Income Over Feed Cost (IOFC)

A good IOFC depends on region and milk price. Generally, IOFC above $10 per cow per day is considered excellent. Values between $7–10 are good, $5–7 moderate, $3–5 below average, and under $3 is poor. These benchmarks help you compare performance over time and across herds.

IOFC measures only the relationship between milk income and feed cost — the two largest variables in dairy farming. Net profit includes all other costs such as labor, veterinary care, equipment, and depreciation. IOFC is a pure measure of feed program efficiency and is more useful for evaluating ration changes.

Yes. Total feed cost should include all feed inputs — forages, concentrates, minerals, and supplements. The more accurate your feed cost figure, the more useful your IOFC calculation will be for decision-making. Partial feed costs will give a misleadingly high IOFC.

Calculate IOFC monthly at minimum. Weekly calculation is ideal for tracking the impact of feed price changes, ration adjustments, or milk price fluctuations. Many farms track IOFC as a key performance indicator on their management dashboard.

Feed cost ratio is the percentage of milk revenue consumed by feed costs. It is calculated as (Feed Cost ÷ Milk Revenue) × 100. A ratio below 50% is excellent, 50–60% is good, 60–70% is fair, and above 70% means feed costs are unsustainable and threatening profitability.

Milk price has a direct linear impact on IOFC. A $0.05/liter increase in milk price on a cow producing 25 liters/day adds $1.25 to daily IOFC. This is why IOFC should always be tracked alongside milk price — a rising IOFC may simply reflect higher milk prices rather than improved feed efficiency.

Higher milk yield increases milk revenue, which directly increases IOFC — assuming feed costs do not rise proportionally. However, higher-producing cows typically require more feed. The goal is to maximize the marginal revenue from additional feed input, not just maximize yield.

Effective feed additives such as yeasts, enzymes, and bypass fats can improve milk yield or reduce feed cost per unit of production. If an additive costs $0.10/cow/day but increases revenue by $0.30/cow/day, IOFC improves by $0.20/cow/day. Always evaluate additives using IOFC impact.

Yes. Negative IOFC means feed cost exceeds milk revenue — the cow costs more to feed than she earns from milk production. This signals an urgent need to review the ration, milk yield, or milk price. Negative IOFC is unsustainable and must be addressed immediately.

F$/CWT (Feed Cost per Hundredweight of Milk) measures feed cost per unit of milk produced. IOFC measures the absolute dollar margin above feed cost. Both are useful: F$/CWT is better for comparing feed efficiency across farms, while IOFC better captures total profitability per cow.

Indexed IOFC compares your IOFC to a benchmark or baseline period. For example, if your baseline IOFC was $8.00 and current IOFC is $9.50, your index is 118.75. This helps track improvement over time regardless of absolute values and is useful for comparing across different milk price environments.

Seasonal changes affect both sides of the IOFC equation. Summer heat stress can reduce milk yield by 10–25%, while winter may increase feed costs due to higher energy needs. Forage quality varies seasonally, affecting both cost and nutritional value. Track IOFC monthly to identify and plan for seasonal patterns.