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 June and July were $24.34 and $24.47/cwt, respectively. Class III milk closing price for June was $24.33/cwt, with protein and butterfat prices at $3.42 and $3.33/lb, respectively. The component price for protein is unchanged from the May issue, with butterfat price increasing as we approach Autumn. For this issue, the Class III future for August is $20.67/cwt, continuing to further decrease in September to $20.21/cwt.
Nutrient prices
It can be helpful to compare the prices in Table 1 to the 5-year averages. Since the May issue, the price of metabolizable protein (MP) has decreased by about 13%, alongside a slight increase in the price of net energy for lactation (NEL). The current price of NEL and MP are about 75 and 12% higher than the 5-year averages ($0.08/Mcal and $0.41/lb, respectively), and physically effective neutral detergent fiber (pe-NDF) is about 5% lower than the 5-year average ($0.09/lb). These nutrient costs are reflective of recent trends in ingredient costs, largely following swings in the cost of protein and energy ingredients.
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 the July issue, the income over nutrient cost (IONC) for cows milking 70 and 85 lb/day is about $15.70 and $16.28/cwt, respectively. 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, July 22, 2022.
Estimate of Nutrient Unit Costs | |||||||||||
Nutrient name | Estimate | ||||||||||
NEl - 3X (2001) | 0.147764 | ** | |||||||||
Metabolizable Protein (MP, g/kg) | 0.459976 | ** | |||||||||
e-NDF | 0.085522 | ~ | |||||||||
ne-NDF | -0.119643 | * | |||||||||
- A blank means that the nutrient unit cost is likely equal to zero | |||||||||||
- ~ means that the nutrient unit cost may be close to zero | |||||||||||
- * means that the nutrient unit cost is unlikely to be equal to zero | |||||||||||
- ** means that the nutrient unit cost is most likely not equal to zero |
Economic Value of Feeds
Results of the Sesame analysis for central Ohio on July 22, 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 in this issue.
Table 2. Actual, breakeven (predicted) and 75% confidence limits of 26 feed commodities used on Ohio dairy farms, July 22, 2022.
Calibration set | |||||||||||||||||||||||||
Name | Actual [/T] | Predicted [/T] | Lower limit | Upper limit | Corrected | 75.0% CI | 75.0% CI | ||||||||||||||||||
Alfalfa Hay - 40 NDF 20 CP 150 RFV | 210 | 263.233 | 225.063 | 301.403 | 289.744 | 251.574 | 327.914 | ||||||||||||||||||
Blood Meal, ring dried | 1630 | 821.571 | 750.396 | 892.746 | - | - | - | ||||||||||||||||||
Canola Meal, mech. extracted | 481 | 323.86 | 308.355 | 339.365 | - | - | - | ||||||||||||||||||
Corn Grain, ground, dry | 230 | 304.954 | 269.43 | 340.478 | - | - | - | ||||||||||||||||||
Corn Silage, 32-38% DM | 60.75 | 100.31 | 87.067 | 113.553 | 100.31 | 87.067 | 113.553 | ||||||||||||||||||
Cotton Seed Meal, 41% CP | 430 | 389.104 | 364.367 | 413.842 | - | - | - | ||||||||||||||||||
Cotton Seed, Whole w lint | 440 | 396.189 | 342.135 | 450.244 | - | - | - | ||||||||||||||||||
Distillers Dried Grains w Sol | 250 | 311.232 | 285.165 | 337.299 | - | - | - | ||||||||||||||||||
Feathers Hydrolyzed Meal | 600 | 652.305 | 610.108 | 694.502 | - | - | - | ||||||||||||||||||
Gluten Feed, dry | 200 | 275.17 | 255.725 | 294.615 | - | - | - | ||||||||||||||||||
