Dairy Dollars: Feed Prices, Nutrient Costs, and Milk Income

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

Despite its frequent fluctuation, feed remains the largest cost of production on dairy farms. Recently, the overall cost of feedstuffs has decreased in Ohio. In the month of March, the average cost of soybean meal (48% CP) decreased by about 7%, while the cost of whole roasted soybeans decreased by 9% (Figure 1). This is significant as soybeans are a commonly fed protein source for animals of all stages of growth and production on dairy farms. These slight changes in the cost of feedstuffs can directly impact the income over feed costs for dairy procedures.

Figure 1. Percent change of the actual cost of 21 feedstuffs fed on Ohio dairy farms from January 27, 2025, to March 26, 2025. Feedstuffs that decreased in price since the previous issue are shown in green, while those that increased in price are colored red. The cost of corn silage did not change since January, as it is priced on a biannual basis.

Figure 2. Actual and predicted cost of feedstuffs with 75% confidence interval (CI) of 21 feed commodities fed on Ohio Dairy Farms; March 26, 2025. Feedstuffs that are priced above the upper prediction price limit are overpriced (red bars). Feedstuffs that fall within the upper and lower limits of the predicted prices are breakeven feeds (grey bars). Feedstuffs that are priced below the lower prediction price limit are considered a bargain (green bars).

Economic Value of Feeds

Figure 2 displays the costs for the 21 reported commodities in Ohio. These results were produced by SESAME^TM for the central Ohio region on March 26, 2025. In simple terms, Figure 2 represents the bargain feedstuffs (green), the overpriced feedstuffs (red), and the breakeven feedstuffs (grey). This month, the prices of many commodities fall within their expected range. However, dried distillers grain and corn gluten feed are generally bargains, while canola meal, blood meal, and whole roasted soybeans are generally overpriced. Remember, these prices and estimates are from a point in time and their economic classification may change from what is reported. While it is important to consider the costs of feedstuffs when formulating a ration, the prices are not the only thing that should be considered. Some of the “bargain” priced commodities may have a place in a dairy cattle ration, though it is important to consider the investment opportunity that may arise by feeding “overpriced” feedstuffs.

The appraisal set, shown in Table 1, 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 estimated value at one specific point in time and are therefore subject to change. These values may be used as a benchmark if you’re considering purchasing these ingredients for your dairy farm.

Table 1. Estimated feedstuffs prices not reported for Ohio, March 26, 2025. 

Feed Nutrient Prices

Since our January issue, the cost of net energy of lactation (NE_L) decreased by about half of its previous cost, though the cost of metabolizable protein (MP) increased by about 10% in March. The cost of physically effective fiber (e-NDF) increased by 24%. Values of nutrients are shown in Table 2.

Table 2. Prices of nutrients for Ohio dairy farms, March 26, 2025, compared to January 27, 2025.

Milk and Milk Component Prices

In the month of January, the ending Class III milk price was $18.62/cwt, but it has since increased to $20.18/cwt. The price for fat in milk decreased by about $0.10/lb since the previous issue and is currently $2.82/lb. The price for protein increased by $0.57/lb, resulting in it being $2.53/lb in the month of March.

The Cow-Jones Index estimates the profitability of milk production, considering factors including the nutrient input costs displayed in Table 2, cow production metrics, and the current milk and component prices which are shown in Table 3. The prediction formula uses a 1500 lb cow, producing milk with 4.09% fat and 3.22% protein. This month, the income over nutrient cost (IONC) for cows milking 85 and 70 lb/day is about $15.52 and $15.06 /cwt, respectively. Both estimates are expected to be profitable, despite not including factors such as replacement and cull cows in the herd. 

Table 3. Prices of milk and milk components, sourced from the Federal Marketing Order 33, for Ohio dairy farms, March 26, 2025, compared to January 27, 2025.

In a slight change of course since the previous issue, the decreased feed costs and elevated milk price for class III milk and milk components have led to a reduced cost of production in the month of March for Ohio dairy farmers.