2018 September Board Book

Dairy Review Volume 22 Issue 6 California

June 2018

California Milk Production Cost Comparison, 2016 and 2017 In 2017, milk sold per cow decreased by 1.9 percent compared to the previous year. Despite this decrease in milk production, the total cost to produce a cwt. of milk decreased by 2.5 percent compared to a year ago. All cost categories on a cost per cwt. decreased or remained relatively unchanged, except labor and operating costs. Labor costs increased by 7.5 percent due to higher hourly wages. Operating cost increased by 4.8 percent due to rising costs for utilities, supplies, fuel, etc. The main driver in lower cost per cwt. was lower feed prices, which decreased by 4.9 percent. The return on investments & management costs decreased by 0.7 percent, while marketing costs remained unchanged compared to a year ago.

Cost Comparison Summary, 2017 (Cost per Hundredweight)

Cost Comparison Summary, 2016 (Cost per Hundredweight)

Labor $1.74

Labor $1.87

Replacements $1.88

Replacements $2.10

Feed $8.77

Feed $9.22

Operating $2.92

Operating $3.06

Marketing $0.55

Marketing $0.55

Return on Investment & Management $1.40

Return on Investment & Management $1.41

Milk Production Cost Comparison Summary for California 2016-2017 California Milk Production Cost Comparison, by Region, 2016-2017 Total Feed Costs Total Hired Labor Costs Total Replacement Costs Total Operating Costs Total Milk Marketing Costs Allowance: ROI & Management Total Feed Costs Total Hired Labor Costs Total Replacement Costs Total Operating Costs Total Milk Marketing Costs Allowance: ROI & Management

North Coast

North Valley

South Valley

Southern California

Statewide

Weighted Average

Quarter

2016

2017

2016

2017

2016

2017

2016

2017

2016

2017

Dollars per Hundredweight

1st Quarter Total Costs

$28.57 $29.08 $17.07 $15.76 $16.45 $15.41 $16.28 $15.41 $16.94 $15.85

Total Costs & Allowances*

$30.65 $31.17 $18.53 $17.15 $17.95 $16.87 $17.77 $17.04 $18.44 $17.30

2nd Quarter Total Costs

$26.50 $27.00 $16.72 $15.44 $16.12 $15.38 $15.53 $15.02 $16.54 $15.65

Total Costs & Allowances*

$28.30 $28.94 $17.99 $16.75 $17.46 $16.76 $17.00 $16.50 $17.87 $17.01

3rd Quarter Total Costs

$27.04 $26.80 $16.80 $16.30 $16.43 $16.39 $16.36 $16.10 $16.82 $16.59

Total Costs & Allowances*

$28.80 $28.69 $18.11 $17.66 $17.82 $17.83 $17.94 $17.65 $18.19 $18.00

4th Quarter Total Costs

$28.49 $28.39 $16.44 $16.78 $15.81 $16.27 $15.45 $15.86 $16.31 $16.72

Total Costs & Allowances*

$30.47 $30.29 $17.85 $18.12 $17.29 $17.66 $17.10 $17.37 $17.78 $18.11

* Includes an allowance for management and a return on investment.