Part I and II of “Making Money” covered Component Levels and Milk per Cow. This post will cover revenue from a low Somatic Cell Count (SCC). SCC is a count of somatic cells in a milliliter specimen measured in thousands and is a measure of health. The count is primarily white blood cells and is an indication of bacteria often caused by Mastitis.
The U.S. maximum for SCCs is 750,000 cells per milliliter per farm for domestic sales and 400,000 cells per milliliter for exports. A low SCC is especially important for productivity in cheese making.
The Federal Order pricing includes a bonus for cell counts below 350,000 cells and a penalty for cell counts above 350,000. The SCC calculation for payment is based on the price of wholesale Cheddar cheese multiplied by .0005.
There are only four Federal Orders that are paid based on SCCs. All producers in these four Federal Orders are paid a bonus in their initial payment when milk is delivered regardless of the end use of the milk. The four that receive a bonus for low SCCs are the Upper Midwest, Mideast, Central, and Southwest Orders. California, although they are a major cheese producer, did not want to include a SCC bonus because it would increase the cost of milk for producers using milk for products other than cheese.
How important is the revenue for low SCCs? The Upper Midwest is the largest Federal Order receiving a SCC bonus and they have the lowest SCC. The SCC bonus is .6% of the revenue on the first payment. When the Producer Price Differential and Uniform price is calculated, Class I SCC revenue is not included.
How are the four Federal Orders getting paid for a lower SCC doing in reducing SCC? Chart I below shows the change in average SCC for the combined four Federal Orders getting a SCC bonus. Between 2016 and 2019, the SCC decreased from 219,000 to 190,000, a 13% reduction. Since then, the SCC has bounced around between 184,000 to 193,000. Is this the best that can be done?
Of the four Orders paid for SCCs, the Upper Midwest is averaging the lowest SCCs currently at 173,000 cells per milliliter (Chart II).
The Mideast Federal Order is second best with a current average count of 179,000 SCC (Chart III). The current trend is back to higher SCCs.
The Central Federal Order falls into third place with a current SCC of 194,000 per milliliter (Chart V). The good news is that the current trend shows improvement.
The Southwest Federal Order has the highest SCC by far with a current level of 208,000 per milliliter (Chart VI). They are trending toward lower SCCs.
Summary
SCC payments are a very small part of the overall payment to producers. Nevertheless, those being paid have improved SCC levels significantly from the 2016 levels. Herd health is hard to measure and there is little data on the savings in cheese production with lower SCCs. Lower levels can be obtained, but the lack of a specific value for health and cheese production are needed to entice future effort to further lower SCCs
