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 March and April were at $16.18/cwt and $17.20/cwt, respectively. Class III closed at $17.67/cwt in March, with protein continuing to decline slowly in price and butterfat climbing toward $2/lb ($1.95/lb in April). The Class III future for May is $18.93/cwt, followed by a decrease to $17.63/cwt in June.

Nutrient prices

It can be helpful to compare the prices in Table 1 to the 5-year averages. The price of metabolizable (MP) and physically effective neutral detergent fiber (peNDF) are about 33 and 64% higher compared to the 5-year averages ($0.39/lb and $0.08/lb, respectively). Net energy for lactation (NEL) is about 16% higher than the 5-year average ($0.08/Mcal), and closer to the price reported in January ($0.10/Mcal) after the decrease in the March issue. The price of MP is decreased compared to the March issue ($0.67/lb) but remains high alongside the cost of soy products and canola meal.

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 was about $9.57 and $10.13/cwt, respectively. Both estimates exceed those in the previous issue by $1.00 or more and are likely to be 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, May 25, 2021.

Economic Value of Feeds

Results of the Sesame analysis for central Ohio on May 25, 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 in this issue.

Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, May 25, 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 in bold. Conversely, feedstuffs that have moved to the left (i.e., decreased in value) are underlined. 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, May 25, 2021.

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

Table 4. Prices of dairy nutrients using the 5-nutrient solution for Ohio dairy farms, May 25, 2021.