| Missouri Dairy Business Update |  |
| Volume 1, Number 1 | |
September 2001 | |
| Missouri Dairy Business Update | |
| Volume 1, Number 1 | |
September 2001 | |
The longer answer is that as long as there are buyers with underused facilities, milk prices that are decent, and feed that is cheap, dairymen will continue to add high priced heifers to their herds. Remember: If Margin Revenue > Marginal Cost, then expand.
Using average Missouri prices, Wisconsin's spreadsheet below makes that point.
Average Per Hundredweight*
| Milk Price | $15.00 | Cow's Productive Life (months) | 24 |
| Feed Costs | $7.25 | Production Per Cow (pounds) | 17,500 |
| Labor Costs | $2.50 | Average Cull Value | $350 |
| Vet, Elect, Marketing, Etc. | $1.50 | Average Calf Value | $95 |
| *over her productive life | Interest Rate | 9.00% |
Break Even Price of a Cow at Various Milk Price and Production Levels
| $14.00 | $14.50 | $15.00 | $15.50 | $16.00 | ||
|
| 15,500 | $1,217 | $1,358 | $1,499 | $1,641 | $1,782 |
| 16,500 | $1,267 | $1,417 | $1,568 | $1,718 | $1,869 | |
| 17,500 | $1,317 | $1,477 | $1,636 | $1,796 | $1,955 | |
| 18,500 | $1,367 | $1,536 | $1,705 | $1,873 | $2,042 | |
| 19,500 | $1,417 | $1,595 | $1,773 | $1,951 | $2,129 | |
Break Even Price of a Cow at Various Productive Lives and Production Levels
Per Cow | ||||||
| 18 | 21 | 24 | 27 | 30 | ||
|
| 15,500 | $1,272 | $1,387 | $1,499 | $1,609 | $1,717 |
| 16,500 | $1,324 | $1,447 | $1,568 | $1,685 | $1,800 | |
| 17,500 | $1,377 | $1,508 | $1,636 | $1,762 | $1,884 | |
| 18,500 | $1,429 | $1,568 | $1,705 | $1,838 | $1,968 | |
| 19,500 | $1,482 | $1,629 | $1,773 | $1,914 | $2,051 | |
Break Even Price of a Cow at Various Milk Price and Productive Lives
| $14.00 | $14.50 | $15.00 | $15.50 | $16.00 | ||
|
| 18 | $1,132 | $1,255 | $1,377 | $1,499 | $1,622 |
| 21 | $1,226 | $1,367 | $1,508 | $1,649 | $1,790 | |
| 24 | $1,317 | $1,477 | $1,636 | $1,796 | $1,955 | |
| 27 | $1,406 | $1,584 | $1,762 | $1,939 | $2,117 | |
| 30 | $1,494 | $1,689 | $1,884 | $2,079 | $2,275 | |
Continuing into phase II of his bottling study, Leroy Shatto of Shatto Farms Creamery, Osborn, is determining the feasibility and market for a producer-owned milk bottling facility. News Release.
Missouri Farmers Union, Jefferson City, is launching a study to determine if markets exist for natural milk and dairy products, as well as for the pre-engineering design of bottling and processing plants. News Release.
Looking for a broker? This list of brokers who are familiar with milk futures was distributed to dairymen who attended the Dairy Options Pilot Programs. Adobe Reader required to download.
Dairy Marketing Clubs are becoming more common. Good information about starting and running a dairy marketing club is available from the National Ag Risk Education Library. Adobe Reader required to download.
Singup ended July 28th for Round III of the Dairy Options Pilot Program, DOPP. In Missouri 22 producers actually completed the course requirements and the application to participate in this program where the government pays 80% of the put option premium used to put a floor under milk prices. Participation by county is as follows:
| County | |
| Wright | |
| Webster | |
| Lawrence | |
| Douglas | |
| Howell | |
| Barry | |
| Ozark | |
| Texas | |
| Greene |
Prepared by Joe Horner, Dairy and Beef Economist, Commercial
Agriculture Program, University of Missouri. To contact Joe, call 573-882-9339,
or e-mail hornerj@missouri.edu.
All copies of this publication are accessible through AgEBB.
| University Outreach and Extension | | | AgEBB | | | Dairy Focus Team | | | Dairy Publications |