July 1987 A.E. Res. 87-20
BUSINESS SUMMARY 
NEW YORK 
1986
Stuart F. Smith 
Wayne A. Knoblauch 
Linda D. Putnam
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If is the policy of Cornell University actively to support equality 
of educational and employment opportunity. No person shall be 
denied admission to any educational program or activity or be 
denied employment on the basis of any legally prohibited dis­
crimination involving, but not limited to, such factors as race, 
color, creed, religion, national or ethnic origin, sex, age or 
handicap. The University is committed to the maintenance of 
affirmative action programs which will assure the continuation 
of such equality of opportunity.
TABLE OF CONTENTS
Pag®
INTRODUCTION . ........................................ ....................  1
Features ...................................................    1
Acknowledgement .......................................................  1
1986 Regional Summary Publications .............................. 2
THE ECONOMIC ENVIRONMENT FACING NEW YORK DAIRY FARMERS ....................  3
SUMMARY AND ANALYSIS OF THE FARM BUSINESS ................................. 7
Business Characteristics and Resources Used ................... .......  7
Accounting Procedures ..................     8
Income S tatement ......................................................  8
Profitability Analysis .....................................  11
Returns Per Unit of Input .............................................  13
Farm and Family Financial Status . ....................................  14
Cash Flow Summary and Analysis ........................................ 16
Repayment Analysis ................     18
Cropping Program Analysis .............................................  19
Dairy Program Analysis . ............................................... 22
Capital and Labor Efficiency Analysis .....................  28
Miscellaneous Costs ...........   30
Combination of Factors ................................................  31
Farm Business Chart ......    32
Financial Analysis and Management .................   34
Financial Analysis Chart ..............................................  35
SUPPLEMENTAL INFORMATION ..................................................  36
Introduction ............     36
Herd Size Comparisons ...............      38
Same 229 New York Dairy Farms, 1984, 1985, and 1986 ................... 46
Comparisons by Type of Barn and Herd Size .............................  47
Comparisons by Business Organization ..................................  52
Comparison by Milking System .............................   54
Other Comparisons .....................................................  55
NOTES ...................    60
LIST OF FIGURES AND CHARTS
Page
Figure 1, Location of the 414 New York Dairy Farms in the 1986
Dairy Farm Business Summary .....................................  2
Chart 1. Prices Received by New York Dairy Farmers, 1974-1986 ...........  3
Chart 2. Ratio of Prices Received for Milk and Prices Paid by
New York Dairy Farmers,1 977-1986 ...............................  4
Chart 3. Annual Changes in Dairy Cow, Farm Machinery,and Farm Real
Estate Values, New York Dairy Farms, 1977-1986 .................  5
Chart 4. Distribution of Labor and Management Incomes Per Operator,
414 New York Dairy Farms, 1986 . ..............................■* * 12
Chart 5. Variation in Average Milk Prices, 414 New York Dairy
Farms, 1986 ....................................................  26
i
LIST OF TABLES
Table No. Page
1 Prices Received by New York Dairy Farmers, 1974-1986 ...........  3
2 Prices Paid by New York Farmers for Selected Items, 1976-1986 ... 4
3 Values of New York Dairy Farm Inventory Items, 1977-1986 .......  5
4 Cost and Return Estimates Per Hundredweight of Milk, Specialized
Dairy Farms by Region, United States, 1986 (Preliminary) ..... 6
5 Business Characteristics and Resources Used, 414 New York
Dairy Farms, 1986 ............................................  7
6 Cash and Accrual Farm Expenses, 414 New York Dairy Farms, 1986 .. 9
7 Cash and Accrual Farm Receipts, 414 New York Dairy Farms, 1986 .. 10
8 Net Farm Income, 414 New York Dairy Farms, 1986 ................  11
9 Return to Operator(s') Labor, Management, and Equity,
414 New York Dairy Farms, 1986 ...............................  11
10 Labor and Management Income, 414 New York Dairy Farms, 1986 .... 12
11 Return on Equity Capital, 414 New York Dairy Farms, 1986 ........ 13
12 Returns to All Labor and Management, 414 New York Dairy
Farms, 1986 . ................................................. 13
13 1986 Farm Business and Nonfarm Balance Sheet, 414 New York
Dairy Farms, 1986 ....     14
14 Balance Sheet Analysis, 414 New York Dairy Farms, 1986 .........  15
15 Farm Inventory Balance, 414 New York Dairy Farms, 1986 .........  15
16 Annual Cash Flow Statement, 414 New York Dairy Farms, 1986 .....  16
17 Annual Cash Flow Budgeting Data, 414 New York Dairy Farms, 1986 . 17
18 Farm Debt Payments Planned, New York Dairy Farms, 1986 .........  18
19 Cash Flow Coverage Ratio, New York Dairy Farms, 1986 ............ 18
20 Land Resources and Crop Production, 414 New York
Dairy Farms, 1986 ............................................  19
21 Crop Management Factors, 414 New York Dairy Farms, 1986 ........  19
22 Crop Related Accrual Expenses, New York Dairy Farms, 1986 ......  20
23 Accrual Machinery Expenses, 414 New York Dairy Farms, 1986 ..... 20
24 Crop Related Accrual Expenses by Hay Crop Production Per Acre,
249 New York Dairy Farms, 1986 ...............................  21
25 Crop Related Accrual Expenses by Corn Silage Production Per Acre,
247 New York Dairy Farms, 1986 ...............................  21
26 Dairy Herd Inventory, 414 New York Dairy Farms, 1986 ...........  22
27 Cows Per Farm and Farm Income Measures, 414 New York
Dairy Farms, 1986 ............................................  22
28 Milk Production, 414 New York Dairy Farms, 1986 ................. 23
29 Milk Sold Per Cow and Labor and Management Income, 414 New
York Dairy Farms, 1986 .......................................  23
30 Accrual Receipts from Dairy and Cost of Producing Milk,
414 New York Dairy Farms, 1986 ........................ ......  23
31 Farm Cost of Producing Milk by Herd Size and Milk Sold Per Cow,
414 New York Dairy Farms, 1986 ...............................  24
32 Total Cost of Producing Milk Based on Whole Farm Data, 414 New
York Dairy Farms and Top 10 Percent of Farms, 1986 ...........  25
33 Dairy Related Accrual Expenses, 414 New York Dairy Farms, 1986 ., 26
34 Percent Purchased Dairy Grain and Concentrates are of Milk
Receipts and Labor and Management Income, 414 New York
Dairy Farms, 1986 ............................................ 27
35 Capital Efficiency, 414 New York Dairy Farms, 1986 .............  28
36 Capital Turnover and Labor and Management Income, 414 New York
Dairy Farms, 1986 ............................................ 28
37 Labor Efficiency, 414 New York Dairy Farms, 1986 ...............  28
38 Labor Force Inventory and Cost Analysis, 414 New York
Dairy Farms, 1986 ............................................  29
ii
Table No. Page
39 Milk Sold Per Worker and Net Farm Income, 414 New York
Dairy Farms, 1986 ............................................ 29
40 Miscellaneous Cost Control Measures, 414 New York
Dairy Farms, 1986 . ........................................... 30
41 Combination of Factors Above Average and Net Farm Income,
414 New York Dairy Farms, 1986 . .............................. 31
42 Farm Business Chart for Farm Management Cooperators,
414 New York Dairy Farms, 1986 ............................... 32
43 A Farm Finance Checklist, 414 New York Dairy Farms, 1986 ........ 34
44 Financial Analysis Chart, 414 New York Dairy Farms, 1986 ....... 35
45 Farm Business Summary by Herd Size, 414 New York Dairy
Farms, 1986 .................................................. 38
46 Farm. Family Financial Situation by Herd Size, 414 New York
Dairy Farms, 1986 ...........................................  40
47 Selected Business Factors by Herd Size, 414 New York
Dairy Farms, 1986 ...........................................  44
48 Comparison of Farm Business Summaries for 1984, 1985, and 1986
Same 229 New York Dairy Farms ................................ 46
49 Selected Business Factors by Type of Barn and Herd Size,
414 New York Dairy Farms, 1986 . .............................. 47
50 Farm Business Chart for Small Conventional Stall Dairy Farms,
146 Conventional Stall Dairy Farms with 60 or Less Cows,
New York, 1986 . . ... ......................................... 48
51 Farm Business Chart for Large Conventional Stall Dairy Farms,
124 Conventional Stall Dairy Farms with More Than 60 Cows,
New York, 1986 . ......... .................................... 49
52 Farm Business Chart for Small Freestall Dairy Farms,
71 Freestall Barn Dairy Farms With 120 or Less Cows,
New York, 1986 ............................................... 50
53 Farm Business Chart for Large Freestall Dairy Farms,
73 Freestall Barn Dairy Farms With More Than 120 Cows,
New York, 1986 ............................................... 51
54 Farm Business Summaries for Single Proprietorships, Partnerships,
and Corporations, 413 New York Dairy Farms, 1986 ............. 52
55 Farm Family Financial Situation for Single Proprietorships,
Partnerships, and Corporations, 413 New York Dairy Farms, 1986 53
56 Selected Business Factors by Milking Systems, 411 New York
Dairy Farms, 1986 ............................................ 54
57 Farm Business Summary and Farm Family Financial Situation,
20 New York Dairy-Cash Crop Farms, 1986 . . .................... 55
58 Farm Business Summary and Farm Family Financial Situation,
51 New York Dairy-Renter Farms, 1986 . ........................ 56
59 Farm Business Summary and Farm Family Financial Situation,
Top 10 Percent of the Farms by Net Farm Income (without 
appreciation), 41 New York Dairy Farms, 1986 .................  57
60 Farm Business Summary and Farm Family Financial Situation,
Average of 414 New York Dairy Farms, 1986 . . .................. 58
61 Farm Business Summary and Farm Family Financial Situation,
Average Per Cow, 414 New York Dairy Farms, 1986 .............. 59
ill
INTRODUCTION
Dairy farm business summary (DFBS) projects are an integral part of 
Cornell Cooperative Extension's agriculture program in New York State. The 
Department of Agricultural Economics of the New York State College of 
Agriculture and Life Sciences, and County Extension staff, cooperate in 
sponsoring DFBS projects. In 1986, more than 500 dairy farmers participated. 
Business records submitted by dairy farmers from 45 counties in the State 
provide the basis for continued Extension educational programs, data for, applied 
research studies, and for use in the classroom. Regardless of the use of the 
data, confidentiality of individual farm data is maintained.
Cooperative Extension agents and specialists enroll the cooperators and 
collect the records. Each cooperator receives a detailed summary and analysis 
of his or her business. More than 70 percent of the agents and specialists are 
using a micro computer in their offices and/or on the farm to process and return 
the individual farm business reports for immediate use. Regional reports are 
prepared by Cornell faculty and used by DFBS cooperators and other farmers to 
compare their farm with regional averages. The DFBS program helps farmers 
develop managerial skills and solve business management problems.
Records from the nine regions of the State have been combined and the 
total data set analyzed as an applied research study of the effects of changes 
in price, technology, and management on dairy farm incomes (Figure 1, page 2). 
This research provides current farm business information for use by dairy 
farmers, Cooperative Extension staff, teachers, and others concerned with the 
New York dairy industry.
A total of 414 farm business records are included in the main body of this 
report. These farms do NOT represent the "average" for all dairy farms in the 
State. Participation was on a voluntary basis, therefore, not all areas or 
types of operations were equally represented (Figure 1, page 2). The 414 farms 
represent a cross section of better than average commercial dairy farm owner- 
operators in the State. Dairy farm renters, dairy-cash crop farmers, and part- 
time dairy operators have been excluded from the main body of this report and 
summarized separately in the supplemental information section of the 
publication.
Features
Accrual procedures have been used to provide the most accurate accounting 
of farm receipts and farm expenses for measuring farm profits. An explanation 
of these procedures is found on page 8. Four measures of farm profits are 
calculated on pages 11 through 13. The balance sheet and cash flow statement 
are featured on pages 14 through 18.
The dairy program analysis includes data on the costs of producing milk 
(pages 22-26) and separate farm business charts using data from freestall farms 
versus conventional stall dairy farms (pages 47-51).
Acknowledgements
The authors appreciate the outstanding assistance provided by the 
following staff members: Gregory Bogardo - programming, Joe Baldwin - artwork,
Cindy Farrell - wordprocessing, and Beverly Carcelli - proofreading and 
distribution.
2
Figure 1. LOCATION OF THE 414 NEW YORK DAIRY FARMS
IN THE 1986 DAIRY FARM BUSINESS SUMMARY
1986 Regional Summary Publications 
Region Publications Author(s)
Northern New York A.E. Ext. 87-8 William F. Lazarus 
Western Plain Region A. E. Ext. 87-9 Stuart F. Smith
Eastern Plateau Region A.E. Ext. 87-10 Robert A. Milligan 6c Linda D. Putnam 
Western Plateau Region A.E. Ext. 87-11 George L. Casler 
Northern Hudson Region A.E. Ext. 87-13 Stuart F. Smith 
Oneida-Mohawk Region A.E. Ext. 87-14 Eddy L. LaDue
Central New York
6c Central Plain A.E. Ext. 87-15 Wayne A. Knoblauch, Robert A. Milligan 
& Linda D . Putnam 
Southeastern New York A.E. Ext. 87-16 Stuart F. Smith
3
THE ECONOMIC ENVIRONMENT FACING NEW YORK DAIRY FARMERS
Chant i. PRICES RECEIVED BY NEW YORK 
DAIRY FARMERS, 1974-1986
300 x
.ME. I| «  l |M  Ij Hffl
1974 1975 1975 1977 197B 1973 1980 1991 1902 1963 1904 1385 1906
Years
SOURCE: NYCRS, New York Crop and Livestock Report.
The prices dairy farmers receive for milk and slaughter cows have a major 
impact on dairy farm profits. Milk prices generally increased from 1974 to 
1981. Since 1981, annual milk prices have been declining, although the average 
monthly farm price exceeded 1985 levels during the last five months of 1986. 
Slaughter cow prices hit a six-year low in 1975, peaked in 1979, and have 
declined throughout the 1980's.
Table 1. PRICES RECEIVED BY NEW YORK DAIRY FARMERS, 1974-1986
Monthly Farm Price 
Year All Milk Slaughter Cows of Milk
($/cwt) ($/cwt) ($/cwt)
1985 1986
1974 8.39 27.10 J anuary 14.00 12.50
1975 8.75 20.60 February 13.80 12.40
1976 9.83 25.40 March 13.30 12.00
1977 9.75 25.00 April 12.80 11.80
1978 10.50 35.30 May 12.30 11.60
June 11,80 11.50
1979 11.90 49.80 July 12.30 12.10
1980 13.00 46.30 Augus t 12.60 12.70
1981 13.80 41.30 September 12.80 13.20
1982 13.70 38.60 October 13.00 13.60
1983 13.70 37.20 November 12.90 13.70
December 12.70 13.40
1984 13.50 36.90
1985 12.80 34.90
1986 12.60 33.60
SOURCE: NYCRS, New York Crop and Livestock Report.
4
Table 2. PRICES PAID BY NEW YORK. FARMERS FOR SELECTED ITEMS, 1976- 1986
Mixed Fertilizer, Seed Wage Rate 
Dairy Feed Urea, Corn, Diesel Tractor All Hired 
Year 16% Protein 45-46%N Hybrid* Fuel 50-59 PTO* Farm Workers
($/ton) ($/ton) ($/bu) ($/gal) ($) ($/br)
1976 139.00 180 36.50 0.420 9,300 2.48
1977 139.40 180 40.00 0.481 10,000 2.53
1978 136.50 189 43.00 0.509 10,900 2.78
1979 156.80 213 45.50 0.723 12,000 2.88
1980 179.60 259 52.50 1.030 13,400 3.12
1981 193.70 275 60.00 1.310 14,900 3.26
1982 176.60 278 63.70 1,240 16,000 3.26
1983 192.60 249 64.60 1.140 17,200 3.52
1984 194.30 250 70.20 1.140 17,400 3.60
1985 164.20 238 67.30 1.080 16,800 4.00***
1986 162.90 200** 65.60 0.840** 16,600 4.41***
SOURCE: NYCRS, New York Agricultural Statistics. USDA, ASB, Agricultural
Prices. *United States average. **Northeast region average. ***New 
York and New England combined.
The prices dairy farmers pay for a given quantity of goods and services 
has a major influence on farm production costs. The astute manager will keep 
close watch on unit costs and utilize the most economical goods and services.
The table above shows average prices of selected goods and services used 
on New York dairy farms. Chart 2 shows the ratio of prices received for milk 
and prices paid by New York dairy farmers as a percent change from 1977. The 
ratio has been on a downward trend since 1978 except for a slight increase in 
1985.
Chant 2. RATIO OF PRICES RECEIVED FOR MILK AND PRICES PAID 
BY NEW YORK DAIRY FARMERS, 1977-1986
—  Prices 
Paid
—  Prices
Received
•••• Ratio
Years
SOURCE: NYCRS, New York Agricultural Statistics.
5
Inflation, farm profitability, supply and demand all have a direct impact 
on the inventory values on New York dairy farms. The table below shows year-end 
(December) prices paid for dairy cows (replacements), an index of these cow 
prices, an index of new machinery prices (U.S. average), the average per acre 
value of farmland and buildings reported in April (February for 1986), and an 
index of the real estate prices.
Table 3. VALUES OF NEW YORK DAIRY FARM INVENTORY ITEMS, 1977-1986
Dairy Cows Machinery* Farm Real Estate
Year Value/Head 1977=100 1977=100' Value/Acre 1977=100
1977 $ 495 100 100 $587 100
1978 800 162 109 600 102
1979 1,150 232 121 670 113
1980 1,240 251 134 720 119
1981 1,120 226 149 773 126
1982 1,010 204 163 821 132
.1983 850 172 173 817 129
1984 790 160 181 842 133
1985 740 149 181 808 128
1986 770 156 179 824 131
SOURCE: USDA, ERS, Farm Real Estate Market Developments Outlook and Situation. 
