Feed represents more than half of a typical dairy’s operating costs. When milk prices decline, cutting feed costs is often a tempting first strategy for producers and their nutrition consultants. However, when it comes to nutrition management, short-term cost cutting may lead to long-term and expensive consequences.
An analysis of recent trends in dairy consumption suggests increased use of butter and other higher-fat dairy products has added $2.2 billion to dairy farmers’ milk checks, say officials with Dairy Management Inc. (DMI) and the National Milk Producers Federation (NMPF).
The pricing signal has now changed. Protein is no longer the most valuable milk component; butterfat is now milk’s most valuable component. Skim and the components in the skim, protein and other solids, are now the minority value.
Even though U.S. milk production surged 2.5% in October, shrinking production in other regions of the world and increasing global demand mean milk prices likely will improve significantly in 2017. USDA is projecting about $1/cwt increase in the All-Milk Price in 2017.
