Tuesday, March 31, 2009

How is SCC Premium Related to Cheese Prices?

How is the Federal Milk Marketing Order adjustment for Somatic Cell Count related to Cheese Prices?

In a word - Directly!

The premium (or penalty) for Somatic Cell Count above or below 350,000 cells per milliliter is directly related to the cheese price. The formula is:

SCC pricing adjustment = monthly price for cheese x .0005

Therefore, there is a significant correlation between the SCC premium and the price paid for protein.

When Cheese is around $1.25 (its current pricing) the SCC value is .000625. If a cow is producing 80 lbs. of milk and the SCC is 250,000, that is worth 5 cents per day. When cheese is $2.00 per lb., the SCC premium is .001 and is worth 8 cent per day, an increase of 4 cents per day. For a herd of 1000 cows, this is a difference of $10,950 per year.

A higher cheese price is worth more than just the increased value of protein.

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