A recent analysis of Illinois dairy farms finds even though
milk prices increased by nearly 14 percent in 2019, the economic cost to
produce milk was below prices received.
“The milk price in Illinois was $18.72 which was still below
our total economic cost of $21.34 and that’s labor, feed, and all the other
non-feed costs.”
Bradley Zwilling with the Illinois Farm Business Farm
Management (FBFM) Association tells Brownfield broken down further, their
annual member survey found farms were losing more than $600 per cow for
producing milk.
“The largest expense on a dairy farm is the feed, in 2019 it
was 52% of the total cost,” he says.
When accounting for just cash costs, not labor, Zwilling
says returns over the past decade, expect during 2012, have been at breakeven
or positive which is why he strongly suggests farmers dissect operating
expenses to stay afloat.
Zwilling is projecting milk prices to decline by about one
percent for 2020 and says with increasing feed costs, 2021 prices could decline
an additional nine percent.
More than 20 Illinois dairy farms were part of the economic
analysis in 2019 compared to the nearly 1,750 operating in the state.
Brownfield AgNews