheese output exceeded the prior year throughout the last half of 2023. There seems to be a shift to other varieties of cheese. Italian-type cheese production has surpassed the previous year and is substantially higher than in 2023.

Milk prices have been better than expected and could remain that way for a while. Lower American cheese production and strong exports should provide further support.

(USDA, AMS, DMIN)

Total cheese production has been mixed with some months higher and some lower. This has kept American cheese inventory below last year setting the stage for potentially higher prices if demand increases and runs similar to a year ago. So far, demand has not increased sufficiently to cause concern for cheese buyers. They have not been aggressive on the daily spot market with cheese prices holding in a choppy pattern.

A positive development in the market is the strong exports of cheese. Cheese reached the highest-ever exports during March, April, and May. This is positive as higher cheese prices have not turned international buyers away. Higher prices may have an impact as the year unfolds but overall cheese exports are expected to remain strong. International butter demand is improving and may see a rebound in exports through much of the rest of the year. If butter shows continued strength in exports, the price may increase over the next few months. The butter price may not set another record this year, but further strength is likely.

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Robin Schmahl is a commodity broker with AgDairy, the dairy division of John Stewart & Associates Inc. (JSA). JSA is a full-service commodity brokerage firm based out of St. Joseph, MO. Robin’s office is located in Elkhart Lake, Wisconsin. Robin may be reached at 877-256-3253 or through the website www.agdairy.com .

The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There is risk of loss in trading commodity futures and options on futures. It may not be suitable for everyone. This material has been prepared by an employee or agent of JSA and is in the nature of a solicitation. By accepting this communication, you acknowledge and agree that you are not, and will not rely solely on this communication for making trading decisions.

Here's Why Freight Is Driving Up Amino Acid Prices

Fri, 28 Jun 2024 21:04:32 GMT

The global feed-grade amino acid market is expected to grow steadily in coming years. But this popular class of feed additives also is becoming more expensive to access.

A recent report by Verified Market Reports indicates that from 2021-2031, demand the ration enhancements is expected to approximately quadruple, from less than $10 million to more than $40 million annually.

A rise in consumption of and demand for protein-based food sources worldwide is fueling the growth. Additionally, livestock nutritionists and producers are recognizing the value of optimizing feed formulations with the enhancement of amino acids to enhance animal performance, minimize environmental impact, and support food safety.

But as demand for these feed additives is rising, so is the cost. Currently, it’s not the ingredients themselves, but the freight required to deliver them.

A large share of the feed-grade amino acids today is manufactured in China. According to feed industry source All About Feed , FOB China prices for common amino acids including lysine, threonine, tryptophan and valine have softened in the first half of 2024.

However, the container freight rate from China to the Americas and Europe has increased significantly in recent months, with further upward potential at least through the summer.

The result is a net price for most amino acids that is firm-to-climbing. Thus, analysts expect strong interest in locking in contracts for Q3 and even into Q4 for these amino acids.

Meanwhile, reports continue that production of methionine is still lagging, but that factor has not influenced current methionine prices as much as freight rates. Like the other amino acids, slightly weaker prices have been offset by higher shipping costs.

What's The New Break-Even Cost? Because $20 Milk is No Good

Tue, 21 May 2024 13:30:00 GMT

“Oh my. Good Lord. Someone pour me up a double shot of whiskey.”

Those were not the exact words that my husband spewed when looking over the last milk check he opened up, but let me tell you he wasn’t thrilled.

My guess is neither were any of you.

Yes, we are keeping a close eye on milk futures that are showing a glimmer of hope, but let’s be honest, something has to give. When I look at the milk price history for our farm which dates back to 2010, I just shake my head. I’ve always said to be a dairy farmer you must be passionate or crazy.

A decade ago, in 2014, our milk check’s final pay (net) averaged $30.30 for the year. Last year, it was a mere $24.22. I just think of how much input prices have risen in the last decade and how much less milk is worth today.

Something must give.

We are shipping more than 3.5 million more pounds annually, but only netting a half million more. Then deduct all the expenses, well, you all get the drift.

Good lord. No wonder farms are selling out.

I used to believe that $20 milk is what it takes to rock and roll. To cover our expenses and to have some dollars left to make capital purchases. What is the new break-even cost? I know that drastically depends on many different variables, but I can guarantee that it’s not $20 any longer. Even with feed prices dropping year-over-year.

