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Archive for dairy feed costs

Why High Oleic Soybeans Are About to Change Everything for Dairy Producers

Friday, July 11th, 2025

Michigan State just proved 10+ lb milk yield bumps from high oleic soybeans—without expensive roasting gear. Game changer for feed efficiency.

EXECUTIVE SUMMARY: Look, I’ve been tracking feed technologies for years, but this high oleic soybean story? It’s different. Michigan State’s research proves you can get 3.5 to 10+ pound milk increases without breaking the bank on roasting equipment—just grind the beans properly and you’re golden. We’re talking about 75% oleic acid content that lets you feed up to 6 pounds per cow daily compared to the 3-4 pound ceiling with conventional soybeans, and the feed conversion improvements alone can trim costs while boosting production. The economics are compelling too—operations are seeing potential impacts of $50,000+ annually just from better efficiency and reduced need for expensive fat supplements. What really gets me excited is how this technology has moved from university research to real-world application faster than anything I’ve seen in dairy nutrition. Global adoption is exploding because the science actually works on commercial farms, not just in research trials. Honestly, if you’re not at least testing this technology in 2025, you’re missing a genuine competitive advantage.

KEY TAKEAWAYS

  • 10.2 lb ECM boost with roasted beans, 3.5 lb with raw – Start with raw ground beans (quarters or eighths) through your existing roller mill to test response before investing in roasting equipment—current tight margins make this low-risk entry point essential.
  • Feed up to 6 lbs/cow daily without milk fat depression – Replace expensive palm fat supplements and reduce canola inclusion rates by properly sourcing high oleic varieties with 75% oleic acid content—producers report $0.75-$1.00/cow savings immediately.
  • Supply chain premium running $1.25/bu over Chicago cash – Lock contracts now for 2026 feeding programs since high oleic acreage is still under 6% of total plantings and demand tripled this year—elevator systems can’t keep up with producer interest.
  • Feed efficiency gains of 1.70 vs 1.49 ECM per lb dry matter – Calibrate processing equipment every 50 hours and test every batch for mycotoxins to maintain consistent rumen undegradable protein levels that support milk protein synthesis in high-producing cows.
high oleic soybeans, dairy feed costs, milk production, feed efficiency, dairy profitability

I’ve been in this industry long enough to spot the difference between research that sounds good on paper and technology that actually moves the needle on farm profitability. High oleic soybeans? This one’s the real deal, and the numbers coming out of Michigan State are frankly incredible – we’re talking documented 10+ pound milk bumps without the massive equipment investments.

The Reality Check Every Producer Needs Right Now

The thing about July 2025 is you can’t ignore what’s happening with input costs. I was just talking to a producer in Wisconsin last week, and honestly? The margin squeeze is real. Feed costs are staying stubbornly high while milk checks… well, let’s just say they’re not keeping pace the way we’d all like to see.

What really gets me is how expensive money has become again. That makes every equipment decision feel like you’re betting the farm – literally. Which is exactly why the timing on high oleic soybeans couldn’t be better.

What strikes me about this whole development is how quickly it’s moved from “interesting university work” to “you better pay attention right now.” The research coming out of places like Michigan State… these aren’t marginal improvements we’re talking about. This is game-changing stuff.

What Dr. Adam Lock’s Team Actually Discovered

Energy-corrected milk response comparison between raw and roasted high oleic soybeans shows roasted beans deliver significantly higher production benefits in dairy cattle

The dairy nutrition group up at Michigan State – and these folks have been at the forefront of fat research for years – recently published work in the Journal of Dairy Science that’s causing quite a stir. Their study compared three approaches: standard soybean meal, raw high oleic beans cracked to quarters, and properly roasted high oleic beans.

Data from a recent study published in the Journal of Dairy Science shows a significant milk production response. While roasted high oleic soybeans delivered a 10.2 lb increase, even raw, ground beans provided a 3.5 lb boost over the control diet.

The production response data? It caught my attention immediately. According to their published research, the roasted beans delivered 93.4 pounds of energy-corrected milk per day compared to 83.2 pounds from the soybean meal control. That’s a 10.2-pound jump that any producer would notice in their bulk tank.

But here’s what really got me thinking – the raw high oleic beans still managed 86.7 pounds. That’s a 3.5-pound increase just from grinding them properly. No roasting equipment, no additional processing costs beyond what you’re already doing.

What’s particularly noteworthy is the feed conversion story. Cows eating the roasted beans were converting at 1.70 ECM per pound of dry matter compared to 1.49 for the control group. In today’s cost environment, that efficiency gain alone can make the difference between red and black ink.

The Science Behind Why This Works

Here’s where it gets fascinating from a rumen nutrition standpoint. Conventional soybeans are rich in polyunsaturated fatty acids – research shows approximately 54 grams of PUFA per 100 grams of oil, primarily linoleic acid.

This stuff creates real problems through biohydrogenation pathways that produce trans-10, cis-12 conjugated linoleic acid. Yeah, that’s a mouthful, but stay with me here – this compound is basically kryptonite for milk fat synthesis. It’s why we’ve always had to walk on eggshells with soybean inclusion rates.

High oleic varieties flip this whole equation. According to the research, we’re looking at 75 percent oleic acid with PUFA content below 10 percent. The difference is dramatic – you can feed up to 6 pounds per cow per day without seeing milk fat depression. Compare that to conventional soybeans, where most nutritionists get nervous above 3-4 pounds.

Bill Mahanna from Corteva Agriscience – the folks who developed Plenish – has been tracking this technology for years. What he’s consistently emphasized is that proper particle size is critical for nutrient release. Whole beans transit the rumen too rapidly to deliver full nutritional value. He’s absolutely right about the grinding requirement.

The Processing Question That’s Keeping Nutritionists Up at Night

The decision to roast depends on herd size, capital, and production goals. While roasting maximizes the milk response, a raw, ground approach offers a significant benefit with minimal initial investment.

So here’s the million-dollar question everyone’s asking: do you really need to roast?

The Roasting Route

If you’re thinking about investing in roasting capability, we’re talking serious capital. On-farm barrel roasters start around $55,000 – though I’ve seen operations justify that cost surprisingly quickly when you factor in the production response.

Custom roasting services are running $38-50 per ton plus freight. Not cheap, but depending on your situation and scale, it might make sense. The thing about roasting is that it accomplishes multiple objectives beyond just protecting protein from rumen degradation.

You’re bumping rumen-undegradable protein from around 30 percent to 48 percent, which really helps with metabolizable lysine supply. That’s particularly important if you’re dealing with high-producing cows that need that extra protein boost for milk protein synthesis.

But here’s the reality – you’re going to see 8-12 percent shrink during roasting, which can knock significant value off if you’re not accounting for it properly in your economics. And with current financing costs? The payback calculations get interesting real quick.

The Raw Processing Option That’s Gaining Traction

Proper particle size is critical for nutrient release in the rumen. Whole beans (left) pass through too quickly, while properly cracked beans (center) allow for optimal digestion. Over-grinding (right) can be counterproductive.

What’s interesting is how many producers are finding success with raw high oleic beans. Recent industry reports show demand has absolutely exploded – we’re talking about 70,000 to 80,000 cows now getting these beans in their rations, and that number’s growing fast.

The key is getting that particle size right. You need to fracture those beans into quarters or eighths. One pass through a standard roller mill, maybe 4 minutes per ton in extra labor. That’s literally it.

I’ve been tracking what some of the early adopters are seeing, and the results are pretty compelling. John Schaendorf in Illinois went all-in on high oleic beans back in 2023 – switched his entire soybean planting plan and even installed a roaster. He’s feeding 7.5 pounds of dry matter and seeing $0.75 to a dollar per cow savings by switching out other fats and reducing canola in his rations.

Real-World Results That Are Hard to Ignore

The field data is starting to back up what the university research predicted. Industry reports show producers aren’t just seeing improvements in milk production – they’re reporting better conception rates, lower somatic cell counts, and even reduced death loss rates.

What’s particularly encouraging is the scale of adoption we’re seeing. Harvey Commodities is projecting 50,000 tons this year and potentially 100,000 next year. That’s not niche market stuff anymore – that’s mainstream adoption happening right before our eyes.

The commodity brokers are taking notice, too. Premium markets are developing in regions where elevator systems can handle the identity preservation requirements. This is becoming a real crop marketing opportunity for producers who can grow and deliver these beans.

The Pitfalls That Can Trip You Up

Look, I’d be doing you a disservice if I didn’t mention the potential problems. Over-roasting can brown the protein fraction and absolutely kill your intestinal digestibility. I’ve seen operations get sloppy with calibration and lose half their production response.

Equipment calibration every 50 hours of run time isn’t a suggestion – it’s mandatory if you want consistent results.

Mycotoxin contamination is another issue that caught some folks off-guard, particularly after the challenging growing conditions we’ve seen in parts of the Midwest. The FDA monitors these compounds closely, and roasting doesn’t eliminate contamination problems. You absolutely need to test every new batch.

The supply chain piece is probably my biggest long-term concern. High oleic acreage is still a relatively small percentage of total U.S. soybean plantings. That’s changing rapidly, but securing reliable sources requires planning ahead. I’ve already heard from several elevators that they’re running tight on supply this season.

Making the Economics Work

Before you jump into this, you really need to think through a few critical factors:

Can you source high oleic beans at a basis that protects your margin? Current premiums are running about $1.25 per bushel over Chicago Board of Trade cash prices for these specialty varieties. That’s significant, but the production response data suggests it’s usually justified.

Do you have the throughput to make processing economical? Operations under 300 cows often find that contract roasting costs outweigh the feed benefits. Grinding tends to be more favorable for smaller operations.

What’s your cash flow situation looking like? With financing costs where they are, equipment purchases carry real opportunity cost. I’m seeing more creative lease arrangements that match payments to seasonal milk revenue patterns – might be worth exploring.

What This Means for Your Operation

Here’s my take after watching this technology evolve over the past few years… high oleic soybeans aren’t going to solve every feed cost problem you’ve got, but they’re one of the few ingredients currently offering both cost management and production enhancement in the same package.

The production benefits are real and repeatable. Whether you can capture them profitably depends on your specific situation – scale, infrastructure, access to processing, and frankly, your willingness to manage the details that actually matter.

What’s particularly encouraging is seeing smaller operations find success with the raw, ground approach. You don’t need a $55,000 roaster to benefit from this technology. That opens doors for a lot more producers who might have been priced out of the game otherwise.

The Bottom Line

If you’re running a dairy operation in 2025, here’s what you need to know:

The production response is documented and real – we’re talking 3.5 to 10+ pounds of milk per cow per day, depending on your processing method. That’s not promotional material, that’s peer-reviewed research from institutions like Michigan State that you can bank on.

You’ve got processing flexibility that didn’t exist before. Raw, properly ground beans deliver meaningful benefits without major capital investment. Roasting maximizes the response if you can justify the equipment or custom processing costs.

Market timing actually favors adoption right now. The combination of elevated feed costs and margin pressure makes the economics compelling for most well-managed operations.

Supply chain infrastructure is maturing, but you still need to plan ahead. Don’t wait until October to start looking for high oleic beans for next year’s feeding program.

The technology has definitively moved past the “interesting research” phase into practical application. Whether you choose roasting for maximum impact or grinding for cost-effective gains, success comes down to consistent execution and appropriate inclusion rates.

For producers with homegrown soybeans or access to local high oleic production, this represents a genuine competitive advantage. The question isn’t whether high oleic soybeans work – the research has settled that debate. The question is whether you can implement them effectively in your operation.

And honestly? If you can capture even half the production response we’re seeing in the university trials while reducing your supplemental fat purchases, this might be the highest-return feed change you can make this year. The research has proven what’s possible. The only question left is how you’re going to make it work for your bottom line.

Complete references and supporting documentation are available upon request by contacting the editorial team at editor@thebullvine.com.

Learn More:

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Join over 30,000 successful dairy professionals who rely on Bullvine Weekly for their competitive edge. Delivered directly to your inbox each week, our exclusive industry insights help you make smarter decisions while saving precious hours every week. Never miss critical updates on milk production trends, breakthrough technologies, and profit-boosting strategies that top producers are already implementing. Subscribe now to transform your dairy operation’s efficiency and profitability—your future success is just one click away.

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EU’s 50% Agricultural Tariff: The Feed Cost Crisis That’s About to Shake Global Dairy

Thursday, July 3rd, 2025

EU tariff shock eliminates 25% of fertilizer supply – while you focused on milk prices, politicians just rewrote global feed procurement rules.

EXECUTIVE SUMMARY:  While dairy farmers obsessed over milk pricing models, European politicians just detonated a supply chain bomb that’s about to test every assumption you’ve made about feed procurement strategy. The EU’s 50% tariff on Russian and Belarusian agricultural imports – effective July 1, 2025 – eliminates 6.2 million tonnes of fertilizer (25% of EU imports) and disrupts 145+ product codes including critical feed components. European operations face 15-20% feed cost increases over 18 months, but here’s the kicker: alternative suppliers from Morocco to Canada lack immediate capacity to replace Russian volumes, creating premium pricing that doesn’t stay contained within European borders. This isn’t just about European competitiveness – it’s about fundamental supply chain fragmentation that transforms feed procurement from commodity purchasing into strategic risk management requiring the same attention as genetic selection programs. Smart operators are already asking different questions: what if this disruption creates permanent competitive advantages for regions with domestic feed production capacity? The uncomfortable truth: operations still treating feed sourcing as routine purchasing are about to learn expensive lessons about geopolitical agriculture. Stop thinking like a commodity buyer and start thinking like a supply chain strategist – because the old playbook just got incinerated.

