Calendar | Logan County Extension Unit | Ag News Elsewhere (fresh daily from the Web)

Dairy returns          Send a link to a friend

[OCT. 28, 2005]  URBANA -- For the average Illinois dairy producer, 2004 was one of the best years for profits in the past 20, according to a University of Illinois Extension study. The returns producers received per cow were the second-highest in the last two decades.

"Record-high milk prices more than offset increased costs, resulting in total returns for dairy producers exceeding total economic costs in 2004," said Dale Lattz, U of I Extension farm management specialist who did the study. "The average net price received per 100 pounds of milk in 2004 was $16.37, which was more than the total costs of $15.30.

"On a per-cow basis, total returns from milk were $3,189, compared to the total cost to produce milk of $2,980 per cow."

Lattz noted that in three of the last five years total costs have exceeded total returns. Only four times in the past 10 years have total returns exceeded total economic costs.

The study was prepared from data generated by the Farm Business Farm Management Association throughout Illinois. The complete report can be found online at
. Click on the report titled "Costs to Produce Milk in Illinois." [To download Adobe Acrobat Reader for the PDF file, click here.]

Illinois dairy cows were also more productive in 2004, according to the study.

"Milk production per cow averaged 19,480 pounds," said Lattz. "This average is 127 pounds more per cow than in 2003. It was the third-highest level ever. The highest was in 2001, when milk production was 20,175 pounds per cow."

The 2004 returns were higher than the 2003 returns by $2.48 per 100 pounds produced, due to higher milk prices. The average net price received for milk was $16.37 per 100 pounds. This is $3.86 per 100 pounds, or 31 percent, higher than the average price received in 2003.

[to top of second column in this article]

"Based on 19,500 pounds of milk produced per cow, this increase in price increased total returns per cow by $753," said Lattz. "Dairy assistance payments from the Farm Service Agency and patronage returns related to the dairy enterprise were not included in our figures. This would add about 55 cents per 100 pounds of milk produced to returns."

The higher milk prices were essential because producers also faced increased feed and nonfeed costs for their enterprises. Feed costs in 2004 averaged $7.61 per 100 pounds of milk produced in 2004, compared with $6.95 in 2003. Nonfeed costs per 100 pounds of milk produced were $7.69 in 2004, compared with $6.97 in 2003.

"Profit margins for dairy producers in 2005 should remain in the black," said Lattz. "Lower milk prices should be offset by lower feed costs.

"The average price received for milk in 2004 was 31 percent higher than the average in 2003. The average milk price for 2005 is projected to be about 4 to 5 percent less, or a little under $1 per hundredweight, than the average for 2004."

Lattz noted that while milk prices should decrease, feed costs should also be lower than in 2004.

[News release from the University of Illinois College of Agricultural, Consumer and Environmental Sciences]

< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor