Ohio Enterprise Budgets

Ohio State University Extension
Department of Agricultural, Environmental, and Development Economics
The Ohio State University

1999 DAIRY COW AND REPLACEMENT BUDGET -- LARGE BREED
Forage= 80% Corn Silage and 20% Hay


-	-	-	-	PRICE PER		--- Pounds of Milk Sold Per Cow² ---				-	YOUR
ITEM		-	-	UNIT		18,000	21,000	24,000	27,000	-	BUDGET


RECEIPTS
	Milk Sales ³			$13.00	/cwt	$2,340	$2,730	$3,120	$3,510
	Bull Calf ⁴			75	/head	34	34	34	34
	Heifer ⁵					28	34	37	40
	Cull Cow⁶			40	/cwt	185	185	185	185

TOTAL RECEIPTS						2587	2983	3375	3768

Variable Costs
	Feed ⁷
		Hay Equiv.		110	/ton	432	444	460	476
		Corn Silage		26.28	/ton	250	265	278	289
		Corn		2.69	/bu	173	192	212	234
		Soybean Meal 48%		0.10	/lb	225	260	294	326
		BiCarb		0.16	/lb	6	7	8	9
		Limestone		0.05	/lb	8	8	9	8
		Mag.Ox.		0.17	/lb	2	2	2	2
		Salt TM		0.12	/lb	17	17	17	17
		DiCal Phos		0.20	/lb	28	28	28	29
		Selenium 90		0.10	/lb	16	16	16	16
		Vitamins A,D,E		0.38	/lb	8	8	8	8
		Feed Additives		0.45	/lb	0	0	78	78
		Milk Replacer		0.85	/lb	13	13	13	13

	TOTAL FEED COSTS					1179	1261	1422	1506

	Other Variable Costs
		Veterinary & Medicine				75	80	85	90
		Breeding, Milk Testing & Reg.				35	40	45	50
		Utilities				64	66	68	70
		Bedding ⁸				32	32	32	32
		Misc. & Supplies				106	106	106	106
		Marketing & Hauling Costs		0.50	/cwt	90	105	120	135
		Posilac® (bST) ⁹		5.80	/dose	93	93	93	93
		Int. on Oper. Capital ¹⁰		9	%	71	75	83	88

	TOTAL OTHER VARIABLE COSTS					566	597	632	663

TOTAL VARIABLE COSTS						1745	1858	2055	2169

Fixed Costs
	Labor Charge¹¹		60 hrs.	10.00	/hr	600	600	600	600
	Interest & Insurance on Cow and Calf¹²					93	107	114	120
	Equipment Charge ¹³			$1,400	/cow	246	246	246	246
	Building Charge ¹⁴			$2,300	/cow	336	336	336	336
	Management Charge ¹⁵			5%		129	149	169	188

TOTAL FIXED COSTS						1405	1438	1465	1491

TOTAL COSTS						3150	3296	3519	3660

RETURN ABOVE VARIABLE COSTS						842	1125	1321	1599
RETURN ABOVE TOTAL COSTS						(563)	(313)	(144)	108
/
						------- Per cwt of Milk Produced -------
TOTAL RECEIPTS						14.37	14.20	14.06	13.96
FEED COSTS						6.55	6.00	5.93	5.58
TOTAL VARIABLE COSTS						9.69	8.85	8.56	8.03
TOTAL COSTS						17.50	15.70	14.66	13.55

¹	Enterprise budget includes the costs of a one cow lactation plus dry period as well as a replacement heifer. Dairy cows are
	presumed to be in the herd for three years. As a result, the dairy cow and replacement budgets include 0.38 of the feed
		requirements of raising a heifer. Heifer raising costs and feed requirements are given in the heifer budgets.
²	"Milk Sold" equals the average pounds sold per cow over a 12-month period. It is about 95 percent of production as
		reported by the DHIA Rolling Herd Average.
³	The milk price is stated as the gross per cwt price less promotion and government assessment.
⁴	Bull calf receipts assume that 0.45 bulls are sold per cow per year. The 0.45 is based on a 13 month calving interval, a 2
	percent death loss, and 50 percent of the calf crop (i.e., 0.45 = (12 months in a year / 13 month calving interval)
	x 0.98 calves born live x 0.50 of calves born are bull calves). Bull calf price is $75 per head. Receipts equal 0.45 x $75.
⁵	Heifer receipts are based on 11 percent cull rate. Of the 11 percent, 6 percent are sold at birth and 5 percent are sold
		at springing. Heifer calf prices and springing heifer prices are shown below:

				--------------milk production--------------
				18,000	21,000	24,000	27,000

	Heifer Calf			$100	$135	$145	$155
	Springing Heifer			$1,000	$1,200	$1,300	$1,400

⁶	Cull cow receipts are based on a 33 percent cull rate, sale price at $40 per cwt, and culled animals weighing
		1,400 lbs. Cull cow receipts equal 0.33 x $0.40/lb x 1,400 lbs.
⁷	Feed costs are calculated assuming 10 percent and 3 percent losses for forages and other feeds, respectively. Values
		not in italics give requirements for the cow and replacement. Values in italics are for the cow only.
		Corn silage priced at cost of production ($21.28/ton) + $5 handling charge. Corn is priced at cost of production.
		Costs of production can be found in the Ohio Crop Enterprise Budgets. Feed additives were assumed to be fed
		to the two highest production levels and cost $0.45/lb. Feed additives could consist of any combination of
		supplemental fat, special trace mineral supplements, direct-fed microbials, etc.

	Item		Price	Unit	18,000		21,000		24,000		27,000

	Hay Equiv.		$110.00	/ton	3.93	2.62	4.04	2.73	4.18	2.87	4.33	3.02
	Corn Silage		$26.28	/ton	9.51	7	10.08	8	10.56	8	11.01	8.71
	Corn		$2.69	/bu	64	49	71	56	79	63	87	71
	Soybean Meal		$0.10	/lb	2251	2082	2603	2434	2936	2767	3257	3088
	BiCarb		0.16	/lb	38	38	44	44	50	50	56	56
	Limestone		0.05	/lb	168	148	154	134	171	151	162	142
	Mag.Ox.		0.17	/lb	14	14	14	14	14	14	14	14
	Salt TM		0.12	/lb	145	126	145	126	145	126	145	126
	DiCal Phos		0.20	/lb	138	119	138	119	138	119	143	124
	Selenium 90		0.10	/lb	161	94	161	94	161	94	161	94
	Vits. A,D,E		0.38	/lb	21	16	21	16	21	16	21	16
	Feed Additives		0.45	/lb	0	0	0	0	174	174	174	174
	Milk Replacer		0.85	/lb	15		15		15		15

⁸	Bedding is assumed to be sand. Adjust your bedding costs accordingly.
⁹	Posilac® used only at 24,000 and 27,000 lb production levels; 1 dose every two weeks for 32 weeks starting
		at 63rd day of lactation.
¹⁰	Interest costs are based on a 9 percent interest rate. Interest costs are calculated on 50 percent of all variable costs
		excluding marketing and hauling.
¹¹	Part or all of labor may be a variable cost if paid labor varies with cows milked. It's a fixed cost if labor costs do
		not change with cows milked. Labor charge includes workers compensation, social security, and fringe benefits.
¹²	This cost is based on a 9 percent interest rate and a 0.43 insurance rate. The cow's value is based on an average of the
	springing heifer price (see footnote 5) and the cull cow price (see footnote 6). The heifer's value is based on an average
	of the calf price and springing heifer price. Total value on which the interest and insurance charge is based is the cow's
		value plus 0.38 times the heifer's value.
¹³	Equipment charge equals 17.6% of new equipment costs. Costs include interest, insurance, depreciation, and repairs.
		New equipment costs equals $1,400 per cow and heifer. Equipment includes milking parlor ( 8 stalls), feed processing
		and distribution system, manure/waste system, tractor/scraper, 1/2 pickup, and other miscellaneous items.
¹⁴	Building charge equals 14.7% of new building costs. New building costs equal $2,300 per cow and heifer.
		Costs include interest, insurance, depreciation, and repairs. Buildings include free stall barn, heifer barn, calf shelter,
	feed storage, milking facilities, and fencing/corrals.
15	Management charge is 5 percent of total receipts.

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Ohio Enterprise Budgets

Ohio State University Extension Department of Agricultural, Environmental, and Development Economics The Ohio State University

Ohio State University Extension
Department of Agricultural, Environmental, and Development Economics
The Ohio State University