KEY TAKEAWAYS

  • Feed Cost Reality Check: European dairy operations consuming 450 tonnes monthly now face procurement challenges as Russian oilseed meal at €285/tonne gets replaced by alternatives charging €340-365/tonne – that’s €330 additional annual cost per cow for average Polish operations producing 8,500 liters.
  • Technology Won’t Save You (But Strategy Might): While genomic testing for feed efficiency traits shows 15-25% variation between high and low efficiency animals, a 15% improvement in feed conversion ratios gets obliterated when feed costs spike 25% due to geopolitical supply shock – optimization can’t eliminate disruption.
  • Geographic Winners and Losers: U.S. dairy operations benefit from favorable feed prices and domestic production capacity while European competitors face escalating input costs, creating structural shifts in global competitiveness that extend far beyond temporary arbitrage opportunities.
  • Supply Chain Fragmentation Is Permanent: This isn’t temporary policy – it’s strategic decoupling designed to eliminate Russian revenue streams over 18-36 months, meaning operations locked into traditional sourcing relationships without strategic flexibility become acquisition targets for well-capitalized competitors.
  • Strategic Procurement Imperative: The crisis accelerates industry consolidation as smaller operations without strategic purchasing power get priced out of competitive feed markets, while smart operators treat feed procurement as strategic risk management requiring geopolitical analysis alongside nutritional expertise.
dairy feed costs, global supply chain disruption, agricultural tariff impact, strategic feed procurement, feed efficiency strategies

Let’s face it, while you were focused on milk prices and weather patterns, European politicians just rewrote the rules of global feed procurement. The EU’s comprehensive 50% tariff on Russian and Belarusian agricultural imports took effect July 1, 2025, and if you think this only affects European farmers, you’re about to get a harsh reality check.

The European Parliament’s decisive 411-100 vote in May didn’t just target agricultural products, it declared war on the global feed supply chain that’s kept your input costs manageable for decades. Here’s the uncomfortable truth: this policy shift is about to test every assumption you’ve made about feed sourcing, margin management, and competitive positioning.

The Numbers That Should Keep You Awake at Night

Russian fertilizer alone represented 6.2 million tonnes, 25% of total EU fertilizer imports in 2024. That’s not just a number on a spreadsheet; that’s a quarter of the nutrients feeding European crops that eventually become your feed ingredients. And here’s what the politicians won’t tell you: March 2025 saw Russian fertilizer imports spike to €206.1 million, a 15% monthly increase, as importers desperately stockpiled before the hammer fell.

But fertilizer is just the appetizer. The new tariffs target more than 145 product codes, including animal feed, flour, and agricultural inputs that form the backbone of global feed supply chains. The policy eliminates access to agricultural products that represented approximately 15% of Russian exports to the EU in 2023,and that disruption doesn’t stay contained within European borders.

For context, EU milk production is already forecast to decline in 2025 due to dropping cow numbers and tight dairy farmer margins. Now add feed cost inflation on top of an industry already under pressure, and you’ve got a perfect storm brewing.

Why Your Feed Bills Are About to Get Interesting

Here’s where conventional wisdom gets challenged: most dairy farmers still think about feed purchasing as a commodity transaction. Buy cheap, feed cows, make milk, collect check. That playbook just got incinerated.

The EU implemented a graduated escalation schedule for fertilizers starting with additional duties of €40-45 per tonne for nitrogen fertilizers including urea and ammonium nitrate, rising to €430 per tonne by 2028. But here’s the kicker, safeguard measures trigger if import quotas exceed 2.7 million tonnes in 2025-2026, declining to just 0.9 million tonnes by 2027-2028.

What does this mean for your operation? Alternative fertilizer suppliers including Morocco (11% of EU imports), Canada (7%), Algeria (6%), and Norway (5%) lack immediate capacity to replace Russian volumes entirely. That capacity gap isn’t just an European problem, it’s a global feed cost problem that’s coming for your bottom line whether you’re milking cows in Wisconsin, Alberta, or New Zealand.

The Global Domino Effect You Didn’t See Coming

Let’s destroy another myth: that geographic distance protects you from European trade policy. RaboResearch expects average milk prices around €54 per 100 kgs in 2025, with slight drops expected in the second half. Meanwhile, the U.S. dairy sector enters 2025 with favorable feed prices and a slightly larger dairy herd.

See the disconnect? European milk production is declining while feed costs escalate, potentially creating pricing pressure that ripples through global dairy markets. If European producers can’t compete on cost, guess who picks up that market share, and the associated feed demand pressure?

Global milk production will grow by just 1% in total this year, with growth coming from non-European regions. That’s not coincidence; that’s economics responding to policy-driven cost structures.

Technology Isn’t Going to Save You (But Strategy Might)

Here’s where most industry cheerleaders get it wrong: they’ll tell you precision agriculture and genomic testing will solve your feed cost problems. That’s partially true, but it misses the bigger picture.

Feed conversion ratios averaging 1.4-1.6 kg dry matter intake per liter of milk could deteriorate to 1.7-1.9 as farms substitute lower-quality alternative feeds. Yes, genomic testing for feed efficiency traits helps, university research shows substantial variation in individual cow feed conversion capabilities, with differences of 15-25% between high and low efficiency animals.

But here’s the hard truth: technology can optimize margins, but it can’t eliminate supply chain disruption. A 15% improvement in feed conversion efficiency sounds impressive until feed costs increase 25% due to geopolitical supply shock.

The Strategic Response Most Farmers Are Missing

While everyone’s focused on the immediate cost impact, smart operators are asking different questions:

What if this supply chain disruption creates competitive advantages for regions with domestic feed production capacity? The USDA reports favorable feed prices for U.S. dairy operations in 2025, while European farmers face escalating input costs. That’s not just a temporary arbitrage opportunity, it’s a structural shift in global competitiveness.

What if traditional feed sourcing relationships become strategic liabilities? Operations still buying feed like commodities are about to learn expensive lessons about supply chain resilience. The farms that survive this transition will be those that treat feed procurement as strategic risk management, not purchasing optimization.

The Uncomfortable Questions Everyone’s Avoiding

Let’s tackle the elephant in the barn: are you prepared for permanent supply chain fragmentation? European Commission officials acknowledge this isn’t temporary policy, it’s strategic decoupling designed to eliminate Russian revenue streams while forcing supply chain diversification over 18-36 months.

Standing Rapporteur for Russia Inese Vaidere stated: “The regulation gradually increasing customs duties for products from Russia and Belarus will help to prevent Russia from using the EU market to finance its war machine”. Notice she didn’t mention farmer profitability or competitive impact, because that’s not the priority.

Consumer confidence in the United States is at an all-time low, and China is experiencing economic difficulty. Demand destruction in key export markets, combined with feed cost inflation, creates margin compression that most operations aren’t prepared to navigate.

Regional Reality Check: Who Wins and Who Loses

Despite financial incentives, European milk supply lagged behind but recovered in April thanks to favorable margins and low feed prices. That recovery is about to get tested as alternative feed sources command premium pricing.

Meanwhile, New Zealand’s pasture-based systems show relative resilience due to lower manufactured feed dependence, but even they face exposure through supplemental feed requirements during dry seasons.

The geographic winners? Regions with domestic feed production capacity and proximity to alternative suppliers. The losers? Operations locked into traditional sourcing relationships without strategic flexibility.

Disease Risk: The Crisis Nobody’s Calculating

Here’s another layer of complexity the talking heads ignore: RaboResearch analysts express concerns about animal disease risks, including foot and mouth disease in Germany, Slovakia and Austria, with bluetongue virus potentially resurging between May and September.

Disease outbreaks in regions already managing feed cost pressure create compound risk that most operations haven’t stress-tested. When feed costs spike and disease forces depopulation, traditional risk management models break down.

The Bottom Line: Strategic Adaptation or Margin Extinction

The EU’s tariff policy transforms feed procurement from routine purchasing into strategic risk management requiring the same attention as genetic selection and reproductive programs. Operations that master this transition will emerge stronger; those that don’t will become acquisition targets.

Key indicators to monitor include fertilizer price spreads between suppliers, logistics costs for alternative supply routes, and currency fluctuations affecting import expenses. Supply chain diversification success will become apparent by late 2025 as Russian supply elimination effects fully materialize.

But here’s the provocative question nobody’s asking: what if this crisis accelerates the industry consolidation that’s been inevitable for decades? Smaller operations without strategic purchasing power may find themselves priced out of competitive feed markets, creating acquisition opportunities for well-capitalized operators with supply chain expertise.

The fundamental challenge isn’t absorbing additional costs, it’s developing adaptive capacity for navigating permanently altered global commodity markets. The next 18 months will separate operators who understand this new reality from those still playing by old rules.

Are you prepared for a world where feed procurement requires geopolitical analysis alongside nutritional expertise? Because that world just arrived, whether you’re ready or not.

Complete references and supporting documentation are available upon request by contacting the editorial team at editor@thebullvine.com.

Learn More:

Join the Revolution!

Join over 30,000 successful dairy professionals who rely on Bullvine Weekly for their competitive edge. Delivered directly to your inbox each week, our exclusive industry insights help you make smarter decisions while saving precious hours every week. Never miss critical updates on milk production trends, breakthrough technologies, and profit-boosting strategies that top producers are already implementing. Subscribe now to transform your dairy operation’s efficiency and profitability—your future success is just one click away.

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Feed Cost Reality Check: How Smart Dairy Operators Can Lock in $200+ Per Cow Savings While Markets Stay Predictable

Thursday, June 12th, 2025

Your nutritionist is costing you $200+ per cow annually. USDA projects stable feed costs through 2026—time to challenge protein dogma.

EXECUTIVE SUMMARY: While dairy farmers celebrate stable corn prices at $4.39/bushel, most operations are still overpaying for protein and missing the biggest procurement opportunity in years. The USDA’s June 2025 projections show feed cost predictability through 2026 with corn forecast at $4.20/bushel, but research reveals that conventional soybean meal sourcing is costing operations $200+ per cow annually compared to strategic alternatives like canola meal. Hoard’s Dairyman research demonstrates canola meal delivers 9.8 pounds daily milk yield increases compared to soybean meal diets, while precision feeding technology reduces costs by 5-10% without sacrificing production. The biofuel boom driving soybean crush demand to 2.49 billion bushels creates unprecedented opportunities in undervalued protein sources that nutritional models consistently misprize. Operations using individual cow feed intake monitoring achieve efficiency improvements worth $470 per cow annually, yet 78% of precision feeding installations focus solely on delivery without tracking metabolic responses. With replacement heifer inventories at a 47-year low and renewable diesel capacity surging from 791 million gallons in 2021 to 4.58 billion gallons currently, smart operators are challenging conventional protein sourcing while grain markets broadcast their intentions. Stop following nutritional dogma designed for volatile markets—this stability window rewards contrarian thinking that compounds competitive advantages when volatility inevitably returns.

KEY TAKEAWAYS

  • Challenge the Protein Premium Myth: Canola meal delivers 9.8 pounds daily milk yield increases over soybean meal while trading at significant discounts, yet most nutritionists still recommend expensive conventional proteins despite research proving superior metabolizable protein efficiency
  • Implement Precision Feed Efficiency Monitoring: Operations using individual cow feed intake tracking achieve $470 per cow annual savings through profit-based culling decisions, while blood biomarker monitoring predicts feed efficiency 40% more accurately than traditional residual feed intake calculations
  • Capitalize on the Feed Cost Stability Window: With corn forecast at $4.20/bushel through 2026 and soybean crush demand hitting 2.49 billion bushels, forward contract 60-70% of feed needs while corn trades below $4.60/bushel to lock in predictable margins
  • Optimize Alternative Protein Sourcing: Strategic forage substitutions reduce diet costs from $0.543 to $0.465 per kg dry matter (14.4% reduction) while maintaining production efficiency, translating to $180-220 annual savings per cow for 1,000-cow operations
  • Leverage Technology Integration During Market Calm: Precision feeding systems combined with metabolic monitoring achieve feed efficiency ratios of 1.5-1.8 pounds milk per pound DMI compared to 1.2-1.4 for conventional systems, with 15-20% productivity gains and 30% reduction in health-related expenses
dairy feed costs, feed efficiency optimization, dairy farm profitability, grain market stability, precision feeding technology

Your nutritionist is costing you $200+ per cow annually by following industry protein dogma, while grain markets broadcast the biggest stability window in years. The USDA’s June 2025 projections show corn at $4.20 per bushel through 2026, but only operations brave enough to challenge conventional feed wisdom will capture the real profit opportunity hiding in plain sight.

Why Every Dairy Manager Should Be Moving Fast

You know that feeling when corn futures spike 15% overnight, and suddenly your total mixed ration (TMR) costs are eating into margins faster than a fresh cow drops milk fat percentage? Well, take a breath. The USDA’s June 2025 World Agricultural Supply and Demand Estimates just handed you something rarer than a 4.5% butterfat herd average – predictable feed costs through the next crop year.

With feed representing 50-60% of your milk production costs and the average U.S. dairy operation now running 337 cows per herd, this stability translates to real money. But here’s what’s keeping smart operators awake: this calm won’t last forever. According to USDA data, replacement heifer inventories have dropped to a 47-year low of just 3.91 million head.

But here’s the controversial truth most nutritionists won’t tell you: While everyone’s celebrating stable corn prices at $4.39 per bushel, you’re probably still overpaying for protein and missing the biggest profit opportunity in feed procurement.

Challenging the Protein Premium Myth: What USDA Data Really Shows

Let’s cut through the industry’s most expensive myth first. The USDA’s latest soybean crush projections show domestic crush demand jumping 70 million bushels to 2.49 billion bushels in 2025-26, driven by renewable diesel production consuming 13.9 billion pounds of soybean oil.

Here’s what your nutritionist isn’t telling you: This biofuel boom artificially inflates soybean meal prices while creating unprecedented opportunities in alternative protein sources that nutritional models consistently undervalue.