NYCRS, New York Agricultural Statistics. USDA, ASB, Agricultural 
Prices. *United States average.
Several price trends were reversed in 1986. Dairy cow prices turned up 
after declining for five consecutive years, new machinery prices declined for 
the first time in eight years, and farm real estate values strengthened. All of 
these changes are associated with the gradual improvement in economic conditions 
on dairy farms.
70-r Chart 3. ANNUAL CHANGES IN DAIRY COW, 
FARM MACHINERY, AND FARM REAL ESTATE 
80 VALUES, NEW YORK DAIRY FARMS, 1977-1986
H  Dairy Cows
^  Farm 
Machinery
% change □  Farm Real 
Estate
-20-1-1978 1973 1980 19B1 1982 1903 1904 1905 1986
Years
SOURCE: USDA, ERS, Farm Real Estate Market Developments Outlook and Situation. 
NYCRS, New York Agricultural Statistics.
6
Table 4. COST AND RETURN ESTIMATES PER HUNDREDWEIGHT OF MILK
Specialized Dairy Farms by Region, United States, 1986 (Preliminary)
Re turn Return to 
to Oper­ Labor, 
Returns/Cwt. Costs/Cwt. ator's Mgmt. & 
Region Milk Total Variable Total* Memt. Ownersh.**
1. Southern Plains 
(TEXAS) $13.65 $14.46 $8.32 $11.25 $3.21 $4.42
2. Upper Midwest 
(MN,WI,MI,SD) 12.15 13.28 6.32 11.74 1.54 4.23
3. Northeast
(NY,PA,OH,NEW 
ENGLAND) 12.72 13.61 7.38, 12.14 1,47 3.85
4. Pacific 
(CA, WA) 11.83 12.53 7.61 9.43 3.10 3.81
5. Appalachia
(KY,TN,VA,NC,GA) 13.21 14.01 8.57 12 .,74 1.27 3.51
6. Corn Belt
(IN,IL,IA,M0) 12.27 13.18 7.21 12.69 0.49 3.39
National Average 12.42 13.36 7.14 11.70 1.66 3.96
SOURCE: USDA, ERS, Economic Indicators of the Farm Sector, Costs of Production,
1986 (preliminary).
*Total costs include allocated charges for unpaid labor and equity capital. 
**Return to labor, management, and ownership excludes charges for unpaid labor 
and equity capital from total costs.
The Agriculture and Consumer Protection Act of 1973 directed the Secretary 
of Agriculture to make annual estimates of the costs of producing a number of 
major agricultural commodities. One of these is milk. The most recent set of 
estimates is for 1986 and was issued in 1987 as part of the Economic Indicators 
of the Farm Sector series by the ERS. ' Cost estimates were developed by the USDA 
for six major producing regions in the United States.
Over the past 10 years the differences in prices received for milk at the 
farm between regions have narrowed substantially. In 1986, the highest prices 
received nationally were in the South and the lowest in the Pacific region. The 
spread is now about $1.82 per hundredweight. There are important differences in 
average production costs between regions. The USDA estimates are based on a 
consistent methodology and appear reasonable in relation to other data and 
information from the six designated regions. In 1986, the Southern Plains 
region showed the highest return to labor, management, and ownership. The 
Northeast is In third place and ahead of the Pacific region on this measure.
At Cornell University, the "whole farm data" method is used to compute the 
cost of producing milk. This method is based on the actual costs and returns 
reported by 414 dairy farmers which is quite different from the USDA's use of 
budget estimates. One could compare cost of production data from these two 
sources keeping in mind the different methodologies.
7
SUMMARY AND ANALYSIS OF THE FARM BUSINESS
Business Characteristics and Resources Used
Recognition of important business characteristics and identification of 
the farm resources used is necessary for evaluating management performance. The 
combination of resources and management practices is known as farm organization. 
Important farm business characteristics, the number of farms reporting these 
characteristics, and a listing of the average labor, land, and dairy cattle 
resources used are presented in the following table.
Table 5. BUSINESS CHARACTERISTICS AND RESOURCES USED
414 New York Dairy Farms, 1986
Type of Business Number Percent Labor Force Average Percent
Sole Proprietorship 295 72 Operators 15.6 mo. 42
Partnership 100 24 Family 4.7 mo. 13
Corporation 18 4 Family unpaid 3.2 mo. 8
Other 1 <1 Hired 13.6 mo. 37
Total Months 37.1 100
Barn Type
Stanchion 259 62 Average
Freestall 144 35 Operators (total = 539) 1.30
Other 11 3 Age 44
Education 13 yrs.
Milking System Estimated Value of
Bucket & Carry 3 1 Labor & Management $24,116
Dumping Station 35 8
Pipeline 228 55
Herringbone 135 33
Other Parlor 13 3 Farms Reporting
Land Used Number Average
Business Records Number Percent Total acres:
Account Book 191 46 Owned 414 347
Agrifax (mail in) 67 16 Rented 349 269
ELFAC 36 9 Tillable acres:
On-Farm Computer 36 9 Owned 414 188
Other 84 20 Rented 344 121
Total 414 288
Dairy Records Number Percent Number of
D.H.I.C. 299 72 Dairy Livestock Cows Heifers
Owner Sampler 54 13 Beginning of Year 94 77
Other 18 4 End of Year 97 78
None 43 11 Average for Year 95 77
The sole proprietorship, conventional stall barn, pipeline milking system, 
farm business account book, and DHIC record system continue to prevail on these 
dairy farms.
There were 539 full-time operator equivalents on the 414 dairy farms for 
an average of 1.30 operators per farm. The operators averaged 44 years of age 
and 13 years of formal education. Additional data on the labor force is in 
Table 38. All 414 farm businesses included in the regular dairy summary own 
farm real estate. Dairy farm renters are summarized separately later in this 
publication. However, 344 of the dairy farm owners rented an average of 121 
acres of tillable land in 1986. The 414 farms averaged 288 total tillable acres 
per farm of which 100 acres were rented. Tables 20 and 26 contain additional 
information on land use and the dairy herd.
8
Accounting Procedures
Accrual accounting is used for measuring farm profitability. It is a more 
accurate method than cash accounting when examining the profitability of a 
business in a particular year. Gash expenses and receipts are used when 
evaluating the cash flow position of the business.
The accrual accounting system considers changes in accounts payable and 
receivable and changes in inventory of not only such items as crop and livestock 
inventory but also the inventory of production items such as fertilizer, seed, 
and fuel. In this manner, the total costs of production and the total value of 
production are obtained to provide an accurate representation of profitability 
in that year.
Accrual accounting is complimented by accounting procedures used to 
separate changes in inventory into changes caused by price and those caused by 
quality or quantity changes. Separating price changes (appreciation) from 
physical changes in the farm inventory are important in determining farm 
profitability. Appreciation of farm assets are included in the return to farm 
capital but excluded from the return to labor and management
Income Statement
The accrual income statement on the following page begins with an 
accounting of all farm business expenses. Farm business expenditures are 
grouped into seven major categories.
Hired labor includes gross wages plus the farm share of social security, 
workmen's compensation insurance, health insurance, and other employee benefits 
paid by the farm employer.
Feed expenses are divided into purchased dairy grain and concentrate. purchased 
dairy roughage, and all feed purchased for other livestock to allow more 
thorough analysis of dairy herd feeding costs. The costs of growing grain and 
roughage are not included in cash and accrual feed expenses.
Machinery costs represent all the operating costs of using power machinery on 
the: farm. Ownership costs are excluded here but are included in the analysis of 
machinery costs.
Livestock expenses include the cost of supplies and services directly associated 
with the care and maintenance of the dairy herd, plus milk marketing costs. The 
purchase of replacement cattle is considered a herd maintenance expense while 
expansion livestock is not.
Cron expenses include the costs of fertilizer, lime, seeds, pesticides, and 
other crop supplies.
Real estate expenses are the direct costs associated with owning and maintaining 
farmland and buildings.
Other includes the farm share of utilities, interest paid on all farm indebted­
ness, and miscellaneous costs. Total operating expenses exclude expansion 
livestock and machinery and building depreciation. These nonoperating costs are 
included in total expenses. Depreciation charges are based on income tax 
figures.
9
Cash and accrual farm expenses are summarized below. Total operating 
accrual expenses for the 414 farms averaged $472 per day or $4.97 per cow per 
day. Total accrual expenses averaged more than $540 per day. The average 
expenses per farm and percent of total for each item are shown below.
Table 6. CASH AND ACCRUAL FARM EXPENSES
414 New York Dairy Farms, 1986
Change in 
Cash Change in Accounts Accrual
Expense Item Paid + Inventorv + Pavable = Expenses Percent
Hired Labor $ 21,239 $ 42 $ 21,281 12
Feed
Dairy grain & cone. 46,540 $-918 167 45,789 27
Dairy roughage 1,705 -91 205 1,819 1
Other livestock 729 29 2 760 <1
Machinerv
Mach, hire, rent/lease 1,801 37 1,838 1
Machinery repairs/parts 9,689 -40 11 9,660 6
Auto expense (farm share) 565 0 565 <1
Fuel, oil & grease 5,380 -11 -87 5,282 3
Livestock
Replacement livestock 1,962 2 1,964 1
Breeding 2,892 -11 -33 2,848 2
Vet & medicine 4,285 15 4,300 3
Milk marketing 12,942 24 12,966 8
Cattle lease/rent 81 -1 80 <1
Other livestock expense 7,905 37 46 7,988 5
Crops
Fertilizer & lime 7,407 96 33 7,536 4
Seeds & plants 3,338 -51 -15 3,272 2
Spray, other crop exp. 2,954 71 15 3,040 2
Real Estate
Land/bldg./fence repair 2,449 -41 30 2,438 1
Taxes 4,956 120 5,076 3
Insurance 3,415 6 3,421 2
Rent & lease 3,855 39 3,894 2
Other
Telephone (farm share) 770 0 770 <1
Electricity (farm share) 5,158 29 5,187 3
Interest paid 18,026 88 18,114 11
Miscellaneous 2.467 90 ~ 5 2.552 __1
Total Operating $172,510 $-840 $770 $172,440 100
Expansion livestock $ 1,218 $ 9 $ 1,228
Machinery depreciation 15,545
Building depreciation 8.135
TOTAL ACCRUAL EXPENSES $197,348
Cash paid is the actual amount of money paid out during the year and does not 
necessarily represent the cost of goods and services actually used.
10
Accrual expenses are the costs of inputs actually used in this year's 
production. The value of feed and supplies used out of inventory are included 
as are the costs of inputs purchased but not paid for (net increases in accounts 
payable). Items paid for and not used (net additions to inventory) are excluded 
from accrual expenses as are payments made on inputs used in a prior year (net 
decreases in accounts payable).
Cash and accrual farm receipts are presented in the following table.
Total cash receipts averaged $216,313 per farm. Total accrual receipts averaged 
$221,201 per farm and $2,328 per cow. Accrual receipts were greater than cash 
receipts primarily due to dairy herd growth. Cow numbers increased an average 
of three head per farm and heifer numbers increased from 77 to 78. The increase 
in homegrown feed (change in crop inventory) was very small in 1986 and averaged 
only $71 per additional cow.
Table 7. CASH AND ACCRUAL FARM RECEIPTS
414 New York Dairy Farms, 1986
Change In 
Cash Change in Accounts Accrual
Receipt Item Receipts + Inventory + Receivable = Receipts Percent
Milk sales $193,611 $ 911 $194,522 88
Dairy cattle ■11,919 $3,336 175 15,431 7
Dairy calves 2,378 0 2,378 1
Other livestock 582 -14 5 573 <1
Crops 1,857 214 232 2,303 1
Government receipts 3,220 109 3,329 2
Custom machine work 251 -19 232 <1
Gas tax refund 147 5 152 <1
Other 2,348 123 2,471 1
- Nonfarm noncash
capital 190 190
Total $216,313 $3,346 $1,541 $221,201 100
Cash receipts includes the gross value of milk checks received during the
year plus all other payments received for the sale of farm products, services, 
and government programs.
Accrual receipts represent the value of all farm commodities produced and 
services actually provided by the farmer during the year. Increases in live­
stock inventory caused by herd growth and/or quality, are included as accrual 
receipts. Decreases in inventory caused by herd reduction are deducted.
Changes in inventories of crops grown are accounted for in accrual receipts. 
Changes in accounts receivable include the difference between the January milk 
check for this December's marketings and the previous January's check, and other 
delayed payments.
Nonfarm noncash capital are gifts and inheritances of cattle and crops 
received by the farm owner/operator, and included in inventory or used in the 
business during the year. They are deducted from growth in inventory and reduce 
accrual receipts because they came from outside the farm business. Gift and 
inheritances of machinery and real estate are accounted for in Table 15.
11
Profitability Analysis
Farm owners/operators contribute labor, management, and capital to their 
businesses. The best combination of these resources produces optimum profits. 
Farm profits can be measured as the return to all family resources or as the 
return to one or more individual resources such as labor and management.
Net farm income is the total combined return to the farm operator(s) and 
other unpaid family members for their labor, management, and equity capital. It 
is the farm family's net annual return from working, managing, financing, and 
owning the farm business. This is not a measure of cash available from the 
year's business operation. Cash flow is evaluated later in this report.
Net farm income is computed with and without appreciation, Appreciation 
represents the change in farm inventory values caused by changes in prices 
during the year. Appreciation is a major factor contributing to changes in farm
net worth and must be included in the profitability analysis.
Table 8. NET FARM INCOME
414 New York Dairy Farms, 1986
Average Average Top 
I tern 414 Farms 10% Farms*
Total accrual receipts $221,201 $626,782
+ Appreciation: Livestock 1,689 -2,127
Machinery 4,165 6,579
Real Estate 10,979 15,388
Other Stock/Cert. 70 -1.301
= Total including appreciation $238,104 $645,321
- Total accrual expenses 197.348 514.297
= Net Farm Income (with appreciation) $ 40,756 $131,024
Net Farm Income (without appreciation) $ 23,853 $112,485
*Average of 41 farms with highest net farm Incomes (without appreciation).
Return to operator(s') labor, management, and equity capital measures the 
total business profits for the farm operators. It is calculated by deducting a 
charge for unpaid family labor from net farm income. Operator(s') labor is not 
included in unpaid family labor. Return to operators') labor, management, and 
equity capital has been compiled with and without appreciation. Appreciation Is 
considered an important part of the return to ownership of farm assets.
Table 9. RETURN TO OPERATOR(S') LABOR, MANAGEMENT, AND EQUITY
414 New York Dairy Farms, 1986
Average 414 Farms Average Top 10% Farms
With Without With Without 
Item Apprec. Aporec. Apprec. Apprec.
Net farm income $40,756 $23,853 $131,024 $112,485
- Family labor unpaid 
@ $600 per month 1.926 1.926 702 702
= Return to Operator(s')
Labor, Management, 6c Equity $38,830 $21,927 $130,322 $111,783
12
Labor and management Income is the share of net farm income without 
appreciation returned to the operator(s') labor and management. Appreciation is 
not included as part of the return to labor and management. Labor and 
management income is determined by deducting the cost of using equity capital at 
a real interest rate of five percent, from the return to operator(s') labor, 
management, and equity capital excluding appreciation. The interest charge 
reflects the long-term average rate of return that a farmer might expect to earn 
in comparable risk investments in a low inflation economy.
Labor and management income per operator measures the return to one full­
time operator's labor and management. A full-time operator provides 12 months 
of labor and management.
Table 10. LABOR AND MANAGEMENT INCOME
414 New York Dairy Farms, 1986
Average Average Top 
Item 414 Farms 10% Farms
Return to operator(s') labor, management, 
& equity without appreciation $21,927 $111,783
- Real interest @ 5% on $338,772 
equity capital for average & 
$810,644 for the top 10% 16.939 40.532
= Labor & Management Income (1.30 operators) $ 4,988 (1.79) $ 71,251
Labor & Management Income per Operator $ 3,837 $ 39,805
Labor and management income per operator averaged $3,837 on these 414 
dairy farms in 1986. The range in labor and management income per operator was 
from less than -$50,000 to more than $60,000. Returns to labor and management 
were negative on 45 percent of the farms. Labor and management income per 
operator ranged from $0 to $19,999 on 37 percent of the farms while only 18 
percent showed labor and management incomes of $20,000 or more per operator.
Chart A . DISTRIBUTION OF LABOR AND MANAGEMENT 
INCOMES PER OPERATOR 
414 New York Dairy Farms, 1906
Percent
13
Return on equity capital measures the net return remaining for the 
farmer's equity or owned capital after a charge has been made for the owner- 
operator's labor and management. The earnings or amount of net farm income 
allocated to labor and management is the opportunity cost or value of 
operator(s') labor and management estimated by the cooperators. Return on 
equity capital is calculated with and without appreciation. The rate of* return 
on equity capital is determined by dividing the amount returned by the end of 
year farm net worth or equity capital.
Table 11. RETURN ON EQUITY CAPITAL
414 New York Dairy Farms, 1986
Average Average Top 
Item 414 Farms 10% Farms
Return to operator(s') labor, management, 
& equity capital with appreciation $38,830 $130,322
- Value of operator(s') labor & management 24.116 40.680
= Return on Equity Capital With Appreciation $14,714 $ 89,642
Rate of Return on Equity Capital 
With Appreciation 4.3% 11.1%
Return on Equity Capital Without Appreciation $-2,189 $71,103
Rate of Return Without Appreciation -0.6% 8.8%
The rate of return on all capital can be computed by adding interest paid 
to the return on equity capital and dividing by total farm assets. It averaged 
6.0 percent including appreciation and 2.9 percent not including appreciation on 
these farms in 1986.
Returns Per Unit of Input
Income from a business can also be calculated in relation to various input 
units. For example, the labor and management return can be allocated to the 
entire labor force and figured on a per worker basis.
