Illinois dairy analysis finds thin profits if any
A recent analysis of Illinois dairy farms finds even though milk prices increased by nearly 14 percent in 2019, the economic cost to produce milk was below prices received.
“The milk price in Illinois was $18.72 which was still below our total economic cost of $21.34 and that’s labor, feed, and all the other non-feed costs.”
Bradley Zwilling with the Illinois Farm Business Farm Management (FBFM) Association tells Brownfield broken down further, their annual member survey found farms were losing more than $600 per cow for producing milk.
“The largest expense on a dairy farm is the feed, in 2019 it was 52% of the total cost,” he says.
When accounting for just cash costs, not labor, Zwilling says returns over the past decade, expect during 2012, have been at breakeven or positive which is why he strongly suggests farmers dissect operating expenses to stay afloat.
Zwilling is projecting milk prices to decline by about one percent for 2020 and says with increasing feed costs, 2021 prices could decline an additional nine percent.
More than 20 Illinois dairy farms were part of the economic analysis in 2019 compared to the nearly 1,750 operating in the state.