Dairy Farm Management Business Summary New York State 2015

Knoblauch, Wayne A.; Dymond, Cathryn; Karszes, Jason

Dairy Farm Management Business Summary New York State 2015

Abstract

Business and financial records for 2015 from 168 New York dairy farm businesses are summarized and analyzed. This analysis uses cash accounting with accrual adjustments to measure farm profitability, financial performance, and costs of producing milk. Traditional methods of analyzing dairy farm businesses are combined with evaluation techniques that show the relationship between good management performance and financial success. The farms in the project averaged 761 cows per farm and 25,461 pounds of milk sold per cow, which represent above average size and cow productivity for New York dairy farms. An average New York dairy has a herd size per farm of 128 according to the New York Agricultural Statistics Service. The New York Agricultural Statistics Service reports 22,816 pounds of milk production per cow for New York. Net farm income excluding appreciation, which is the return to the operator's labor, management, capital, and other unpaid family labor, averaged $179,118 per farm. The rate of return to all capital invested in the farm business including appreciation averaged 3.85 percent. Differences in profitability between farms continue to widen. Average net farm income excluding appreciation of the top 10 percent of farms was $764,219, while the lowest 10 percent was $-140,931. Rates of return on equity with appreciation ranged from positive 11 percent to negative 6 percent for the highest decile and the lowest decile of farms, respectively. Large freestall farms averaged the highest milk output per cow and per worker, and the lowest total cost of production. In 2015 the mid sized farms, ranging from 201 to 500 cows, averaged the highest returns to labor, management and capital. Farms milking three times a day (3X) were larger, produced more milk per cow and had higher net farm incomes in 2015 than herds milking two times per day (2X). Operating costs per hundredweight of milk were $0.32 per hundredweight lower for 3X than 2X milking herds, while output per cow was 4,809 pounds higher. Farms adopting intensive grazing generally produced less milk per cow than non-grazing farms; in 2015 however they averaged higher labor and management incomes per operator than similar sized non-grazing farms. One should not conclude that adoption of these technologies alone were responsible for differences in performance.

Description

R.B. 2016-01

Date Issued

2015-12

Publisher

Charles H. Dyson School of Applied Economics and Management, Cornell University

Keywords

Business Analysis; Dairy management; farm business summary; new york farms

Types

report