Markets & Management

The price we receive in our milk check each month is only part of the equation that determines profitability on the farm. The prices we pay for our inputs – like feed, seed, fertilizer, fuel, and other supplies – can also have a major impact on our margin. Feed costs, including the cost of purchased feed and of growing feed on the farm, is typically the largest expense on a dairy. On average, feed costs can range between 30 and 70% of the total cost of producing milk. In periods when milk prices fall dramatically, but feed prices remain stable, it can be almost impossible to maintain a positive profit margin.

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