The Effect of Selected Farm Characteristics on Dairy Farm Profitability: A Logistical Regression Analysis

Abstract

The cost, efficiency, technical and locational factors influencing dairy farm fmancial success were analyzed using records from 384 specialized New York dairy farms. Logistic regression models were constructed for the following size-neutral fmancial performance variables: net farm income per cow; labor and management income per cow; percentage return on equity; and, percentage return on investment. Milk sold per cow, machinery expense per COW, feed expense as a percentage of net milk receipts, hired labor expense per cow, "mailbox" milk price, and percentage of total farm receipts from dairy were the most consistently important explanatory variables. Herd size was inconsistent, statistically significant in only two models.