Winter chill: Regional, state IOFC, COP numbers

Summaries of state and regional reports regarding milk cost of production, income over feed costs, and more. 

Pennsylvania IOFC lower

Despite lower feed costs, lower milk prices pushed Pennsylvania’s January 2013 milk income over feed costs (IOFC) down 5.7%, on top of a 10% decline in December 2012, according to Penn State dairy economist Jim Dunn.

The January Pennsylvania all-milk price was down $1.50/cwt., at $21.20/cwt. Average corn prices were up, but alfalfa hay and soybean meal prices were lower, resulting in average daily feed costs per cow (at 65 lbs. of milk/cow/day) at $6.01, down 51¢ from December. IOFC for a cow producing 65 lbs. of milk per day was $7.77, down 47¢ from December. Measured another way, feed costs per hundredweight of milk produced averaged $9.25/cwt., resulting in a milk income margin over feed costs of $11.95/cwt., down 72¢ from December.

Current trend: Feed costs per cow/day are the lowest since October 2012, but IOFC is the lowest since August 2012; both feed costs per cwt. and milk margin over feed costs are the lowest since September 2012. The Pennsylvania all-milk price is also the lowest since September 2012.

To read Dunn’s February 2013 Dairy Outlook, visit


January IOFC declines in Wisconsin

Wisconsin dairy producers’ estimated income over feed costs (IOFC) dropped again in January 2013, according to Ken Bolton, with UW-Extension’s Center for Dairy Profitability. 

The estimated January IOFC declined 43¢/cwt. from December 2012, to $10.07/cwt. for a Wisconsin herd with an annual production average of 22,000 lbs. of milk per cow. The month’s estimated income over total variable costs for the same herd was $7.95/cwt.

The January predicted Wisconsin mailbox price is $19.62/cwt., down 58¢ from December. 

Prices for corn, hay and soybean meal were down, while corn silage prices were up. The total blended forage price (as fed) increased 42¢, to $116.92/ton. Feed cost per dollar of milk revenue increased 1¢, to 49¢.

Current trend: Compared to October 2012, January 2013 IOFC is down $2.52/cwt. and income over total variable costs is down $2.49/cwt. for a Wisconsin dairy herd with an annual production average of 22,000 lbs. of milk per cow. 


Midwest milk-feed price ratios 

Like their national counterparts, Midwest dairy producers saw mostly lower milk-feed price ratios in January 2013, in some cases again falling below the U.S. average. The index – representing pounds of 16% commercially mixed dairy feed equal in value to 1 lb. of whole milk – is based on current prices for a ration of 51% corn/8% soybeans/41% alfalfa hay.

Current trend: January 2013 continues a recent trend in which several Midwest states had lower milk-feed price ratios than their national counterparts. In almost all cases, the ratios were impacted negatively by alfalfa hay prices that were well above the national average.


Regional milk-feed price ratios

  January December January*
State 2012 2012 2013
Iowa 1.93 1.71 1.60
Michigan 2.09 1.69 1.58
Minnesota 2.02 1.65 1.59
Ohio 1.85 1.62 1.54
Wisconsin 2.05 1.65 1.56
U.S. Average 1.72 1.66 1.58


* Preliminary                    Source: Dairy Market News



Iowa-Nebraska budgets improve a little

December 2012 dairy budgets improved somewhat compared to November in Iowa and Nebraska, according to Robert Tigner, Extension Educator. 

The budgeted break-even price for a freestall dairy with a 24,000-lb. rolling herd average (RHA) dropped by $1.65, to $22.90/cwt. Total cost dropped only 19¢/cwt. from November, to $20.80/cwt., with a decline in soybean meal prices accounting for nearly all the difference.

An improvement in the December federal order producer price differential (PPD) was offset by lower butterfat and protein values in the milk pay price. Cull cow prices were slightly higher.

Current trends: The December total costs per hundredweight and break-even price for the 24,000-lb. RHA freestall herd are the lowest since September 2012.

Contact Tigner at



California milk production costs


California 2012 third quarter (Q3) statewide weighted average total milk production costs were up $1.65/cwt. compared to the same quarter in 2011, according to the February 2012 California Dairy Review. Including an allowance for management and return on investment, total costs were up $1.51/cwt.

Current trend: Continuing a year-long trend, Q3 total costs and total costs plus allowances are up $1.83 and $1.85, respectively, from the Q1 of 2012.



California statewide weighted ave. ($/cwt.)

Third quarter 2011 2012
Total costs $16.80 $18.46
Total costs & allowances $18.43 $19.94

*Total costs and allowances for management and return on investment

Source: February California Dairy Review