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

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

Milk Prices

In the last issue, the Class III futures for August and September were at $16.50/cwt and $16.66/cwt, respectively. Class III closed lower than predicted at $15.95/cwt in August, with protein and milk fat at $2.45/lb and $1.85/lb, respectively. This marks a continued decline in both fat and protein prices since May of 2021. This issue, the Class III future for October is $17.46/cwt, followed by a slight decrease to $17.13/cwt in November.

Updated Corn Silage Price

A new corn silage price used throughout this article was calculated this month as corn silage harvest winds down across the state. This year’s approximate price for normal corn silage (32 to 38% dry matter), based on a $5.36/bu corn grain price at start of day September 27, 2021, is $60.75/ton. Due to the higher December corn future this year ($5.36/bu compared to $3.65/bu this time last year), corn silage is increased in value by ~$14/ton compared to last season ($46.63/ton). However, based on its nutritive value, home grown corn silage continues to be a bargain feed in dairy cattle rations.

Nutrient Prices

It can be helpful to compare the prices in Table 1 to the 5-year averages. The price of net energy for lactation (NEL) is about 32% lower than the 5-year average ($0.08/Mcal), while metabolizable protein (MP) and physically-effective neutral detergent fiber (pe-NDF) are 36 and 59% higher than the 5-year averages ($0.38/lb and $0.08/lb, respectively). These fluctuations in nutrient price are in line with the seasonal adjustments to nutrient prices over the last 5 years.

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 and 85 lb/day is about $9.21 and $9.68/cwt, respectively. Both estimates 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, September 27, 2021.

Economic Value of Feeds

Results of the Sesame analysis for central Ohio on September 27, 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 local 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 this issue.

Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, September 27, 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 oversized text. Conversely, feedstuffs that have moved to the left (i.e., decreased in value) are undersized text. 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, September 27, 2021.

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

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, September 27, 2021.