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Feed cost per hundredweight of milk

A simple calculator for the number every dairy should know, with the formulas out in the open.

Feed is the largest cost on most dairies, so one number is worth tracking every month: what it costs to feed for each hundredweight (cwt, 100 pounds) of milk shipped. Pair it with the milk price and you get income over feed cost, often shortened to IOFC.

The formulas

• Feed cost per cwt = feed cost per cow per day ÷ milk per cow per day × 100
• Milk income per cow per day = milk per cow per day × milk price per cwt ÷ 100
• IOFC per cow per day = milk income per cow per day − feed cost per cow per day
• IOFC per cwt = milk price per cwt − feed cost per cwt

The “fill in an example” button uses round numbers (80 lb of milk, $8 of feed, $20 per cwt) purely to show the arithmetic. They are not market prices or benchmarks.

Using it well

• Use the same basis every time. Decide whether you count only the lactating-cow ration or all feed on the farm, then stick with it so months compare fairly.
• Use your own feed costs. Home-raised forage should be valued at what it costs you to grow and store, or at what you could sell it for. Be consistent.
• Watch the trend, not one day. Weekly or monthly averages smooth out noise from weather, ration changes and group movements.
• IOFC is not profit. Labor, health costs, replacements, interest and everything else still come out of it.

Where milk prices come from

Official price reports and program details change, so check them directly instead of relying on a number printed on a web page. USDA Agricultural Marketing Service publishes dairy market reports, and the Farm Service Agency runs the Dairy Margin Coverage program, which is built around the same idea of margin over feed. Confirm current terms with your FSA office.