The graph generated from the Penn State IOFC tool
Monitoring income over feed costs, or IOFC, is a proven way to evaluate a dairy's profitability. When IOFC is monitored on a monthly basis, it can be a good barometer to gauge when the herd is profitable, when it is not, and when changes need to be made. The challenge faced by many Pa. producers is that they do not know how to monitor IOFC. This puts the industry at a disadvantage compared to producers in other states. Penn State's risk management group, consisting of extension educators, faculty and staff, continues to focus its efforts on this important topic.
There are several strategic decision-making levels related to calculating IOFC. In order to make this process user friendly, a web-based tool is available that will allow the user to determine actual feed cost per cow, their IOFC, and compare it to industry benchmarks and to the IOFC index developed by Penn State (Bailey and Ishler, 2008).