The USDA Economic Research Service released updated numbers on the cost of producing milk. As always, there is a lot of data and it is hard to find the stories in it.
Here is one story for Wisconsin production.
The operational costs of producing milk in Wisconsin have risen significantly since November. Looking at the values themselves is not so illuminating. Instead, here is a graph of how month-by-month milk production costs vary from the long-term average (between 2003 and 2007).
The overall operating cost (black line) was below average for the beginning of the period and a lot above average since March 2006.
There are too many components on the graph to pick out the big factors, so here is a table showing what factors exceeded the long-term average. The exceedences are shown for the March 2006 – March 2007 period and the November 2006 – March 2007 period. In both periods, four feed types were the largest exceedences, but feed grains, silage, and “other feed items” rose in importance after November.
Those who read the newspapers will want to point to corn ethanol as the source of these changes. However, note that hay and silage exceeded their averages first, as early as January 2006. Feed grains have only exceeded the average since fall 2006 and were below average for several years before that.
