Extension/Research Information

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 Cow 2 ---

-

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 Cow 6

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 Charge 11

60 hrs.

10.00

/hr

600

600

600

600

Interest & Insurance on Cow and Calf 12

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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