Research from demonstrates that canola meal enhances early lactation milk production, with studies showing milk yield increases of 9.8 pounds per day for cows fed canola meal-based diets compared to soybean meal-based diets. This gain was accompanied by only a 1.9 pounds per day increase in dry matter intake, delivering superior feed efficiency.

Why this matters now: With corn forecast at $4.20 per bushel and stable supplies projected through 2026, you’re looking at feed costs that won’t break your budget – but only if you stop overpaying for conventional protein sources.

The Journal of Dairy Science research on corn silage and alternative forage combinations reveals that strategic forage substitutions can reduce diet costs from $0.543 to $0.465 per kg dry matter while maintaining production efficiency. That’s a 14.4% reduction in feed costs per unit – translating to $180-220 annual savings per cow for a 1,000-cow operation.

The Feed Efficiency Scandal: Why Your Metrics Are Lying

Every dairy consultant preaches residual feed intake (RFI) as the gold standard for feed efficiency. But, research published in the Journal of Dairy Research reveals that feed efficiency relationships differ significantly between Holstein and Jersey cows, with individual-level correlations between feed efficiency and behavior traits being stronger in Jersey than in Holstein cows.

The problem with conventional efficiency metrics is that they measure efficiency after metabolic damage has already been done. Breakthrough technology now identifies individual cow feed efficiency, with recent estimates indicating that an improvement in herd feed efficiency from 1.55 to 1.75 would equate to savings of $470 per cow per year.

What smart operators do instead: Monitor individual cow feed intake using precision technology. Operations using Afimilk’s AfiCollar Feed Efficiency Service report that combining production and feed intake data enables profit-based culling decisions that contribute about $1.2 million to the bottom line of a 2,500 cow dairy.

Technology Integration: Maximizing Feed Efficiency While Costs Stay Predictable

The dairy tech revolution is perfectly positioned to capitalize on this feed cost stability window. Farms implementing IoT technologies see 15-20% productivity gains while reducing health-related expenses by 30%.

Precision feeding technology enables customized nutrition plans that maximize production while minimizing waste, with advanced feeding systems typically reducing feed costs by 5-10% while maintaining or improving milk production.

The productivity gains are remarkable: GEA reports that after installing their DairyFeed F4500 feeding robot, milk production jumped from 28 to 36 liters per cow per day, eliminating competition at the feeding table and ensuring fresh feed access for all animals.

Global Market Dynamics: Your Geographic Feed Advantage

Not all dairy regions benefit equally from this grain market calm. The USDA data shows that while Brazil projects record 175 million metric tons of soybean production and corn at 130 million metric tons, U.S. operations benefit from stable domestic supply chains.

If you’re operating in grain-producing regions, this stability provides significant competitive advantages. Analysts project that lower feed prices will bolster 2025 margins, with corn and soybean meal futures trading near $4.47 per bushel and $291 per ton, respectively, on the CME.

The global context matters: U.S. corn exports are running at 97.2% of USDA’s forecast, well ahead of the five-year average of 91.3%, while domestic renewable diesel capacity has surged from 791 million gallons per year in 2021 to 4.58 billion gallons currently.

Implementation Strategy: Your 90-Day Action Plan

Month 1: Contract Strategy Assessment Contact your feed supplier to discuss forward contracting options for the next 12 months. With corn forecast at $4.20 per bushel and stable supplies projected, successful operations typically contract 60-70% of their feed needs when corn trades below $4.60 per bushel.

Month 2: Alternative Protein Evaluation
Work with your nutritionist to evaluate canola meal substitution strategies. Research demonstrates that canola meal can enhance early lactation performance with 9.8 pounds per day milk yield increases compared to soybean meal diets.

Month 3: Precision Technology Integration Evaluate feed efficiency monitoring systems. Operations using individual cow feed intake monitoring achieve feed efficiency improvements worth $470 per cow annually.

Risk Management: What Smart Operators Can’t Ignore

Weather remains the ultimate wild card. The USDA projects corn ending stocks of 1.365 billion bushels for 2024-25, down 50 million bushels from previous estimates due to stronger export demand. Regional challenges, including flooding in eastern Texas and planting delays in the Ohio Valley, haven’t disrupted national production yet, but they’re warning signs.

The renewable diesel boom driving soybean demand depends on policy support that could change. While current projections support stable feed costs through 2026, policy uncertainty could introduce volatility into currently stable demand patterns.

The Bottom Line

Remember when feed cost spikes forced you to compromise milk production for survival? You’re currently in the opposite scenario – USDA projections showing corn at $4.20 per bushel with record production potential, while industrial demand keeps protein costs supported but predictable.

The uncomfortable truth is that most operations are still following nutritional dogma that costs them $200+ per cow annually. Research proves canola meal delivers superior early lactation performance with 9.8 pounds daily milk yield gains, while precision feeding technology reduces costs by 5-10% without sacrificing production.

Smart dairy operators are using this window to challenge conventional protein sourcing, implement precision feeding systems, and capture feed efficiency improvements worth $470 per cow annually. 2025 margins will benefit from lower feed prices, but only operations that optimize efficiency will maintain competitive advantages when markets eventually tighten.

Your move right now: Stop following conventional wisdom designed for volatile markets. Contact your nutritionist this week to discuss canola meal evaluations and precision feeding implementation. When grain markets return to their usual volatility, you’ll manage from a position of strength instead of reacting to crisis.

The difference between thriving and surviving in 2025 may come down to how you leverage this rare period of feed market calm to implement contrarian strategies that compound competitive advantages. The stability window is open – make your move while certainty is still on the table.

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French Dairy Farmers Storm Paris: How EU Pesticide Wars Could Slash Your Feed Costs 15%

Tuesday, May 27th, 2025

French tractor revolt exposes EU feed crisis—acetamiprid ban could spike your dairy rations 15%. Smart producers are hedging now. Are you?

EXECUTIVE SUMMARY: French farmers’ May 2025 tractor blockade of Paris isn’t just European politics—it’s a preview of the regulatory wars that could determine whether your feed costs soar or stabilize through 2026. The battle over France’s Duplomb law centers on re-authorizing acetamiprid, a banned bee-toxic pesticide critical for sugar beet production that feeds millions of European dairy cows. With opposition lawmakers filing 3,500 amendments to gut the bill, this regulatory uncertainty creates supply-demand imbalances that ripple through global feed markets, potentially impacting sugar beet pulp availability and pricing for North American operations. The EU’s contradictory pesticide policies—acetamiprid approved until 2033 EU-wide but banned in France since 2018—expose the competitive distortions reshaping international dairy economics. Environmental groups cite 16 new peer-reviewed studies showing developmental neurotoxicity risks, while farmers argue regulatory asymmetries between EU nations create unfair feed cost disadvantages. As European milk production already declined 0.3% in 2024 amid regulatory pressures, this French uprising signals whether EU agriculture will prioritize environmental ideology over economic viability. Smart dairy producers need to evaluate feed contract strategies and supply chain diversification before these regulatory battles create market volatility that hits their bottom line.

KEY TAKEAWAYS

  • Feed Cost Hedging Imperative: Lock in sugar beet pulp and alternative protein contracts now—regulatory uncertainty in major EU agricultural regions typically translates to 8-12% price volatility in feed commodity markets, with procurement delays costing operations $0.15-0.23 per cow per day.
  • Supply Chain Diversification Strategy: Develop backup feed sources beyond EU-dependent commodities—dairy operations relying on single-region protein sources face 23% higher cost exposure during regulatory disruptions, while diversified sourcing reduces feed price volatility by up to 31%.
  • Regulatory Arbitrage Monitoring: Track EU pesticide policy inconsistencies for competitive intelligence—French dairy farmers operating under stricter acetamiprid bans face 4-7% higher feed costs than German competitors, creating market distortions that impact global commodity flows and pricing.
  • Technology Investment Priority: Accelerate adoption of precision feed management systems—operations using real-time ration optimization technologies reduce feed waste by 12-18% and maintain consistent milk production during commodity price shocks, with ROI typically achieved within 14-18 months.
  • Policy Risk Assessment: Integrate regulatory scenario planning into 2026 business planning—EU agricultural policy shifts affect global feed markets even for North American operations, with smart producers already modeling 15-20% feed cost scenarios based on European regulatory outcomes.
dairy feed costs, agricultural regulations, dairy profitability, feed supply chain, EU dairy policy

French farmers rolled tractors into the nation’s capital on May 26, 2025, demanding lawmakers pass agricultural deregulation that could reshape European dairy feed markets within months. The heated battle over France’s Duplomb law centers on re-authorizing acetamiprid—a banned bee-toxic pesticide critical for sugar beet production that feeds millions of European dairy cows. With opposition lawmakers filing 3,500 amendments to gut the bill, this isn’t just French politics—it’s a preview of the regulatory wars that could determine whether your feed costs soar or stabilize through 2026.

The Protest That Stopped Traffic

Around ten tractors were parked defiantly outside France’s National Assembly, while over 150 farmers from multiple regions blocked major highways in Paris. This wasn’t symbolic theater—it was calculated pressure on lawmakers debating legislation that could fundamentally alter European agricultural competitiveness.

“This legislation to alleviate the burdens on the agricultural sector is extremely significant to us,” FNSEA Secretary-General Hervé Lapie told AFP. “We have been advocating for this for two decades. Our patience has worn thin”.

The farmers weren’t just making noise. They were defending what they see as survival tools in an increasingly hostile regulatory environment.

The Acetamiprid Battlefield: What’s Really at Stake

Here’s what dairy producers need to understand: acetamiprid has been banned in France since 2018, but it’s still legal across the rest of the EU until 2033. This creates a massive competitive distortion that directly impacts your feed costs.

The numbers tell the story. French beet production suffers when France can’t protect sugar beet crops with the same tools as Germany or Poland. That means less sugar beet pulp—a critical, cost-effective dairy feed component—and higher prices for what’s available.

But here’s the twist: the EU just slashed maximum residue levels for acetamiprid, effective August 19, 2025. Products like bananas, currants, lettuces, and other feed components will face much stricter limits. The European Food Safety Authority identified lower acceptable daily intake levels and acute reference doses, forcing these regulatory changes.

Why Dairy Farmers Should Care About French Politics

Feed Security is Feed Economics. Sugar beet pulp represents a significant portion of many European dairy rations. When regulatory asymmetries restrict production in major agricultural regions like France, supply-demand imbalances ripple through feed markets.

Environmental groups like PAN Europe and Générations Futures are pushing hard against acetamiprid re-authorization, citing new research showing developmental neurotoxicity and harm to pollinators. They’ve identified 16 peer-reviewed studies published within two years indicating various health and environmental risks.

The opposition is fierce. Nearly 1,200 medical doctors publicly warned that re-authorizing such pesticides would represent “a retreat for public health.”

The Parliamentary Power Play

When opposition lawmakers filed 3,500 amendments to delay the bill, supporters used a controversial “motion of rejection” to bypass extensive debate. This parliamentary maneuver sent the legislation directly to a joint committee without allowing a full discussion of the amendments.

Left-wing parties exploded. LFI announced plans to file a no-confidence motion against the government in response. Environmental groups called it an “anti-democratic tactic.”

But for agricultural interests, it was a strategic necessity. The FNSEA and allied groups viewed the amendment flood as obstruction designed to kill legislation they’d fought for decades to achieve.

What This Means for Your Operation

Three immediate implications for dairy producers:

  1. Feed Cost Volatility Increases
    Regulatory uncertainty in major agricultural regions creates price instability. Whether acetamiprid gets re-authorized or remains banned, the back-and-forth creates market uncertainty that typically translates to higher feed costs.
  2. Supply Chain Diversification Becomes Critical
    Dairy operations dependent on specific feed components from restricted regions face increased vulnerability. Smart producers are already exploring alternative protein and energy sources.
  3. Regulatory Harmonization Pressure Builds
    This French battle reflects broader EU tensions between national environmental standards and single-market competitiveness. Expect similar regulatory conflicts across other agricultural inputs.

The Broader European Context

France isn’t alone. Farmers across Germany, Spain, Italy, and Poland have staged similar protests over environmental regulations they claim undermine competitiveness. The EU has already made concessions, including shelving proposals to halve pesticide use by 2030.

Young French farmer Clément Patoir captured the frustration: “Few young people want to become farmers nowadays. Many children of farmers have to hear about their parents struggling with regulations constantly. It is a complicated job; you work long hours and are not necessarily rewarded”.

Bottom Line: Navigate the Regulatory Storm

This French tractor revolt exposes the fundamental tension between environmental ambitions and agricultural economics that’s reshaping European dairy production. Whether you’re in Wisconsin or Waikato, these regulatory battles matter because they’re determining global competitive dynamics.

Your next moves:

  • Lock in feed contracts before regulatory decisions create market volatility
  • Diversify protein sources to reduce dependence on potentially restricted inputs
  • Monitor EU regulatory developments that could impact global feed commodity flows

The farms that thrive through this regulatory uncertainty won’t be those fighting yesterday’s battles—they’ll be the ones adapting fastest to tomorrow’s rules. While politicians argue over pesticides, smart dairy producers are building resilient operations that can profit regardless of how the regulatory winds blow.

The message from Paris is clear: regulatory stability is dead. Operational agility is everything.

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Feed Cost Revolution: Why 2025-26 Could Be Your Most Profitable Year Yet—Or Your Biggest Missed Opportunity

Monday, May 26th, 2025

USDA projects record corn crop could slash feed costs by $1,500+ monthly—but most dairy farms will miss this goldmine. Here’s why strategic thinking beats bargain hunting.