For us, adding that income line of beef-on-dairy certainly helps. To be truthful, a few years ago we took out our bull check income line. It seemed to not add up too much, after all, Jersey bull calves are not a high-dollar ticket item and could be categorized as miscellaneous income. We now have a waiting list for beef cross calves and as crazy as it sounds, we are getting $150 for our Jersey bull calves.

I don’t think we need a double shot of whiskey, but a deep conversation is needed to strategically figure out how to generate income away from milk because that might be what it takes to stay afloat and to get through 2024.

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No DMC Indemnity Payment for March Milk

Wed, 01 May 2024 14:47:14 GMT

With feed prices dropping, no indemnity payment will be issued for March milk production, as the USDA Agricultural Prices report calculated Dairy Margin Coverage (DMC) income over feed costs to be $9.65. The takeaway from the report included:

The all-milk price increased by a dime from last month to $20.70/cwt.
Feed costs fell by $0.11/cwt to $11.05. Corn remained unchanged.
Corn price remained unchanged from February at $4.36/bu.
Premium alfalfa dropped $7 per ton to $271.
Soybean meal dropped $1.46 per ton to $362.17.

“The all-milk price is only $0.40/cwt. lower than last March, but feed costs are down nearly $4.00/cwt.,” Erick Metzger, general manager with National All-Jersey, stated. “Hay is down $43 per ton; corn is lowered by $2.31 per bushel and soybean meal is $122.23 per ton less.”

In 2023, producers maximizing Dairy Margin Coverage utilization could have received up to nearly $150,000.

Phil Plourd, president of Ever.Ag Insights, says that in a vacuum, the absence of a DMC payment seems like a good thing.

“It means that ‘the market’ is yielding better results,” he says. “In real life, however, things haven’t likely gotten that much better on the farm as lower feed prices don’t benefit everyone and a wide Class III and Class IV spread has been creating uneven income performance. If the current cheese rally sticks, the income side will improve more universally.”

Metzger says that continued increasing butterfat tests seem evident in the all-milk price. Nationally, last month’s butterfat test averaged 4.28% compared to year-ago levels that averaged 4.19%. In 2021, for the first time, the average milk fat in the Upper Midwest hit 4.0%.

Isaac Salfer, assistant professor of dairy nutrition at the University of Minnesota, shared that the trend continues.

“I fully expect that in a few years, I will be teaching my class that a 4.0% milk fat test is on the low end of what a herd should expect,” he says.

Salfer says there are four main reasons why milk fat continues to increase:

Improved ration formulation with an emphasis on feeding rumen-protected fatty acid products and focusing on fatty acid digestibility.
Improved forage quality and fiber digestibility, which allows you to feed higher fiber diets without sacrificing available energy for milk production.
Improved feed and bunk management to maximize cows’ time at the feed bunk.
Improved genetic selection for milk fat percentage, mainly due to the use of the Net Merit $ selection index, which puts heavy emphasis on milk fat and protein yield.

Capitalizing on butterfat is one-way producers are trying to boost not only their milk check, but also their bottom-line, as DMC indemnity payments did not generate any dollars for March.

Last Call for Producers to Enroll in DMC for 2024

Mon, 22 Apr 2024 16:21:40 GMT

The deadline to enroll for the USDA’s Dairy Margin Coverage (DMC) and Supplemental Dairy Margin Coverage (SDMC) programs is approaching fast. The last day for producers to sign up is Monday, April 29, 2024.

National Milk Producers Federation (NMPF) president and CEO, Gregg Doud, urges every dairy farmer to strongly consider signing up for this program.

“DMC itself is improved from the previous farm bill, thanks to the permanent incorporation of updated production histories in the program, and recent low producer margins underscore just how critical DMC is for dairy farms of all sizes,” he says.

Katie Burgess, director of risk management with Ever.Ag, encourages producers to continue to sign up for USDA’s DMC program.

“It has a strong track record of generating producer payouts when margins get squeezed,” she says.

DMC allows producers to select a margin between the milk price and average feed cost to determine at which level they receive assistance.

