Dozens, if not hundreds, of variables make a single precise answer impossible for all farms, but there is one statement that applies to everyone: It was expensive.
According to income and cost data for clients of Mulder and Co. LLC, the largest dairy accounting firm in the U.S., cost of production in 2013 ranged from $17.85 to $20.99 per hundredweight in seven Western states and two Central Plains regions that the firm summarizes each year. The five biggest individual costs were grain, hay and silage, labor, replacements, and interest and rent.
When all nine figures are averaged together, it works out to $19.38. However, that doesn't include owner living expenses and repayment of debt principal. It must also be remembered that average herd size among the firm's clients is more than 10 times the U.S. average.
According to the data summaries, production costs in 2013 were higher than in 2012 ($18.71), but near-record Class III milk prices meant dairy operating margins were better. Average net profit per cow in 2013 was $267 versus $46 in 2012.
Bruce Miles, a partner at Genske, Mulder and Co., says whether feed is purchased or grown is having a greater impact on profitability.
"To have a cost advantage, you've got to be able to supply feed yourself or have access to it. Things are heading in the direction of dairies growing more of their own and buying less, but not everyone can do that."