Table 12. RETURNS TO ALL LABOR AND MANAGEMENT
414 New York Dairy Farms, 1986
Item Average
Labor & management income per farm $ 4,988 
+ Cost of hired labor 21,281 
+ Value of unpaid family labor 1.926
- Total Returns to All Labor & Management $28,195
Average worker equivalent 3.09
Returns per worker equivalent $9,125
Returns per hour (3,000 hours/worker/year) $3.04
14
Farm and Family Financial Status
Evaluating the financial status of the farm business and the farm family 
is an important part of business analysis. The first step is to inventory all 
the assets, determine all the liabilities, and fill out the balance sheet. The 
second step is to analyze the completed balance sheet by evaluating the 
relationships between assets and liabilities and changes made during the year.
Table 13. 1986 FARM BUSINESS AND NONFARM BALANCE SHEET
414 New York Dairy Farms, 1986
Farm Liabilities
Farm Assets Jan. 1 Dec„ 31 & Net Worth Jan. 1 Dec. 31
Current Current
Farm cash, checking Accounts payable $ 5,563 $ 6,346
& savings $ 3,283 $ 4,120 Operating debt 3,783 4,598
Accounts rec. 16,556 18,136 Short-term 2.391 3.028
Feed 6c supplies 42.670 43,722 Total $11,737 $13,972
Total $62,509 $65,978
Intermediate Intermediate
Dairy cows: Structured debt
owned $ 76,901 $ 80,350 1-10 years $77,488 $76,988
leased 8 20 Financial lease
Heifers 31,276 32,817 (cattle/mach.) 714 744
Bulls/other lvstk. 1,028 1,050 FLB 6c PCA stock 4.071 4.107
Mach./eq. owned 99,365 100,393 Total $82,273 $81,839
Mach./eq. leased 705 725
FLB & PCA stock 4,071 4,107 Lons;-Term
Coop stock 6: cert, 5.871 7,449 Structured debt
Total $219,226 $226,910 >10 years $112,666 $112,559
Lone;-Term Financial lease
Land/buildings: (structures) 2.163 2.199
owned $253,576 $264,392 Total $114,830 $114,758
leased 2.163 2.199
Total $255,739 , $266,591 Total Farm Liab. $208,840 $210,570
Total Farm Assets $537,474 $559,479 FARM NET WORTH $328,634 $348,909
Nonfarm Liabilities*
Nonfarm Assets* Jan. 1 Dec. 31 6c Net Worth Jan. 1 Dec. 31
Personal cash, chkg. Nonfarm Liab. $1,595 $1,694
6c savings $ 6,229 $ 6,614 NONFARM NET WORTH $40,248 $43,120
Cash value life ins. 4,006 3,867 1
Nonfarm real estate 10,076 10,640 | FARM Sc NONFARM* Jan. 1 Dec. 31
Auto (personal sh,,) 2,699 3,198 [Total Assets $579,317 $604,293
Stocks 6c bonds 6,973 7,823 [Total Liabilities 210.435 212.264
Household furn. 8,236 8,590 i
All other 3.625 4.081 [ T O T A L  F A R M  6c N O N -
Total Nonfarm $41,843 $44,814 j FARM NET WORTH $368,882 $392,029
^Average of 268 farms completing the nonfarm balance sheet.
Financial lease obligations are included in the balance sheet. The 
present values of all future payments are listed as liabilities since the farmer 
(lessee) is committed to make the payments. The present values are also listed 
as assets, representing the future value the item has to the business.
15
The balance sheet analysis continues by examining financial and debt 
ratios and factors measuring levels of debt. Percent equity is calculated by 
dividing net worth by assets. Equity increases as the value of assets increase 
more than liabilities. The debt to asset ratio is compiled by dividing 
liabilities by assets. Low debt to asset ratios reflect strength in solvency 
and the potential capacity to borrow. The debt analysis ratios show how well 
the debt is structured and managed. Debt levels per unit of production include 
some old standards that are still useful if used with measures of cash flow and 
repayment ability. Thirteen farms reported no farm liabilities.
Table 14. BALANCE SHEET ANALYSIS
414 New York Dairy Farms, 1986
Average Average Top
Item__________________________________414 Farms________________ 10% Farms_______
Financial Ratios - Farm:
Percent equity 62% 65%
Debt/asset ratio: total 0.38 0.35
long-term 0.43 0.40
inter. & current 0.33 0.31
Financial Ratios - Farm & Nonfarm:
Percent equity 64% 65%
Total debt/asset ratio 0.36 0.35
Farm Debt Analysis:
Accts. payable as % of total debt 3% 2%
Long-term liab. as % of total debt 54% 50%
Current & int, liab. as % of tot. debt 46% 50%
Per Tillable Per Tillable 
Farm Debt Levels: Per Cow Acre Owned Per Cow Acre Owned 
Total farm debt $2,171 $1,120 $1,880 $1,114
Long-term debt 1,183 610 939 556
Intermediate & current debt 988 510 941 558
The Farm Inventory Balance accounts for the changes in the values of major 
farm assets from the beginning to the end of the year.
Table 15. FARM INVENTORY BALANCE
414 New York Dairy Farms, 1986
Item Real :Estate Machinerv/Eauin. Livestock
Value beg. of year $253,576 $99,365 $109,206
Purchases $10,915* $12,891
+ Nonfarm noncash
transfer** 1,114 55
- Lost capital 2,468
- Sales 1,179 539
- Depreciation 8.135 15.545
= Net investment 247 -3,138 3,322
+ Appreciation 10.569*** 4.165 1.689
Value end of year $264,392 $100,393 $114,217
*$3,578 land and $7,337 buildings and/or depreciable improvements.
**Gifts and inheritances of property transferred into the farm business from
outside.
***Excludes $410 of appreciation on assets sold during the year.
16
Cash Flow Summary and Analysis
Completing an annual cash flow summary and analysis is important to 
determine how well the cash generated by the business, plus that brought in from 
outside, met the annual cash needs of the business and the farm family. 
Understanding last year's cash flow is the first step toward planning and 
managing cash flow for the current and future years.
The Annual Cash Flow Statement is structured to compare all the cash 
inflows with all the cash outflows for the year. Cash inflows include all the 
cash farm receipts, receipts from the sale of farm assets, additional funds 
borrowed, cash used in the business from the sale of nonfarm capital, as well as 
the amount of cash available at the beginning of the year. Cash outflows 
include all the cash farm expenses, capital purchases, principal payments, money 
taken out of the business, and the cash balance left at year's end. When all 
the cash inflows and outflows are correct, the statement will balance. The 
positive imbalance of $5,739 indicates that on average, farms had more inflows 
than were accounted for by outflows.
Table 16. ANNUAL CASH FLOW STATEMENT
414 New York Dairy Farms, 1986
Average Average Top
Item 414 Farms 10% Farms
Cash Inflows
Beginning farm cash, checking & savings $ 3,283 $ 5,031
Cash farm receipts 216,312 594,614
Sale of assets: Machinery 539 2,344
Real estate 1,208 252
Other stock & certificates 621 2,218
Money borrowed (intermediate & long-term) 33,294 129,437
Money borrowed (short-term) 2,397 7,249
Increase in operating debt 816 9,034
Nonfarm income 4,859 2,243
Cash from nonfarm capital 1,688 504
Money borrowed - nonfarm 375 536
Total $265,392 $753,462
Cash Outflows
Cash farm expenses $172,511 $460,037
Capital purchases: Expansion livestock 1,218 5,955
Machinery 12,891 37,034
Real estate 10,915 45,250
Other stock & certificates 2,129 13,719
Principal payments (intermediate & long-term) 33,902 115,225
Principal payments (short-term) 1,759 5,199
Decrease In operating debt 0 0
Nonfarm debt payments 574 1,891
Personal withdrawals & family expenditures 19,634 47,905
Ending farm cash, checking & savings 4.120 9.030
Total $259,653 $741,245
Imbalance (error) $ 5,739 $ 12,217
17
Table 17. ANNUAL CASH FLOW BUDGETING DATA
414 New York Dairy Farms, 1986
Average 414 Farms Average Top 10% Farms
Item Total Per Cow Total Per Cow
Average number of cows 94.7 232.3
Accrual Operating: Receipts 
Milk $194,522 $2,055 $539,217 $2,321
Dairy cattle 15,431 163 48,326 208
Dairy calves 2,378 25 5,703 25
Other livestock 573 6 788 3
Crops 2,303 24 16,421 71
Miscellaneous receipts 6.184 65 16.327 70
Total $221,391 $2,338 $626,782 , $2,698
Accrual Operating; Expenses
Hired labor $ 21,281 $ 225 $ 74,532 $ 321
Dairy grain & concentrate 45,789 484 125,159 539
Dairy roughage 1,819 19 5,983 26
Other livestock feed 760 8 444 2
Machinery hire/rent/lease 1,838 19 3,524 15
Machinery repairs/parts & auto 10,225 108 25,216 108
Fuel, oil & grease 5,282 56 11,788 51
Replacement livestock 1,964 21 2,496 11
Breeding 2,848 30 7,852 34
Vet & medicine 4,300 45 12,797 55
Milk marketing 12,966 137 33,781 145
Cattle lease 80 1 276 1
Other livestock expense 7,988 84 21,235 91
Fertilizer & lime 7,536 80 19,899 86
Seeds & plants 3,272 34 8,854 38
Spray/other crop expense 3,040 32 9,137 39
Land, building, fence repair 2,438 26 6,429 28
Taxes 5,076 54 9,481 41
Insurance 3,421 36 6,598 28
Real estate rent/lease 3,894 41 8,598 37
Utilities 5,957 63 12,819 55
Miscellaneous 2.552 27 7.142 31
Total Less Interest Paid $154,326 $1,630 $414,038 $1,782
Net Accrual Operating Income
(without interest paid) $67,065 $708 $212,744 $916
- Change in livestock/crop inv. 3,346 37 24,873 107
- Change in accounts rec. 1,541 16 7,294 31
+ Change in feed/supply inv. -840 -9 -5,867 -25
+ Change in accounts payable* 682 8 1.070 5
NET CASH FLOW $62,020 $654 $175,780 $758
~ Net personal withdrawals 
6: family expenditures 14.400 152 45.126 194
Available for Farm Debt 
Payments & Investments $47,620 $502 $130,654 $564
- Farm Debt Payments 54.275 573 162.269 698
Avail, for Farm Investments $-6,655 $-71 $-31,615 $-134
- Capital Purchases: cattle, 
machinery & improvements 27.163 287 101.958 439
Capital Deficit $-33,818 $-358 $-133,573 $-573
^Excludes change in interest account payable.
18
Repayment Analysis
The second step in cash flow planning is to compare and evaluate debt 
payments planned and made last year, and estimate the payments required in the 
current year. It is helpful to compare and evaluate a farm's repayment position 
by using debt payments per unit of production and receipt/debt payment ratios. 
The data presented below are for the 293 farms that completed Dairy Farm 
Business Summaries for both 1985 and 1986.
Table 18. FARM DEBT PAYMENTS PLANNED
New York Dairy Farms, 1986
Same 293 Dairy Farms Same 30 Ton 10% Farms
1986 Payments Planned 1986 Payments Planned
Debt Payments Planned Made 1987 Planned Made 1987
Long-term $16,111 $22,813 $15,564 $30,045 $ 59,928 $28,759
Intermediate- term 22,963 31,640 22,868 51,519 88,279 41,276
Short-term 2,516 2,175 2,379 8,458 7,432 8,051
Operating (net
reduction) 755 0 889 167 0 260
Accounts payable
(net reduction) 1.138 1.362 1.167 707 3.746 4.175
Total $43,484 $57,990 $42,868 $90,895 $159,385 $82,521
Per cow $429 $572 $391 $686
Per cwt. 1986 milk $2.62 $3.49 $2.16 $3.80
Percent of total
1986 receipts 18% 24% 15% 26%
Percent of 1986
milk receipts 21% 28% 17% 30%
The Cash Flow Coverage Ratio measures the ability of the farm business to
meet its planned debt payment schedule. The ratio shows the percentage of last
year's planned payments that could have been made with last year's available
cash flow.
Table 19. CASH FLOW COVERAGE RATIO
New York Dairy Farms, 1986
Same 293 Same 30 Top
Item Dairy Farms 10% Farms
Cash farm receipts $234,850 $587,426
- Cash farm expenses 187,145 458,187
+ Interest paid 19,054 38,779
- Net personal withdrawals from farm* 15.973 44.202
(A) = Amount Available for Debt Service $ 50,786 $123,816
(B) = Debt Payments Planned for 1986 $ 43,484 $ 90,895
(A -s- B) = Cash Flow Coverage Ratio for 1986 1.17 1.36
^Personal withdrawals and family expenditures less nonfarm income and nonfarm 
money borrowed. If family withdrawals are excluded the cash flow coverage 
ratio will be incorrect.
19
Cropping Program Analysis '■
The cropping program is an important part of the dairy farm business that 
sometimes is overlooked and neglected. A complete evaluation of available land 
resources, how they are being used, how well crops are producing and what it 
costs to produce them, is required to evaluate alternative cropping and feed 
purchase choices.
Table 20. LAND RESOURCES AND CROP PRODUCTION
414 New York Dairy Farms, 1986
Average 
Item 414 Farms Average Top 10% Farms
Land Owned Rented Total Owned Rented Total
Tillable 188 100 288 405 205 609
Nontillable 49 12 61 48 10 59
Other nontillable 110 10 120 155 12 167
Total 347 122 469 608 227 835
Crop Yields Farms Acres Prod/Acre Farms Acres Prod/Acre
Hay crop 411 148 2.8 tn DM 41 243 3.1 tn DM
Corn silage 384 72 14.3 tn 41 200 16,1 tn
4.9 tn DM 5.4 tn DM
Other forage 49 20 1.7 tn DM 6 29 3.3 tn DM
Total forage 413 216 3.4 tn DM 41 447 4.1 tn DM
Corn grain 223 72 99.8 bu 34 119 104.6 bu
Oats 1 104 28 64.0 bu 11 36 65.9 bu
Wheat 32 42 49.2 bu 9 51 56.4 bu
Other crops 52 30 9 54
Tillable pasture 113 30 14 41
Idle 130 34 14 49
Total Tillable Acres 414 288 41 609
Crop acres and yields compiled for the state average represent only the 
number of farms reporting each crop. Yields of forage crops have been converted 
to tons of dry matter using dry matter coefficients reported by the farmers. 
Grain production has been converted to bushels of dry grain equivalent.
The following measures of crop management indicate how efficiently the 
land resource is being used and how well total forage requirements are being 
met.
Table 21. CROP MANAGEMENT FACTORS
414 New York Dairy Farms, 1986
Average Average Top 
Item 414 Farms 10% Farms
Total tillable acres per cow 3.04 2.62
Total forage acres per cow 2.28 1.92
Harvested forage dry matter, tons per cow 7.73 7.96
t
20
In the second year of collecting information on individual crop production 
costs, over 240 cooperators allocated expenses to hay crop, corn, and other crop 
production. This additional data has been compiled to show the crop production 
expenses per acre and per unit for these crops. Corn grain production has been 
converted to corn silage equivalent using 5.88 bushels of dry shell corn to 
equal one ton of corn silage as fed. In Table 22, the total per tillable acre 
represents all 414 farms and the expenses for individual crops are for the 249 
farms which submitted data.
Table 22. CROP RELATED ACCRUAL EXPENSES
New York Dairy Farms, 1986
Average 
414 Farms Average 249 Farms Reporting Individual Crop Costs
Total Per
Per Hav Crop Corn Ton Corn Other
Tillable Per Per Per Silage Crops
Expense Acre Acre Ton DM Acre Eauiv. Per Acre
Fertilizer & lime $26.18 $16.81 $6.12 $43.47 $2.85 $29.11
Seeds & plants 11.37 6.48 2.36 19.52 1.28 15.48
Spray & other crop
expense 10.56 3.93 1.43 23.14 1.52 9.97
Total $48.11 $27.22 $9.92 $86.13 $5.64 $54.57
Average Top 17 Farms
Average Top 10% Farms: Reporting Individual Crop Costs
Fertilizer & lime $32.67 $20.09 $ 7.10 $43.76 $2.76 $28.27
Seeds & plants 14.54 8.52 3.01 18.20 1.15 13.57
Spray & other crop
expense 15.00 5.42 1.92 24.06 1.52 10.93
Total $62.21 $34.03 $12.03 $86.02 $5.43 $52.77
Most machinery costs are associated with crop production and should be 
analyzed with the crop enterprise. Total machinery expenses include the major 
fixed costs (interest and depreciation), as well as the accrual operating costs. 
Machinery costs have not been allocated to individual crops, but they are 
calculated per total tillable acre.
Table 23. ACCRUAL MACHINERY EXPENSES
414 New York Dairy Farms, 1986
Average 414 Farms Average T o p  10% Farms
Machinery Total Per Til. Total Per Til. 