USDA revised DMC regulations to extend coverage for calendar year 2024, which is retroactive to Jan. 1, 2024, and to provide an adjustment to the production history for dairy operations with less than 5 million pounds of production. In previous years, smaller dairy operations could establish a supplemental production history and receive Supplemental Dairy Margin Coverage.

For 2024, dairy producers can establish one adjusted base production history through DMC for each participating dairy operation to better reflect the operation’s current production.

DMC payments are triggered when the difference between the national all-milk price and the national average feed cost (the margin) falls below the producer-selected margin trigger, ranging from Tier 1 from $4.00 to $9.50, and Tier 2 from $4.00 to $8.00, calculated monthly.

Producers are urged to contact their local Farm Service Agency (FSA) office by April 29, 2024, to sign up.

Global Feed Production Takes a Dip

Sat, 20 Apr 2024 20:04:07 GMT

There was 0.2% less animal feed grown in 2023 compared to 2022, according to the 2024 Agri-Food Outlook Report published by Alltech.

Alltech analysts estimated that global feed tonnage produced worldwide dropped by 2.6 million metric tons last year. The report attributed this decline to a drop in feed demand. It was fueled by:

More efficient use of feed in livestock operations.
Tight margins in food-animal production, causing a slowdown in the overall production of animal protein.
Changing food consumption patterns, caused by inflation and dietary trends.
Geopolitical tensions around the globe.

The greatest reduction in feed production occurred in Europe and North America. The largest growth was seen in the Asia-Pacific region, followed by Latin America, Africa, and Oceania.

The top-5 feed producing countries were unchanged: (1) China; (2) United States; (3) Brazil; (4) India; and (5) Mexico.

Compared to all feed production, the global dairy industry showed a 10-fold reduction, down 2.28% in the past year. High feed costs and low milk prices pushed dairy farmers to trim back cow numbers and seek less-costly, non-commercial feed sources. The report noted European dairy farmers continue to grapple with stricter environmental policies as they try to keep their businesses viable.

The only part of the world that saw growth in dairy feed production was the Asia-Pacific region. There, consumers are more widely embracing dairy products, and feed production in cooperatives is expanding.

Alltech’s annual feed survey encompasses data from 142 countries and more than 27,000 feed mills worldwide.

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Dairy Feed Co-products: The Ultimate Recycling Story

Tue, 05 Mar 2024 14:00:00 GMT

It’s a well-kept secret in the dairy industry that needs to be shared, according to longtime dairy nutrition researcher and educator Dr. Larry Chase: how dairy cows can take the “leftovers” of human food and fiber processing and turn them into high-quality protein that humans can consume in the form of meat, milk, and other dairy products.

Chase, who has spent a storied career for 40 years in the Department of Animal Science at Cornell University and another decade as an Emeritus Professor and industry consultant, told listeners on a recent edition of The Dairy Podcast Show that cows also perform this nutrient-conversion hat trick with amazing efficiency.

“In the last probably 10 years, there’s been a lot of research effort on how much protein a cow can produce versus how much she consumes,” noted Chase. “When you go through the rations, especially those with higher levels of co-products, it’s very common for cows to produce 2-1/2 to 3 times more human edible protein than she consumes. That’s a really great advantage for the industry, and a good reason to use those co-products.”

Chase said co-products also play a key role in substituting for forages in regions where forage sources are more scarce, costly, or both. He noted Florida and California as U.S. dairy regions that rely heavily on co-products like citrus pulp, brewers’ grains and yeast, fruit pomace, cottonseed meal and gin trash, wheat middlings and more. Both states maintain excellent milk production despite rations commonly containing forage inclusion rates of just 35-40%.

Another example is Israel. There, alfalfa is quite scarce and expensive but co-products are plentiful, and forage inclusion rates may drop even lower, to just 30%. Yet Chase said Israel has the highest average milk production in the world.

According to Chase, much of the original research assessing cows’ conversion efficiency of co-products to human edible protein was performed in Europe, specifically Austria. The European Feed Manufacturers’ Federation (FEFAC) has developed a colorful, highly informative and well-illustrated brochure that can be used to tell the story of dairy protein recycling to consumers.

“We need to be talking more to our consumer friends as to how the cow is really helping with the sustainability of the whole system,” stated Chase. “Especially because the other option for those co-products is the landfill.”

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Dairy Feed Co-products: The Ultimate Recycling Story

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