This report summarizes the records of 48 Western Plateau dairy farmers who in 1969 participated in business management projects sponsored by the Cooperative Extension Service in Allegany, Cattaraugus, Chautauqua and Erie Counties and the Department of Agricultural Economics at Cornell University. The data presented here do not represent the average of all dairymen in these counties but the average of a group of dairymen interested enough in their farm businesses to keep good records and take the time to study and analyze them. Averages for the group of farms in each of these counties are included at the end of the publication. These are not to be taken as indicative of the relative profitability of dairy farming in the various counties. One of the purposes of the business management projects is to teach and encourage farmers to keep better records. A more important purpose is to teach farmers to use the records as a basis for sound management decisions. The business analysis beginning on Page 10 is a good starting point for using your farm records in decision making. Your records should be useful as a basis for budgeting the probable consequences of the alternatives available to you in the operation of your farm business. Farmers in many counties of New York State participate in business management projects similar to those in the Western Plateau Region. Some of the data included in this booklet is taken fr0m the 1968 records of 568 New York dairy farmers. This gives farmers the opportunity to compare their business with a larger group of their competitors. The larger number of farmers also makes possible the sorting of farms into groups, thereby allowing comparisons that could not be made from the relatively small number of records in. any one county. Note that in calculating Labor Income (Page 9) and Machinery Costs (Page 14) interest has been charged at seven p2rcent rather than at the 5 percent rate used in the past. The interest charged intended to reflect the fact that the capital invested in the business would earn a return if invested elsewhere. Thus, the interest charge is not necessarily the interest rate on borrowed money but is an "opportunity cost" -- the rate of return the capital would earn if invested elsewhere. This opportunity cost varies from farm to farm but there is no doubt that alternative investments -- savings accounts, government bonds, etc. -- returned a much higher rate of interest in 1969 than in earlier years. This situation, plus the fact that interest rates on borrowed money were much higher in 1969 than two or three years earlier, was the basis for the decision to use a 7 percent interest charge for 1969. Note also that on Pages 9 and 14, the 1968 data for 568 New York farms has been recalculated using a 7 percent interest rate. The information in this report should be useful to farmers in the county who are not enrolled in the business management projects. It should also be helpful to persons who work with farmers, such as agricultural teachers and credit representatives.