EXECUTIVE SUMMARY: The May 2025 USDA Feed Outlook presents dairy farmers with a transformative opportunity through projected record corn supplies that could drive prices down to $4.20 per bushel, potentially saving operations hundreds to thousands of dollars monthly in feed costs. However, this corn windfall comes with a critical caveat: protein costs, particularly soybean meal, are expected to remain firm or increase, creating a “barbell economy” of feed expenses that demands strategic management rather than reactive purchasing. The article challenges the industry’s destructive “cheap feed mentality,” arguing that success will go to farmers who optimize total ration economics instead of simply chasing individual ingredient bargains. While the opportunity is substantial—potentially saving a 1,000-cow operation up to $1,530 monthly—it hinges on achieving record yields for a third consecutive year, making weather patterns and crop progress critical risk factors. The key message is clear: dairy farmers must approach this opportunity with comprehensive feed procurement strategies, risk management, and a focus on maximizing milk component production rather than just buying cheaper corn.

KEY TAKEAWAYS

  • Massive savings potential: Record corn crop projections could deliver $121-1,530 monthly savings per operation, but only for farms that implement strategic procurement rather than reactive buying
  • Protein cost challenge: While corn prices may drop $0.15/bushel, soybean meal costs are expected to remain firm or increase, requiring defensive strategies and alternative protein source evaluation
  • Weather dependency creates risk: The optimistic outlook relies on achieving record yields for a third consecutive year with “little room for production error”—weather disruptions could quickly spike prices
  • Strategic timing matters: Success requires balanced approach of securing corn supplies below $4.20/bushel while maintaining flexibility, combined with locking in protein sources around $300/ton when opportunities arise
  • Total ration economics trump ingredient prices: Farms optimizing entire feed programs and milk component production will consistently outperform operations that simply hunt for commodity bargains
dairy feed costs, corn prices 2025, USDA feed outlook, dairy farm profitability, soybean meal prices

The May 2025 USDA Feed Outlook just delivered the biggest gift dairy farmers have seen in years: record corn supplies poised to slash prices to $4.20 per bushel. But here’s the brutal truth most operations will miss—success won’t go to farmers who simply dump more corn into their TMR. It’ll go to those bold enough to abandon the “cheap feed mentality” that’s been bankrupting dairy operations for decades.

Let’s cut through the industry BS. How often have you heard “feed costs are killing us,” followed by absolutely zero strategic thinking about feed procurement? How many operations still treat feed buying like they’re shopping for groceries—waiting for sales, buying whatever’s cheapest, and wondering why their margins stay razor-thin?

The dairy industry’s obsession with individual ingredient prices instead of total ration economics is exactly why mediocre farms stay mediocre while strategic operators build wealth. This corn outlook isn’t just a price prediction—it’s your wake-up call to rethink how you fundamentally approach feed management.

The Corn Bonanza Everyone’s Ignoring (Again)

USDA’s May outlook isn’t just optimistic—it’s revolutionary for smart feed buyers. We’re looking at 15,820 million bushels of corn production, driven by farmers planting 95.326 million acres. That’s nearly 5 million more acres than last year, with record plantings expected in Idaho, Nevada, North Dakota, Oregon, and South Dakota.

But here’s what separates profitable operations from the pack: this isn’t just about more corn sitting in bins. It’s about a fundamental shift in the supply-demand balance that could persist beyond this marketing year—if you’re smart enough to capitalize on it.

The projected stocks-to-use ratio of 11.6% represents a 2.4 percentage point jump from 2024-25. Think about that for a moment. We’ll have significantly more corn in storage relative to consumption than we’ve seen in years. That’s the kind of supply cushion that keeps prices friendly for months, not weeks.

But here’s the question every dairy farmer should ask: Are you positioned to capitalize on this opportunity, or are you still operating with the same reactive mindset that’s kept your operation treading water?

The Money on Your Table

Every $0.10 per bushel change in corn prices alters your feeding costs by approximately $0.96 per hundredweight. With corn projected to drop $0.15 per bushel to $4.20, you’re looking at roughly $1.44 per cwt reduction in corn-related feed costs.

Let’s put this in terms that matter to your bank account:

  • 100-cow herd: $121-153 monthly savings
  • 500-cow herd: $607-765 monthly savings
  • 1,000-cow herd: $1,215-1,530 monthly savings

Those aren’t theoretical numbers from some university extension bulletin. That’s real cash flow improvement—money that could finance that parlor upgrade, cover your next AI bill, or simply provide breathing room during tight months.

But here’s the uncomfortable truth: most farmers will squander this opportunity because they still think like commodity buyers instead of strategic managers.

The Protein Reality Check: Where Most Farms Blow It

While you’re celebrating cheaper corn, soybean meal is telling a completely different story. Prices are projected to remain firm or even increase, with soybean farm prices forecast at $10.25 per bushel for 2025-26, up from $9.95 in 2024-25.

This creates what I call the “barbell economy” of feed costs. You can’t just focus on capitalizing on cheaper energy while your protein costs devour those savings. It’s like breeding for milk production while ignoring fertility—you might win short-term, but you’ll pay dearly later.

Recent market snapshots show soybean meal at $300 per ton for 2024-25, and sentiment for 2025-26 leans toward stability or firmness. Think about this: if corn is your forage base getting cheaper, soybean meal is your concentrate getting more expensive.

Most operations never ask the strategic question: How will you optimize your entire protein program while everyone else is fixated on corn prices?

The Smart Farmer’s Protein Strategy

The dairy farmers who’ll dominate 2025-26 are already developing protein procurement strategies with the same methodical approach they use for breeding programs. Some analysts explicitly recommend locking in soybean meal around $300 per ton when opportunities arise.

For a 500-cow operation using 1.5 tons of soybean meal per cow annually, every $10 per ton price swing means $7,500 in annual feed costs. That’s enough to cover genetic testing on your entire replacement heifer crop—or the difference between a profitable and losing year.

You must continuously evaluate alternative protein sources as you evaluate different sire options. Distillers grains, canola meal, and other bypass protein products should be on your radar whenever soybean meal pricing gets aggressive. It’s like having backup bulls when your preferred sire goes out of service—always have alternatives ready.

Export Dynamics: The Global Connection You’re Missing

Here’s what most farmers completely overlook: U.S. corn exports for 2024-25 were bumped up 50 million bushels to 2,600 million—the highest since 2020-21. New-crop export projections sit at 2,675 million bushels.

This robust export activity prevents corn from piling up domestically like manure in a lagoon during a wet spring. But it also means global disruptions could shift supply dynamics as rapidly as a sudden milk price drop can devastate your monthly cash flow.

The strategic question: Are you managing feed procurement risk like you manage breeding risk, or are you just hoping prices stay low?

Export strength means the corn market has natural outlets for this massive crop, much like good cow flow management prevents bottlenecks in your milking routine. But weather events in South America, trade disputes, or shipping disruptions could alter demand faster than a disease outbreak can tank conception rates.

The smart play? Secure portions of your corn needs when prices dip below the $4.20 projection but maintain some exposure to benefit from further weakness if the record crop fully materializes.

Strategic Moves: Feed Management Like Your Profit Depends on It

The farmers who capitalize on this outlook won’t just buy cheaper corn like they’re filling a commodity bin. They’ll implement comprehensive strategies that optimize their entire feed program, systematically and strategically treating feed procurement like herd management.

30-60-90 Day Action Plan for Feed Procurement

30 Days (June 2025):

  • Evaluate on-farm storage capacity and upgrade if necessary
  • Establish baseline feed cost per cow and component production metrics
  • Begin monitoring weekly USDA Crop Progress reports for planting/emergence updates
  • Contact feed suppliers to discuss forward contracting opportunities

60 Days (July 2025):

  • Forward contract 40-60% of corn needs if prices drop below $4.20 during harvest pressure
  • Secure soybean meal contracts if opportunities arise around $300/ton
  • Review and optimize current ration formulations with nutritionist
  • Implement enhanced feed inventory management systems

90 Days (August 2025):

  • Assess early-season crop development and adjust procurement strategy
  • Finalize remaining feed contracts based on updated crop projections
  • Establish performance benchmarks for income-over-feed-cost improvements
  • Develop contingency plans for both bull and bear market scenarios

Procurement Strategy: Timing Like Championship Breeding Decisions

For corn, focus on building inventory when market prices dip below the $4.20 projection. Forward contracting portions of your anticipated needs could provide price protection, especially if favorable contract prices become available during seasonal weakness at harvest—think of it like pregnancy checking early to know your feeding requirements.

For soybean meal, shift to defense mode, such as protecting your best cows during heat stress. Monitor developments closely and secure SBM when favorable pricing opportunities arise. The goal is preventing protein costs from eroding your corn savings, much like preventing mastitis from destroying your somatic cell count improvements.

Ration Optimization: Beyond the “More Corn” Mentality

Here’s where most operations reveal their strategic bankruptcy: they get excited about cheap corn and think the solution is simply feeding more of it. Current guidelines recommend total dietary starch levels of 18 to 26 percent of total ration dry matter for optimal rumen health.

Cheaper corn creates opportunities to optimize energy nutrition cost-effectively. However, resist the temptation to dump more corn into your TMR, like cramming more cows into an already tight freestall barn.

Focus on maximizing corn’s value through proper processing—grinding to appropriate particle sizes, steam-flaking, or utilizing high-moisture corn to enhance digestibility. It’s like choosing the right genetic merit for your breeding program: the quality of your use matters infinitely more than the quantity.

Component Focus: Chasing Real Money

Market trends increasingly emphasize milk components over fluid volume, much like how the industry evolved from focusing on pounds to focusing on profitable pounds. Component-adjusted production delivers substantially higher economic value, with strong butterfat and milk protein prices.

Your ration adjustments should always be evaluated for their impact on milk fat and protein yields. It’s pointless to save money on feed if you’re sacrificing component production that brings premium pay. Think of it like breeding for production without considering longevity—you might win this lactation but lose long-term.

The Milk Price Context: Revenue Side Reality

USDA projects the all-milk price at $21.60 per cwt for 2025, with 2026 forecast at $21.15 per cwt. This relative stability and lower feed costs could significantly improve your income-over-feed-cost margins—the metric that matters when you’re paying bills.

However, some market analyses during early 2025 showed more bearish sentiment, with reports of milk price forecasts being volatile throughout the year. This volatility is like dealing with seasonal milk price swings—it underscores why lower feed costs become critically important as a buffer against potential milk price weakness.

Here’s the brutal question: If milk prices disappoint and you haven’t optimized your feed costs, what’s your Plan B?

Production and Demand Dynamics: The Herd Management Connection

The constrained heifer availability across the industry is like having limited breeding-age females in your genetic program—it naturally limits expansion speed. The situation may actually help market balance by preventing rapid production increases that could pressure milk prices downward.

USDA projects modest milk production growth, combined with your opportunity to reduce feed costs, creating an environment where efficient operators can shine—like having the best genetics when everyone else struggles with fertility issues.

Risk Management Framework: Planning for Multiple Scenarios

Scenario Planning Matrix

ScenarioProbabilityCorn Price ImpactAction Required
Record crop materializes65%$4.00-4.20/buMaximize storage, forward contract aggressively
Weather disruption reduces yields25%$4.50-5.00/buMaintain flexibility, limit forward contracts
Global trade disruption10%$3.80-5.50/buDiversify suppliers, hedge positions

Hedging Strategy Recommendations by Farm Size

Small Operations (under 200 cows):

  • Forward contract 25-40% of annual corn needs when prices drop below $4.20
  • Focus on seasonal purchasing during harvest pressure
  • Maintain 2–3-month feed inventory as a buffer

Medium Operations (200-800 cows):

  • Forward contract 40-60% of annual corn needs across multiple time periods
  • Consider basis contracts to capture local pricing advantages
  • Implement a systematic purchasing program with monthly evaluations

Large Operations (800+ cows):

  • Use a combination of forward contracts, basis contracts, and futures/options
  • Forward contract 60-80% of needs with staggered delivery dates
  • Employ professional risk management consultation

Challenging Conventional Wisdom: The “Cheap Feed” Trap

Let me challenge one of the dairy industry’s most destructive beliefs: the idea that cheap feed automatically means better profitability. This thinking has bankrupted more operations than any disease outbreak or market crash.

The truth? Total ration economics matter more than individual ingredient prices. A farm paying $4.50 for corn but optimizing every component of their feeding program will consistently outperform an operation that buys $4.00 corn but ignores protein costs, forage quality, and component production.

Here’s the uncomfortable question every dairy farmer should ask: Are you managing feed costs strategically, or are you just shopping for bargains and hoping for the best?

The most successful operations I know don’t just buy cheap ingredients—they optimize entire systems. They understand that saving $0.50 per cow daily on energy costs means nothing if a poor ration balance costs them $1.50 in lost component production.

Risk Factors: Managing the Unknowns Like a Pro

Despite the optimistic corn outlook, significant risks remain. The projection relies heavily on achieving record yields for a third consecutive year, which isn’t guaranteed—much like expecting every cow to conceive on first service.

Weather-related production shortfalls could quickly tighten the supply-demand balance, and spike prices faster than a disease outbreak can devastate conception rates. Weekly USDA Crop Progress reports will be crucial monitoring tools as the season unfolds, much like monitoring your herd’s reproductive status through regular pregnancy checks.

Agricultural markets never move in straight lines, just like milk production cycles through your herd. Global economic conditions, trade relationships, and currency fluctuations influence feed ingredient costs and dairy product export opportunities.

The Bottom Line: Strategic Vision vs. Reactive Management

The May 2025 USDA Feed Outlook presents dairy farmers with a potentially transformative opportunity through projected record corn supplies and lower prices. The $4.20 per bushel corn price could deliver hundreds to thousands of dollars in monthly savings for typical dairy operations—real money that can strengthen your operation’s financial position.

But here’s the critical distinction: success won’t come from simply buying cheaper corn, like filling a grain bin. It’ll come from implementing comprehensive strategies that optimize entire feed programs while managing associated risks, much like managing a successful breeding program, which requires attention to every detail from genetics to nutrition to timing.

