Effects of Alternative Protein and Fat Payment Plans on Production Variables and Returns in Louisiana Dairy Herds.

Abstract

Multiple linear regression was used to compare the impact of proposed multiple component milk pricing systems with the present milk pricing system for Louisiana Holstein herds on DHIA. Dependent variables were milk yield, fat yield, protein yield, six income over feed cost pricing systems, and six product value pricing systems. Independent variables were herd, year, and month as class variables and 18 production variables. Data were 16,675 herd-year-month observations of Louisiana Holsteins from DHIA monthly Herd Summary DHI-202 computer files. Pricing data was standardized using prices form the New Orleans - Mississippi Federal Milk Marketing Order 1094, Zone 1. The pricing plans studied were current milk yield-fat differential pricing using DHIA data; current milk yield-fat differential pricing with standardized prices; Great Basin Federal Milk Marketing Order pricing; cheese formula pricing; milk yield-fat differential pricing with reduced fat differential; and milk yield-fat differential pricing with reduced fat differential and $.12/.1\% protein differential. Herds had higher product value and income over feed cost than with the present milk yield-fat differential pricing system in all plans except the cheese formula pricing. Income over feed cost per day per cow was $.23 higher in reduced fat differential with a protein differential pricing; \$.04 higher with Great Basin pricing; and $.45 lower with cheese formula pricing than with the present milk yield-fat differential pricing system. The results suggested variables that may have a different influence under multiple component pricing than with present milk pricing. More silage and concentrate may be fed under multiple component pricing, and heavier body weights would have less advantage over lighter weights. Days open, number of breedings for pregnant cows, first breeding conception rate, percent involuntary culling, and percent cows in milk may have enhanced value or suffer a lower penalty under multiple component pricing than present pricing. Variables having less value under multiple component pricing were dry forage, pasture quality, percent possible breedings serviced, predicted difference dollars, and percent cows in the breeding herd.