Dairy Basics – 101

In the dairy industry, when contracted with a processing company, dairies are paid by the CWT (or hundredweight). Which is the price per every 100 lbs.

This price obviously has it’s fluctuations in the market. What the current demand for dairy products are, (any one else craving some eggnog right now??) what the economy is doing, if products are even able to be exported and also the quantity that is shipped. HOWEVER, even with the price flux due to the economy, your milk quality is also judged and sales price reflects the “blend” that you are producing.

Dairies work very closely with vet’s and nutritionists to get the PERFECT blends and rations when feeding their cows. Different species of cows naturally produce different qualities of milk. For example, Holstein cows are very good at producing high quantities of milk with a good amount of butter fat, but Jersey cows are know for their high butter fat content, but generally don’t produce quite as much milk on the daily.

Currently we milk Holstein cows and are always improving the feed rations and incrementally improving our milk blend and milk sales price. CWT price has been up into the mid 20’s over the past few years, and has been down as low as $13. So even in the hard times you can still make more than the uniform price if your blend is producing the quality components.

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