Winter chill: Regional, state IOFC, COP numbers
Summaries of state and regional reports regarding milk cost of production (COP), income over feed costs (IOFC) and other dairy economic factors show feed prices are coming down, but declining milk prices are squeezing dairy producer incomes this winter. For more details, click here.
• 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. 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.
• January IOFC declines in Wisconsin. Wisconsin dairy producers’ estimated IOFC dropped again in January. The estimated January IOFC declined 43¢/cwt., to $10.07/cwt. for a Wisconsin herd with an annual production average of 22,000 lbs. of milk per cow. 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. Midwest dairy producers saw mostly lower milk-feed price ratios in January 2013, and a recent trend in which several of those states had lower milk-feed price ratios than their national counterparts continues. In almost all cases, the ratios were impacted negatively by alfalfa hay prices that were well above the national average.
• Iowa-Nebraska budgets improve a little. December 2012 dairy budgets improved somewhat compared to November in Iowa and Nebraska. 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.The December total costs per hundredweight and break-even price are the lowest since September 2012.
• California milk production costs. California 2012 Q3 statewide weighted average total milk production costs were up $1.65/cwt. compared to the same quarter in 201. Including an allowance for management and return on investment, total costs were up $1.51/cwt. 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.