April F. White, Graduate Student, Department of Animal Sciences, The Ohio State University
In the last issue, the Class III futures for November and December were at $23.10 and $16.09/cwt, respectively. Class III closed at $17.08/cwt in December, with protein at $3.03/lb and milk fat at $1.59/lb. Protein is ~$2 lower than in the previous issue. The Class III future for January is ~$1/cwt lower than December at $16.12/cwt, followed by a further decrease to $15.56/cwt in February.
It can be helpful to compare the prices in Table 1 to the 5-year averages. The price of NEL and MP are about 22 and 21% higher compared to the 5-year averages ($0.08/Mcal and $0.39/lb, respectively). When comparing the nutrient costs to this time last year, however, NEL and MP are about 42 and 36% higher than January 2020 ($0.07/Mcal and $0.35/lb, respectively), while peNDF is 40% lower than its January 2020 price ($0.1077/lb).
To estimate profitability at these nutrient prices, the Cow-Jones Index was used for average US cows weighing 1500 lb and producing milk with 3.9% fat and 3.2% protein. For January’s issue, the income over nutrient cost (IONC) for cows milking 70 lb/day and 85 lb/day is about $8.73 and $9.18/cwt, respectively. These are both more $6/cwt lower than the estimates in the previous issue and are reflective of the lower protein and fat prices currently reporting. Both estimates are likely to be at least marginally profitable. As a word of caution, these estimates of IONC do not account for the cost of replacements or dry cows, or for profitability changes related to culling cows.
Table 1. Prices of dairy nutrients for Ohio dairy farms, January 26, 2021.
Economic Value of Feeds
Results of the Sesame analysis for central Ohio on January 26, 2021 are presented in Table 2. Detailed results for all 26 feed commodities are reported. The lower and upper limits mark the 75% confidence range for the predicted (break-even) prices. Feeds in the “Appraisal Set” were those for which we didn’t have a price or were adjusted to reflect their true (“Corrected”) value in a lactating diet. One must remember that SESAME™ compares all commodities at one specific point in time. Thus, the results do not imply that the bargain feeds are cheap on a historical basis. For this issue, a price for ring-dried blood meal was not reported, so blood meal was added to the appraisal set in order to provide a price prediction range.
Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, January 26, 2021.
For convenience, Table 3 summarizes the economic classification of feeds according to their outcome in the SESAME™ analysis. Feedstuffs that have gone up in price based on current nutrient values or in other words moved a column to the right since the last issue are red. Conversely, feedstuffs that have moved to the left (i.e., decreased in value) are green. These shifts (i.e., feeds moving columns to the left or right) in price are only temporary changes relative to other feedstuffs within the last two months and do not reflect historical prices.
Table 3. Partitioning of feedstuffs in Ohio, January 26, 2021.
|Bakery byproducts||Whole cottonseed||Mechanically extracted canola meal|
|Corn,ground,dry||Soybean meal - expeller||Tallow|
|Corn silage||Wheat bran||Fish meal|
|Distillers dried grains||Whole, roasted soybeans||Blood meal|
|Feather meal||48% Soybean meal||Molasses|
|Gluten feed||Alfalfa hay - 40% NDF||Solvent extracted canola meal|
|Hominy||41% Cottonseed meal||44% Soybean meal|
|Wheat middlings||Beet pulp||Soybean hulls|
|Gluten meal||Citrus pulp, dried|
For those of you who use the 5-nutrient group values (i.e., replace metabolizable protein by rumen degradable protein and digestible rumen undegradable protein), see the Table 4 below.
Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, January 26, 2021.