App helps dairy farmers milk profits during volatile times

September 12th, 2012 in Biology / Other

(Phys.org)—A free mobile app developed by Penn State researchers can help dairy farmers plow through financial planning by helping them track feed costs and income.

The DairyCents , currently available on the , helps farmers estimate income over feed cost per cow, a number that tells farmers how much money is left over to pay other expenses minus the feed costs, according to Virginia Ishler, nutrient management specialist and dairy complex manager in . Another function compares feed prices in several locations across the country.

"Farmers are doers, they enjoy the physical work aspect of farming, but not always the financial side of the operations," said Ishler. "Hopefully, this app makes this part a little easier."

To use the income-over-feed function, farmers need to enter only a few pieces of information to help estimate the income a cow can produce compared to the cost of the feed, according to Ishler. They can enter the date, their zip code and estimated level of milk production. Farmers can select estimated production levels based on three settings—65, 75 and 85 pounds.

"The income-over-feed cost is a good barometer for how their operation is doing," said Ishler. "It gives farmers a feel for how much money will be left over at the end of the month to pay bills."

Ishler said that the app uses average prices for alfalfa hay, milk, corn and soybean meal and is based on diets developed by Ishler. Hay and milk prices are obtained from the U.S. National Agricultural Statistics Service. Corn and soybean meal prices are obtained from the Chicago Mercantile Exchange.

The app, available on the web at extension.psu.edu/dairycents, can help farmers track price data on feeds, forages and commodities.

The app also allows farmers to enter the prices they are currently paying for feed, which can then be referenced by other farmers around the country. Ishler said that eventually this function may help farmers find better prices for feed, as well as give them more leverage to negotiate with current feed suppliers.

About 150 subscribers signed up for the app within a week after its release.

The team is planning a second round of development to make the app available on other platforms, such as the Android smart phone operating system.

Ishler, who worked with Rebecca White, senior project associate, Penn State, and Alex Heiphetz, CEO of AHG Inc., said that current market conditions influence problems and opportunities for farmers. Weather conditions during one season can have a ripple effect for months.

Weather issues and price volatility have hit farmers particularly hard the last few years, according to Ishler.

"We have never seen this type of price variability," Ishler said. "People can't make a decision in a vacuum, so this app helps by easily giving them information to help the with long-term planning."

Provided by Pennsylvania State University

"App helps dairy farmers milk profits during volatile times." September 12th, 2012. http://phys.org/news/2012-09-app-dairy-farmers-profits-volatile.html