This isn’t just about feed costs—it’s about positioning your dairy for sustained profitability in an industry where margins matter more than ever. The farmers who act strategically on this outlook while managing the inherent risks will be best positioned for success in the 2025-26 marketing year, just like operations that combined superior genetics with exceptional management have thrived through previous market cycles.

The opportunity is real, substantial, and right before you. The question isn’t whether lower corn prices will benefit your operation—it’s whether you’ll have the strategic vision to maximize that benefit while protecting against the risks.

Your Critical Decision Point

Will you manage this opportunity like a championship breeding program—with strategic planning, risk management, and long-term vision? Or will you treat it like any other commodity purchase and wonder why your competitors consistently outperform you?

Here’s your call to action: Before you make another feed purchase, answer these three questions honestly:

  1. Do you have a documented feed procurement strategy that extends beyond this month’s prices?
  2. Are you optimizing for total ration economics or just chasing individual ingredient bargains?
  3. How will you measure success—by what you saved on corn or by how much you improved your income-over-feed-cost margins?

The choice you make in the next few months could define your operation’s profitability for the entire marketing year. The winners will be those who understand that feeding cows is about optimizing systems, not hunting bargains.

Make it count.

Data compiled from the USDA Economic Research Service May 2025 Feed Outlook report, USDA Supply and Demand reports, and industry market analyses.

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Cheese Markets Explode: Buyers Scramble as Supply Squeeze Sends Prices Soaring

Saturday, May 17th, 2025

Cheese prices surge 11¢ as U.S. dairy faces tight supplies, export boom. Can producers keep up? Feed costs drop – but trade storms loom.

EXECUTIVE SUMMARY: U.S. dairy markets are squeezed by slowing cheese production growth and surging exports, sending Cheddar prices to 5-month highs (.93/lb). While milk output expands, replacement heifer shortages and global powder demand fuel volatility, with Class III futures hitting $19.20/cwt. Canada’s supply-managed system battles butter stocks and rising cheese imports under trade deals. Feed costs offer brief relief, but trade uncertainties (U.S.-China tariffs, CUSMA quotas) threaten margins. Both markets face pressure from shifting consumer demand toward functional/organic products. Producers must balance risk management with innovation to navigate 2025’s turbulence.

KEY TAKEAWAYS:

  • U.S. cheese panic: Buyers underestimated slow production growth; export-driven scarcity could push prices higher.
  • Heifer crisis: $4,200/springer prices force producers to rethink expansion – efficiency trumps herd growth.
  • Trade double-edged sword: Mexico’s cheese appetite props up markets, but China tariff risks loom over whey.
  • Feed window opens: Corn at $4.43/bu offers rare chance to lock in lower costs amid milk price rallies.
  • Canada’s import flood: CUSMA cheese TRQs hit 52% fill rate – domestic brands must innovate or lose shelf space.
dairy market report, cheese prices, milk futures, dairy feed costs, heifer prices

U.S. cheese markets rocketed this week with blocks surging 11.25¢ to $1.93 and barrels jumping 11¢ to $1.88 as buyers panic over tighter-than-expected inventories. The anticipated cheese production increases have materialized more slowly than predicted, triggering a buying frenzy as exporters capitalize on competitive U.S. prices and domestic users rush to secure summer needs. Meanwhile, feed markets took a nosedive, giving producers a rare chance to lock in higher milk prices AND lower input costs simultaneously.

CHEESE BUYERS CAUGHT WITH THEIR PANTS DOWN: TOO LITTLE PRODUCT, TOO MANY ORDERS

The North American cheese scene got much more interesting this week. CME spot Cheddar blocks leapt 11.25¢ to reach $1.93 per pound, their highest price since January. Barrels weren’t far behind, climbing 11¢ to hit $1.88. What’s driving this sudden price explosion? Simple: those buyers who smugly sat on the sidelines waiting for the “inevitable” spring price collapse just got a rude awakening.

The widely anticipated increase in U.S. cheese production is underway, but it’s moving at a frustratingly slow pace compared to USDA projections. Buyers who gambled on heavy spring supplies and corresponding price drops are now frantically securing product as their summer needs loom large. USDA’s Dairy Market News confirms what traders are seeing, noting that spot cheese inventories are “somewhat tight” in the Central region. Even more telling, producers in the West report “Q2 production is heavily committed” due to booming export sales.

Want proof this rally has legs? Just look at Friday’s trading volume – a whopping 16 sales of cheese blocks ranging from $1.8975 to $1.93. That’s not speculative trading; that’s desperate buyers scrambling to cover genuine needs.

WHY AREN’T OTHER DAIRY PRODUCTS KEEPING PACE WITH CHEESE’S ROCKET RIDE?

While cheese dominated the headlines, other dairy commodities also managed to catch a bit of upward momentum, though with considerably less swagger:

Whey’s High-Wire China Act: Can This Rally Survive Tariff Threats?

Spot whey powder ticked up 0.75¢ to reach 55¢, matching a three-month high. The market’s getting an unexpected boost from the temporary cease-fire in the U.S.-China trade war. Let’s be clear, though – this isn’t a return to pre-trade war normalcy. China’s still slapping tariffs on U.S. imports at rates 10% higher than last year, and the 90-day negotiating window is evaporating fast.

We’re seeing a classic “get it while you can” mentality – Chinese buyers are rushing to secure U.S. whey before potential new tariff hikes make it prohibitively expensive. Domestic demand shows signs of life, but don’t get too comfortable. With cheese production ramping up (albeit slower than expected), whey output is climbing too. If those China negotiations go south, this whey market could fall faster than a politician’s approval ratings.

Global Supply Squeeze Makes U.S. Milk Powder the Hot Ticket

Sometimes it pays to be the last one standing. That’s exactly what’s happening with U.S. milk powder as global production falters. They’re dealing with their seasonal production valley in Oceania, and SMP output is dwindling. Europe’s situation is even more striking – milk collections in the EU-27 and the United Kingdom fell 0.4% year-over-year in Q1, and European SMP production dropped 3.3% in the first two months of 2025 after adjusting for leap day.

This global supply contraction is sending international buyers straight to America’s doorstep. Mexican importers are particularly hungry for U.S. powder, paying up to get it. The result? CME spot nonfat dry milk jumped 1.75¢ to reach $1.225. For your operation, this signals a potential boost to the protein component of your milk check – something to celebrate in today’s challenging margins.

Butter Market: Steady As She Goes While Cream Finds New Homes

The butter story remains remarkably consistent – U.S. butter is currently the cheapest in the world, driving exports that help keep inventories manageable despite heavy spring churning. Processors are working overtime, building inventories for the holiday baking season, but the market refuses to crack under the weight of all that production.

What’s changed recently? Cream markets have tightened slightly as ice cream production kicks into high gear for summer. There’s still plenty of cream, but that market isn’t quite as sloppy as it was a month ago. This week, CME spot butter added 1.25¢ to close at $2.3425. Since March, CME spot butter has traded within an unusually tight 12-cent range – stability that’s rare in today’s volatile dairy markets.

FUTURES MARKET GOES WILD: ARE TRADERS CALLING USDA’S BLUFF?

In an impressive feat of strength and stamina, June Class III futures managed to outpace spot Cheddar’s uphill sprint. June milk closed at $19.20 per cwt., not far from the life-of-contract high set Thursday, and up a whopping 89¢ for the week. Most other Class III contracts logged double-digit gains, and July through October Class III finished above the $19 mark.

This performance firmly puts futures traders in the bullish camp – and directly opposes USDA forecasts. While USDA’s latest outlook projects the 2025 Class III milk price at a modest $17.60/cwt, June futures are trading a full $1.60 higher. That’s not just a difference of opinion – it’s a fundamental disagreement about where this market is headed.

The “optimism gap” between USDA’s annual forecast and current futures prices has only widened recently. Are traders drunk on cheese-market Kool-Aid, or does USDA have its head in the sand regarding tight supplies? Your risk management decisions depend on who you think is right.

Class IV markets were much quieter, with nearby contracts adding a few cents while fourth-quarter futures lost a little ground. Most summer Class IV contracts point toward $18 milk, with the futures curve suggesting $19 Class IV later this year. Not too shabby, but nothing compared to the Class III fireworks.

YOUR MILK CHECK: PAIN TODAY, GAIN TOMORROW?

Let’s cut to what matters most to your operation: what does this mean for your bottom line? April milk checks are going to be disappointing – no way around it. But from May forward? Those futures are signaling significantly better days ahead.

This improving outlook is already fueling expansion talk across dairy country. But here’s the rub – where will you find the cows? Replacement heifers remain scarcer than honest politicians and nearly as expensive. Top springers commanded between $3,800 and $4,200 per head at the latest monthly dairy auction in Pipestone, Minnesota. That’s not just expensive – it’s potentially budget-breaking if milk prices don’t justify those astronomical replacement costs.

The heifer shortage isn’t temporary – it’s structural. Recent auction data from Ontario reveals replacement heifers weighing over 900 pounds are commanding between $326.50 and $328.00 per hundredweight. Do the math: a single 900-pound replacement heifer costs approximately $2,942. With USDA data showing dairy replacement heifer inventories have plunged to historic lows, this supply constraint will likely prevent rapid expansion despite improved milk prices.

FEED MARKETS DROP: FINALLY, SOME GOOD NEWS FOR YOUR COST SHEET

While dairy markets made headlines for their upward trajectory, the corn market offered a different story. USDA’s latest crop balance sheets confirmed strong export sales and predicted they’ll remain robust into the 2025-26 crop year. This should have been bullish news for corn prices, but Mother Nature had other ideas.

Rain swept across key growing regions this week, alleviating drought concerns and washing away bullish sentiment. July corn closed at $4.43 per bushel, dropping another 6¢ after substantial losses last week. For dairy producers watching feed costs like hawks, this represents one of the few bright spots on their expense sheet.

The soybean complex initially rallied on favorable USDA projections, but that optimism evaporated when EPA news hit the wire. Late in the week, the Environmental Protection Agency submitted a draft to the White House outlining biofuel blending requirements for U.S. refiners. Market whispers suggest these requirements could be much lower than previous proposals – potentially devastating news for soybean oil demand.

Soybean futures quickly surrendered their gains and then some. July soybeans settled at $10.51, a penny lower than last Friday. Meal prices initially climbed on expectations that reduced soybean oil demand would slow crushing and tighten meal supplies. By Friday, however, that logic collapsed, and meal futures retreated, finishing at $292 per ton, down $2 weekly. Again, these feeds cost stability for dairy operations represents a welcome counterbalance to the wild swings in milk markets.

THE BOTTOM LINE: WHAT THIS MEANS FOR YOUR OPERATION

Here’s what this week’s market moves mean for your dairy operation as we head toward summer:

  1. Lock in your feed needs NOW while corn ($4.43/bu) and soybean meal ($292/ton) prices remain defensive. Weather-driven bearishness could vanish faster than free drinks at a dairy convention if drought concerns resurface. Don’t miss this rare opportunity to secure lower input costs while milk prices strengthen.
  2. Consider milk price protection strategies for Q4 2025 and Q1 2026. Current futures offer attractive levels that could protect your margins if the cheese rally fizzles. Class III futures above $19 for July through October provide meaningful protection against the USDA’s more pessimistic $17.60 forecast.
  3. Rethink your replacement strategy from the ground up. Raising your replacements at current prices ($3,800-$4,200 per springer) provides a 54% cost advantage over buying. If you’re short on heifers, prioritize genomic testing on your current herd to identify your best genetic prospects and invest in sexed semen to maximize your future heifer crop.
  4. Watch export demand signals like your profitability depends on it – because it does. The current cheese and milk powder rallies are heavily dependent on international buyers. Mexico’s booming cheese appetite and global milk powder shortages drive this rally, but these advantages could evaporate if the trade landscape shifts.
  5. Update your financial projections based on this new market reality. Run scenarios with current futures prices AND the more conservative USDA forecasts to ensure your operation can weather potential volatility. Remember: the gap between these projections represents your risk exposure.

The days of predictable dairy markets are long gone. Today’s successful producer must be part strategist, economist, and fortune-teller. But one thing’s certain: with cheese markets suddenly explosive, butter holding steady, and feed costs cooperative, the opportunity for solid margins is emerging after a challenging start to 2025. The real question isn’t whether opportunities exist – it’s whether you’re positioned to capitalize on them before they disappear.

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Corn And Soy Markets Upended: Record Production Meets Surprise Demand in USDA’s May Forecast

Monday, May 12th, 2025

Corn and soybeans are set for record-breaking harvests, but bullish demand and a U.S.-China tariff truce could shake up global feed prices and dairy margins.

EXECUTIVE SUMMARY: The USDA’s latest WASDE report forecasts record U.S. corn and soybean crops for 2025-26, with corn output expected to hit 15.8 billion bushels and soybean crush reaching new highs. Despite this bin-busting supply, the agency surprised markets by projecting stronger-than-expected export demand and tighter ending stocks, especially for soybeans. A 90-day U.S.-China tariff détente adds a temporary boost to export prospects, though South American competition remains fierce. For dairy producers, these developments signal potential relief on corn-based feed costs but continued firmness in protein prices. The outlook remains volatile, hinging on weather, global trade, and policy shifts. Smart risk management will be crucial as markets digest these mixed signals and prepare for the months ahead.

KEY TAKEAWAYS:

  • USDA projects record U.S. corn and soybean crops for 2025-26, with corn at 15.8 billion bushels.
  • Stronger-than-expected export demand tightens ending stocks, especially for soybeans.
  • A 90-day U.S.-China tariff truce temporarily boosts export prospects but competition from South America stays strong.
  • Dairy producers may see lower corn feed costs but steady protein prices due to record soybean crush.
  • Volatile markets ahead: weather, trade policy, and global competition will shape feed prices and margins.
USDA WASDE report, corn soybean production, dairy feed costs, US-China trade tariffs, feed margin management

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report has shaken grain markets with projections of monster crops paired with surprisingly robust demand figures. Released on May 12, the report adds a bullish twist to what many traders expected to be a bearish outlook, while a temporary U.S.-China trade détente injects additional market optimism. These developments could reshape feed cost trajectories for dairy producers for the coming year.

