Analysis of the top five dairy states over the past decade shows that feed prices and milk per cow are key components in the profitability equation, says Robert Goodling, Jr., a Pennsylvania State University Extension educator. “In 2015, the states with the highest production, production per cow and even highest milk income per cow did not have the highest income over feed costs (IOFC),” he says.
IOFC is critical, because it determines how much is left over to pay all other bills on the dairy farm. “In 2015, Wisconsin led the top dairy states in IOFC,” Goodling says, despite ranking third among the top five for milk price, fourth in milk per cow and third in milk income per cow. It was in feed cost where Wisconsin ranked first.
“Pennsylvania had the highest All-Milk price at $18.46 per cwt in 2015 and every year for the past nine years,” Goodling says. Yet, the Keystone State fell to fourth in IOFC last year because it had the lowest production per cow. Only once, in 2010, did it rank first.
Chart Source: Pennsylvania State University
California, the nation’s No. 1 dairy state with nearly 20% of total U.S. milk production, ranks fifth in IOFC among the top five dairy states. Its low ranking is attributable to both the lowest milk price among the top five dairy states and the third highest feed cost.
Idaho, which ranks first in milk per cow among the top five dairy states, ranks third in IOFC. New York, which ranked first in terms of milk income per cow (based on milk price and production per cow), was second in IOFC.
Source: DairyHerd