MONITORING INCOME OVER FEED COST TO IMPROVE DAIRY FARM PROFITABILITY
Extension Education
Eugene Schurman
Clymer
Abstract
\r\n Income Over Feed Cost (IOFC) was determined on 55 Pennsylvania dairy operations from January 2010 through January 2011. The objectives were to 1) provide immediate feedback to dairy producers on a monthly basis about their IOFC and 2) build a database with the calculated IOFC. Income Over Feed Cost is a simple approach to determine the profitability of a dairy operation. Feed costs usually represent the biggest expense on a dairy operation and can be easily tracked. Dairy producers voluntarily submitted their milk production and diet formulation with ingredients and purchased feed costs on a monthly basis. Home grown feeds were assigned a market value for the month it was fed derived from the Penn State Feed Price List and reflects a compilation of current market prices throughout Pennsylvania. The average IOFC was $7.52 ($3.08-$12.57) with the highest month’s average at $8.77 in October and lowest at $6.43 in January. The dairy producer receives their monthly report with their current IOFC and a graph illustrating their IOFC over time in relation to high (feed cost represents 40% of income) and low (feed cost represents 60% of income) benchmarks. This information enables the dairy farmer to make more informed decisions about feed purchases, know when to lock in milk price, or adjust the diet formulation to accommodate price volatility. Tracking IOFC over time allows dairy producers to make informed, timely decisions about feed purchases and can positively affect the overall operation’s profitability.
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Poster has NOT been presented at any previous NACAA AM/PIC
This poster is being submitted for judging. It will be displayed at the AM/PIC if not selected as a State winner. The abstract will be published in the proceedings.
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Authors: *E.W. Schurman, V. Ishler, R. White
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Schurman, *. Extension Educator, Penn State Cooperative Extension, Pennsylvania, 15701
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Ishler, V. Penn State Dairy Nutrient Management Specialist, Penn State Dairy and Animal Science Department, Pennsylvania, 16802
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White, R. Penn State Senior Project Associate, Penn State Dairy and Animal Science Department, Pennsylvania, 16802