Concentrates and grain requirements increase as milk production increases. However, as shown in Table 1, the value of increased production generally will offset the added feed cost associated with the higher production levels. Table 3 shows the amounts and cost of feed used for the different production levels in this budget. Feed costs are based on market prices, thus, for dairy operations that produce some, or all, of their grain and forage requirements this allocates the cost of producing the feed to the dairy enterprise. Returns Producers receive income primarily from the sale of milk.
Additional income is received from the sale of calves and culled breeding stock.
In this budget it is assumed that replacement heifers are purchased and thus all calves are sold. Cull income is assigned to 28 percent of herd annually. The other 5 percent represents death loss and cows with no salvage value. Because milk sales make up the majority of income, returns are very sensitive to milk prices. This text was extracted from the publication, MF2441.