1. Joe Horner Agricultural Economist University of Missouri
Impact of Dairy Prices on Farm US Dairy Farmer’s Perspective from Lower Midwest
Joe Horner
Agricultural Economist
University of Missouri

2. Dairy Farms Face Falling Feed Prices
Dairy Feedstuffs
Price per Ton (as fed)
US $/Short Ton
NZ $/Metric Ton
Corn Silage
$40
$65
Corn Grain (Maize)
$140
$226
Alfalfa Hay
$180
$291
Soybean Meal
$390
$631
Soyhulls
$120
$195
Corn Gluten Feed
$135
$218
Dried Distillers Grains
$165
$267
Note: Missouri feed prices as of , using current exchange rates.

3. Milk Prices in a NZ Perspective
Period
Missouri Milk Prices
US$/100 Lbs.
US$/Kg Milksolids
NZ$/Kg Milksolids
2009
$12.53
$3.53
$5.56
2010
$16.45
$4.64
$6.43
2011
$20.14
$5.68
$7.18
2012
$18.05
$5.09
$6.28
2013
$20.31
$5.73
$6.98
2014
$24.80
$6.99
$8.42
2015
$17.88
$5.04
$7.41
2016 Thru April
$15.36
$4.33
$6.37
2016 2nd Half*
$15.61
$4.40
$6.47
Notes: US Mailbox Milk Prices, Southern Missouri. Conversion to NZ measures using 7.8% milk solids and average annual and current exchange rates.
* Forecasts based upon Class III futures as of , plus expected historical basis.

4. Historical USDA Income over Feed Cost (MPP) Margin Calculations for Perspective
Note: April and May 2016 margins estimated

5. USDA MPP Income over Feed Cost Margins (US$/100 lbs.)
Note: April and May 2016 margins estimated

6. US Dairy Sector Key Trends
Declining profit margins
Milk prices trending lower
Feed costs trending higher
Margins squeezed
Not as bad as in 2009 or 2012
Milk production still growing
Suppressed in most Western states
Continued growth in Great Lakes traditional dairy states
Big corn crop timely planted, El Nino turning to La Nina weather concerns