Lower Feed Costs, Higher Beef Prices Helping Iowa Dairies Break Even
Iowa dairy farmers are seeing a small profit on milk right now — and Iowa State University Extension dairy specialist Fred Hall says it’s partly because of what’s happening elsewhere in agriculture.
Hall says lower grain prices have helped dairy operations by cutting feed costs. With corn prices down, he says it’s become less expensive to feed cows for milk production, allowing many dairies to hold onto a modest margin.
At the same time, a drop in overall cattle numbers has pushed beef prices higher — and Hall says that’s creating another boost for dairy producers.
Most dairy cows are bred to calve about once a year, and Hall says selling calves has become a more significant source of income. He says the value of calves — now often topping a thousand dollars — can add roughly two-and-a-half to three-and-a-half dollars per hundredweight of milk to a dairy’s bottom line.
Hall says many dairy farmers are adjusting their breeding strategies to take advantage of the strong beef market. He says producers are breeding only their best cows with dairy bulls to produce replacement heifers, while using beef bulls for the rest of the herd.
Those crossbred calves, Hall says, bring in far more money than traditional dairy bull calves — especially since dairies don’t need large numbers of bulls.
Hall says it’s an unusual situation where dairies are benefiting from challenges in other parts of agriculture, but for now, the combination of cheaper feed and stronger beef prices is helping many Iowa dairy farms at least break even — and in some cases, turn a small profit.