Expense Item Expenses Acre Expenses Acre
Fuel, oil & grease $ 5,282 $ 18.35 $11,787 $ 19.35
Machinery repairs & parts 9,660 33.56 24,467 40.17
Machine hire, rent & lease 1,838 6.39 3,524 5.79
Auto expense (farm share) 565 1.96 749 1.23
Interest (5%) 4,994 17.35 10,087 16.56
Depreciation 15.545 54.00 33.577 55.12
Total $37,884 $131.61 $84,191 $138.21
21
Table 24. CROP RELATED ACCRUAL EXPENSES BY HAY CROP PRODUCTION PER ACRE
249 New York Dairy Farms, 1986
Tons of Hav Crop Drv Hatter Per1 Acre
Item <2.0 2.0-2.4 2.5-2.9 3.0-3.4 >3.5
Hay crop, tons DM/acre 1.6 2.3 2.7 3.2 4.1
Farms reporting crop
expense breakdowns 47 64 46 46 46
Average number hay crop
acres for farms reporting 141 139 148 152 144
Accrual Crop Expense
Per Acre of Hav Crop:
Fertilizer & lime $9.81 $14.29 $18.00 $21.61 $20.92
Seeds & plants 4.00 5.60 6.31 8.43 8.28
Spray & other crop expense 1.88 3.12 2.74 5.68 6.43
Total $15.69 $23.01 $27.05 $35.72 $35.63
Accrual Crop Expense
Per Ton DM of Hav Crop:
Fertilizer & lime $6.14 $ 6.26 $ 6.66 $ 6.78 $5.12
Seeds & plants 2.50 2.45 2.33 2.64 2.03
Spray & other crop expense 1.18 1.37 1.01 1.78 1.57
Total $9.82 $10.08 $10.00 $11.20 $8.72
Table 25. CROP RELATED ACCRUAL EXPENSES BY CORN SILAGE PRODUCTION PER ACRE
247' New York Dairy Farms, 1986
Tons of Corn Silage Per Acre
Item 0-9 10-12 13-15 16-18 >19
Corn silage, tons/acre 6.9 11.2 14.2 16.7 19.9
Farms reporting crop
expense breakdowns 41 41 82 52 31
Average number corn acres
for farms reporting 66 92 106 140 93
Accrual Cron Exp./Acre of Corn:
Fertilizer & lime $41.83 $41.00 $43.01 $44.27 $47.58
Seeds &. plants 17.06 20.30 19.46 , 19.63 20.71
Spray & other crop expense 19.03 21.06 22.53 25.18 26.35
Total $77.93 $82.36 $85.00 $89.09 $94.64
Accrual Crop Expense Per
Ton Corn Silage Eauiv.*:
Fertilizer & lime $4.04 $3.38 $2.91 $2.57 $2.32
Seeds & plants 1.65 1.67 1.32 1.14 1.01
Spray & other crop expense 1.84 1.73 1.52 1.46 1.29
Total $7.53 $6.78 $5.75 $5.18 $4.62
*Corn grain converted to silage equivalent using 5.88 bushels = 1 ton corn 
silage, as fed.
From the above two tables, it is important to observe that as forage 
yields per acre increase, crop related expenses per acre also increase. For 
corn silage, crop expense per ton decreases significantly as yield per acre 
increases. However, for hay crop silage, crop expense per ton increases 
slightly as yield per acre increases except for the very high yields. This is 
likely attributable to not only increases in yield but also increases in quality 
of the hay crop. The change in cost per ton as yield increases is likely more 
than offset by the increase in value of the crop.
22
Dairy Program Analysis
An analysis of the dairy enterprise can identify and explain the strengths 
and weaknesses of the dairy farm business. Changes in dairy herd size and 
market values that occurred during the year are identified in the table below. 
The change in inventory value without appreciation is attributed to physical 
changes in herd size and quality. This "real" increase in inventory has been 
included as an accrual farm receipt for the profitability calculations shown on 
page 11.
Table 26. DAIRY HERD INVENTORY
414 New York Dairy Farms, 1986
____Dairy Cows Heifers____
Item Number Value Number______Value
Beginning of year (owned) 94 $76,901 77 $31,276
+ Change without appreciation 2,528 809
+ Appreciation 921 732
End of year (owned) 97 $80,350 78 $32,817
End including leased 97
Average number 95 77
Average Ton 10% Farms:
Beginning of year (owned) 226 $191,386 188 $79,848
+ Change without appreciation 11,657 5,488
+ Appreciation -1.235 -872
End of year (owned) 240 $201,808 196 $84,464
End including leased 240
Average number 232 194
There is a strong relationship between farm size and farm income. When 
net farm income and labor and management income are compared with cows per farm, 
net farm income increased 1,701 percent while labor and management income per 
operator jumped $44,852 as herd size increased from less than 40 to over 250 
cows per farm.
Table 27. COWS PER FARM AND FARM INCOME MEASURES
414 New York Dairy Farms, 1986
Average Net Farm 
Number Number Number Worker Income Labor 6c Management 
of Cows of Cows of Farms Equivalent (w/o apprec.) Income Per Operator
Under 40 32 32 1.69 $ 6,845 $-2,533
40 to 54 47 87 2.01 7,644 -2,168
55 to 69 61 76 2.43 16,164 1,361
70 to 84 76 60 2.87 15,600 -1,372
85 to 99 90 46 2.95 19,361 378
100 to 149 119 62 3.57 39,080 8,981
150 to 199 172 22 4.66 33,630 3,696
200 to 249 226 10 5.85 42,881 4,803
250 & over 382 19 9.36 123,246 42,319
23
Total milk sold and milk sold per cow are extremely valuable measures of 
productivity on the dairy farm. These measures of milk output are based on 
pounds of milk marketed during the year.
Table 28. MILK PRODUCTION
414 New York Dairy Farms, 1986
Average Average Top 
Item 414 Farms 10% Farms
Total milk sold, lbs. 1,537,444 4,230,167
Milk sold per cow, lbs. 16,237 18,209
Average milk plant test, percent butterfat 3.61 3.57
Farms with higher rates of production tend to have higher profits. In 
1986, the farms that sold more than 16,000 pounds of milk per cow had 
substantially higher profit margins and higher than average herd sizes.
Table 29. MILK SOLD PER COW AND LABOR AND MANAGEMENT INCOME
414 New York Dairy Farms, 1986
Average Net Farm Labor &
Pounds of Milk Number Number Income Management
Sold Per Cow of Farms of Cows w/o Apprec. Income/Operator
Under 11,000 12 67 $-3,316 $-■17,416
11,000 to 11,999 16 76 11,874 -1,314
12,000 to 12,999 22 68 7,781 -4,457
13,000 to 13,999 35 75 8,521 -5,837
14,000 to 14,999 60 74 15,162 2,564
15,000 to 15,999 87 87 18,929 700
16,000 to 16,999 72 99 23,916 3,211
17,000 to 17,999 50 103 29,939 5,931
18,000 & over 60 146 57,951 18,643
The cost of -producing milk has been compiled using the whole farm method,
and is featured in the following table.
Table 30. ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK
414 New York Dairy Farms, 1986
Average 414 Farms Average Top 10% Farms
Item Total Per Cow Per Cwt. Total Per Cow Per Cwt.
Accrual Costs of
Producing Milk 
Operating costs $145,761 $1,539 $9.48 $367,676 $1,583 $8.69
Total costs with-
out op(s') labor, 
mgmt. & capital $172,595 $1,823 $11.23 $427,434 $1,840 $10.10
Total Costs $213,650 $2,256 $13.90 $508,647 $2,189 $12.02
Accrual Receipts 
from Milk $194,522 $2,054 $12.65 $539,217 $2,321 $12.75
24
Accrual receipts from milk sales are compared with the accrual costs of 
producing milk per cow and per hundredweight of milk in the preceding table. 
Using the whole farm method, operating costs of producing milk are estimated by 
deducting non-milk accrual receipts from total accrual operating expenses.
Total costs of producing milk include the operating costs plus expansion 
livestock purchased, depreciation on machinery and buildings, the value of 
operators') labor and management, and an interest charge for using equity 
capital. Note that the cost of operator's labor, management, and equity capital 
has been excluded in the intermediate compilation.
The total cost of producing milk on all 414 dairy farms averaged $13.90 
per hundredweight, $1.25 more than the average price received for milk sold from 
these farms during 1986. In 1985 the total cost of producing milk averaged 
$14.23 on 404 New York dairy farms, $1.33 per hundredweight more than the 
average price received. This implies dairy farmers are willing to receive less 
than the stated returns on their labor and equity capital to remain in farming.
Size of herd and level of milk production are important factors related to 
the cost of producing milk. The cost of production for nine herd size 
categories and nine production levels is shown in the following table. The 
average total cost of production was $15.07 for herds with less than 100 cows, 
and $13.25 for those with 100 cows or more, for a difference of $1.82 per 
hundredweight. Farms selling less than 16,000 pounds of milk per cow had an 
average total cost of production of $15.83 while those selling 16,000 pounds and 
over averaged approximately $13.42 for a difference of $2.41 per hundredweight.
Table 31. FARM COST OF PRODUCING MILK BY HERD SIZE AND MILK SOLD PER COW
414 New York Dairy Farms, 1986
By Herd S i z e ___________ _________Bv Milk Sold Per Cow _______ _
Cost per Hundredweight Cost per Hundredweight
Excluding Pounds Excluding
Number Oper­ O p .s Labor, Milk Sold Oper­ Op.s Labor, 
of Cows ating Mgt. 6c Cap. Total Per Cow ating Mgt. 6c Cap. Total
Under 40 $  9.27 $11.,42 $ 1 6 .,34 Under ;LI,000 $11. 83 $ 1 4 .,85 $19,.49
40 to 54 9.77 11,,71 15,,40 11,000 to 11,999 10. 00 12,,16 15,.71
55 to 69 9.14 11..04 14.,75 12,000 to 12,999 10. 03 12,.32 15,.86
70 to 84 9.56 11.,43 14..57 13,000 to 13,999 10. 01 12.,07 1 5 ,.46
85 to 99 9 . 45 11.,36 14,,29 14,000 to 14,999 9.70 11..40 14,.26
100 to 149 9.17 10., 8 6 13.,65 15,000 to 15,999 9.61 1 1 ..35 14..21
150 to 199 9 . 82 1 1 .,56 13.,71 16,000 to 16,999 9 . 56 1 1 . 2 6 13,,89
200 to 249 9 . 93 1 1 .,54 13. 26 17,000 to 17,999 9 . 08 1 1 . 03 13.,60
250 & over 9 . 54 10., 9 8 12. 37 18,000 6c over 9 . 15 10. 6 1 12.,76
Costs of production are divided into 10 categories and presented for the 
414 New York dairy farms and the top 10 percent farms (by net farm income, 
without appreciation) in the table on page 25. Non-milk receipts are deducted 
on the assumption they were produced at cost. Government receipts are included 
as a credit or negative cost of production under feed and crop expenses. For 
1986, government receipts are primarily crop related.
25
Table 32. TOTAL COST OF PRODUCING MILK BASED ON WHOLE FARM DATA
414 New York Dairy Farms and Top 10 Percent of Farms, 1986
Average of 414 Average of
New York Dairy Farms Top 10% Farms
Cost Item Total Cost/Cwt. Total Cost/Cwt.
Feed & Crop Expense 
Dairy grain & concentrate $ 45,789 $125,159
Dairy roughage 1,819 5,983
Other livestock feed 760 444
Fertilizer & lime 7,536 19,899
All other crop expenses 6,312 17,991
- Crop sales & gov't receipts 5.632 25.208
TOTAL $ 56,584 $ 3.68 $144,268 $ 3.41
Labor Costs
Value of operator's labor & 
management & family labor $ 26,042 $ 41,382 
Hired labor 21.281 74.532 
TOTAL $ 47,323 $ 3,08 $115,914 $2.74
Machinery Costs 
Depreciation $ 15,545 $ 33,577 
Machine repairs, hire & auto 12,063 28,739 
Fuel, oil & grease 5,282 11,788 
- Gas tax ref & custom work 384 694 
TOTAL $ 32,506 $ 2.11 $ 73,410 $ 1.73
Livestock Expenses 
Breeding fees, vet & medicine $ 7,148 $ 20,649 
Other livestock expense 7.988 21.235 
TOTAL $ 15,136 $ 0.99 $ 41,884 $ 0.99
Milk Marketing $ 12,966 $ 0.84 $ 33,781 $ 0.80
Livestock Ownership 
Purchased livestock $ 3,192 $ 8,451 
Cattle lease 80 276 
- Dairy cattle & Ivstk. sales* 18.192 54.817 
TOTAL $-14,920 $-0.97 $-46,090 $-1.09
Real Estate Costs 
Land, building & fence repair $ 2,438 $ 6,429 
Taxes & Insurance 8,497 16,079 
Rent/lease 3,894 8,598 
Building depreciation 8.135 19.524 
TOTAL $ 22,964 $ 1.50 $ 50,630 $ 1.20
Interest Expense 
Interest paid $ 18,114 $ 41,203 
Interest on equity @ 5% 16.939 40.532 
TOTAL $ 35,053 $ 2.28 $ 81,735 $ 1.93
Miscellaneous 
Telephone & electricity $ 5,957 $ 12,818 
Miscellaneous 2,552 7,142 
- Miscellaneous income 2.471 6.846 
TOTAL $ 6,038 $ 0.39 $ 13,114 $ 0.31
TOTAL COST OF PRODUCING MILK $213,650 $13.90 $508,647 $12.02
- Operator's labor, manage­
ment & capital 41,055 2.67 81.212 1.92
TOTAL COST EXCLUDING OPERATOR'S 
LABOR, MANAGEMENT & CAPITAL $172,595 $11.23 $427,435 $10.10
^Includes $190 of nonfarm noncash capital for cattle and crops.
26
The average or mean price per hundredweight of milk sold is calculated by 
dividing the gross milk receipts for the year by the total pounds of milk sold. 
The average price for the 414 farms was $12.65 but there was considerable 
variation among the individual farms. The variation in average price received 
and the distribution of farms around the mean is shown below.
Chart 5. VARIATION IN AVERAGE MILK PRICE 
414 NEW YORK DAIRY FARMS. 1906
Avg. Price Received for Milk 
(Oollars)
Sixty-one percent of the farms received from $12.00 to $12.99 per hundred­
weight of milk sold. Twenty-four percent of the farms received $13.00 or more 
per hundredweight while 15 percent received less than $12.00 per hundredweight. 
Location and organization of markets are factors contributing to the variability 
of milk prices on these dairy farms. Management practices on farms as well as 
in milk companies also affect farm milk prices. Seasonality of production and 
butterfat test are two variables under the direct control of the farm manager.
The accrual operating expenses most commonly associated with the dairy 
enterprise are listed in the table below. Evaluating these costs per unit of 
production enables the comparison of different size dairy farms for strengths 
and areas for improvement.
Table 33. DAIRY RELATED ACCRUAL EXPENSES
414 New York Dairy Farms, 1986
Average 414 Farms Average Too 10% Farms
Item Per Cow Per Cwt. Per Cow Per Cwt.
Pure, dairy grain & cone. $484 $2.98 $539 $2.96
Purchased dairy roughage 19 0.12 26 0.14
Total Purchased Dairy Feed $503 $3.10 $565 $3.10
Purchased grain & cone.
as % of milk receipts 24% 23%
Purchased feed & crop exp. $649 $4.00 $728 $4.00
Purchased feed & crop exp.
as % of milk receipts 32% 31%
Breeding $30 $0.19 $34 $0.19
Veterinary & medicine 45 0.28 55 0.30
Milk marketing 137 0.84 145 0.80
Cattle lease 1 0.01 1 0.01
Other livestock expense 84 0.52 91 0.50
27
Feed costs are influenced by a number of factors. Feed production costs 
are affected by the amount of homegrown grains fed, quality and quantity of the 
roughage, and the number of youngstock. Purchasing costs are influenced by the 
farmer's ability to purchase grains and concentrates at reasonable prices and to 
balance nutrients fed with energy and protein requirements.
Dairy grain and concentrates bought per cow is calculated by dividing the 
total expenses for dairy grains and concentrates purchased by the average number 
of cows. Because this also includes the amount spent for calf and heifer feed, 
it actually represents the feed cost per cow and the replacements being raised.
Feed and crop expense per hundredweight of milk is one of the most useful 
feed cost measures because it accounts for variations in milk production between 
herds, it includes all feeds purchased on the farm, and it includes crop 
expenses that are associated with feed production.
Grain and concentrates purchased as percent of milk sales is calculated by 
dividing feed purchased by milk receipts. This is another useful measure of 
feed efficiency although variations in homegrown grains fed and milk prices can 
have an adverse effect.
Forage dry matter harvested per cow is calculated by converting all hay 
crops and corn silage harvested to tons of dry matter, and dividing by the 
average number of cows. It is a measure of the forage supply available for a 
12-month feeding season.
Table 34. PERCENT PURCHASED DAIRY GRAIN AND CONCENTRATES
ARE OF MILK RECEIPTS AND LABOR AND MANAGEMENT INCOME 
414 New York Dairy Farms, 1986
Percent Forage 
Grain & Dry Matter Pounds 
Cone. are Number Number Harvested Milk Labor & Management 
of Milk of Farms of Cows Per ,Cow Per Cow Income Per Operator
Over 40% 6 80 5.7 15,483 $-8,713
35 to 39 24 62 7,6 15,545 -7,618
30 to 34 61 114 7.2 16,756 3,778
25 to 29 112 95 8.1 16,338 8,934
20 to 24 93 87 7.7 15,804 976
15 to 19 60 102 8.0 16,321 2,899
Under 15% 58 94 7.7 16,175 5,528
Generally, the lower the percent of the milk check going for purchased 
dairy grain and concentrates, the higher the income. If purchased feed is 
restricted enough to cause substantial declines in production, profits will 
fall. Farmers spending less than 30 percent but more than 24 percent of their 
milk receipts for purchased feed in 1986 appear to be practicing the most 
effective feed cost control.
28
Capital and Labor Efficiency Analysis
Capital efficiency factors measure how intensively the capital is being 
used in the farm business. Measures of labor efficiency are key indicators of 
the amount of work each worker has accomplished.
Table 35. CAPITAL EFFICIENCY 
414 New York Dairy Farms, 1986
Per Per Per Tillable Per Tillable
Item (Average for Year) Worker Cow Acre Acre Owned
Farm capital $177,500 $5,792 $1,905 $2,917
Real estate $2,758 $1,389
Machinery & equipment $32,555 $1,062 $349
Capital turnover,, years 2.30
Average Too 10% Farms:
Farm capital $208,108 $5,375 $2,050 $3,083
Real estate $2,371 $1,360
Machinery & equipment $33,663 $869 $332
Capital turnover, years 1.93
Capital turnover is a measure of capital efficiency as it shows the number 
of years of farm receipts required to equal or "turnover" capital investment.
It is computed by dividing the average farm assets by the year's total farm 
accrual receipts. The relationship capital turnover has to labor and management 
income and other factors is shown in the following table. As a general rule, 
dairy farmers should aim for a capital turnover rate of 2.5 years or less.
Table 36. CAPITAL TURNOVER AND LABOR AND MANAGEMENT INCOME
414 New York Dairy Farms, 1986
Capital No. No. Farm Capital Labor & Mgt. Net Farm
Turnover of of (average for year) Inc. Per Income
Rate - Years Farms Cows Per Cow Per Worker Operator (w/o apprec.)
