Milk bonus does your wallet good

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WOOSTER, Ohio – Dairy farmers can increase their milk checks without expanding their herds. It just takes a little more management and some shopping around, according to Tom Noyes, dairy agent at the Wayne County office of Ohio State Extension.

There is probably an opportunity for some producers to gain at least an additional $1.50 per hundred pounds of milk produced, Noyes said. And, with milk prices more than $1 per hundred pounds lower than normal, maximizing the milk check is more important than ever.

Recently, the All Milk Price – the base price of milk plus additions for butterfat, protein and other solids content – was about $12.50 per hundredweight. The average All Milk Price received by Ohio dairy farmers over the past 10 years is $13.76 per hundredweight.

“You can affect what your milk price is through management on the farm and looking at different marketing alternatives,” Noyes said. “You could gain $1 per hundredweight just by altering what you do on your farm.”

Improving milk quality by lowering the somatic cell count and controlling other factors could make a noticeable difference. Somatic cells are animal body cells present at low levels in normal milk.

High levels of the cells in milk – caused by such things as mastitis infection, udder injuries, stress, poor milking procedures and cow age – indicate abnormal, reduced-quality milk.

Milk with a high somatic cell count has a shorter shelf life, yields less cheese and may have poor flavor, Noyes said.

In Federal Order 33, the milk price producers receive is adjusted up or down by how much their milk’s somatic cell count is below or above 350,000 cells per milliliter. Milk below 350,000 cells per milliliter gets a premium, while milk above 350,000 is discounted.

“In Federal Order 33, about 53 percent of the milk produced has a somatic cell count between 201,000 and 400,000 cells per milliliter,” Noyes said. “That means more than half of the milk produced is discounted or receives only a small bonus.

“Another 25 percent of the milk has counts worse than 400,000. So there is definitely room for improvement in gaining take home dollars through reducing somatic cell counts.”

The premium amounts vary by market and can range from 10 cents per hundredweight to $1 per hundredweight. Additional bonuses often are paid for producing premium quality milk for consecutive months, Noyes said.

All quality programs also are based on milk being free of antibiotics, added water, low sediment and off flavors. Based on the milk supply, some buyers may offer over order premiums. These are bonuses above the market price for milk within a federal order offered simply to secure milk for a buyer. They are not based on quality.

The more competition there is for milk, the higher these bonuses may be, Noyes said. The bonuses often range from zero to 30 cents per hundredweight and vary by month. Dairy farmers can adjust their production to take advantage of seasonal bonuses.

The bonuses often occur in the fall when children are going back to school and milk demand increases. The problem is, many producers often get their highest milk production in the spring, when grass and hay supplies flourish, but the school year is almost over.

Finding ways to increase fall production could be beneficial, Noyes said. However, with expanding dairy herds, milk production across the United States is becoming more consistent throughout the year. So, seasonal bonuses have diminished and may not be around much longer, Noyes said.

Bonuses also exist for milk with high levels of protein. Some buyers are paying 10 cents per pound of protein in milk. Having a high protein dairy herd can add significantly to the bottom line.

“You have to shop around for the market that best suits your milk,” Noyes said. “And once the buyer who pays the best premium is found, producers have to be willing to change where they ship their milk so they can get the best price possible.

“Ohio producers often are loyal and are hesitant to shift buyers. But the decision should depend on the price.”

In the long run, taking advantage of premium prices could really pay off. For a 100-cow Holstein operation producing 20,000 pounds of milk per cow per year, an extra $1.50 per hundred pounds of milk produced would garner $30,000 of additional income per year.

By adjusting management practices, producers could probably obtain these bonuses with little or no added production costs, Noyes said. Be sure barns are well ventilated, stalls well bedded, the operation is clean, and proper milking techniques followed.

Take advantage. “There is obviously additional money to be made by producing high quality milk and shopping around to find the market that will be to your advantage,” Noyes said.

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