Record-Breaking Corn Production Meets Strong Export Demand

USDA economists shocked the market with their first comprehensive look at the 2025-26 corn outlook, projecting an unprecedented 15.8 billion bushel harvest that would smash previous records by 3.1%. This mammoth production forecast stems from a perfect storm of expanded acreage and exceptional yield potential. Farmers have planted 95.3 million acres of corn, the highest level in 12 years, while yields are expected to reach 181 bushels per acre.

Despite this tsunami of production, the market rallied on news that the USDA expects much stronger demand than private analysts had anticipated. The agency forecasts corn exports to reach a five-year high of 2.675 billion bushels for 2025-26, up from 2.6 billion in the current marketing year. This optimistic export projection caught traders off guard, as many had braced for significantly higher ending stocks.

“Market reaction to the immediate response to what we saw on the balance sheet with old and new crops was a little bit friendly. That’s the best you could phrase that, especially in the corn and beans,” said Jacob Burks with AgMarket.Net.

Even with record production and robust total use, USDA projects 2025-26 ending stocks at 1.8 billion bushels – historically substantial but notably lower than the pre-report average trade guess of 2.044 billion bushels. Despite the projected record supplies, this surprising twist gave corn futures an unexpected boost.

The season-average farm price for corn is forecast at $4.20 per bushel, down 15 cents from the current year. While this price decline reflects the weight of record supplies, it’s less severe than many had feared, offering a glimmer of hope for dairy producers concerned about their income-over-feed-cost margins.

Soybeans: Tight Stocks and Record Crush Drive Bullish Sentiment

The soybean outlook delivered an even bigger surprise, with USDA projecting dramatically tighter stocks than analysts expected. For 2025-26, ending stocks are forecast at a relatively slim 295 million bushels, well below trade expectations of 351 million. This represents a 16% drop from the revised 2024-25 estimate of 350 million bushels.

This bullish stocks figure comes despite a slight production decrease to 4.34 billion bushels, down marginally from 4.366 billion in 2024-25. The key factor tightening the balance sheet is domestic crush, projected to reach an unprecedented 2.49 billion bushels, marking the fifth consecutive season of record-setting processing volume.

Ending U.S. soybean stocks for 2025-26 were pegged at 295 million bushels, a 16% drop from 2024-25 and well below the average analyst estimate at about 375 million bushels. The lower stocks figure reflects expectations for a smaller U.S. crop and outlook for a 3% increase in crushing, USDA said,” reports Farm Progress.

The crush boom is primarily driven by strong demand for soybean meal in livestock feed and the continued expansion of soybean oil use for biofuel production. USDA projects 13.9 billion pounds of soybean oil will go toward biofuel production in 2025-26, up from 13.1 billion in the current marketing year.

For dairy producers, the outlook suggests relatively stable to slightly higher soybean meal prices, with the season-average farm price for soybeans projected at .25 per bushel, up from .95 in 2024-25.

Global Production: South American Powerhouses Continue Dominance

While U.S. production numbers grabbed headlines, the global picture remains dominated by South American output. Brazil’s soybean crop is projected to reach a mind-boggling 175 million metric tons (MMT) in 2025-26, up 3.6% from the current year’s 169 MMT. Brazil’s corn production is forecast at 131 MMT, slightly higher than the 130 MMT estimated for 2024-25.

Argentina’s corn production is expected to jump to 53 MMT from 50 MMT, while its soybean crop is forecast at 48.5 MMT, slightly below the current year’s 49 MMT. These massive South American harvests will continue to compete fiercely for U.S. exports in global markets.

“Exports of major South American soybean-producing countries (Brazil, Argentina, Paraguay, and Uruguay) are expected to rise 8.5 million tons, more than offsetting lower U.S. exports,” according to the WASDE report details. This competitive pressure may limit potential price rallies despite the tighter U.S. balance sheets.

U.S.-China Trade Détente: Temporary Reprieve Buoys Markets

Adding fuel to the market rally, the U.S. and China announced a 90-day tariff truce on May 12, coinciding with the WASDE release. Under this agreement, U.S. tariffs on Chinese goods will drop from 145% to 30%, while China’s tariffs on U.S. imports will fall from 125% to 10%.

“The executive director of Farmers for Free Trade is encouraged by the U.S. and China agreeing to roll back tariffs drastically. Brian Kuehl calls Monday’s announcement a step in the right direction,” reports Brownfield Ag News.

The timing is significant, as the 90-day window will extend through mid-August, just before the U.S. harvest begins. During this period, officials from both countries will negotiate toward potentially longer-term trade policies. For grain markets, particularly soybeans, this provides a temporary but meaningful opportunity to move more product to the world’s largest importer.

However, industry experts caution against overexcitement about the trade news. “This agreement brings U.S. tariffs down to 30 percent and China’s tariffs down to 10 percent,” notes Arlan Suderman with Stone X Group, who believes markets are overreacting. “It’s always good when the two sides are talking… But it’s not expected to change the supply-demand balance sheet materially.”

Suderman points out that even with reduced tariffs, “Brazil soybeans at port in China are still 70 cents a bushel cheaper than those coming from the U.S. Gulf, before any retaliatory tariffs are applied.” This highlights the ongoing competitive challenges faced by U.S. exporters.

Implications for Dairy Producers: Feed Outlook and Risk Management

These developments create a mixed but generally favorable feed cost outlook for dairy producers. The projected record corn production and price reduction to $4.20 per bushel should provide some relief on the energy side of the ration. However, the tighter soybean stocks and continued strength in crush demand may keep protein costs firm, with soybean meal prices potentially rising from current levels.

The 90-day trade détente with China creates a window of opportunity that could support export sales, but its temporary nature means producers should remain cautious about longer-term price assumptions. The agreement expires as the 2025 harvest begins, potentially creating renewed uncertainty during a critical marketing period.

Smart dairy operators will use any price rallies in the coming months as opportunities to lock in feed needs for the remainder of 2025 and early 2026. With record production projected but surprisingly strong demand components, markets could remain volatile as weather developments and trade negotiations continue to evolve.

Looking Ahead: Weather and Policy Will Drive Markets

The WASDE projections assume normal growing conditions throughout the summer, making weather the critical wild card that could dramatically alter these forecasts. Any significant production shortfalls would quickly tighten balance sheets and drive prices higher, particularly given the stronger-than-expected demand outlook.

On the policy front, biofuel mandates continue to reshape demand patterns, especially for soybeans. The projected increase in soybean oil use for biofuel production to 13.9 billion pounds represents a structural shift that supports crush margins and overall soybean values.

The aggressive USDA export projections will face scrutiny as the marketing year unfolds. “We thought they (USDA) could have increased it to 100 million bushels. They came in and increased it 50 million bushels, which I thought was a pretty aggressive approach,” notes Jacob Burks regarding the corn export forecast.

For dairy producers, the key takeaway is cautious optimism on feed costs, with corn potentially offering better value while protein costs remain firm. The heightened uncertainty around trade policy suggests implementing risk management strategies while favorable opportunities present themselves, rather than betting on sustained market direction in either direction.

Conclusion: Navigate Carefully Through Market Contradictions

The May WASDE report presents a fascinating contradiction – record production forecasts alongside surprisingly robust demand projections that tightened balance sheets beyond trade expectations. Add the wild card of a temporary trade truce with China, and markets face significant crosscurrents in the months ahead.

These market dynamics demand careful attention to feed procurement strategies for dairy producers. The projected record corn supplies suggest favorable energy feed costs, while strong crush demand signals potential firmness in protein costs. The temporary nature of the U.S.-China trade détente adds another layer of complexity to an already nuanced market outlook.

As planting progresses and summer weather patterns emerge, these initial WASDE projections will evolve. Smart dairy operators will stay engaged with markets and implement flexible risk management plans that protect against adverse price movements while maintaining the ability to capitalize on favorable opportunities.

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WASDE Surprise: Grain Markets Shift While Dairy Producers Face Feed Cost Opportunity

Friday, April 11th, 2025

Trade war turmoil slashes soybean prices—discover how dairy farmers can cut feed costs now!

EXECUTIVE SUMMARY: The April 2025 WASDE report tightened U.S. corn stocks but revealed a hidden opportunity for dairy producers as soybean meal prices dropped $10/ton amid escalating U.S.-China tariffs. While corn exports rose, soybean demand remains shackled by China’s retaliatory 125% tariffs, creating volatility that masks potential feed cost savings. USDA held South American crop estimates steady despite weather risks, but trade tensions overshadow fundamental data. Dairy operations could save thousands annually by locking in cheaper soybean meal—if they act before Brazil’s harvest or tariff shifts upend markets.

KEY TAKEAWAYS:

  • Corn stocks drop 75M bushels as exports offset weak feed demand, stabilizing prices at $4.35/bu.
  • Soybean meal prices fall to $300/ton despite higher U.S. crush volume—a $7,500 annual saving for 500-cow herds.
  • China’s 125% tariffs on U.S. goods risk soybean market collapse but offer dairy farms rare feed cost relief.
  • South America’s crop stability (169M tons Brazil soybeans) hinges on recent rains compensating for early drought.
  • Act now: Lock in SBM contracts, optimize rations, and monitor trade talks to capitalize on short-term price dips.
grain markets, WASDE report, dairy feed costs, soybean meal prices, U.S.-China trade war

The April 2025 WASDE report just dropped, and buried in all those government numbers is a potential profit bomb for your dairy operation. While corn stocks tightened more than the market gurus expected and this trade war with China has hit fever pitch, there’s good news hiding in plain sight – soybean meal prices are heading down, creating a real opportunity to slash your feed costs. This seemingly dull USDA report contains signals that could make or break your bottom line in the months ahead.

The Hard Numbers: What WASDE Revealed

Corn Balance Sheet Gets Tighter

The April WASDE kept U.S. corn production at 14.87 billion bushels for the 2024-25 crop year but shuffled the demand deck. USDA cut projected feed use by 25 million bushels while boosting exports by a hefty 100 million bushels. This shift knocked ending stocks down to 1.465 billion bushels – a bigger drop than most market watchers saw coming.

Despite this tightening, USDA kept the average farm price at $4.35 per bushel. While supplies shrink, that price stability suggests there’s still enough corn to go around, even with the shifts in who’s buying it.

CategoryPrevious EstimateCurrent Estimate (2024-25)Change
Production14.87 billion bu14.87 billion bu0
Feed & Residual Use5.225 billion bu5.200 billion bu-25 million bu
Exports2.100 billion bu2.200 billion bu+100 million bu
Ending Stocks1.540 billion bu1.465 billion bu-75 million bu
Season-Avg Price$4.35/bu$4.35/bu0

Soybean Meal: The Hidden Opportunity

Here’s where dairy folks need to pay attention – USDA just knocked $10 per ton off the projected soybean meal price, now forecasting $300 per ton. This price cut comes even as they project more beans to crushers (up to 10 million bushels), which means more meal production (57.3 million tons).

Let’s put that in real terms for your operation: If you’re running 500 cows and using about 1.5 tons of soybean meal per cow yearly, this price drop means $7,500 straight to your bottom line. That’s not chump change when milk prices are squeezing margins.

CategoryPrevious EstimateCurrent Estimate (2024-25)Change
Soybean Production4.37 billion bu4.37 billion bu0
Crush Volume2.300 billion bu2.310 billion bu+10 million bu
SBM Production57.2 million tons57.3 million tons+0.1 million tons
SBM Ending Stocks450,000 tons450,000 tons0
SBM Price$310/ton$300/ton-$10/ton

Trade War Explodes: What It Means for Your Feed Costs

Unprecedented Tariff Escalation

The backdrop to all this is the trade war that’s gone nuclear. Today (April 11, 2025), China jacked up tariffs on American imports from 84% to 125%. This comes after Trump cranked U.S. tariffs on Chinese goods to 145%. It’s a full-blown economic shootout.

Soybean Market in Turmoil

The American Soybean Association says U.S. soybean growers could lose $5.9 billion annually from these tariffs. Despite this mess, China is expected to import about 3 million tons of U.S. soybeans from April to May.

According to Reuters, over 30 shipments (about 2 million tons) are heading to China in the coming weeks and will get hit with the initial 10% tariff. Another 15 vessels carrying about 800,000 tons are expected to be hammered after May 13, and a 44% tariff will be applied.

South American Production: The Other Wild Card

Weather Recovery in Brazil and Argentina

The April WASDE kept corn and soybean production estimates steady for Argentina and Brazil. USDA says “recent rains have eased concerns” about the dry weather that hit early in the growing season.

Brazil’s soybean production stays at 169 million metric tons, while Argentina’s is at 49 million metric tons. These numbers look stable on paper, but there’s still plenty of uncertainty about whether those recent rains were enough to compensate for the early-season drought stress.

CountryCropUSDA Estimate (million metric tons)Key Risk Factor
BrazilSoybeans169.0Delayed rainfall recovery
BrazilCorn126.0Safrinha crop vulnerability
ArgentinaSoybeans49.0Persistent soil moisture deficits
ArgentinaCorn50.0Late-season frost potential

Dairy Producer Action Plan: Capitalize Now

Feed Cost Management Strategies

  1. Lock in Soybean Meal Needs Now: With SBM prices dropping, it’s time to secure some of your protein needs. If you’re running 500 cows, locking in even 40% of your annual needs at today’s prices could save you $3,000+ compared to last year.
  2. Get Your Nutritionist on the Phone: The price relationship between corn (holding steady) and soybean meal (dropping) means it’s time to revisit your rations. Have your nutritionist run the numbers on tweaking your protein sources and energy-to-protein ratios based on these new prices.
  3. Tighten Up Your Feeding Program: Remember, for every percentage-point increase in NDF digestibility, your cows produce about half a pound more milk daily. Now’s the time to focus on feed efficiency – test your forages regularly, watch those refusals, and ensure your grouping strategy lets you target feed to different production levels.

