First Quarter Dairy Profit Monitor Update

During first quarter of 2018, 43 farms participated in the Dairy Profit Monitor (DPM) program for the past 12 months. This DPM March 2018 data set includes farms that entered at least nine months of data within the last year and collectively averaged 836 cows. Each farm in DPM is provided graphs that includes their individual data. The same farm is not always the highest or lowest across all months. The graphs are intended to show trends to benchmark against the average of others in the program.

Since the start of the year, pounds of components per head per day has shown a steady increase, with the average of 5.91 lbs for the 41 farms entering data in March. Milk price received by farms was $15.05 per cwt for March, which was a slight increase from February at $14.81. The last time farms saw below $15 per cwt net milk price was June of 2016. Net milk price takes into account the value of milk shipped (component value), PPD, quality and volume premiums, and any deductions regarding milk hauling, promotion, coop dues, and marketing adjustments.

With a wet spring last year, producers have been feeling the effects of forage quality. Many farms have seen a slight decrease in feed conversion due to less milk production. Many farms adjusted diets for lower forages shown in the graphs for the fall and winter months. The effect of this is seen in feed cost per cwt., which has steadily increased since last June, when costs averaged $7.67 per cwt compared to $8.11 in March 2018. This feed cost measure does include the value of homegrown forages, which are valued in DPM at the cost to grow and harvest them.

Net milk income over feed costs using the actual milk price showed a decrease, but on a fixed milk price basis, the average farm was steady and slightly increasing their margin. Although producers don’t have control over the milk price they receive, operationally they do have an impact on how effective their feed program is. Using DPM to focus on component production, feed conversion, and feed costs allows producers to manage and improve their monthly margin. For additional information, visit the DPM website, or email Ashley Howlett at [email protected].