Less than 1.5 17 142 $3,902 $131,481 $17,757 $49,523
1.5 to 1.99 68 144 4,714 165,669 20,972 47,379
2.0 to 2.49 141 94 5,662 174,567 5,960 25,721
2.5 to 2.99 106 79 6,594 186,509 “3,203 14,398
3.0 to 3.49 42 67 7,217 185,764 -4,486 13,244
3.5 & over 40 65 8,165 218,648 -15,490 2,493
The decile of farms with the highest net farm incomes (without
appreciation) were considerably above the average of all 414 farms in the four
measures of labor efficiency. The top 10 percent sold 42 percent :more milk per
worker than the average of all farms,
Table 37. LABOR :EFFICIENCY
414 New York Dairy Farms, 1986
Labor Average 414 Farms Average Top 10% Farms
Efficiencv Total Per Worker Total Per Worker
Cows, average number 95 31 232 39
Milk sold, pounds 1,537,444 497,555 4,230,167 705,028
Tillable acres 288 93 609 102
29
The labor force averaged 3.09 full-time worker equivalents per farm.
Forty-two percent of the labor was supplied by the farm operator/managers, 21 
percent came from the operator's family, and 37 percent was regular hired labor.
Labor costs, labor efficiency, and farm profitability are closely related. 
Farms with high net farm incomes can attribute some of their success to the 
control of labor and machinery costs. Labor and machinery costs averaged $20 
per cow less on the 41 farms in the top decile.
Table 38. LABOR FORCE INVENTORY AND COST ANALYSIS
414 New York Dairy Farms, 1986
Years Value of
Labor Force______________________Months______Age_____of Educ .____ Labor & Mgmt.
Operator number 1 11.75 44 ■ 13 $18,411
Operator number 2 3.31 39 14 4,907
Operator number 3 0.49 43 12 676
Operator number 4 0.08 49 X4 122
Family paid 4.74 Total $24,116
Family unpaid 3.21
Hired 13.55
Total 37.13 - 12 =3.09 Worker Equivalent
1.30 Operator/Manager Equiv.
Average Ton 10% Farms:
Total 72.01 - 12 = 6.00 Worker Equivalent
Operators' 21.52' * 12 = 1.79 Operator/Manager Equiv.
Average 414 Farms Average Tod 10% Farms
Per Per Per Per
Labor Costs Total Cow Til.. Acre Total Cow Til. Acre
Value op.s' lab.($850/mo) $13,286 $140 $ 46.16 $18,292 $ 79 $ 30.03
Family unpd. ($600/mo.) 1,926 20 6.69 ■ , 702 3 1.15
Hired 21.281 225 73.93 74.531 321 122.35
Total Labor $36,493 $385 $126.78 $93,525 $403 $153.53
Machinery Cost 37.884 400 131.61 84.191 362 138.21
Total Labor & Mach. $74,377 $785, ■ $258.39 , $177,716 $765 $291.74
The relationship of labor efficiency tc> net farm income is very positive
on the 414 farms. The higher output per worker achieved is partially
attributable to more and higher producing cows.
Table 39. MILK SOLD PER WORKER AND NET FARM INCOME
414 New York Dairy Farms, 1986
No. No. Pounds Net Farm Labor & Mgmt.
Pounds of Milk of of Milk Income Income
Sold Per Worker Farms Cows Per Cow (w/o aDDrec.) Per Operator
Under 250,000 24 45 12,460 $ -151 $-■14,266
250,000 to 299,999 34 49 13,829 5,366 -4,941
300,000 to 349,999 38 56 15,232 8,888 -4,067
350,000 to 399,999 48 65 15,462 15,975 1,547
400,000 to 449,999 70 74 15,616 15,424 479
450,000 to 499,999 58 84 15,764 16,686 -433
500,000 to 599,999 74 104 16,401 30,049 5,813
600,000 & over 68 197 17,498 63,506 21,709
30
Miscellaneous Costs
Costs in addition to feed, machinery, and labor make up a sizable amount 
on a dairy farm. The "cost conscious*' manager checks on all cost items both 
large and small. Good cost management requires careful planning and priority 
spending on farm inputs that will pay dividends when the checkbook is balanced 
at the end of the month. A number of miscellaneous cost items are reported in 
the following table to help in a detailed checkup on all farm costs.
Table 40. MISCELLANEOUS COST CONTROL MEASURES
414 New York Dairy Farms, 1986
Average Average Top 
Item 414 Farms 10% Farms
Livestock
Breeding fees per cow $30 $34
Veterinary & medicine per cow $45 $55
Other livestock expense per cow $84 $91
Milk marketing per cow $137 $145
Milk marketing per hundredweight milk $0.84 $0.80
Real Estate
Taxes per cow $54 $41
Taxes per $1,000 year-end real estate value $19 $17
Insurance paid per cow $36 $28
Cash rent paid per cow $41 $37
Cash rent paid per acre rented $32 $38
Real estate expense per cow $157 $134
Canital Cost
Interest paid per cow $191 $177
Interest on equity per cow $179 $174
Interest paid as percent of year-end debt , 8.6% 9.1%
Depreciation per cow $250 $229
Fixed & Variable Costs*
Total fixed costs per cow $796 $717
Total variable costs per cow $1,486 $1,674
Variable costs per hundredweight milk sold $9.15 $9.19
*Fixed costs include real estate repairs, taxes, insurance, rent, interest paid, 
depreciation, unpaid family labor, and interest on equity capital. All other 
costs were classified as variable.
Fixed costs per cow on the top decile farms were 10 percent below the 414 
farm average. This Is related to more intensive use of cows and cropland 
through better management. Variable costs were four cents higher per 
hundredweight of milk sold on the top farms.
31
Combination of Factors
Individual factors representing the cropping program, dairy program, and 
capital and labor efficiency have been examined in the analysis up to this 
point. It has been suggested that these factors are interrelated. On this 
page, the combination of four important factors is studied. The factors 
combined are the number of cows per farm, pounds of milk sold per cow, pounds of 
milk sold per worker, and purchased feed and crop expense per hundredweight of 
milk.'
For each factor, the farms were divided on the basis of whether or not 
they were better than the average for the 414 farms. They were then grouped on 
the basis of the number of factors better than average. The combination of 
factors above or below average within the three middle groups varied.
The relationship between the number of factors better than average and net 
farm income is shown in the table below. As the number of factors better than 
average decreased, net farm income decreased at a rapid rate.
Table 41. COMBINATION OF FACTORS ABOVE AVERAGE*
AND NET FARM INCOME 
414 New York Dairy Farms, 1986
Number of Factors Number Percent Net Farm Income 
Above Average of Farms of Farms without Aooreciation
4 factors better than average 29 7 $70,378
3 factors better than average ' 54 13 57,250
2 factors better than average 114 28 24,634
1 factor better than average 145 35 10,642
0 factors better than average 72 17 5,401
^Factors were:
Size - number of cows - average 95.
Rate of production - pounds of milk sold per cow - average 16,237
Labor efficiency - pounds of milk sold per worker - average 497,555
Cost control - purchased feed and crop expense per hundredweight milk - 
average $4.00
The 29 farms with four factors better than average had 183 cows, 18,319 
pounds of milk sold per cow, 672,421 pounds of milk sold per worker, and $3.30 
per hundredweight purchased feed and crop expense. Net farm income averaged 
$70,378 on these farms. Obviously, other business factors excluded from the 
combination in the above table have a strong affect on business profits. These 
include labor, machinery and crop expenses, capital efficiency, financial 
management, crop yields, and the receipts from milk and cattle sales.
It is important in managing a farm business to give attention to all major 
factors affecting the business. Concentrating on only one or two factors and 
neglecting the others will not give the kind of net return most farmers want.
32
Farm Business Chart
The Farm Business Chart is a tool which can be used in analyzing a 
business by drawing a line through the figure in each column which represents 
the current level of management performance. The figure at the top of each 
column is the average of the top 10 percent of the 414 farms for that factor, 
The other figures in each column are the average for the second 10 percent, 
third 10 percent, etc. Each column of the chart is independent of the others. 
The farms which are in the top 10 percent for one factor would not necessarily 
be the same farms which make up the top 10 percent for any other factor.
The cost control factors are ranked from low to high, but the lowest cost 
is not necessarily the most profitable. In some cases, the "best" management 
position is somewhere near the middle or average. Many things affect the level 
of costs, and must be taken into account when analyzing the factors.
Table 42. FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS
414 New York Dairy Farms, 1986
Size of Business Rates of Production Labor Efficiency
Worker No. Pounds Pounds Tons Tons Corn Cows Pounds
Equiv- of Milk Milk Sold Hay Crop Silage Per Milk Sold
alent Cows Sold Per Cow DM/Acre Per Acre Worker Per Worker
7.4 286 5,067,341 19,686 4.6 21 48 767,478
4.2 137 2,199,034 18,065 3.7 18 38 614,002
3.5 106 1,711,440 17,165 3.3 17 34 545,894
3.1 88 1,394,330 16,585 3.0 15 32 499,543
2.8 77 1,214,123 15,981 2.7 15 29 462,369
2.5 68 1,053,490 15,498 2.5 14 27 432,308
2.3 59 896,427 15,025 2.3 ■ 13 26 402,824
2.0 52 779,541 14,393 2.1 12 24 358,752
1.9 45 671,587 13,423 1.8 10 21 304,576
1.4 34 468,617 11,150 1.4 6 16 230,949
Cost Control
Grain % Feed is Machinery Labor i  Feed & Crop Feed & Crop
Bought of Milk Costs Machinery Expenses Expenses Per
Per Cow Receipts Per Cow Costs Per Cow Per Cow Cwt. Milk
$188 10% $197 $ 496 $352 $2.44
290 15 262 599 449 3.00
354 18 310 663 502 3.36
402 21 351 712 550 3.59
445 23 384 757 590 3.83
483 25 411 805 632 4.04
528 27 441 868 682 4.28
573 29 481 916 728 4.50
629 31 542 1,007 794 4.85
765 37 712 1,201 936 5.86
33
The next section of the Farm Business Chart provides for comparative 
analysis of the value of production as measured by milk receipts per cow and 
dairy receipts per hundredweight of milk sold and the costs of production. The 
final or profitability section shows the variation in farm income by decile and 
enables a dairy farmer to determine where he or she ranks by using several 
measures of farm profitability. Remember that each column is independently 
established and the farms making up the top decile in the first column will not 
necessarily be on the top of any other column. The dairy farmer who ranks at or 
near the top of most of these columns is in a very enviable position.
Table 42 (continued) FARM BUSINESS CHART FOR FARM
MANAGEMENT COOPERATORS 
414 New York Dairy Farms, 1986
Milk Dairy Oper. Cost Oper. Cost Total Cost Total Cost
Receipts Receipts Milk Milk Production Production
Per Cow Per Cwt. Per Cow Per Cwt. Per Cow Per Cwt.
$2,747 $15.65 $ 922 $ 6.41 $1,678 $11.39
2,518 14.69 1,149 7.69 1,920 12.48
2,401 14.30 1,274 8.29 2,026 13.19
2,293 14.01 1,368 8.80 2,124 13.69
2,189 13.82 1,445 9.26 2,218 14.04
2,115 13.57 1,533 9.59 2,308 14.54
2,026 13.36 1,599 10.12 2,415 15.23 '
1,932 13.11 1,693 10.64 2,522 15.97
1,812 12.80 1,798 11.20 2,671 16.98
1,517 12.10 2,039 13.18 3,026 20.35
Profitability
Return to Operator's Labor, Labor &
Net Farm Income Management. & Eauitv Canital Management Income
With Without With Without Per Per
Appreciation. Appreciation Appreciation Appreciation____Farm Operator
$157,944 $112,483 $157,154 $111,814 $72,075 $50,073
72,699 46,862 70,487 44,957 25,129 18,115
51,682 33,290 49,335 31,000 15,514 12,290
40,559 25,457 39,083 23,381 9,128 7,659
33,904 19,749 32,076 17,627 4,136 3,599
26,429 15,395 23,588 13,469 21 -24
19,844 10,520 18,127 8,427 -4,171 -3,475
14,690 4,432 12,898 2,090 -9,752 -8,829
6,680 -3,173 4,611 -5,189 -20,244 -16,770
“13,617 -23,915 -15,804 -25,722 -44,712 -39,924
Farm Business Charts for farms with freestall barns and 120 cows or less 
and more than 120 cows, and farms with conventional barns with 60 cows or less 
and more than 60 cows are discussed in the supplemental section on pages 47-51.
34
Financial Analysis and Management
Analysis and astute management of farm financial affairs must receive high 
priority if the farm business is to be successful and if the farm family is to 
achieve a reasonable living standard.
The Farm Finance Checklist and the Financial Analysis Chart are provided 
to serve as guidelines. Dairy farmers can determine how their financial 
management measures up by comparing with average data from other farms.
Table 43. A FARM FINANCE CHECKLIST
414 New York Dairy Farms, 1986
Average 414 Average Top 
New York Farms 10% Farms'*
How farm assets are being used
(average for the year):
Total assets (capital) per cow $5,792 $5,375
Farm assets in livestock 20% 22%
Farm assets in farm real estate 48% 44%
Farm assets in machinery 18% 16%
Measures of debt capacity & debt structure:
Equity in the business 62% 65%
Farm debt per cow $2,171 $1,880
Long term debt/asset ratio** 0.43 0.40
Intermediate & current term
debt/asset ratio** 0.33 0.31
Intermediate & current term
debt as % of total 46% 50%
Debt renavment ability:
Cash flow coverage ratio 1.17 1.36
Debt payments made per cow $572 $686
Debt payments made as % of milk check 28% 30%
Indicators of annual financial progress: Amount Percent Amount Percent
Annual change in farm assets +$22,005 +4.1% +$85,581 +7.1%
Annual change in farm debts +$1,730 +0.8% +$26,429 +6.2%
Annual change in farm net worth +$20,275 +6.2% +59,152 +7.6%
*Forty-one farms with highest net farm Incomes (without appreciation).
**Long or intermediate and current term debt divided by long or intermediate and 
current term assets.
The most profitable farms carried $291 less debt per cow, had a greater 
ability to make 1986 debt payments, and equity in their business was three 
percent more than that of the average.
Farm assets grew faster than farm debts during 1986 and net worth 
increased more than six percent.
35
Financial Analysis Chart
The farm financial analysis chart is designed just like the Farm Business 
Chart on pages 32-33 and may be used to measure the financial health of the farm 
business. Most of the financial measures used are defined on pages 13, 15, 18, 
and 28 in this publication.
Table 44. FINANCIAL ANALYSIS CHART
414 New York Dairy Farms, 1986
Liauiditv (repayment)
Debt Available for Cash Flow Debt Payments
Payments Debt Service Coverage as Percent Debt
Per Cow, Per Cow Ratio of Milk Sales Per Cow
$ 48 $984 4.68 2% $ 136
204 726 1.99 10 705
291 635 1.56 15 1,249
367 571 1.31 19 1,670
426 522 1.16 22 2,036
488 461 1.02 25 2,402
578 400 0.89 29 2,751
670 336 0.76 35 3,053
804 244 0.53 42 3,567
1,525 76 0.02 78 4,842
Solvencv Efficiency & Profitability
Debt/Asset Ratio Capital
Leverage Percent Current & Long Turnover Rate of Return on:
Ratio* Eauitv Intermediate Term (years) Eauitv Investment**
0.02 98% 0.01 0.00 1.52 38 18
0,14 88 0.07 0.02 1.88 12 11
0.28 79 0.14 0.15 2.06 8 9
0.40 73 0.20 0.30 2.20 5 7
0.54 65 0.26 0.38 2.34 3 5
0.74 58 0.32 0.48 2.50 1 4
0.95 52 0.39 0.60 2.68 -1 2
1.23 46 0.47 0.71 2.90 -4 1
1.76 37 0.56 0.86 3.19 -9 -1
9.80 15 0.88 1.33 4,39 -45 -7
Efficiency (Capital)
Real Estate Machinery Investment Total Farm Assets
Investment Per Cow Per Cow Per Cow
$1,272 $ 468 $3,753
1,940 665 4,529
2,231 797 4,963
2,430 900 5,276
2,644 1,011 5,620
2,870 1,122 5,901
3,151 1,250 6,322
3,517 1,425 6,945
4,118 1,665 7,751
5,629 2,338 9,489
^Dollars of debt per dollar of equity, computed by dividing total liabilities 
by total equity.
**Return on all farm capital (no deduction for interest paid) divided by total
farm assets.
SUPPLEMENTAL INFORMATION
Introduction
Comparisons of business performance for the same farms over time, by herd 
size and housing, business organization and milking technology, and numberous 
other factors are contained in this section. Summary data is also presented for 
dairy-cash crop and dairy-renters in this section. The tables on the following 
pages are provided for use as a reference, thus, the discussion of each table is 
at a minimum.
Herd Size Comparisons: A detailed comparison of profitability, financial
situation, and business analysis factors across herd sizes is contained in 
Tables 45 through 47. As herd size increases, the average profitability also 
increases (Table 45). Net farm income without appreciation was $123,246 per 
farm for the 250 or more herd size group and $6,845 per farm for those with less 
than 40 cows. This relationship holds for all measures of profitability 
including rate of return on equity capital.
As herd sizes increase above 55 cows, percent equity decreases (Table 46). 
However, farm net worth increases substantially as herd size increases. The 
average net worth for all size farms increased during 1986.
Crop yields increased as herd size increased, but fertilizer and lime 
expenses and machinery cost per tillable acre also increased (Table 47). Milk 
sold per cow also increased as herd size increased, ranging from 14,525 pounds 
on the farms with less than 40 cows to 18,593 pounds on farms with 250 or more 
cows. Farm capital per worker increased as herd size increased, while farm 
capital per cow decreased as herd size increased. Cows per worker increased 
dramatically as herd size increased, ranging from 20 at the lowest herd size 
category up to 41 at the largest size category.
Same 229 New York Dairy Farms. 1984. 1985. and 1986: Two hundred and twenty- 
nine farms participated in the Dairy Farm Business Summary Project in all three 
years 1984, 1985, and 1986 (Table 48). Total operating expenses and total 
accrual expenses, and receipts have been slowly increasing over these years. 
