A lower-test herd shipped $212,000 more than its 4.25% neighbor. If you’re chasing percentages, this barn math is your wake-up call.
Executive Summary: June 2025 FMMO reforms and the 2025 NM$ revision have flipped the script so that fat and protein pounds shipped, not test percentages, drive your milk check. A side‑by‑side model of two 500‑cow Upper Midwest herds shows the lower‑test herd (4.05% fat at 82 lbs) shipping $212,000 more fat and protein value per year than a 4.25% herd at 72 lbs, using the USDA’s NM$ planning prices. NM$ now gives 31.8% weight to fat and only 3.2% to volume, which means “percent‑only” bulls with negative Milk PTAs can quietly cut lifetime component revenue even when their proofs look good on fat percentage. On the ration side, C16:0 supplement programs that add +0.10 fat test often cost three to four times more than the extra fat is worth once you do the barn math at $0.65–$1.00/cow/day. Your federal order then decides how much of that value you actually see: the same 0.3‑point fat gain is worth roughly $94,500 in a Wisconsin MCP plant but closer to $54,700 in a fluid‑heavy Florida order. The article walks through these calculations step by step and finishes with a four‑point playbook — track CFP, cull on pounds, match spending to your order, and pick sires on component pounds — so you can stress‑test your own numbers instead of trusting what the bulk tank report says.
A 500-cow Upper Midwest dairy can leave $212,000 in combined fat and protein revenue on the table by chasing a higher bulk tank test instead of shipping more component pounds. That’s not a hypothetical — it’s what the math shows when you model two herds side by side using USDA’s own NM$ planning prices.
A nutritionist working with herds in the region described the pattern: a 500-cow operation watches butterfat climb from 3.9% to 4.1% over six months. Everyone celebrates. Then somebody runs the real numbers — 78 lbs/day at 3.9% versus 74 lbs/day at 4.1% — and realizes they’re shipping nearly identical fat pounds. The test improved. The milk check didn’t.
What June 2025 Changed — And What It Cost
USDA’s April 2025 Net Merit revision pushed butterfat to 31.8% relative emphasis in NM$ — up from 28.6% in 2021 (VanRaden et al., NM$8 and NM$9). Protein carries 13.0%. Milk volume? Just 3.2%. The economic values are blunter still: fat at $5.01 per PTA pound, protein at $3.33, volume at $0.022.
Then the FMMO reforms hit on June 1, 2025. AFBF economist Daniel Munch calculated that in the first three months, producers lost more than $337 million in combined pool value — class price reductions of 85 to 93 cents per hundredweight depending on the order (AFBF Market Intel, September 2025). As Munch told Brownfield Ag News, the higher make allowances “more than wipe out” the gains from other reforms.
Upper Midwest Order 30 absorbed the worst of it. Roughly 69% of pooled milk went to Class III cheese in October 2025, with just 11.3% to Class I fluid (FMMA30 Dairy News, November 2025). That heavy cheese utilization means component value flows directly to producers — but the make allowance increase hit just as directly.
And regional structure amplifies everything. A 0.3-point butterfat improvement on a 500-cow herd captures an estimated $94,500 annually in Wisconsin’s MCP system versus approximately $54,700 in Florida’s skim-fat system. Same genetics. Same nutrition. A $40,000 gap from the order structure alone.
How $212,000 Disappears Into a Better Bulk Tank Test
Two 500-cow herds, both running 305-day lactations, were modeled using NM$ 2025 planning prices of $2.90/lb fat and $2.08/lb protein (VanRaden et al., January 2025). These are multi-year forecast prices; USDA built the index on non-spot prices. Actual FMMO butterfat ran about $2.95/lb in January 2025 and fell to approximately $1.45/lb by January 2026. The pounds principle holds at any price level; the dollar gap moves with the market.
| Metric | Herd A (High Test) | Herd B (High Volume) | Difference |
|---|---|---|---|
| Milk/Cow/Day | 72 lbs | 82 lbs | +10 lbs |
| Fat Test | 4.25% | 4.05% | −0.20 points |
| Protein Test | 3.05% | 3.05% | Same |
| Annual Fat Shipped | 466,650 lbs | 506,453 lbs | +39,803 lbs |
| Annual Protein Shipped | 334,890 lbs | 381,403 lbs | +46,513 lbs |
| Fat Revenue @ $2.90/lb | $1,353,285 | $1,468,712 | +$115,427 |
| Protein Revenue @ $2.08/lb | $696,571 | $793,317 | +$96,746 |
| Combined F+P Revenue | $2,049,856 | $2,262,029 | +$212,173 |
Herd B — the lower-test herd — ships nearly 40,000 more pounds of fat and over 46,500 more pounds of protein. At actual January 2025 FMMO prices ($2.95 fat, $2.33 protein), the gap widens to roughly $226,000 because protein is priced higher than the NM$ assumption.
Three Places the Trap Compounds Silently
Genetics. The 2025 NM$ penalizes “percent-only” bulls with deeply negative Milk PTAs. A bull posting +0.25% fat but −500 lbs Milk loses on all three lines — less volume means fewer total fat pounds, fewer protein pounds, and less volume revenue. A bull at +0.08% fat with +1,200 lbs Milk often ships more total component pounds per lactation. That’s exactly what the $5.01/lb and $3.33/lb economic values reward.
