Dairy Dollars: Feed Prices, Nutrient Costs, and Milk Income

Source: Ohio State University Extension

by: Andie Majewski, Graduate Teaching Associate, Department of Animal Sciences, The Ohio State University

Feed is the largest cost of production on dairy farms; therefore, it important to monitor the costs of feedstuffs on a local level. Since November, the overall price of feedstuffs has increased in Ohio (Figure 1), directly impacting the income over feed costs for dairy farms. While the greatest $/ton price increase is seen in blood meal, the price of all corn products increased by some amount except for corn silage, which is priced on a biannual basis. This is significant as corn is commonly incorporated into rations for lactating dairy cows.

Figure 1. Actual cost of 21 feedstuffs fed on Ohio dairy farms on January 27, 2025 (red) compared to the actual costs of feedstuffs on November 18, 2024 (gray).

Figure 2. Actual and predicted cost of feedstuffs with 75% confidence interval (CI) of 21 feed commodities fed on Ohio dairy farms; January 27, 2025. Feedstuffs that are priced above the upper prediction price limit are overpriced (red bars). Feedstuffs that fall within the upper and lower limits of the predicted prices are breakeven feeds (gray bars). Feedstuffs that are priced below the lower prediction price limit are considered a bargain (green bars).

Economic Value of Feeds

Figure 2 displays the costs for the 21 reported commodities in Ohio. These results were produced by SESAME^TM for the central Ohio region on January 27, 2025. In simple terms, Figure 1 represents the bargain feedstuffs (green), the overpriced feedstuffs (red), and the breakeven feedstuffs (gray). Despite the overall rise in cost of feedstuffs in January, corn-based feeds were generally a bargain as in the previous report. Other byproducts, such as cotton seed meal, canola meal, and blood meal, were generally overpriced. Remember, these prices and estimates are from a point in time and their economic classification may change from what is reported. While it is important to consider the costs of feedstuffs when formulating a ration, the prices are not the only thing that should be considered. Some of the “bargain” priced commodities may have a place in a dairy cattle ration, though it is important to consider the investment opportunity that may arise by feeding “overpriced” feedstuffs.

The appraisal set, shown in Table 1, predicts the prices for the commodities that did not have a current local price. These commodity prices were predicted by SESAME^TM and represent the estimated commodity prices at one specific point in time and are therefore subject to change. These values may be used as a benchmark if you’re considering purchasing these ingredients for your dairy farm.

Table 1. Estimated feedstuffs prices not reported for Ohio, January 27, 2025. 

Feed Nutrient Prices

The cost of net energy of lactation (NE_L) and metabolizable protein (MP) increased slightly by about 1% and 0.25% respectively, from our previous report in November. The cost of physically effective fiber
(e-NDF) decreased by about 4.6%. Values of nutrients are shown in Table 2.

Table 2. Prices of nutrients for Ohio dairy farms, January 27, 2025, compared to November 18, 2024.

Milk and Milk Component Prices

In the month of January, the ending Class III milk price was $18.62/cwt. January’s milk fat and protein prices were $2.91/lb and $1.96/lb, respectively (Table 3). While the price of fat decreased slightly by $0.18 since the month of November, the price of protein decreased significantly, by $1.36 since the last report. The price of class III milk dropped from $22.85 to 18.62/cwt.

The profitability of milk production with the nutrient costs displayed in Table 2 is estimated using the Cow-Jones Index. The prediction formula uses a 1500 lb cow, producing milk with 4.09% fat and 3.22% protein. This month, the income over nutrient cost (IONC) for cows milking 85 and 70 lb/day is about $13.73 and 13.42/cwt, respectively. Both estimates are expected to be profitable, despite not including factors such as replacement and cull cows in the herd. 

Table 3. Prices of milk and milk components, sourced from the Federal Marketing Order 33, for Ohio dairy farms, January 27, 2025, compared to November 18, 2024.

Considering the increased feed costs, reduced milk price for Class III milk and milk components, in addition to the slight increase in feed nutrient prices, the overall cost of production increased for Ohio dairy farmers at the start of the new year.