During this time, average cow numbers increased from 96 in 1984 to 106 in 1986. 
Profitability, however, has not increased in the same fashion. Net farm income 
without appreciation and labor and management Income were greatest in 1985. Net 
farm income including appreciation rebounded in 1986 to its highest level in the 
last three years.
Pounds of milk sold per cow has increased by 532 pounds or 3.4 percent 
over the last two years. When combined with the Increase in cow numbers, the 
increase in milk sold per cow results in total milk sold from the farms Increas­
ing by 213,848 pounds. This increase has been achieved by only a small addition 
to the work force and, thus, pounds of milk sold per worker has increased 
dramatically.
Comparisons by Tyne of Barn and Herd Size: When analyzing a dairy farm business
by comparing it to a group of farms, it is important that the group of farms 
used have as many of the same physical characteristics as possible as the farm 
being analyzed. To assist in this endeavor, dairy farms in the summary have 
been divided into those with freestall and those with conventional housing. 
Within each group is a further classification by size of the dairy herd.
Table 49 on page 47 shows the average values for the resulting four groups 
of dairy farms. Within each housing type, the larger herd size has the highest
37
crop yields and pounds of milk sold per cow. The cost of producing milk was 
lower on the larger farms and labor efficiency greater. Profitability was also 
greater on the larger farms within each housing type.
Farm business charts have been computed for each of the four housing and 
herd size categories. From these charts on pages 48-51 (Tables 50-53) the range 
in size of business rates of production, labor efficiency, value and cost of 
producing milk, and profitability can be,observed. The range in every category 
of business performance is tremendous.
By comparing the farm's performance on the most appropriate business 
chart, a farm manager will be better able to evaluate his or her business 
performance. Farm managers should remember, however, that their competition is 
not limited to the other farms in their own b a m  type and herd size category. 
They should observe how their management performance compares with farms in 
other categories as well.
Comparisons by Business Organization: A comparison of profitability, business
analysis factors, and financial situation by business organization i.s contained 
in Tables 54 and 55. Farms organized as a corporation are larger than 
partnership-operated farms and more than twice as large as proprietorship- 
operated farms. Profitability is also greater on corporation organized farms, 
followed by partnerships and then proprietorships.
Comparison by Milking System; Farms with herringbone parlors had the highest 
farm capital per worker and the highest cows per worker (Table 56). Farms with 
herringbone parlors were also larger and had the greatest profitability.
Other Comparisons: The 20 dairy-cash crop farms had about the same number of
cows as the 414 specialized dairy farms, but had more crop acres and crop sales 
and were more profitable (Table 57). A.E. Ext. 86-34 contains detailed 
information on dairy-cash crop farms for the year 1985. A publication 
containing 1986 data is forthcoming.
Dairy-renter farms were smaller than the 414 owner-operated farms, and 
were less profitable than the average specialized dairy farm (Table 58). A.E. 
Ext, 86-30 contains detailed information on dairy-renters. A publication 
containing 1986 data is forthcoming.
Data for the top 10 percent of farms by net farm income without 
appreciation is presented in Table 59. Summary data for the 414 dairy farms is 
presented for the farm in Table 60 and on a per cow basis in Table 61.
38
Table 45. . FARM BUSINESS SUMMARY BY HERD SIZE
414 New York Dairy Farms, 1986
Less than 40 to 55 to 70 to 85 to 
Item Farm Size: 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 32 87 76 60 46
ACCRUAL EXPENSES
Hired labor $ 2,783 $ 5,555 $ 9,003 $ 14,979 $ 16,565
Dairy grain & concentrate 14,087 23,314 28,109 34,369 38,303
Dairy roughage 948 1,261 1,229 1,062 1,191
Other livestock feed 863 271 548 603 1,326
Machine hire/rent/lease 739 948 1,326 1,419 2,711
Machine repairs/parts 2,846 3,908 5,511 7,365 10,511
Auto expense (farm share) 641 456 449 477 771
Fuel, oil & grease 1,496 2,355 3,319 4,251 5,833
Replacement livestock 1,061 1,279 1,143 812 1,946
Breeding 1,077 1,372 2,053 2,303 2,303
Veterinary & medicine 974 1,702 2,840 2,826 3,997
Milk marketing 4,828 6,606 7,792 10,424 11,482
Cattle lease/rent 48 16 43 2 10
Other livestock expense 2,119 3,969 4,968 6,070 6,814
Fertilizer & lime 1,456 3,135 4,782 6,506 7,355
Seeds & plants 873 1,171 1,865 2,889 3,272
Spray & other crop expense 533 898 1,710 2,448 2,683
Land/building/fence repair 1,113 1,154 1,509 1,683 2,523
Taxes & insurance 3,743 4,807 6,408 7,257 9,077
Telephone & electricity 2,543 3,414 4,225 5,328 6,122
Interest paid 6,487 10,078 10,104 13,570 17,334
Misc. (including rent) 1.589 2.374 4.287 5.267 6.998
Total Operating Expenses $52,847 $80,043 $103,223 $131,910 $159,127
Expansion livestock 456 283 664 474 985
Machinery depreciation 4,657 7,458 10,906 13,388 16,449
Building depreciation 2.570 3.740 5.019 6.469 8.182
Total Accrual Expenses $60,530 $91,524 $119,812 $152,241 $184,743
ACCRUAL RECEIPTS
Milk sales $58,125 $89,125 $121,096 $149,343 $180,096
Dairy cattle 5,294 6,411 9,025 10,559 14,433
Dairy calves 971 1,295 1,674 1,837 2,357
Other livestock 454 200 317 235 156
Crops 1,144 197 86 1,724 1,582
Misc. receipts 1.387 1.940 3.778 4.143 5.480
Total Accrual Receipts $67,375 $99,168 $135,976 $167,841 $204,104
PROFITABILITY ANALYSIS
Net farm income (w/o apprec.) $6,845 $7,644 $16,164 $15,600 $19,361
Net farm income (w/apprec.) $14,484 $17,774 $25,724 $31,524 $40,888
Labor & mgmt. income $-2,533 $-2,450 $1,797 $-1,674 $518
Number of operators 1.00 1.13 1.32 1.22 1.37
Labor & mgmt. inc./oper. $-2,533 $-2,168 $1,361 $-1,372 $378
Rate of return on equity 
capital (w/o apprec.) -8.8% -8.6% -3.7% -2.8% -2,1%
Rate of return on equity 
capital (w/apprec.) -3.2% -2.1% 0.1% 2.5% 4.2%
39
Table 45 (continued) FARM BUSINESS SUMMARY BY HERD SIZE
414 New York Dairy Farms, 1986
100 to 150 to 200 to 250 or 
Item Farm Size: 149 Cows 199 Cows 249 Cows More Cows
Number 6f farms 62 22 10 19
ACCRUAL EXPENSES
Hired labor $ 23,213 $ 46,159 $ 68,294 $ 145,034
Dairy grain & concentrate 53,781 77,088 122,806 224,158
Dairy roughage 1,576 1,573 , 5,901 11,045
Other livestock feed 1,066 1,162 1,900 754
Machine hire/rent/lease 2,622 2,627 4,523 4,140
Machine repairs/parts 13,261 15;449 27,760 41,273
Auto expense (farm share) 558 550 262 1,383
Fuel, oil & grease 6,944 11,345 12,368 18,665
Replacement livestock 1,996 7,347 7,535 4,336
Breeding 3,629 4,076 7,832 12,224
Veterinary 6c medicine 4,985 6,909 12,373 23,522
Milk marketing 16,715 22,704 28,678 56,326
Cattle lease/rent 65 598 0 499
Other livestock expense 10,053 13,968 18,995 37,792
Fertilizer 6c lime 10,159 13,391 20,410 30,533
Seeds 6c plants 4,438 6,510 7,633 13,922
Spray 6c, other crop expense 4,358 5,755 8,207 14,950
Land/building/fence repair 2,954 2,912 5,095 12,813
Taxes 6c insurance 10,320 14,487 20,465 25,083
Telephone & electricity 7,271 9,442 12,178 20,281
Interest paid 21,682 34,929 42,595 78,770
Misc. (including rent) 6.999 10.459 22.781 29.228
Total Operating Expenses $208,645 $309,440 $458,591 $ 806,731
Expansion livestock 582 2,139 2,297 12,572
Machinery depreciation 20,893 26,190 37,063 52,995
Building depreciation 9.226 15.992 20.451 36.105
Total Accrual Expenses $239,346 $353,761 . $518,402 $ 908,403
ACCRUAL RECEIPTS
Milk sales $245,627 $334,063 $474,437 $ 902,482
Dairy cattle 18,626 28,784 42,300 77,186
Dairy calves 3,038 3,468 4,742 9,618
Other livestock 345 1,275 9,333 877
Crops 3,668 5,490 4,850 16,858
Misc. receipts 7.122 14.311 25.621 24.628
Total Accrual Receipts $278,426 $387,391 $561,283 $1,031,649
PROFITABILITY ANALYSIS
Net farm income (w/o apprec.) $39,080 $33,630 $42,881 $123,246
Net farm income (w/apprec.) $65,839 $58,481 $65,595 $163,623
Labor 6c mgmt. income $14,011 $5,359 $7,205 $65,171
Number of operators 1.56 1.45 1.50 1,54
Labor 6c mgmt. inc./oper. $8,981 $3,696 $4,803 $42,319
Rate of return on equity
capital (w/o apprec.) 1.5% 0.7% 1.8% 7.1%
Rate of return on equity
capital (w/apprec.) 7.3% 5.3% 5.1% 10.6%
40
Table 46. FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
414 New York Dairy Farms, 1986
Farms with: Less than 40 Cows 40 to 54 Cows 55 to 69 Cows
Item_______________  Jan, 1____Dec. 31 Jan, 1____Dec. 31 Jan. 1____Dec. 31
ASSETS
Farm cash/chkg./sav. $ 1,986 $ 2,198 $ 1,938 $ 2,701 $ 2,526 $ 3,408
Accounts receivable 4,661 4,646 7,038 7,400 10,126 10,700
Feed & supplies 10,565 11,503 16,819 16,887 25,547 25,019
Livestock* 35,537 37,823 50,999 54,104 72,821 74,528
Machinery & equipment* 40,675 41,786 54,251 54,042 76,061 76,061
FLB & PCA stock 893 874 1,522 1,645 1,584 1,560
Coop stocks & cert. 1,697 1,905 1,637 1,879 2,951 2,984
Land & buildings* 116.480 119.878 147.042 150.445 180.616 187.073
Total Farm Assets $212,494 $220,613 $281,246 $289,103 $372,232 $381,333
Pers. cash/chkg./sav.$ 7,733 $ 7,940 $ 5,478 $ 5,390 $ 4,292 $ 4,848
Cash value of life ins. 2,634 2,007 2,977 3,252 3,476 3,842
Nonfarm real estate 15,208 19,250 1,956 1,964 18,045 17,580
Auto (personal share) 1,866 1,923 2,398 2,906 2,870 3,669
Stocks & bonds 866 773 2,262 3,430 17,622 19,198
Household furnishings: 8,083 8,167 8,936 9,139 6,732 7,755
All other 894 752 3.105 2.782 1.889 2.015
Total Nonfarm 
Assets** $ 37,285 $ 40,812 $ 27,113 $ 28,865 $ 54,925 $ 58,908
Total Farm & Nonfarm 
Assets $249,779 $261,425 $308,359 $317,968 $427,157 $440,241
LIABILITIES 
Accounts payable $ 2,287 $ 2,224 $ 3,367 $ 4,389 $ 3,650 $ 4,504
Operating debt 597 811 1,315 963 1,468 1,366
Short term 1,638 1,406 1,106 1,704 ,1,420 1,738
Intermediate*** 20,880 20,413 43,165 43,747 44,828 43,302
Long term* 56.147 53.569 80.763 78.938 77.843 77.741
Total Farm Liab. $ 81,550 $ 78,423 $129,716 $129,741 $129,208 $128,651
Tot. Nonfarm Liab.** 1.354 981 1.046 1.083 1.917 2.034
Total Farm & Nonfarm 
Liabilities $ 82,904 $ 79,404 $130,762 $130,824 $131,125 $130,685
Farm Net Worth 
(Equity Capital) $130,944 $142,190 $151,530 $159,362 $243,024 $252,682
Farm & Nonfarm 
Net Worth $166,875 $182,021 $177,597 $187,144 $296,032 $309,556
FINANCIAL MEASURES Less than 40 Cows 40 to 54 Cows 55 to 69 Cows
Percent equity 64% 55% 66%
Debt/asset ratio-long term 0.45 0.52 0.42
Debt/asset ratio-inter. & current 0.25 0.37 0.26
Change in net worth with apprec. $11,246 $7,832 $9,658
Total farm debt per cow $2,376 $2,703 $2,075
Debt payments made per cow $600 $526 $446
Debt payments as % of milk sales 33% 28% 22%
Amount avail, for debt service $15,290 $22,426 $32,964
Cash flow coverage ratio for 1986 1.25 1.04 1.33
^Includes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1986.
***Includes FLB/PCA stock and discounted lease payments for cattle and 
machinery.
41
Table 46 (cont'd) FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
414 New York Dairy Farms, 1986
Farms with: 70 to 84 Cows 85 to 99 Cows
Item Jan. 1 Dec. 31 Jan. 1 Dec. 31
ASSETS
Farm cash/chkg./savings $ 3,624 $ 4,311 $ 4,152 $ 4,674
Accounts receivable 13,182 13,731 15,052 16,928
Feed & supplies 32,473 33,003 41,277 41,802
Livestock* 86,471 91,004 104,001 109,208
Machinery & equipment* 92,371 93,896 116,081 117,533
FLB & PCA stock 3,140 3,362 3,246 2,959
Coop stocks & cert. 3,587 4,016 4,055 5,362
Land & buildings* 226.185 232.659 244.511 257.618
Total Farm Assets $461,034 $475,981 $532,375 $556,084
Pers. cash/chkg./savings $ 11,952 $ 12,071 $ 5,906 $ 6,958
Cash value of life ins. 4,330 4,257 3,120 3,430
Nonfarm real estate 8,671 8,474 3,577 3,423
Auto (personal share) 3,198 3,312 2,175 2,536
Stocks & bonds 4,062 4,383 3,912 4,181
Household furnishings 9,168 9,259 7,281 7,788
All other 4.362 3.032 4.423 5.554
Total Nonfarm Assets** $ 45,745 $ 44,789 $ 30,394 $ 33,869
Total Farm & Nonfarm
Assets $506,779 $520,770 $562,769 $589,953
LIABILITIES
Accounts payable $ 5,836 $ 6,211 $ 5,443 $ 5,899
Operating debt 1,932 1,840 3,774 3,883
Short term 1,955 2,047 827 1,540
Intermediate*** 55,996 57,039 78,119 80,681
Long term* 98.649 94.722 113.871 111.042
Total Farm Liab. $164,368 $161,859 $202,034 $203,045
Total Nonfarm Liab.** 1.213 800 .115 77
Total Farm & Nonfarm
Liabilities $165,581 $162,659 $202,149 $203,122
Farm Net Worth
(Equity Capital) $296,666 $314,122 $330,342 $353,039
Farm & Nonfarm Net Worth $341,198 $358,111 $360,620 $386,831
FINANCIAL MEASURES 70 to 84 Cows 85 to 99 Cows
Percent equity 66% 63%
Debt/asset ratio-long term 0.41 0.43
Debt/asset ratio-inter. & current 0.28 0 .31
Change in net worth with apprec. $17,456 $22,698
Total farm debt per cow $2,102 $2,207
Debt payments made per cow $484 $465
Debt payments as % of milk sales 24% 23%
Amount avail, for debt service $34,979 $42,858
Cash flow coverage ratio for 1986 1.12 1.18
*Includes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1986, 
***Includes FLB/PCA stock and discounted lease payments for cattle and 
machinery.
42
Table 46 (cont'd) FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
414 New York Dairy Farms, 1986
Farms with: 100 to 149 Cows 150 to■ 199 Cows
Item Jan. 1 Dec. 31 Jan. 1 Dec. 31
ASSETS
Farm cash/chkg./savings $ 5,440 $ 6,624 $ 3,576 $ 4,521
Accounts receivable 20,835 22,677 27,738 33,021
Feed & supplies 58,288 60,473 73,223 74,490
Livestock* 142,725 147,952 188,540 199,263
Machinery & equipment* 128,625 127,761 167,695 172,506
FLB & FCA stock 5,968 6,358 11,845 11,879
Coop stocks & cert. 9,312 9,610 9,224 10,601
Land & buildings* 322.502 343.761 417.368 427.326
Total Farm Assets $693,695 $725,216 $899,209 $933,607
Pers. cash/chkg./savings $ 4,272 $ 4,744 $ 7,433 $ 7,561
Cash value of life ins. 4,278 4,382 6,743 8,120
Nonfarm real estate 9,270 11,871 26,500 26,000
Auto (personal share) 2,762 3,248 4,370 4,780
Stocks & bonds 6,834 7,596 12,388 12,524
Household furnishings 8,716 8,689 14,790 14,850
All other 3.265 3.429 5.050 17.770
Total Nonfarm Assets** $ 39,398 $ 43,960 $ 77,274 $ 91,605
Total Farm & Nonfarm 
Assets $733,093 $769,176 $976,483 $1,025,212
LIABILITIES 
Accounts payable $ 5,090 $ 5,192 $ 13,306 $ 15,005
Operating debt 4,056 3,204 9,115 8,569
Short term 3,768 4,257 3,209 6,496
Intermediate*** 99,966 96,334 181,693 179,730
Long term* 137.951 132.876 161.152 168.331
Total Farm Liab. $250,831 $241,863 $368,475 $ 378,130
Total Nonfarm Liab.** 1,546 2.545 11.759 10.833
Total Farm & Nonfarm 
Liabilities $252,377 $244,408 $380,234 $ 388,963
Farm Net Worth 
(Equity Capital) $442,864 $483,354 $530,734 $ 555,477
Farm & Nonfarm Net Worth $480,716 $524,768 $596,249 $ 636,249
FINANCIAL MEASURES 100 to 149 Cows 150 to 199 Cows
Percent equity 67% 59%
Debt/asset ratio-long term 0.39 0.39
Debt/asset ratio-inter. & current 0.29 0.41
Change in net worth with apprec. $40,489 $24,743
Total farm debt per cow $1,982 $2,136
Debt payments made per cow $532 $536
Debt payments as % of milk sales 26% 28%
Amount avail. for debt service $62,953 $81,720
Cash flow coverage ratio for 1986 1.20 1.04
^Includes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1986. 
