In recent years, dairy farming costs have risen across several categories, posing challenges to farm profitability. However, not all costs are beyond a farmer’s control. By focusing on specific actionable items, farmers can manage expenses effectively without negatively impacting cow health or milk production.
A recent analysis of dairy production costs from 2021 to 2023 reveals key areas where targeted strategies can help mitigate cost increases and improve operational efficiency. The costs of producing milk in the U.S. have increased significantly over the past few years, particularly in areas such as interest on operating capital, repairs and custom services. These rising expenses are forcing dairy farmers to make smarter decisions about where to focus their efforts to control costs without compromising the quality of their product or the health of their herd.
Figure 1 shows how much some individual items have increased between 2021 and 2023. While being aware of which costs have increased the most is important, even more critical is knowing which to tackle first since it hits your income harder.
Table 1 provides a comprehensive overview of the operating costs and total costs of production for dairy farming from 2021 to 2023, as reported by the USDA Economic Research Service (ERS). Among these expenses, feed stands out as the largest itemized cost, accounting for a substantial 77.2% of operating costs and 50.7% of total costs in 2023. This highlights the critical role that feed plays in the overall finances of dairy operations.
Given its significant impact on both cost structure and cow health, it is crucial to approach feed management with caution. While there may be opportunities for minor adjustments – such as optimizing feed additives or improving feed efficiency – care must be taken to ensure these changes do not negatively affect animal health or milk production. Any alterations in the feed strategy must be backed by data demonstrating clear benefits for the well-being of the cows, which is key to maintaining productivity and profitability on the farm.
Continue reading this article published in Progressive Dairy.
