Income over feed cost (IOFC)

Definition

Income over feed cost (IOFC) is milk revenue minus the cost of the feed used to produce it, over the same group of cows and the same period. It is usually stated per lactating cow per day, sometimes per cwt of milk shipped.

IOFC is a margin, not profit: labor, replacements, health, facilities and debt service all come out of it. It is the right metric for feeding decisions, because a cheaper ration that loses more milk value than it saves lowers IOFC.

Before you compare two IOFC numbers, state three definitions:

1. Which cows: lactating only (most common), or the whole herd including dry cows and sometimes heifers.
2. Which milk price: mailbox/net price received (after hauling, promotion, co-op deductions), or a gross component price. Herds paid on components should use the component-based price, not a fat-corrected-milk shortcut.
3. Which feed cost: the ration cost as fed (including shrink), or the formulated cost (excluding shrink). Homegrown forages priced at market value or at cost of production.

Formula

Plain text:

IOFC ($/cow/day) = milk (lb/cow/day) / 100 × milk price ($/cwt) − feed cost ($/cow/day)
IOFC ($/cwt)     = milk price ($/cwt) − feed cost ($/cow/day) / milk (lb/cow/day) × 100

LaTeX:

\mathrm{IOFC}_{\text{cow/day}} = \frac{M}{100} \cdot P_{\text{milk}} - C_{\text{feed}}
\qquad
\mathrm{IOFC}_{\text{cwt}} = P_{\text{milk}} - \frac{100 \cdot C_{\text{feed}}}{M}

where M = milk in lb per cow per day, P = milk price in $/cwt, and C = feed cost in $ per cow per day.

Use milk shipped (bulk tank / plant receipts) for revenue, not test-day or meter milk. Hospital and fresh-cow dump milk is produced and fed for, but not sold.

How to pull it in DC305

DC305 supplies the milk and cow-count parts. It doesn’t hold milk prices or feed costs: those come from the milk check and from feeding software (e.g. TMR Tracker, FeedWatch, EZ Feed) or the nutritionist.

SUM MILK FOR LACT>0 MILK>0          average test-day milk, lactating cows
SUM MILK BY PEN FOR LACT>0          by pen, to match pen-level ration cost
COUNT FOR LACT>0 MILK>0             approx. lactating cows (cows with a current test-day milk)

(These use the standard MILK = current test-day milk, LACT, PEN and RC items.)

[!VERIFY] The cleanest DC305 filter for “currently lactating” (dry status by RC or pen differs by herd setup; see the herd’s private dc305-vocab mapping).

Use DC305 test-day milk only to split milk between pens. For herd IOFC, take total shipped milk from plant receipts and divide by average lactating cows for the period.

Typical range

Herd context: US Holsteins, freestall or dry-lot, lactating cows only, mailbox milk price, as-fed ration cost including shrink.

IOFC follows the milk-to-feed price cycle more than herd management, so give it with the period and prices.

Basis	Low-margin years	Typical	Strong
$/lactating cow/day	< $7	$8–$12	> $13
$/cwt shipped	< $8	$9–$13	> $14

[!VERIFY] All four bands. These are rough recent-US ranges and very price-dependent. Replace with a dated benchmark source, or with peer comparisons from the same milk-price region.

• Feed cost per cwt (the other side of the margin) commonly runs about $8–$12/cwt for lactating cows.

[!VERIFY] Feed cost per cwt range.

• USDA’s DMC margin (all-milk price minus a national formula feed cost, per cwt) is a published, standardized IOFC-style benchmark. Use it for market-level context, not as a farm’s own IOFC.

Common mistakes

• Mixing bases. Comparing a lactating-only IOFC with a whole-herd one, or mailbox price with gross price, can easily move the number by $1–3/cow/day.
• Test-day milk for revenue. Meter or test milk overstates sold milk: discarded milk, calf milk and meter error all get counted.
• Formulated ration cost instead of as-fed cost. Shrink (spoilage, wind, refusals thrown out) is a real feed cost. See shrink.
• Counting cows on the wrong day. Average lactating cows over the period, not the count on the last day.
• Treating IOFC as profit. A herd can raise IOFC by pushing milk with expensive feed while cost per cwt overall gets worse. Pair it with feed efficiency and total cost of production.
• Dry cows and heifers left out silently. Fine for a lactating-ration decision, misleading for whole-farm margin.

Related

• Feed efficiency
• Shrink