***Includes FLB/FCA stock and discounted lease payments for cattle and 
machinery,
43
Table 46 (cont'd) FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
414 New York Dairy Farms, 1986
Farms with: 200 to 249 Cows More than 250 Cows
Item Jan. 1 Dec. 31 Jan. 1 Dec. 31
ASSETS
Farm cash/chkg./savings $ 5,182 $ 5,285 $ 3,098 $ 5,509
Accounts receivable 47,222 48,353 77,139 88,644
Feed & supplies 110,301 112,044 197,236 207,932
Livestock* 272,218 280,550 442,895 466,645
Machinery & equipment* 203,740 207,527 265,465 274,285
FLB & PCA stock 14,501 14,456 15,298 14,356
Coop stocks & cert. 21,898 29,283 32,024 53,851
Land & buildings* 486.214 495.339 882.690 934.130
Total Farm Assets $1,161,276 $1,192,837 $1,915,845 $2,045,352
Pers. cash/chkg./savings $ 7,629 $ 8,086 $ 1,741 $ 3,824
Cash value of life ins. 17,877 6,118 4,170 4,166
Nonfarm real estate 17,429 17,429 5,889 5,889
Auto (personal share) 5,429 7,357 1,046 1,889
Stocks & bonds 3,643 5,286 7,208 8,332
Household furnishings 6,714 7,714 4,000 4,000
All other 10.493 17.023 14.377 12,205
Total Nonfarm Assets** $ 69,213 $ 69,012 $ 38,430 $ 40,305
Total Farm 6c Nonfarm
Assets $1,230,489 $1,261,849 $1,954,275 $2,085,657
LIABILITIES 
Accounts payable $ 15,676 $ 9,132 $ 15,482 $ 23,393
Operating debt 6,258 5,947 27,204 50,242
Short term 2,925 7,172 12,870 13,488
Intermediate*** 215,166 243,542 364,772 349,232
Long term* 232.444 215.211 380.025 428.144
Total Farm Liab. $ 472,468 $ 481,004 $ 800,354 $ 864,499
Total Nonfarm Liab.** 0 2,217 0 0
Total Farm 6c Nonfarm
Liabilities $ 472,468 $ 483,221 $ 800,354 $ 864,499
Farm Net Worth
(Equity Capital) $ 688,808 $ 711,833 $1,115,491 $1,180,853
Farm 6c Nonfarm Net Worth $ 758,021 $ 778,628 $1,153,921 $1,221,158
FINANCIAL MEASURES 200 to 249 Cows More than 250 Cows
Percent equity 60% 58%
Debt/asset ratio-long term 0.43 0.46
Debt/asset ratio-inter. 6c current 0.38 0.39
Change in net worth with apprec. $23,026 $65,361
Total farm debt per cow $2,073 $2,194
Debt payments made per cow $638 $769
Debt payments as % of milk sales 30% 33%
Amount avail, for debt service $96,415 $206,413
Cash flow coverage ratio for 1986 0.98 1.25
■^Includes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1986. 
***Includes FLB/PCA stock and discounted lease payments for cattle and 
machinery.
44
Table 47. SELECTED BUSINESS FACTORS BY HERD SIZE
414 New York Dairy Farms, 1986
Farms with: Less than 40 to 55 to 70 to 85 to 
Item 40 Cows 54 Cows 69 Cows 84 Cows 99 Cows
Number of farms 32 87 76 60 46
Cropping; Program Analysis
Total Tillable acres 117 162 198 266 301
Tillable acres rented* 28 58 62 91 114
Hay crop acres* 76 100 110 148 168
Corn silage acres* 14 30 38 48 56
Hay crop, tons DM/acre 2.1 2.2 2.6 2.6 2.7
Corn silage, tons/acre 11.8 12.3 13.1 13.6 13.7
Oats, bushels/acre 43.3 60.5 67.1 70.1 64.4
Forage DM per cow, tons 6.9 7.4 7.6 8.0 8.0
Tillable acres/cow 3.6 3.4 3.3 3.5 3.3
Fert. & lime exp./til. acre $12.43 $19.38 $24.13 $24.42 $24.42
Total machinery costs $12,414 $17,793 $25,291 $31,515 $42,081
Machinery cost/tillable acre $106 $110 $128 $118 $140
Dairy Analysis
Number of cows 32 47 61 76 90
Number of heifers 25 36 50 62 73
Milk sold, lbs. 470,234 716,437 966,374 1,185,995 1,430,399
Milk sold/cow, lbs. 14,525 15,180 15,825 15,605 15,840
Operating cost of prod, milk/cwt. $9.27 $9.77 $9.14 $9.56 $9.45
Total cost of prod, milk/cwt. $16.34 $15.40 $14.75 $14.57 $14.29
Price/cwt. milk sold $12.36 $12.44 $12.53 $12.59 $12.59
Purchased dairy feed/cow $464 $521 $480 $466 $437
Purchased dairy feed/cwt. milk $3.20 $3.43 $3.04 $2.99 $2.76
Purchased grain & cone, as %
of milk receipts 24% 26% 23% 23% 21%
Purchased feed & crop
expense/ewt. milk $3.81 $4.16 $3.90 $3.99 $3.69
Capital Efficiency
Farm capital/worker $128,138 $141,878 $155,055 $163,243 $184,485
Farm capital/cow 6,689 6,042 6,170 6,165 6,027
Farm capital/til. acre owned 2,433 2,742 2,750 2,677 2,910
Real estate/cow 3,650 3,152 3,011 3,019 2,780
Machinery investment/cow 1,274 1,147 1,246 1,225 1,293
Capital turnover, years 2.89 2.61 2.59 2.55 2.41
Labor Efficiency
Worker equivalent 1.69 2.01 2.43 2.87 2.95
Operator/manager equivalent 1.00 1.13 1.32 1.22 1.37
Milk sold/worker, lbs. 278,245 356,436 397,685 413,239 484,881
Cows/worker 20 23 25 26 31
Work units/worker 204 247 266 287 327
Labor cost/cow $480 $411 $400 $388 $357
Labor cost/tillable acre $133 $120 $123 $111 $107
^Average of all farms, not only those reporting data.
45
Table 47 (continued) SELECTED BUSINESS FACTORS BY HERD SIZE
414 New York Dairy Farms, 1986
Farms with: 100 to 150 to 200 to 250 or 
Item 149 Cows 199 Cows 249 Cows More Cows
Number of farms 62 22 10 19
Cronnine Program Analysis
Total tillable acres 364 506 678 839
Tillable acres rented* 126 202 277 267
Hay crop acres* 180 228 268 310
Corn silage acres* 81 129 158 351
Hay crop, tons DM/acre 3.0 2.9 3.1 3.5
Corn silage, tons/acre 14.5 13.8 15.5 16.1
Oats, bushels/acre 67.4 55.4 50.0 57.5
Forage DM per cow, tons 7.9 7.6 7.4 7.8
Tillable acres/cow 3.1 3.0 3.0 2.2
Fert. & lime exp./til. acre $27.87 $26.45 $30.13 $36.38
Total machinery costs $50,654 $64,609 $92,196 $131,927
Machinery cost/tillable acre $139 $128 $136 $157
Dairy Analyses
Number of cows 119 172 226 382
Number of heifers 102 139 176 314
Milk sold, lbs. 1,917,759 2,608,778 3,744,053 7,104,584
Milk sold/cow, lbs. 16,055 15,199 16,552 18,593
Operating cost of prod, milk/cwt. $9.17 $9.82 $9.93 $9.54
Total cost of prod, milk/cwt. $13.65 $13.71 $13.26 $12.37
Price/cwt. milk sold $12.81 $12,81 $12.67 $12,70
Purchased dairy feed/cow $463 $458 $569 $616
Purchased dairy feed/cwt. milk $2.89 $3.02 $3.44 $3.31
Purchased grain & cone, as %
of milk receipts 22% 23% 26% 25%
Purchased feed & crop
expense/ewt. milk $3.87 $4.00 $4.41 $4.15,
Capital Efficiency
Farm capital/worker $198,727 $196,654 $201,206 $211,602
Farm capital/cow 5,939 5,339 5,204 5,183
Farm capital/til. acre owned 2,968 3,014 2,943 3,463
Real estate/cow 2,789 2,461 2,170 2,377
Machinery investment/cow 1,073 991 909 706
Capital turnover, years 2.32 2.22 2.02 1.85
Labor Efficiency
Worker equivalent 3.57 4.66 5.85 9.36
Operator/manager equivalent 1.56 1.45 1.50 1.54
Milk sold/worker, lbs. 537,187 559,824 640,009 759,037
Cows/worker 33 37 39 41
Work units/worker 355 385 407 422
Labor cost/cow $343 $362 $372 $423
Labor cost/tillable acre $113 $123 $124 $192
^Average of all farms, not only those reporting data.
46
Table 48. COMPARISON OF FARM BUSINESS SUMMARIES FOR 1984,
1985, AND 1986
Same 229 New York Dairy Farms
Item 1984 1985 1986
ACCRUAL EXPENSES
Hired labor $ 21,670 $ 23,649 $ 25,484
Feed 52,490 50,173 55,947
Machinery 20,264 20,512 19,401
Livestock 32,921 30,887 33,805
Crops 16,391 18,179 ■ 15,476
Real estate 14,476 15,765 16,048
Other 28.614 29.244 29.447
Total Operating $186,826 $188,409 $195,608
Expansion livestock 2,389 2,780 1,543
Machinery depreciation 17,206 17,111 16,915
Building depreciation 8,039 8.884 9.135
Total Accrual Expenses $214,460 $217,184 $223,201
ACCRUAL RECEIPTS
Milk sales $206,003 $212,216 $221,104
Livestock 22,622 22,549 20,252
Crops 3,114 4,948 1,783
All other 6.710 7.337 7.261
Total Accrual Receipts $238,449 $247,050 $250,400
PROFITABILITY ANALYSIS
Net farm income (without appreciation) $23,989 $29,866 $27,199
Net farm income (with appreciation) $38,615 $28,322 $44,992
Labor & management income -$262 $9,884 $6,213
Number of operators 1.33 1.32 1.31
Labor & management income per operator -$197 $7,488 $4,743
BUSINESS FACTORS
Worker equivalent 3.20 3.29 3.32
Number of cows 96 102 106
Number of heifers 83 84 86
Acres of hay crops* 141 145 153
Acres of corn silage* 75 79 77
Total tillable acres 288 299 305
Pounds of milk sold 1,526,978 1,637,695 1,740,826
Pounds of milk sold per cow 15,860 16,011 16,392
Tons hay crop dry matter per acre 2.9 2.9 2.8
Tons corn silage per acre 14 15 15
Cows per worker 30 31 32
Pounds of milk sold per worker 477,181 497,779 524,345
Percent grain & cone, is of milk receipts 24% 22% 24%
Feed & crop expense per cwt, milk $4.51 $4.11 $4.05
Fertilizer & lime per crop acre $34.29 $35.73 $26.90
Machinery cost per tillable acre $149 $144 $137
Average price per cwt. milk $13.49 $12.96 $12.70
*Average of all farms, not only those reporting data.
47
Table 49. SELECTED BUSINESS FACTORS BY TYPE OF BARN
AND HERD SIZE
414 New York Dairy Farms, 1986
Farms with: Conventional Freestall
Item <60 Cows >60 Cows <120 Cows >120 Cows
Number of farms 146 124 71 73
.Cropping Program Analysis
Total Tillable acres 157 274 273 588
Tillable acres rented* 51 97 99 205
Hay crop acres* 96 155 139 243
Corn silage acres* 27 48 62 181
Hay crop, tons DM/acre 2.3 2.7 2.8 3.2
Corn silage, tons/acre 12.3 13.7 , 14.0 15.2
Oats, bushels/acre 56.1 70.4 68.7 56.5
Forage DM per cow, tons 7.2 7.9 7.8 7.8
Tillable acres/cow 3.4 3.4 3.1 2.7
Fert. & lime exp./til. acre $19.90 $22.75 $28.70 $31.11
Total machinery costs $17,584 $33,257 $41,281 $83,046
Machinery cost/tillable acre $112 $121 $151 $141
Dairy Analysis
Number of cows 46 81 88 222
Number of heifers 35 68 73 182
Milk sold, lbs. 698,200 1,286,440 1,388,642 3,787,019
Milk sold/cow, lbs. 15,171 15,802 15,866 17,093
Operating cost of prod, milk/cwt $9.51 $9.33 $9.36 $9.60
Total cost of prod, milk/cwt. $15.38 $14.37 $14.22 $12.96
Price/cwt. milk sold $12.47 $12.53 $12.84 $12.72
Purchased dairy feed/cow $499 $459 $459 $548
Purchased dairy feed/cwt. milk $3.29 $2.91 $2.89 $3.21
Pure, grain 6c cone, as % milk rec. 25% 23% 22% 24%
Pure, feed 6c crop exp./ewt. milk $4.05 $3.79 $3,94 $4.12
Capital Efficiency
Farm capital/worker $137,144 $173,780 $183,971 $204,899
Farm capital/cow 6,020 6,233 5,970 5,355
Farm capital/til. acre owned 2,614 2,867 2,986 3,098
Real estate/cow 3,109 3,066 2,749 2,424
Machinery investment/cow 1,147 1,223 1,214 869
Capital turnover, years 2.57 2.52 2.37 2.05
Labor Efficiency
Worker equivalent 2.02 2.92 2.84 5.79
Operator/manager equivalent 1.15 1.33 1.41 1.47
Milk sold/worker, lbs. 345,644 440,562 488,958 654,062
Cows/worker 23 28 31 38
Work units/worker 240 299 328 399
Labor cost/cow $417 $381 $361 $385
Labor cost/tillable acre $122 $113 $116 $145
Profitability 6c Balance Sheet Analysis 
Net farm income (w/o apprec.) $9,341 $19,138 $24,475 $60,243
Labor 6c mgmt. income/operator $-999 $455 $4,275 $16,090
Farm debt/cow $2,428 $2,090 $2,050 $2,145
Percent equity 59% 66% 65% 60%
^Average of all farms, not only those reporting data.
48
Table 50. FARM BUSINESS CHART FOR SMALL CONVENTIONAL STALL DAIRY FARMS
146 Conventional Stall Dairy Farms with 60 or Less Cows, New York, 1986
Size of Business Rates of Production Labor Efficiency
Worker No. Pounds Pounds Tons Tons Corn Cows Pounds
Equiv- of Milk Milk Sold Hay Crop Silage Per Milk Sold
alent Cows Sold Per Cow DM/Acre Per Acre Worker Per Worker
3.1 58 1,007,751 18,878 4.1 20 34 544,485
2.6 55 873,140 17,368 3.3 17 30 459,871
2.3 54 832,613 16,639 2.9 16 27 428,718
2.2 51 787,319 16,037 2.6 15 26 404,025
2.0 49 740,807 15,438 2.4 14 25 375,361
2.0 47 700,379 15,034 2.2 13 23 343,283
1.9 44 653,090 14,416 2.1 12 21 316,418
1.7 41 580,976 13,938 1.9 10 20 286,500
1.5 36 501,065 12,992 1.6 8 18 255,798
1.2 28 352,058 10,736 1.1 5 14 192,273
Cost Control
Grain %; Feed is Machinery Labor & Feed & Crop Feed & Crop
Bought of Milk Costs Machine ry Exp ens e s Expenses Per
Per Cow Receipts Per Cow Costs Per Cow Per Cow Cwt. Milk
$189 11% $177 $520 $338 $2,51
320 17 249 611 455 3.15
386 22 285 666 503 3.44
422 24 323 734 535 3.70
459 25 365 785 580 3.86
488 27 397 827 611 4.05
532 29 429 884 661 4.28
580 30 464 916 721 4.59
631 32 522 1,000 783 4.97
765 38 648 1,176 954 6.06
Value and Cost of Production Profitability
Milk Oper. Cost Total Cost Net Farm Income
Receipts Milk Production With Without Labor & Memt. Income
Per Cow Per Cwt. Per Cwt. Apprec. Apprec. Per Farm Per Oper.
