Missouri Dairy Business Update  
Volume 7, Number 7
July 2007

Missouri's Monthly Milk Cost of Production

Missouri has recently been added to the USDA monthly milk cost of production reports, assessible at the following web link http://www.ers.usda.gov/Data/CostsAndReturns/TestPick.htm. This information is based on USDA's 2005 Agricultural Resource Management Survey of milk producers in Missouri and updated using current USDA milk production per cow and production input indexes. The spreadsheet for Missouri has data for the past year 2006 and is continually updated each month.

Dairymen should keep in mind that the feed costs include the feed for dry cows and heifer as well as the milking herd.

A major source of month-to-month changes in production costs is from seasonal variation in cow productivity. Milk cows produce less during hot summer months despite using about the same level of inputs. This seasonal variation causes costs per unit to increase during the summer even if input prices are unchanged. Seasonal variation in productivity tends to have a greater impact on monthly COP than do changes in input prices.

Missouri, monthly dairy costs of production per cwt of milk sold, 2007
========================================= ======= ======= ======= ======= =======
Jan
Feb 
Mar
Apr
May
========================================= ======= ======= ======= ======= =======
Operating costs:
$/cwt
  Feed--
    Purchased feed 6.05 6.78 5.70 5.44 5.44
    Homegrown harvested feed 2.47 2.51 2.46 2.52 2.77
    Grazed feed 0.36 0.37 0.36 0.37 0.41
      Total, feed costs 8.88 9.66 8.52 8.32 8.62
  Veterinary and medicine 0.85 0.84 0.80 0.78 0.80
  Bedding and litter 0.14 0.14 0.13 0.13 0.13
  Marketing 0.42 0.42 0.42 0.42 0.42
  Custom services 0.16 0.16 0.16 0.15 0.15
  Fuel, lube, and electricity 0.62 0.62 0.64 0.66 0.68
  Repairs 0.79 0.79 0.75 0.73 0.74
  Other operating costs 0.00 0.00 0.00 0.00 0.00
  Interest on operating capital 0.25 0.25 0.23 0.23 0.23
    Total operating costs 12.11 12.88 11.66 11.43 11.78
Allocated overhead:
  Hired labor 1.19 1.14 1.13 1.08 1.09
  Opportunity cost of unpaid labor 6.11 5.84 5.80 5.52 5.60
  Capital recovery of machinery and equipment 5.40 5.40 5.32 5.15 5.25
  Opportunity cost of land (rental rate) 0.19 0.19 0.18 0.17 0.18
  Taxes and insurance 0.50 0.49 0.47 0.46 0.46
  General farm overhead 0.40 0.40 0.39 0.39 0.39
    Total, allocated overhead 13.79 13.47 13.29 12.76 12.97
Total costs listed 25.90 26.35 24.95 24.19 24.75

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