October 20, 2023: Feed Costs Pressure Margins

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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