Gluten Meal, dry | 660 | 673.063 | 626.915 | 719.212 | - | - | - | ||||||||||||||||||
Hominy | 200 | 264.144 | 237.221 | 291.066 | - | - | - | ||||||||||||||||||
Meat Meal, rendered | 515 | 519.284 | 487.323 | 551.246 | - | - | - | ||||||||||||||||||
Solvent Extracted Canola Meal | 481 | 329.051 | 312.931 | 345.172 | - | - | - | ||||||||||||||||||
Soybean Hulls | 208 | 148.139 | 102.68 | 193.599 | - | - | - | ||||||||||||||||||
Soybean Meal, expellers | 534 | 547.72 | 519.828 | 575.612 | - | - | - | ||||||||||||||||||
Soybean Meal, solvent 44% | 460 | 410.335 | 388.693 | 431.977 | - | - | - | ||||||||||||||||||
Soybean Meal, solvent, 48% | 470 | 474.25 | 450.561 | 497.939 | - | - | - | ||||||||||||||||||
Soybean Seeds, whole roasted | 530 | 475.91 | 443.207 | 508.613 | - | - | - | ||||||||||||||||||
Tallow | 1145 | 709.85 | 576.69 | 843.01 | - | - | - | ||||||||||||||||||
Wheat Bran | 170 | 171.624 | 141.065 | 202.183 | - | - | - | ||||||||||||||||||
Wheat Middlings | 175 | 203.483 | 177.114 | 229.853 | - | - | - |
Appraisal set | ||||||||||||||||||||||
Name | Actual [/T] | Predicted [/T] | Pred.-Act. | 75.0% CI | 75.0% CI | Corrected | ||||||||||||||||
Alfalfa Hay - 32 NDF 24 CP 190 RFV | 0 | 290.595 | 290.595 | 259.472 | 321.718 | 370.128 | ||||||||||||||||
Alfalfa Hay - 36 NDF 22 CP 170 RFV | 0 | 287.16 | 287.16 | 252.723 | 321.597 | 340.182 | ||||||||||||||||
Alfalfa Hay - 44 NDF 18 CP 130 RFV | 0 | 249.429 | 249.429 | 206.636 | 292.223 | 249.429 | ||||||||||||||||
Alfalfa Hay - 48 NDF 16 CP 110 RFV | 0 | 233.153 | 233.153 | 185.126 | 281.18 | 206.642 | ||||||||||||||||
Bakery Byproduct Meal | 0 | 299.521 | 299.521 | 261.036 | 338.007 | - | ||||||||||||||||
Beet Sugar Pulp, dried | 0 | 224.624 | 224.624 | 198.274 | 250.974 | - | ||||||||||||||||
Citrus Pulp dried | 0 | 241.904 | 241.904 | 218.093 | 265.714 | - | ||||||||||||||||
Fish Menhaden Meal, mech. | 0 | 676.096 | 676.096 | 633.738 | 718.455 | - | ||||||||||||||||
Molasses, Sugarcane | 0 | 219.107 | 219.107 | 186.075 | 252.138 | - |
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, July 22, 2022.
Bargains | At Breakeven | Overpriced |
Alfalfa hay - 40% NDF | 48% Soybean meal | Mechanically extracted canola meal |
Feather meal | Soybean meal - expeller | Whole roasted soybeans |
Corn silage | Wheat bran |
Soybean hulls |
Distillers dried grains | Gluten meal | 44% Soybean meal |
Gluten feed | Whole cottonseed | Solvent extracted canola meal |
Meat meal | Blood meal | |
Corn, ground, dry |
41% Cottonseed meal |
|
Hominy | ||
Wheat middlings |
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.
Appendix
For those of you who use the 5-nutrient group values (i.e., replace MP 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, July 22, 2022.
Estimate of Nutrient Unit Costs | |||||||
Nutrient name | Estimate | ||||||
NEl - 3X (2001) | 0.141102 | ** | |||||
RDP | 0.147803 | ~ | |||||
Digestible RUP | 0.424871 | ** | |||||
e-NDF | 0.103028 | ~ | |||||
ne-NDF | -0.076797 | ~ | |||||
- A blank means that the nutrient unit cost is likely equal to zero | |||||||
- ~ means that the nutrient unit cost may be close to zero | |||||||
- * means that the nutrient unit cost is unlikely to be equal to zero | |||||||
- ** means that the nutrient unit cost is most likely not equal to zero |