Nutrition. Research from Prof. Kevin Harvatine’s lab at Penn State found C16:0 palmitic acid boosts fat test by +0.30 to +0.50 percentage points at ~2% of diet DM (Dairy Global, November 2023). Michigan State’s de Souza lab (J. Dairy Sci., 2024) showed mid-lactation cows at 40–50 kg/day responded best. But supplements run $0.65–$1.00/cow/day, and the protein test can slip 0.02–0.03 points. If milk yield doesn’t climb with the fat test, the P&L can go negative while the bulk tank report looks great.
Culling. Cow 1 at 90 lbs/day and 3.8% fat ships 3.42 lbs fat/day. Cow 2 at 65 lbs/day and 4.3% ships 2.80 lbs. The “low test” cow delivers 0.62 more lbs of fat daily — about $550/year at $2.90/lb. If your cull list sorts by test instead of CFP (combined fat and protein pounds shipped), you may be shipping the wrong animals.
Does Chasing +0.1% Fat Actually Pay Under Component Pricing?
Full walkthrough: a program promising +0.10 points fat test on 500 cows averaging 75 lbs/day.
Value: 75 × 0.001 = 0.075 lbs extra fat/cow/day → 37.5 lbs/day × 305 = 11,438 lbs/year → 11,438 × $2.90 = ~$33,170
| Cost/Cow/Day | Annual Cost | Net vs. $33,170 Gain |
| $0.65 (low end) | $99,125 | −$65,955 |
| $0.80 (midpoint) | $122,000 | −$88,830 |
| $1.00 (top) | $152,500 | −$119,330 |
Break-even: about $0.22/cow/day. That’s three to four times below what any published C16:0 program costs. If a tenth of a point on fat test is the only gain — and you’re losing milk or protein in the process — the math is underwater.
The Shift: From Test Reports to Pounds Shipped
For herds getting ahead of this, the pivot starts with one change: they stop celebrating test and start tracking CFP per cow per day. Instead of “Our herd’s at 4.1% fat,” they’re asking: “How many pounds of fat and protein did we ship per cow today?”
That reframes every proposal — a new sire lineup, a nutrition tweak, or a cull list — around one question: does it raise CFP?
The Playbook: Four Ways to Manage for Pounds
1. Make CFP your primary metric. Calculate combined fat + protein pounds per cow per day, minimum monthly. 30-day action: pull last month’s data and establish your baseline. Trade-off: watching fat test flatten while CFP climbs feels wrong. It’s not.
2. Rebuild the cull list around CFP. Rank by shipped CFP first, then overlay fertility, health, and age. 90-day action: audit last quarter’s culls against CFP. Trade-off: you still need to watch for milk fat depression — tests aren’t irrelevant, just not the sorting metric.
3. Match spending to what your order actually pays. Order 30’s 69% Class III utilization means component value flows through relatively directly. In skim-fat orders with heavy Class I, the math is different. 30-day action: call your field rep and ask how much component value hits your check. Trade-off: even within the same order, different handlers deliver different capture.
4. Run genetics and nutrition on parallel tracks. Long-term: component-pound genetics (NM$, CFP). Short-term: nutrition for quick wins. 365-day action: rebalance your sire lineup at the next proof run using pound PTAs, not percentage PTAs. Trade-off: if component prices sag — January 2026 butterfat at ~$1.45/lb is a reminder — nutrition plays may need to scale back. The genetics keep compounding regardless.
What This Means for Your Operation
- Run your own Herd A vs. Herd B table. Plug in your daily lbs, fat test, protein test, cow count, and your most recent FMMO component prices. If a lower-test scenario ships more pounds, you’ll need to decide.
- The break-even for a +0.1% fat program is $0.22/cow/day. Published C16:0 costs range from $0.65 to $1.00. If you’re spending three to four times the break-even, the fat gain alone doesn’t cover it.
- Audit your culls. Pull three to five cows you shipped for “low components” and check their CFP against cows you kept. If CFP sorts the list differently than test did, rebuild it.
- Know your order structure. Order 30’s 69% Class III means the component value flows through. If you’re in a fluid-heavy order, your capture math is different — and so is every component investment decision.
Key Takeaways
- If your success metric is fat test rather than fat and protein pounds shipped, you’re managing to the wrong number. The post-June 2025 FMMO system and the 2025 NM$ ($5.01/lb fat, $3.33/lb protein) both reward pounds.
- The $212,000 gap is $115,427 from fat and $96,746 from protein at NM$ planning prices. At actual January 2025 FMMO prices, it’s closer to $226,000.
- The 2025 NM$ penalizes percent-only bulls. Fat emphasis jumped from 28.6% to 31.8%, but milk volume still carries a positive value. A sire whose Milk PTA drags may produce daughters that ship fewer total component pounds.
- Regional structure reshapes every component decision. A 0.3-point fat gain isn’t worth the same $94,500 in Wisconsin as it is in a fluid-heavy Southeast order.
The Bottom Line
The herds that come out of this stronger won’t necessarily be the ones with the prettiest bulk tank reports. They’ll be the ones that ran the barn math and were honest about what actually pays. So — where does your herd sit: managing for the number that feels good, or the pounds that move the check?
Complete references and supporting documentation are available upon request by contacting the editorial team at editor@thebullvine.com.
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