Farm Horizons, June 2015
US dairy market relatively strong, according to the MN Dept. of Agriculture
By Tara Mathews
The price farmers are paid for the milk their cows produce depends on many factors, including market conditions, the creamery they contract through, input costs, supply and demand, and the cost of feed for cattle.
“Right now, the US market continues to be reasonably strong, and the prices are better than the global market,” Clint Fall, Minnesota Department of Agriculture first district chief executive officer said.
Dairy farmers might say the price they receive for milk is down from last year, which is true, but milk prices reached a record high in 2014, according to Fall.
“The prices aren’t quite what they were in 2011 and 2012, but it’s close,” Fall commented. “Prices began to climb in 2013 and increased more in 2014.”
The average price paid to farmers per 100 weight in April 2015 ranged between $15.60 and $17.20, depending on the creamery, grade of milk, and premiums paid to farmers.
“In April 2014, with premiums, dairy farmers were getting paid upwards of $26 per 100 weight,” Fall noted.
The United States Department of Agriculture lists the class three price for April 2015 at $15.81 per 100 weight.
Milk is classified based on its protein and butterfat content; class three contains about three percent protein and 3.58 percent butterfat, according to Fall.
The way milk is measured between creameries and dairy farmers is different than the way an average consumer measures milk.
Farmers are paid for milk by the “100 weight” or 100 pounds.
Gallons of milk weigh differently depending on the amount of milk fat. For example, a gallon of whole milk would weigh more than a gallon of 1 percent or skim milk.
On average, a gallon of whole milk weighs 8.6 pounds, meaning there are roughly 11.6 gallons of whole milk in 100 pounds.
A farmer receives about 30 cents per dollar spent for gallons of milk purchased by consumers, according to the USDA website.
The cost of production is comparatively lower than in previous years, Fall said.
There are six main breeds of dairy cattle: Ayshire, Brown Swiss, Guernsey, Holstein, Jersey, and milking shorthorn. There is a seventh breed commonly used, the red-and-white, which is a variation of the Holstein.
Cows produce milk once they have given birth to a calf. About 10 months after calving, the cows’ milk production begins to decrease.
Dairy cows are generally milked two to three times per day, and produce about six to seven gallons per day. They eat about 100 pounds of a combination of hay, grain, sileage, and proteins per day.
Cows will calf about 12 to 14 months after the birth of their last calf, meaning there can be a two to four month period where a cow does not produce milk.
Dairy cows can live up to 20 years, according to Midwestdairy.com.
Cost to consumers
The average gallon of milk cost varies greatly, depending on where consumers purchase the milk, as well.
Local grocery stores tend to be between $3 and $4 per gallon; and convenience stores are ranging from $2.50 to $4.70 per gallon, depending on whether the store has deals or sales at the time. Many stores offer 2 gallons for $5 or $6, which is generally the most savings for consumers.
“The milk price to consumers is just one part of the equation,” Fall noted.