Feed Costs per 100 Pounds of Milk
Dairy Pipeline: March 1998
Charles C. Stallings
Extension Dairy Scientist, Nutrition
Do you know what your feed costs are to produce 100 pounds of milk? These calculations can be broken down into purchased feed versus total feed costs. Of course if you buy all your feed they will be the same. At a recent Dairy Management Institute meeting in Wytheville, Farm Business Management Specialists Jim Pease and Tom Covey proposed that a green light for purchased feed, assuming forages are home produced, would be under $3.50 per CWT, yellow light would be $3.50 to 4.50, and a red light over $4.50. In other words if you can produce 100 lbs. of milk for less than $3.50 in purchased feed you have done well. To calculate, take line 18 from your 1997 Schedule F and divide it by the number of hundred weights of milk sold (not DHI average). Line 18 should be the purchased feed for replacements, dry cows, and lactating cows. If beef cows are fed, any feed purchased for them should be subtracted. Example: $100,000 purchased feed/26,250 CWT sold = $3.81. For total feed costs, green light is under $6.00 per CWT, yellow light is 6.00 to 8.00, and red light is over 8.00. To do these calculations add purchased feed and home produced forage costs. It is best to use the cost of production of your own feeds plus an allowance for storage and feeding losses. Using Virginia Farm Management Budgets, calculated that corn silage costs $24/ton, alfalfa silage $50, alfalfa hay $76, and mixed hay $54. Differences in yields can change these numbers. Example: $181,000 total feed cost/26,250 CWT milk sold = $6.90. If you fall into the red light category in either purchased or total feed cost, evaluate your situation and determine why this was the case.
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