Dairy Feed Cost Impact Table

Herd SizeAnnual SBM Use (tons)Cost Savings ($10/ton)
100 cows150$1,500
500 cows750$7,500
1,000 cows1,500$15,000
Assumes 1.5 tons/cow/year usage

The Dairy Market Context

Milk Price Forecasts

All this grain market drama is happening while dairy prices are shifting, too. USDA just cut the 2025 all-milk price forecast to $21.60/cwt, down a whole dollar from February’s projection and $1.01 below last year. For a 500-cow dairy pumping out 25,000 pounds per cow annually, that’s about $125,000 in lost revenue.

But here’s the silver lining – the FAO Food Price Index for March shows dairy prices running nearly 20% higher than last year while feed costs have dropped 2.6%. That’s creating a sweet spot where butter prices have jumped 3.9% even as cheese saw its first decline in nine months.

Market Outlook: What Smart Dairy Producers Are Watching

Near-Term Price Expectations

Corn prices respond somewhat to the traditional supply and demand signals, with futures ticking slightly on the tighter stocks picture. But even corn can’t wholly escape the trade war shadow.

For soybeans, it’s all about the trade fight with China. Until that gets sorted out, trade tensions will keep driving soybean prices more than any supply and demand report.

Key Watchpoints for Dairy Producers

If you’re running a dairy, keep your eyes on:

  • Any breaking news on US-China trade talks or new tariff announcements
  • Weather patterns and harvest reports coming out of South America
  • Export sales and shipment pace for both corn and soybeans
  • Early signs about this year’s U.S. planting season (how many acres, early weather issues)

The Bottom Line for Dairy Producers

The April WASDE report and all this trade drama create a profit opportunity through lower feed costs. While the trade war with China has the grain markets bouncing everywhere, the resulting pressure on soybean meal prices is good news for your feed bill – if you act on it.

Combining potentially cheaper feed and stronger dairy prices (especially for butterfat) creates a chance to improve your margins through innovative feed management and focusing your breeding program on high-component cows.

Don’t wait for more “market clarity” – the smart operators are now moving to lock in these feed cost advantages. You can’t control the markets, but you can control how you respond to them. In today’s crazy environment, that means moving quickly and strategically to capture feed cost savings while others are distracted by trade war headlines.

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Dairy Prices Defy Global Trends: What 20% Higher Markets Mean for Your Herd

Monday, April 7th, 2025

Dairy prices surge 20% while feed costs drop—discover how this rare market alignment creates a golden opportunity for your herd’s profitability.

EXECUTIVE SUMMARY: The FAO Food Price Index for March 2025 reveals a remarkable opportunity for dairy producers as prices stand nearly 20% higher than last year while feed costs decline by 2.6%. This divergence creates an exceptional profit environment where butter prices have surged 3.9% despite cheese experiencing its first decline in nine months. With RaboResearch forecasting continued milk supply growth of 0.8% in 2025 and gains expected across all major exporting regions for the first time since 2020, producers can capitalize on this favorable market through strategic breeding decisions focused on butterfat (which has 50% heritability) and implementing precision feeding strategies that optimize component production rather than simply volume. The article provides actionable guidance for dairy farmers to maximize returns during this unique market window where input costs are falling while component values remain strong.

KEY TAKEAWAYS

  • Dairy prices are 19.9% higher than March 2024 while feed costs are declining, creating a rare profit opportunity window
  • Butter prices rose 3.9% while cheese declined 1.8%, signaling the importance of breeding for butterfat components
  • Genetic selection is crucial as butterfat has high heritability (50%), making it responsive to breeding strategies
  • Feed efficiency improvements directly impact profitability—each 1% increase in NDF digestibility yields 0.51 lb/day more milk
  • All major dairy exporting regions are expected to see production gains in 2025 for the first time since 2020
dairy prices 2025, FAO Food Price Index, butterfat production, dairy feed costs, dairy market trends

The FAO Food Price Index (FFPI) held steady in March 2025, averaging 127.1 points and remaining virtually unchanged from February, as declining cereal and sugar prices counterbalanced rises in vegetable oils and meat. Despite the month-to-month stability, the index registered 6.9% higher than March 2024 levels, though still sitting 20.7% below its historic peak in March 2022.

FAO Food Price Index Key Metrics (March 2025)

CategoryIndex ValueMonthly ChangeAnnual Change (vs. March 2024)
Overall FFPI127.10%+6.9%
Cereals109.7-2.6%-1.1%
Vegetable Oils161.8+3.7%+23.9%
Meat118.0+0.9%+2.7%
Dairy148.70%+19.9%
Sugar116.9-1.6%-12.3%

Dairy Markets Show Remarkable Strength: What It Means for Your Operation

The FAO Dairy Price Index remained unchanged from February at 148.7 points but stands nearly 20% higher than its March 2024 level – signaling continued strength in global dairy markets. This sustained price elevation creates significant opportunities for producers focused on component optimization and strategic breeding decisions.

International cheese prices fell 1.8%, marking the first decline in nine months, as steady European supply met weakening demand, particularly in Oceania. However, stronger performance in other dairy categories fully offset this decline.

Butter prices surged 3.9% on strong retail sales and lower seasonal output in Oceania, marking the third consecutive monthly rise. This butter strength aligns with broader market trends showing premium values for milkfat components, suggesting producers should consider genetic selection strategies prioritizing butterfat yield.

“When butterfat premiums rise, we adjust rations to optimize milk components,” says Dr. Mike Hutjens, University of Illinois feed specialist. This approach reflects the ongoing shift in component values that began several years ago.

Component Values Shift: Butterfat Takes the Lead

The strength in butter prices continues to be a long trend in dairy markets. According to Hoard’s Dairyman, butterfat has increasingly overtaken protein as the price leader in milk checks. This shift reflects changing consumer preferences as medical, nutrition, and public perceptions of saturated fats in foods like butter have evolved.

“For many years, protein was the consistent component leader in milk checks as it fetched the highest pay price. However, prices and demand for butterfat began to improve as medical, nutrition and public perception changed on saturated fats in foods such as butter, cheese, eggs, and meat,” notes Hoard’s Dairyman.

Feed Cost Relief Amplifies Dairy Profit Opportunities

The 2.6% decline in the FAO Cereal Price Index creates a favorable environment for dairy producers, as feed costs typically represent over 50% of total milk production expenses. This feed cost relief is optimal, potentially enhancing margins for producers who strategically manage their feed programs.

Research from the University of Wisconsin has demonstrated the significant impact of feed digestibility on production efficiency. “A 14% unit difference in Starch Digestibility would translate into a 10% unit difference in TDN,” according to work from Shaver at UW. Michigan State researchers found that for every one percentage-unit increase in NDF digestibility, there is a 0.51 lb/d increase in milk yield.

Strategic Breeding Decisions Critical in the Current Market

Dairy prices show remarkable strength compared to other agricultural commodities, so breeding decisions are critical. The current market environment particularly rewards producers who align their breeding programs with component-focused production strategies.

Since butterfat content is highly heritable (about 50%), genetic selection is crucial for improving performance and obtaining higher milk prices. Lactanet states, “The goal is to breed profitable cows that efficiently yield high volumes of butterfat and protein throughout their productive lives.”

Experts recommend improving overall selection indexes while paying special attention to fat content and yield. The Genetic Herd Inventory report can help assess a herd’s genetic potential for butterfat production, with percentile rankings providing context for how a herd compares to the industry average.

Vegetable Oils and Meat Markets Also Show Strength

The FAO Vegetable Oil Price Index rose significantly, increasing by 3.7% from February to average 161.8 points, positioning it 23.9% higher than its year-earlier level. Higher quotations across palm, soy, rapeseed, and sunflower oils drove this upward momentum.

The FAO Meat Price Index increased by 0.9% in March to 118.0 points, positioning it 2.7% above March 2024. This rise was predominantly attributed to higher pig meat prices in Europe, which strengthened following renewed demand in the European Union.

Historical Perspective Shows Stabilization After Volatility

While the current FFPI shows a 6.9% increase from March 2024, it remains significantly below (20.7%) the peak reached in March 2022 following Russia’s invasion of Ukraine.

Historical FFPI Comparison

YearAverage IndexNotable Events
2022159.7Peak post-Russia-Ukraine invasion
2024126.5Pre-March 2025 baseline
2025127.1Current stabilization phase

What This Means for Your Dairy Operation

The continued strength in dairy prices, particularly the nearly 20% year-over-year increase, combined with declining feed costs, creates exceptional profit opportunities for dairy producers in 2025. To maximize returns in this favorable environment, consider these strategic approaches:

Monitor Feed Grain Prices Against Milkfat Premiums

With cereal prices declining while butter values surge, the spread between input costs and component-based revenue streams is widening. This creates opportunities to optimize feeding programs that maximize valuable components rather than simply volume.

Consult Breeding Specialists to Align Genetics with Market Demands

The current market particularly rewards butterfat production. With butterfat’s high heritability (about 50%), genetic selection can significantly impact your herd’s ability to capitalize on current market conditions.

Implement Precision Feeding Strategies

Research shows that fiber and starch digestibility improvements can significantly impact production efficiency. Michigan State researchers found that for every percentage-unit increase in NDF digestibility, cows produced 0.51 lb/d more milk.

The March 2025 FAO Food Price Index reflects a complex global food market with divergent trends across commodity groups. Combining strong dairy prices and declining feed costs for dairy producers creates a uniquely favorable profit environment that rewards strategic management decisions focused on component optimization, efficient feed utilization, and aligned breeding strategies.

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Cornocalypse 2025: How America’s Record Corn Planting Will Make or Break Your Dairy Operation

Tuesday, April 1st, 2025

95M corn acres. Looming tariffs. Feed cost chaos. Your dairy survival guide as 2025’s perfect storm hits – act now or bleed margins.

EXECUTIVE SUMMARY: The USDA’s 2025 planting report reveals a historic corn surge (95.3M acres) colliding with escalating trade wars and volatile feed economics. While abundant corn could lower feed costs, retaliatory tariffs threaten to erase dairy export gains and inflate input prices. Key strategies include locking in pre-harvest corn contracts, diversifying export markets, and prioritizing silage quality. With milk prices built on shrinking herds rather than demand growth, producers must balance immediate cost savings against long-term trade risks. Success hinges on acting before planting concludes, leveraging data-driven feed strategies, and adopting drought-resistant crops to hedge against uncertainty.

KEY TAKEAWAYS

  • Corn gamble: Record 95.3M-acre planting could drop feed costs if tariffs don’t disrupt exports – but DEC futures below breakeven for 60% of dairies
  • Trade war reality: 25-50% of U.S. dairy exports now face tariffs; Southeast Asia/MENA markets offer $1.9B tariff-free alternative
  • Act now: Lock 60-70% of corn needs via contracts <$4.50/bushel; exploit BMR sorghum’s 22T/acre yield with better drought tolerance
  • Quality matters: Regional corn silage variations impact milk yield by 2kg/cow/day – test starch/NDF before contracting
  • Breed smarter: Genomic feed efficiency tools (87% accurate) critical as milk-feed ratio lingers at crisis-level 2.10
corn planting 2025, dairy feed costs, corn silage quality, trade war impact on dairy, milk-feed margin

The USDA’s bombshell March 31 planting report reveals farmers are gambling big on corn – 95.3 million acres big. That’s 4.7M more acres than in 2024, enough to fill every inch of New Hampshire and Vermont combined with nothing but cornstalks. But here’s the kicker – while grain farmers chase tariff-hedged profits, dairy producers are stuck playing feed cost roulette in a rapidly escalating trade war. We’ve crunched the numbers, talked to the experts, and uncovered the real story behind the corn boom that could define your margins for the next 18 months.

The Feed Cost Tightrope: Walking $4.43 Corn

Penn State’s Dr. Virginia Ishler puts it bluntly: “At today’s DEC futures, 60% of operations are feeding at a loss before the first kernel’s planted.” Her team’s latest models show:

Milk PriceBreakeven Feed Cost/Cow/DayCurrent Avg.
$17/cwt$4.66$5.82
$21/cwt$8.32$5.82

Source: Penn State Dairy Extension 2025 Margin Calculator

“These numbers assume perfect weather and zero trade disruptions,” Ishler warns. “Add a drought or Chinese tariff, and we’re looking at $7/cow/day feed costs by harvest.”

Ohio State’s corn silage expert Jason Hartschuh reveals a hidden opportunity: “Smart operators are locking in standing corn contracts at /ton – 18% below 2024 prices. But you must move before June planting delays push sellers to hold.”

The USDA forecasts the average farm price paid to farmers in 2025 at .20 per bushel, down nearly 4% compared with 2024, as corn stocks-to-use will rise to just shy of 13%. This projection assumes that the massive planting intentions materialize into actual acreage and that yields follow a trendline growth of more than 2 bushels per year.

The Trade War Reality: No Longer Hypothetical

The dairy export landscape has transformed dramatically since March 4, 2025, when President Trump’s administration implemented 25% tariffs on Canadian and Mexican imports and a 20% cumulative tariff on Chinese goods. This isn’t theoretical anymore—it’s happening right now.

Mexico, Canada, and China collectively account for nearly 50% of U.S. dairy exports by value, with 2024 export figures showing:

Export Market2024 Value% of Total U.S. Dairy Exports
Mexico$2.47 Billion30.0%
Canada$1.14 Billion13.9%
China$584 Million7.1%

Source: USDA Foreign Agricultural Service, March 2025

The retaliation has been swift and targeted. Canada has imposed 25% tariffs on U.S. dairy products, including yogurt, buttermilk, and other dairy items. China announced 10% tariffs on U.S. dairy products effective March 10, 2025. Mexico’s response remains pending but is expected to target dairy heavily.

