Milk Prices, Costs of Nutrients, Margins and Comparison of Feedstuffs Prices

April F. White, Graduate Student, Department of Animal Sciences, The Ohio State University

Milk prices

In the last issue, the Class III futures for January and February were at $16.12/cwt and $15.56/cwt, respectively. Class III closed at $15.75/cwt in December, with protein maintaining lower than in the winter issues at $2.98/lb and milk fat at about half of that at $1.44/lb. The Class III future for March is $16.18/cwt, followed by an increase to $17.20/cwt in April.

Nutrient prices

It can be helpful to compare the prices in Table 1 to the 5-year averages. The price of metabolizable protein (MP) and physically-effective neutral detergent fiber (peNDF) are about 74 and 62% higher compared to the 5-year averages ($0.39/lb and $0.08/lb, respectively). Net energy for lactation (NEL) is about 39% lower than the 5-year average ($0.08/Mcal) and about 50% of the price reported in January ($0.10/Mcal). The price of MP is nearly double the price of MP in March 2020 ($0.36/lb), reflective of the increased cost of protein-rich feeds, including soybean products this year.

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 $8.38 and $8.87/cwt, respectively. 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, March 26, 2021.

Economic Value of Feeds

Results of the Sesame analysis for central Ohio on March 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. Feeds for which a price was not reported were added to the appraisal set for this issue.

Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, March 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. Feeds added to the appraisal set were removed from this table.

Table 3. Partitioning of feedstuffs in Ohio, March 26, 2021.

Bargains At Breakeven Overpriced
Gluten meal Whole cottonseed Mechanically extracted canola meal
Corn, ground, dry Soybean meal - expeller 41% Cottonseed meal
Corn silage Soybean hulls 44% Soybean meal
Distillers dried grains Whole, roasted soybeans Blood meal
Feather meal 48% Soybean meal Solvent extracted canola meal
Gluten feed Alfalfa hay - 40% NDF  
  Wheat middlings  
  Meat meal  

As coined by Dr. St-Pierre, I must remind the readers that these results do not mean that you can formulate a balanced diet using only feeds in the “bargains” column. Feeds in the “bargains” column offer a savings opportunity, and their usage should be maximized within the limits of a properly balanced diet. In addition, prices within a commodity type can vary considerably because of quality differences as well as non-nutritional value added by some suppliers in the form of nutritional services, blending, terms of credit, etc. Also, there are reasons that a feed might be a very good fit in your feeding program while not appearing in the “bargains” column. For example, your nutritionist might be using some molasses in your rations for reasons other than its NEL and MP contents.


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 Table 4 below.

Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, March 26, 2021.