![]() What is the take home? For most herds, the 4 highest costs will be feed, labor, depreciation, and supplies. The only thing that changed between herd sizes was in the 201 to 500 cow category where supplies were number 3 and depreciation was the 4th highest cost. Herd size was broken down into 51 to 100 cows, 101 to 200 cows, 201 to 500 cows, and over 500 cows categories. Does herd size make a difference? In 2013, the top 4 expenses, accounting for 77% of total costs, were the same across all herd sizes. There is a substantial range in herd sizes in these farms. These numbers represent the average for all farms. Supplies and vet & meds switched places, and there were minor changes in the bottom four expenses, all 2.4% of total expenses or less. ![]() The top 4 costs were the same in both years: feed, labor, depreciation and supplies. All homegrown feed is valued at total cost of production. These feed costs are for all animals milking and dry cows, replacement heifers and calves. No surprise to any dairy farmer, feed costs are the single highest cost on all farms. Top 10 production costs, 20 Ohio Farm Business Analysis Program, average of all farms. What are the big players in the list of costs? Where to start slimming? First, let’s determine “what is”. With a 4-year average total cost of production of $19.66 – which is already adjusted for bull calf and cull cow income –there is a yawning chasm between production costs and milk income per cwt. On the contrary, slimming down production costs is essential. Tagged budgeting, dairy, dairy issue briefs, milk prices Leave a comment Cutting costs on your dairy farmīy Dianne Shoemaker A penny per hundredweight trumps a dollar per cow in 2016įor the country’s dairy farmers, there doesn’t appear to be anything “sweet” to anticipate in ‘16. Posted by Dianne Shoemaker at 10:28am May 19, 2016 The Dairy Issue Briefs were originally developed to help dairy farm families deal with the challenges of 2009’s low milk prices. Tap in to the Dairy Issue Briefs at to help identify opportunities to control costs and concerns to consider. There are many important decisions to be made as costs must be cut. This is an issue that is becoming all too real for many farms. We are in a component – based market in Federal Order 33, so if your components are below these levels, your base milk price will be even lower than the currently pitiful Class III prices. The class III price is based on 3.5% fat and 2.99% protein. While you are working with your nutritionist to be sure there are not ingredients in your ration that have outlasted their usefulness, make sure your components are in line. Ohio Farm Business Analysis and Benchmarking data for 2011 through 2014. More milk to spread the feed costs over results in an average feed cost of $1.32 per cwt less for the high 20%. An average of more than a ton per cow per year more over the last 4 years. But a look at the data for the last 4 years clearly shows that the farms that achieve the highest net return per cow consistently sell more milk per cow than the rest of the farms. The Ohio Farm Business Analysis Dairy Summary shows time and again that at any particular feed cost per cwt, there will be farms making money and farms losing money. That said, losing pounds of milk, components, and/or condition can exact a toll down the line. As the single biggest cost, it is an easy target, and should not be overlooked. ![]() Take care not to make knee-jerk cuts in feed costs. Belt tightening must continue which is particularly worrisome as the time to plant crops rapidly approaches.Īs mentioned last month, it is really, really important to look at the long-term, as well as the short term, implications of costs that are cut now on future productivity and potential profitability. Since March, we have not seen any good news in the milk markets. Sound familiar? That was the closing paragraph from last month’s column, and a good starting point today. of milk in the tank each year, finding one cent per cwt in savings will save $240 per year. If each of those cows are putting 24,000 lbs. How is your time best spent? Trying to cut expenses by a dollar per cow or a penny per hundredweight? For every hundred cows you milk, you will save $100 for every dollar you cut in production costs per cow. ![]()
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