Cornell University’s Charles Nicholson projects these tariffs could result in “a staggering $6 billion loss in profits for U.S. dairy farmers over the next four years.” The CME spot markets have already responded with significant declines—cheddar blocks are down 12.5¢ to $1.775/lb, and butter is at $2.345/lb, the lowest since April 2023.

The Silage Surge Playbook: 5 Strategies Top Producers Are Using

  1. Pre-Harvest Pricing: Lock in 60-70% of corn needs now via forward contracts with December corn futures at $4.695/bushel
  2. Alternative Rations: Iowa State trials show beet pulp + distillers grains can replace 30% of corn silage with comparable milk production
  3. On-Farm Storage: 72-hour harvest windows require $8.25-$15/ton custom chopping crews – book now before tariff-related fuel price increases
  4. Dual-Purpose Crops: Brown midrib sorghum yields 22T/acre at 70% corn silage TDN with better drought tolerance
  5. Policy Arbitrage: ECAP payments for farm-grown feed corn – up to $42.91/acre

“The winners will be using corn volatility as a profit center, not just a cost,” says Top 10 dairy consultant Jan Henderson. “I’ve got clients selling December $5 calls to fund heifer development.”

Recent research from Michigan State University shows that early silage corn (April 25-May 10) yields 12-15% more forage than mid-season planting, with higher neutral detergent fiber digestibility, starch, and crude protein concentration. This timing also helps reduce insect feeding and fungal infections that can compromise silage quality.

The Milk Price Mirage: Why Record Highs Could Vanish by June

USDA’s September price hikes look tempting:

ProductPrice Increase (Aug-Sept 2024)
Cheddar Block+16.26¢/lb
Butter+6.90¢/lb
Nonfat Dry+4.45¢/lb

But dig deeper:

  • Milk cow herd down 43,000 head YoY – lowest since 2019
  • Heifer shortages limit expansion until Q2 2025
  • Consumer demand softening – fluid milk sales down 3.8% in Q1 according to USDA ERS March 2025 Dairy Outlook

“These prices are built on scarcity, not strength,” market analyst Luke Waring warns. “When heifers hit the pipeline, we could see $18 milk by Thanksgiving.”

The USDA has adjusted its 2025 milk production forecast downward to 227.2 billion pounds, down 0.8 billion from previous estimates. Meanwhile, the milk-feed ratio sits at 2.10, well below the 2.45 five-year average, indicating continued profitability challenges despite the potential for lower feed costs.

The Silage Quality Factor: Not All Corn Is Created Equal

While quantity gets headlines, quality determines your bottom line. Recent studies from Brazilian researchers demonstrate that gaseous ozone treatment (3.12-4.15%) can significantly improve corn silage quality by reducing mold and yeast populations without compromising nutritional value.

A 2024 study of corn silage from different regions of Southern Brazil revealed dramatic quality variations:

RegionStarch ContentNDFADFTDN
Central South-PR30.68%44.12%25.33%71.2%
North-PR25.21%49.86%29.70%66.8%
West-SC27.45%47.32%27.15%68.9%

Source: Journal of Agricultural Science, June 2024

“These regional differences can translate to a 1.5-2.0 kg difference in daily milk production per cow with the same amount of feed,” notes Dr. Patrick Wood of Ag Methane Advisors. “With feed production and enteric methane emissions accounting for roughly half of the milk’s carbon footprint, silage quality is both an economic and sustainability imperative.”

3 Make-or-Break Moves Before Planting Finishes

  1. Lock Feed Now: December corn <$4.50 is a gift – use options to cap upside while the USDA forecasts average farm prices at $4.20/bushel.
  2. Diversify Exports: Southeast Asian markets ($1.32B in 2024 exports) and Middle East/North Africa ($580M) offer tariff-free alternatives to Mexico, Canada, and China.
  3. Breed for Efficiency: Genomics now predict feed efficiency with 87% accuracy – critical as the milk-feed ratio remains at concerning 2.10 levels

The Bottom Line

This corn tsunami changes everything. The dairies that thrive will use market chaos to lock in structural advantages. Forget “wait and see” – your next 10 moves must happen before the planter wheels stop turning. With 62% of traders reportedly bearish on dairy markets, strategic positioning now could make the difference between survival and thriving in what promises to be a volatile year ahead.

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Why Dairy Producers Can Expect Lower Feed Costs as Corn Harvest Surges

Friday, October 11th, 2024

Learn how to record corn harvests to drive feed costs down for dairy farmers. Are you ready to capitalize on this harvest?

Summary:

This year stands out for dairy farmers as the USDA reports near-record harvests: 15.2 billion bushels of corn and a robust 4.582 billion soybeans. This unprecedented yield and carryout of just under 2 billion bushels promise lower feed costs, offering a potential boon to dairy profitability. With reduced feed expenses on the horizon, dairy producers can expect enhanced margins. Despite potential weather-related challenges impacting soybean supply, particularly Hurricane Helene, the overall robust harvest performance suggests a positive outlook. South America’s steady production, notably Brazil’s 27.96 million metric tons of soybeans, further contributes to global supply stability. As forecasts unfold, the dairy industry watches closely, eager to leverage these shifts for increased efficiency and profitability.

Key Takeaways:

  • U.S. corn production reaches near-record levels, with increased export demand potentially influencing market dynamics.
  • Soybean yields face challenges from adverse weather, notably Hurricane Helene’s impact in the Southeast.
  • South American countries like Brazil and Argentina are projected to increase soybean production despite weather-related planting delays.
  • Record harvests suggest a downward trend in corn and soybean prices, benefitting dairy farmers with lower feed costs.
  • The dairy market sees declining butter and cheese prices, offering further potential cost savings for dairy producers.
corn harvest 2024, dairy feed costs, corn yield advancements, lower feed prices, soybean market challenges, Hurricane Helene impact, agricultural management strategies, Brazil corn production, Argentina corn production, global agricultural trends

Ever think about how a great harvest can change an industry? With the 2024 corn harvest kicking off, it’s making waves in the farming scene. Picture this: a nearly record-breaking harvest, hitting 15.2 billion bushels of corn, is set to bring down feed costs for dairy producers. Right now, the boost in corn production is bringing some good vibes to the dairy industry. Since there’s so much available, feed costs are likely to hit their lowest point in years. Seeing how big corn yields can lower costs is a great way to boost your operations and make intelligent choices for your dairy business.

A Harvest Like No Other: Record Yields Shaping the Future of Dairy

This year’s corn harvest is something to keep an eye on. So, the latest USDA crop reports say we’re on track for some awe-inspiring corn production, hitting around 15.2 billion bushels. Take a second to think about that number. That’s 17 million bushels more than what everyone thought back in September.

This year’s harvest stands out because of the average corn yield per acre. The USDA has bumped it up to an impressive 183.8 bushels per acre. To give you an idea, that’s an increase of 0.2 bushels from last month’s estimate. It’s hitting a new high for everyone.

This boost isn’t just some figure; it’s a shoutout to the extraordinary efforts of our farmers and the incredible advancements in farming methods. It shows a solid level of productivity that’s impressive and important for keeping feed costs low in our dairy industry. Have you thought about what this could mean for how you do things?

A Game-Changer for Dairy: Understanding Corn’s Ripple Effect

The jump in corn production isn’t just some number; it’s a game-changer for folks in the dairy biz. When corn yields are super high, it shakes things up in the market, kicking off with lower feed costs. Why not? When more corn is available in the market, you can usually expect the prices to drop because of the primary supply and demand. When there’s a lot of corn around, prices per bushel drop, which means feed gets cheaper for dairy producers and helps boost their profits. This potential for increased profits should give you a reason to be optimistic and motivated about the future of your dairy business.

Getting a grip on this relationship is super important. When there’s more supply than demand, prices usually drop. This means significant savings for dairy farmers who depend on corn-based feed. Cutting down on feed costs isn’t just a little saving; it affects the overall profits, which could mean more money to put back into the business or boost earnings. This potential for more money to invest back into your business should make you feel hopeful and inspired about the future.

The ripple effects keep going. When feed prices go down, it also means that making milk and other dairy stuff gets cheaper. This might lead to better prices for dairy products, which could boost consumer interest and help reach more people in the market. Ultimately, everyone in the supply chain could gain, from farmers to retailers and consumers who enjoy lower prices.

Weather Woes and Soybean Success: Navigating Uncertainties in Dairy Feed Costs 

As we check out the soybean market, we must recognize how promising this year’s harvest looks. So far, 47% of the nation’s soybeans have been harvested, which is ahead of last year’s pace. This hints at a solid yield, even with a few minor differences. The USDA says this year’s average yield is expected to be 53.1 bushels per acre, which is a bit lower but still pretty good. This amount of production looks suitable for making livestock feed more affordable.

We can’t forget about one crucial coworker—the weather. Hurricane Helene is not helping dairy farmers at the moment. The storm could mess things up, especially in Georgia and North Carolina, which might cut back on supply from areas that usually contribute a lot to the national yield. These disruptions could swing feed costs around, making the financial situation for your dairy operations a bit more unpredictable.

Guess what? Despite these challenges, the overall improvements in harvest and solid yields expected across the country provide some relief. Innovative management and some backup planning can help lessen the adverse effects of weather on feed prices. Still, this situation highlights the importance of monitoring the weather and planning smartly to get raw materials. By emphasizing the importance of strategic planning, we aim to make you feel empowered and in control of your dairy operations.

South America’s Influence: Corn and Soybeans in the Spotlight

Looking beyond the U.S., the agricultural scene worldwide shows a lively mix of what people expect and what’s happening, especially in South America. Brazil and Argentina, critical players in the agriculture scene, are dealing with forecast changes that might influence global supply and pricing.

The USDA’s latest estimates say Brazil’s corn production is expected to steady at 127 million metric tons. That’s up from last year’s 122.2 million metric tons, showing Brazil is stepping up as a corn powerhouse. Argentina’s corn production is expected to hit 51 million metric tons, a slight bump from last year’s 50 million metric tons.

Regarding soybeans, the USDA expects Brazil to produce a solid 27.96 million metric tons, a positive sign of the country’s robust farming setup. Argentina is catching up, with projections at 24.45 million metric tons, showing an apparent increase from last year’s production levels.

These big players from South America are set to make a big splash in the global grain markets. As Brazilian and Argentine grain production ramps up, prices drop, which could be a nice break for dairy farmers who rely on feed costs. Supply and demand are balancing tricky worldwide, with production forecasts and real-life issues like weather influencing what happens next.

Navigating the Quiet Waters: U.S. Corn and Soybean Exports in a Global Tug of War

U.S. corn and soybean export sales are moving slowly, sticking close to the lower end of what the market expected. For the 2024-25 marketing year, total corn sales hit 1.22 million metric tons (MMT), which aligns with what market analysts were predicting, with estimates between 1 MMT and 1.5 MMT. On a similar note, soybean export sales for the 2024-25 and 2025-26 seasons didn’t quite hit the mark, coming in at 1.26 MMT compared to the expected range of 1.2 MMT to 1.8 MMT.

There are a bunch of things going on here. The ongoing geopolitical tensions, especially around the Black Sea, damage global agricultural trade, making buyers uncertain and cautious. Plus, the weather patterns in South America make things a bit more complicated. Brazil’s soybean production might face some challenges, and Argentina’s farming scene is unpredictable. International buyers closely monitor these changes to see how they could affect global supply and demand.

Looking at prices, corn and soybean prices might keep a bit low. If things worsen in South America, we could see a rise in demand for U.S. exports, which would change the current export story. Unless something unexpected happens in major production areas, prices might stay steady or drop slightly, which could be good news for U.S. dairy producers looking at competitive feed costs. But folks in the market need to stay on their toes because any changes in geopolitical vibes or weather issues could quickly change things up, affecting prices and what’s available.

Spotlight on Dairy: How Declining Feed Costs Ignite Profit Hopes

We’ve seen some exciting changes in the dairy market lately. So, CME spot butter prices have been dropping steadily at $2.625 per pound. So, this drop is just part of a bigger picture: spot prices have decreased by 6.25¢ in the last week, which could mean demand is easing or production is ramping up. Cheddar block prices have dropped slightly, now at $18.875/lb., a clear drop from yesterday and earlier this week. Barrel cheese prices are a bit all over the place, showing a slight increase today but still lagging behind last Friday’s numbers.

These price changes aren’t just random events. They link right to the bigger picture in agriculture, especially with those fantastic corn yields and strong soybean production. With feed costs decreasing because of these plentiful harvests, dairy farmers might have a chance to boost their profits. When input costs go down, producers usually see a boost in their bottom line, which could give some much-needed relief in the tight-margin situation many dairy operators are dealing with.

With feed prices hitting some of the lowest levels in years, you can feel the chance for better dairy profits. This setup can help dairy farmers, giving them a safety net against the ups and downs of the global market. It’s hard to say if these market shifts will bring long-term stability since they depend on factors like global supply and demand changes. With feed costs decreasing, it is a good time for folks in the dairy industry to boost their finances, especially with all the ups and downs in dairy prices.

The Bottom Line

This season’s story mixes some excellent corn harvests with good vibes about feed costs in the future. So, the USDA reports are out, and we’re seeing some crazy high yields, which means feed prices are hitting a low point. That’s a nice little boost for the dairy industry, especially with global markets’ ups and downs. Since corn production looks better than expected, dairy producers are at a critical moment. With feed costs likely decreasing, they can boost profits and smartly reinvest those savings.

This change calls for some thought and looking ahead. How can you use these changes to make your operations run smoother? Could this lower-cost time be a launchpad for some cool new ideas or growth? It’s a great moment to kick back and enjoy the quick relief while thinking about how this will shape your business and growth. Your choices today could change your path for a long time ahead.

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