October milk: COP pushes higher

Higher feed prices pushed U.S. average milk production costs to another record high in October 2012, according to USDA’s monthly Milk Cost of Production estimates. Cost estimates are based on total farm costs per hundredweight of milk sold.

The preliminary October 2012 average total cost was $29.13/cwt., up 66¢ from September, and $4.99/cwt. more than October 2011. The January-October 2012 average is $25.54/cwt., up $2.56 from the same period in 2011.


Milk: October cost of production ($/cwt.)

Costs Oct. ’12 Sept. ’12 Oct. ’11
All feed 17.22 16.54 12.65
Operating* 20.56 19.89 15.91
Allocated overhead** 8.58 8.59 8.24
Total costs 29.13 28.47 24.14

* Includes feed

** Includes labor

Source: USDA Economic Research Service


Purchased ($10.17/cwt.) and homegrown ($6.88/cwt.) feed costs were up 47¢ and 21¢, respectively, from September, and up $4.10 and 68¢, respectively, from October 2011. Feed represented about 59% of total costs. At $14.22/cwt., 2012 year-to-date average feed costs are up $2.30/cwt. from 2011.

Other than feed costs, other operating costs were largely unchanged from both September 2012 and October 2011. Year-to-date total average operating costs (including feed), at $17.39/cwt., are up $2.31 from the same period in 2011.

 Most items included in allocated overhead costs, including labor, were unchanged from September, but up slightly from October 2011. Year-to-date average total overhead costs, at $8.15/cwt., are up 25¢ from the same period in 2011.

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