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 December and January were at $17.95/cwt and $18.23/cwt, respectively. Class III milk again closed higher than predicted at $18.36/cwt in December, with protein and butterfat at $2.59/lb and $2.29/lb respectively. While component prices are still strong, the price of protein has decreased compared to the November issue. For this issue, the Class III future for February is $20.21/cwt, followed by a further increase in March to $21.32/cwt.

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 25% lower than the 5-year average ($0.08/Mcal), while metabolizable protein (MP) and physically-effective neutral detergent fiber (pe-NDF) are 55 and 25% higher than the 5-year averages ($0.38/lb and $0.08/lb, respectively). Although in line with typical seasonal cycling of nutrient cost, these prices yield an overall nutrient cost to feed that is slightly higher than the 5-year average.

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 $11.36 and $11.83/cwt, respectively. Both estimates are increased by about $2/cwt compared to the November issue 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, January 26, 2022.

Economic Value of Feeds

Results of the Sesame analysis for central Ohio on January 26, 2022 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 for this issue.

Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, January 26, 2022.

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, January 26, 2022.

Bargains At Breakeven Overpriced
Gluten meal Wheat middlings Mechanically extracted canola meal
Feather meal Corn, ground, dry
Soybean meal - expeller
Corn silage Wheat bran  
Distillers dried grains 48% Soybean meal 44% Soybean meal
Gluten feed   Solvent extracted canola meal
Meat meal Soybean hulls  
Hominy Alfalfa hay - 40% NDF Whole, roasted soybeans
  41% Cottonseed meal Blood 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 nutrients using the 5-nutrient solution for Ohio dairy farms, January 26, 2022.