Pennsylvania IOFC improves for second straight month
Pennsylvania’s October 2012 milk income over feed costs (IOFC) rose 14%, on the heels of a 33% increase in September, according to Penn State dairy economist Jim Dunn.
The October Pennsylvania all-milk price was up 50¢/cwt. (7%), to $22.30/cwt. Lower hay and soybean meal prices offset a rise in corn prices, pulling down feed costs by 2%. At $5.89, average daily feed costs (at 65 lbs. of milk/cow/day) were down 12¢ from the previous month. IOFC for a cow producing 65 lbs. of milk per day was $8.60.
Measured another way, feed costs per hundredweight of milk produced averaged $9.07/cwt., resulting in a milk income margin over feed costs of $13.23/cwt., up $1.68 from September and the highest since November 2011.
Dairy futures are lower than October’s levels for the next five months, and the feed situation has passed weather issues, so IOFC will probably drift down in coming months, Dunn said.
To read Dunn’s November Dairy Outlook, visit http://www.personal.psu.edu/faculty/j/w/jwd6/DairyOutlooknov12.pdf