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

Andie Majewski, Graduate Teaching Associate, Department of Animal Sciences, The Ohio State University

My name is Andie Majewski. I began pursuing a Master of Science degree in the Department of Animal Sciences at The Ohio State University this fall of 2024. I completed a Bachelor of Science degree in Animal Science with a minor in dairy cattle management at the University of New Hampshire in spring of 2024. At OSU, my research will center around dairy cattle nutrition, with a focus on rumen health. My faculty advisor is Dr. Kirby Krogstad on the Wooster campus.

Milk Prices

In the month of September, the ending Class III milk price was $23.42/cwt. September’s milk butterfat and protein prices were $3.56 and 2.18/lb, respectively. Butterfat remained about the same as it did in the previous month, only increasing $0.02/lb, while protein increased from its prior price of $1.95/lb in July. The Class III milk price is predicted to drop slightly in the next month to $23.30/cwt.

Updated Corn Silage Prices

The corn silage price used in this report is updated each year around the time of harvest. The updated price for corn silage in Ohio was used in this report’s calculations. The updated price of the 32 to 38% dry matter (DM) corn silage is $4.14/bu or $50.68/ton. This price is lower than the 2023 price, which was $56.40/ton making a total of decrease of $5.72/ton since last year.

Nutrient Prices

To put Table 1 into greater context, it is helpful to estimate the profitability of a herd using the nutrient prices listed. The NE_L decreased about 33% from the previous month of July. The cost of metabolizable protein (MP) increased by 10.63%, and the cost of physically effective fiber (e-NDF) increased by about 33%. Previously, the NE_L has progressively increased for the past 6 months of 2024. Despite this, with the new price of corn silage factored in, the NE_L has decreased.

The profitability of these nutrients is estimated using the Cow-Jones Index. The prediction formula uses a 1500 lb cow, producing milk with 3.9% fat and 3.2% protein. This month, the income over nutrient cost (IONC) for cows milking 85 and 70 lb/day is about $15.10/cwt and $14.62/cwt, respectively. Both estimates are expected to be profitable, despite not including factors such as replacement and cull cows in the herd.  

Table 1. Prices of nutrients for Ohio dairy farms, September 24, 2024.

Economic Value of Feeds

Presented in Table 2 are the results for the 21 reported commodities for Ohio. These results were produced by the SESAME^TM analysis for the central Ohio region on September 24, 2024. Listed in Table 2 are the actual and predicted prices for each feed commodity, in addition to the upper and lower limits generated by the 75% confidence interval. The appraisal set predicts the prices for the commodities that did not have a current local price. These commodity prices were predicted by SESAME^TM and represent the commodity prices at one specific point in time and are therefore subject to change.

Table 2. Actual, breakeven (predicted), and 75% confidence limits of 21 feed commodities used on Ohio Dairy Farms, September 24, 2024.

To more comprehensively interpret the above values, Table 3 uses the outcome from the SESAME^TM analysis to compare the economic classification of the listed feedstuffs. The feedstuffs that are priced above the upper limit of the predicted prices are overpriced. Those that fall within the upper and lower limits of the predicted prices are breakeven feeds. The feedstuffs that are priced below the lower limit of the predicted price are considered a bargain. Since the prices of feedstuffs are frequently changing, these columns do not represent these historical values, but rather their temporary economic classification. The feeds included in the Appraisal set from Table 2 are not included in Table 3.

Table 3. Partitioning of feedstuffs in Ohio, September 24, 2024.

While it is important to consider income and the costs of feedstuffs when forming a dairy cattle ration, the prices listed in the table above are not the only thing that should be considered. While some of the “bargain” priced commodities may have a place in a dairy cattle ration, it is important to know the investment opportunity that may exist with some feedstuffs in the “overpriced” column.

Appendix

Table 4 shares the values of the estimated nutrient costs for those who consider rumen degradable protein (RDP) and digestible rumen undegradable protein (digestible RUP) instead of the metabolizable protein that is presented in Table 1.

Table 4. Prices of nutrients using the 5-nutrient solutions for Ohio dairy farms, September 24, 2024.