Whether it’s batting averages or rolling herd averages, we Americans like to keep statistics and rank things. Next to sports, dairy might be one of the most numerically analyzed industries around.
Following the adage that “if you can’t measure it, you can’t manage it,” Pennsylvania State Extension Animal Science Associate Robert Goodling recently analyzed milk production, milk prices, feed costs and income over feed costs (IOFC) for California, Wisconsin, Idaho, New York and Pennsylvania. Those five states have accounted for more than 50 percent of U.S. milk production annually for the last decade.
Each state has bragging rights in at least one category analyzed (Table 1) in 2015:
• California was the leader in total milk production and, as such, continues to produce the highest percentage of total U.S. milk.
• Idaho led in milk production per cow per day.
• Pennsylvania topped all others in average annual milk price, as it has every year for the past nine years.
• New York ranked highest in gross milk income per cow per day for the ninth consecutive year.
• Wisconsin had the cheapest daily feed costs, as it has in eight of the past nine years, and the highest income over feed costs per cow per day.
The analysis provides some other insights.
While California had the second-highest milk production per cow, its low milk price led to the lowest milk income per cow in 2015. The state has averaged the lowest IOFC of any of the top dairy states for the past nine years.
Even though New York had the highest gross milk income per cow, it also had the highest feed costs per cow per day.
Despite its higher milk price, Pennsylvania was second to last for IOFC due to lower production per cow. Over the last nine years, Pennsylvania ranked first in IOFC only once and ranked second twice.
What’s Goodling’s teachable moment? Feed costs typically account for 40 to 60 percent of the cost to produce milk. IOFC is a good starting point to assess how market and production fluctuations impact individual dairy operations.
Achieving good IOFC means maintaining the right balance of strong milk production and reasonable feed cost. Determining the breakeven cost of production allows the herd to then use the IOFC information to make more informed management decisions.
- Progressive Dairyman
- Email Dave Natzke