$2,709 $ 6.23 $11.98 $60,893 $35,087 $22,396 $17,562
2,425 7.49 13.42 35,933 24,247 12,646 10,953
2,294 8.11 13.84 29,970 18,994 7,722 6,887
2,188 8.67 14.32 25,464 14,971 4,609 4,089
2,101 9.26 15.16 20,230 11,729 1,702 1,658
2,000 9.87 15.63 16,582 8,614 -1,464 -1,401
1,937 10.47 16.12 12,687 5,490 -5,240 -4,394
1,853 10.92 17.10 7,202 814 -8,463 -8,524
1,740 11.50 18.57 -257 -3,988 -15,131 -14,528
1,403 13.36 21.95 -12,299 -18,796 -28,918 -26,431
49
Table 51. FARM BUSINESS CHART FOR LARGE CONVENTIONAL STALL DAIRY FARMS
124 Conventional Stall Dairy Farms with More Than 60 Cows, New York, 1986
Size of Business Rates of Production Labor Efficiency
Worker No. Pounds Pounds Tons Tons Corn Cows Pounds
Equiv- of Milk Milk Sold Hay Crop Silage Per Milk Sold
alent Cows Sold Per Cow DM/Acre Per Acre Worker Per Worker
4.7 124 2,093,475 19,571 4.8 22 44 652,718
3.7 99 1,649,764 18,016 3.6 19 37 571,684
3.4 90 1,441,447 17,121 3.3 17 34 530,017
3.1 85 1,317,509 16,694 3.0 16 31 496,060
3.0 79 1,251,151 16,141 2.8 15 29 471,986
2.8 76 1,206,039 15,667 2.6 14 28 446,181
2.5 72 1,147,970 15,233 2.4 13 26 425,808
2.4 68 1,074,750 14,662 2.2 12 25 396,893
2.1 65 967,717 13,618 2.0 10 22 346,946
1.8 62 810,022 11,546 1.5 6 18 256,917
Cost Control
Grain % Feed is Machinery Labor & Feed & Crop Feed & Crop
Bought of Milk Costs Machinery Exp ens e s Expenses Per
Per Cow Receipts Per Cow Costs Per Cow Per Cow Cwt. Milk
$186 10% $191 $476 $342 $2.32
269 14 259 554 428 2.91
333 17 317 625 487 3.29
380 21 353 704 528 3.43
429 22 381 750 579 3.65
473 24 409 800 624 3.95
512 26 456 877 671 4.21
557 27 504 950 713 4.41
624 30 556 1,050 773 4.65
761 37 713 1,219 897 5.52
Value and Cost of Production Profitability
Milk Oper. Cost Total Cost Net Farm Income
Receipts Milk Production With Without Labor & Meant. Income
Per Cow Per Cwt. Per Cwt. ADDrec. Annrec. Per Farm Per Oner.
$2,661 $6.53 $11.61 $137,617 $61,175 $40,774 $27,242
2,517 7.83 12.60 60,290 39,547 21,148 16,925
2,406 8.31 13.14 49,563 32,130 14,942 11,965
2,311 8.68 13.67 42,248 27,056 9,103 7,194
2,201 9.14 14.11 37,685 21,315 3,905 3,225
2,124 9.46 14.43 31,717 18,215 283 175
2,041 9.86 14.81 23,127 14,332 -4,262 -3,498
1,936 10.41 15.66 17,079 7,417 -12,508 -9,625
1,835 10.87 16.56 12,251 -2,565 -20,966 -16,753
1,594 13.21 19.48 -8,813 -20,714 -44,612 -42,011
50
Table 52. FARM BUSINESS CHART FOR SMALL FREESTALL DAIRY FARMS
71 Freestall Barn Dairy Farms with 120 or Less Cows, New York, 1986
Size of Business Rates of Production Labor Efficiency
Worker No. Pounds Pounds Tons Tons Corn Cows Pounds
Equiv- of Milk Milk Sold Hay Crop Silage Per Milk Sold
alent Cows Sold Per Cow DM/Acre Per Acre Worker Per Worker
4.3 117 1,964,379 19,630 4.5 21 52 746,199
3.5 110 1,842,322 18,599 3.9 19 40 621,768
3.3 105 1,711,514 17,868 3.5 17 36 565,788
3.0 97 1,588,855 16,927 3.0 16 33 530,646
2.8 91 1,453,928 16,098 2.7 15 31 506,808
2.7 86 1,350,208 15,704 2.5 14 29 484,530
2.6 82 1,277,728 15,246 2.4 14 29 454,169
2.3 74 1,094,868 14,733 2.3 13 27 422,903
2.1 67 975,911 13,879 1.9 11 25 394,665
1.7 52 721,949 10,706 1.4 7 21 304,171
Cost Control
Grain %: Feed is Machinery Labor &i Feed & Crop Feed 6c Crop
Bought of Milk Costs Machinery Expenses Expenses Per
Per Cow Receiots Per Cow Costs Per Cow Per Cow Cwt. Milk
$183 9% $239 $546 $383 $2.40
291 14 309 653 449 2.85
321 17 354 682 509 3.35
377 19 393 712 577 3.69
423 22 422 759 $07 3.90
489 24 453 822 652 4.06
534 26 488 885 693 4.33
551 28 532 940 719 4.53
597 30 648 1,084 797 5.09
735 35 891 1,323 935 6.15
Value and Cost of Production Profitability
Milk Oper. Cost Total Cost Net Fariri Income
Receipts Milk Production With Without Labor 6c Memt. Income
Per Cow Per Cwt. Per Cwt. Annrec. Apprec. Per Farm Per ODer.
$2,763 $ 6.52 $11.16 $119,436 $85,723 $56,843 $31,786
2,517 7.84 12.33 75,141 51,430 29,843 19,619
2,456 8.22 13.18 58,064 39,357 19,804 14,086
2,349 8.83 13.70 45,183 34,141 14,167 9,502
2,247 9.26 14.00 40,801 25,936 7,804 6,962
2,179 9,55 14.48 34,830 20,431 2,896 2,591
2,113 10.11 14.97 27,277 14,804 -1,786 -1,478
2,041 10.62 15.79 19,458 8,785 -5,399 -4,633
1,932 11.55 16.77 11,308 -531 -16,982 -13,373
1,494 13.08 19.53 -6,377 -27,829 -46,468 -39,164
51
Table 53. FARM BUSINESS CHART FOR LARGE FREESTALL DAIRY FARMS
73 Freestall Barn Dairy Farms with More Than 120 Cows, New York, 1986
Size of Business Rates of Production Labor Efficiency
Worker No. Pounds Pounds Tons Tons Corn Cows Pounds
Equiv- of Milk Milk Sold Hay Crop Silage Per Milk Sold
alent Cows Sold Per Cow DM/Acre Per Acre Worker Per Worker
13.3 540 10,200,698 20,554 5.1 20 59 926,835
7.6 311 5,862,327 19,208 4.0 18 46 821,108
6.7 254 4,456,278 17,921 3.7 17 43 728,084
6.0 226 3,713,183 17,284 3.4 16 40 678,995
5.3. 194 3,138,231 16,825 3.3 16 39 644,490
4.9 173 ■ 2,616,444' 16,360 3.1 15 37 611,932
4.4 156 2,458,443 15,867 3.0 15 35 565,128
4.0 145. 2,327,342 15,350 2.7 13 33 541,569
3.6 132 2,099,647 14,395 2.4 12 31 476,755
3.0 122 1,739,656 12,476 1.9 9 27 415,285
Cost Control
Grain % Feed is Machinery Labor & Feed & Crop Feed & Crop
Bought of Milk Costs Machinery Expenses Expenses Per
Per Cow Receipts Per Cow Costs Per Cow Per Cow Cwt. Milk
$216 12% $229 $500 $401 $2.71
322 16 284 627 505 3.15
389 19 338 683 564 3.47
425 20 380 715 609 3.73
463 23 397 747 658 4. ,04
522 25 411 775 690 4.24
578 27 429 830 741 4,40
622 29 446 887 797 4.61
680 31 491 929 848 4.91
776 35 590 1,033 955 5.67
Value and Cost of Production Profitability
Milk Oper. Cost Total Cost Net Farm Income
Receipts Milk Production With Without Labor & Memt. Income
Per Cow Per Cwt. Per Cwt. Apprec. Apprec. Per Farm Per Oper.
$2,900 $ 6.73 $10.94 $277,840 $227,537 $163,935 $122,334
2,631 8.21 11.91 144,680 122,770 71,851 48,890
2,554 9.03 12.38 111,557 89,415 47,475 35,630
2,424 9.30 12.81 94,081 67,102 36,270 23,042
2,350 9.47 13.21 79,443 55,090 21,997 16,870
2,257 9.79 13.53 70,133 44,237 13,125 10,248
2,169 10.13 13.78 54,017 27,750 122 -210
2,104 10.55 14.18 40,369 20,173 -11,512 -8,932
1,977 11.16 15.16 26,284 5,277 -30,939 -20,499
1,756 12.73 16.90 -15,577 -30,415 -60,131 -57,094
52
Table 54. FARM BUSINESS SUMMARIES FOR SINGLE PROPRIETORSHIPS,
PARTNERSHIPS, AND CORPORATIONS 
413 New York Dairy Farms, 1986
295 100 18
Item Single Pron. Partnershios Corporations
ACCRUAL EXPENSES
Hired labor $ 18,450 $ 22,567 $ 61,266
Feed . 40,574 64,260 88,925
Machinery 14,796 21,349 36,560
Livestock 25,526 38,230 61,807
Crops 11,087 18,286 34,632
Real estate 12,586 17,883 34,306
Other 23.343 31.662 51.279
Total Operating Expenses $146,362 $214,237 $368,775
Expansion livestock 811 2,080 3,390
Machinery depreciation 12,837 20,037 35,592
Building depreciation 6.638 9.889 22.816
Total Accrual Expenses $166,648 $246,243 $430,573
ACCRUAL RECEIPTS
Milk sales $161,109 $252,861 $419,034
Livestock 15,489 23,727 35,574
Crops 1,241 4,288 8,704
All other 5.201 6.182 18.009
Total Accrual Receipts $183,040 $287,058 $481,321
PROFITABILITY ANALYSIS
Net farm income (without appreciation) $16,392 $40,815 $50,748
Net farm income (with appreciation) $31,453 $59,560 $87,403
Labor & management income $175 $17,942 $10,210
Number of operators 1.03 1.98 1.95
Labor & management income per operator $170 $9,062 $5,236
BUSINESS FACTORS
Worker equivalent 2.78 3.71 4.97
Number of cows 81 118 191
Number of heifers 66 95 159
Acres of hay crops* 138 156 241
Acres of corn silage* 56 84 140
Total tillable acres 254 335 589
Pounds of milk sold 1,276,719 1,992,631 3,289,405
Pounds of milk sold per cow 15,798 16,852 17,217
Tons hay crop dry matter per acre 2.6 2.8 3.3
Tons corn silage per acre 13.6 15.2 15.8
Cows per worker 29 32 38
Pounds of milk sold per worker 459,251 537,097 661,852
Pure, grain & cone, as % of milk receipts 24% 24% 20%
Feed & crop expense per cwt. milk $4.00 $4.09 $3.72
Fertilizer & lime per crop acre $23.97 $29.83 $30.29
Machinery cost per tillable acre $126 $142 $140
Average price per cwt. milk $12.62 $12.69 $12.74
^Average of all farms, not only those reporting data.
53
Table 55. FARM FAMILY FINANCIAL SITUATION FOR SINGLE PROPRIETORSHIPS,
PARTNERSHIPS, AND CORPORATIONS 
413 New York Dairy Farms, 1986
Farms with: 295 Single Prop. 100 Partnerships 18 Corporations
Item_________ _______ Jan, 1 Dec. 31 Jan. 1 Dec. 31 Jan. 1 Dec. 31
ASSETS
Farm cash/chkg./sav. $ 2,884 $ 3,629 $ 3,981 $ 4,495 $ 6,135 $ 10,305
Accounts receivable 13,456 14,555 21,453 24,861 40,365 39,481
Feed & supplies 34,545 35,385 54,902 56,486 108,578 110,044
Livestock* 93,868 99,093 137,501 141,259 203,499 211,106
Machinery & equip.* 85,666 86,221 123,300 125,578 206,276 208,862
FLB & PCA stock 3,690 3,668 4,159 4,441 10,049 9,675
Coop stocks & cert. 5,083 5,660 6,474 10,523 15,751 20,097
Land & buildings* 223.313 230.865 296.150 316.439 565.468 578.581
Total Farm Assets $462,505 $479,076 $647,921 $684,082 $1,156,121 $1,188,151
Pers. cash/chkg./sav. $ 6,768 $ 7,203 $ 3,197 $ 3,255 $ 214 $ 214
Cash value life ins. 3,740 3,921 6,380 3,264 3,714 3,714
Nonfarm real estate 10,792 11,078 3,154 6,393 10,429 10,429
Auto (personal share) 2,600 3,117 3,944 3,981 1,043 2,825
Stocks & bonds 7,788 8,738 1,753 1,961 0 0
Household furnishingsi 8,856 9,261 4,885 4,885 1,143 1,143
All other 3.621 4.071 4.779 3.359 0 7.707
Total Nonfarm
Assets** $ 44,164 $ 47,389 $ 28,093 $ 27,098 $ 16,543 $ 26,031
Total Farm & Nonfarm
Assets $506,669 $526,465 $676,014 $711,180 $1,172,664 $1,214,182
LIABILITIES
Accounts payable $ 5,988 $ 6,496 $ 4,597 $ 5,653 $ 3,617 $ 7,539
Operating debt 3,198 3,407 5,710 7,208 2,871 9,533
Short term 2,132 2,436 2,297 4,381 6,738 4,885
Intermediate*** 68,813 68,945 98,010 95,365 210,367 214,863
Long term* 112.720 110.910 114.747 122.556 147.621 132.382
Total Farm Liab. $192,850 $192,194 $225,360 $235,163 $371,214 $369,202
Total Nonfarm Liab.** 1.550 1.553 2.488 3.481 0 0
Total Farm & Nonfarm
Liabilities $194,400 $193,747 $227,848 $238,644 $371,214 $369,202
Farm Net Worth
(Equity Capital) $269,654 $286,882 $422,561 $448,919 $784,907 $818,949
Farm & Nonfarm
Net Worth $312,269 $332,718. $448,166 $472,536 $801,450 $844,980
FINANCIAL MEASURES 295 Single Pron. 100 Partner. 18 Corn.
Percent equity 60% 66% 69%
Debt/asset ratio-long term 0.48 0.39 0.23
Debt/asset ratio-inter. & current 0.33 0.31 0.39 .
Change in net worth with apprec. $17,228 $26,358 $34,042
Total farm debt per cow $2,316 $1,943 $1,893
Debt payments made per cow $556 $633 $462
Debt payments as % of milk sales 28% 29% 21%
Amount avail, for debt service $42,698 $63,468 $105,152
Cash flow coverage ratio for 1986 1,11 1.24 1.31
^Includes discounted lease payments. **Average of 234 single proprietorships
reporting nonfarm assets and liabilities, 26 partnerships, and 7 corporations.
***Includes FLB/PCA stock and discounted lease payments for cattle and 
machinery.
54
Table 56. SELECTED BUSINESS FACTORS BY MILKING SYSTEMS
411 New York Dairy Farms, 1986
Dumping Herringbone Other 
Item Station Pipeline Parlor Parlors
Number of farms 35 228 135 13
Percent of farms 8% 55% 33% 3%
Crooning; Program Analysis 
Total Tillable acres 179 214 441 322
Tillable acres rented* 64 73 154 120
Hay crop acres* 112 124 196 150
Corn silage acres* 22 39 124 77
Hay crop, tons DM/acre 2.1 2.6 3.0 2.7
Corn silage, tons/acre 11.7 13.4 14.8 16.5
Oats, bushels/acre 65.6 65.1 63.9 56.9
Forage DM per cow, tons 7.3 7.6 7.9 6.8
Tillable acres/cow 4.0 3.3 2.8 2.6
Fert. & lime exp./til. acre $15.29 $22.85 $29.80 $31.08
Total machinery costs $13,164 $26,435 $62,943 $51,161
Machinery cost/tillable acre $74 $123 $143 $159
Dairy Analysis
Number of cows 45 66 156 123
Number of heifers 32 53 127 116
Milk sold, lbs. 637,819 1,030,101 2,601,688 2,062,019
Milk sold/cow, lbs. 14,129 15,723 16,730 16,806
Oper. cost of prod, milk/cwt. $9.55 $9.37 $9.54 $9.67
Total, cost of prod, milk/cwt. $15.33 $14.63 $13.31 $13.97
Price/cwt. milk sold $12.40 $12.53 $12.74 $12.85
Purchased dairy feed/cow $472 $479 $517 $589
Purchased dairy feed/cwt. milk $3.34 $3.04 $3.09 $3.51
Pure, grain & cone, as % milk receipts 26% 23% 23% 24%
Pure, feed & crop expense/ewt. milk $4.05 $3.90 $4.04 $4.40
Capital Efficiency
Farm capital/worker $115,217 $163,465 $201,089 $158,057
Farm capital/cow 5,334 6,188 5,586 5,217
Farm capital/tillable acre owned 2,094 2,875 3,027 3,169
Real estate/cow 2,683 3,098 2,553 2,280
Machinery investment/cow 1,033 1,189 986 918
Capital turnover, years 2.59 2.51 2.17 1.94
Labor Efficiency
Worker equivalent 2.09 2.48 4.32 4.05
Operator/manager equivalent 1.15 1.25 1.40 1.71
Milk sold/worker, lbs. 305,177 415,363 602,243 509,140
Cows/worker 22 27 36 30
Work units/worker 229 281 379 320
Labor cost/cow $421 $388 $381 $379
Labor cost/tillable acre $106 $119 $134 $144
Profitability & Balance Sheet Analysis
Net farm income (w/o apprec.) $9,068 $15,450 $41,195 $33,276
Labor & mgmt. income/operator -$679 $590 $9,396 $6,440
Farm debt/cow $2,113 $2,295 $2,111 $1,884
Percent equity 58% 63% 62% 65%
*Average of all farms, not only those reporting data.
55
Table 57. FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
20 New York Dairy-Cash Crop Farms,* 1986
ACCRUAL EXPENSES ACCRUAL RECEIPTS
Labor: Hired $ 18,553 Milk sales $159,150
Feed: Dairy grain 6c cone. 22,799 Dairy cattle $12,873
Dairy roughage 521 Dairy calves 2,278
Other livestock 49 Other livestock 36
Machinery:Mach, hire/rent/lease 2,045 Crops 22,714
Mach, repairs/parts 11,604 Government receipts 5,494
Auto expense (farm share) 614 Custom machine work 1,318
Fuel, oil, grease 6,480 Gas tax refund 214
Livestock: Replacement lvstk, 2,541 Other 3,844
Breeding 2,601 - Nonfarm noncash capital 853
Vet & medicine 3,621 TOTAL ACCRUAL RECEIPTS $207,068
Milk marketing 9,823
Cattle lease/rent 0 PROFITABILITY ANALYSIS
Other livestock expense / , 656 Net farm inc, (w/o apprec.) $29,471
Crops: Fertilizer & lime 10,651 Net farm inc. (w/apprec . ) $37,281
Seeds & plants 5,527 Labor & mgt. income/farm $9,094
Spray & other crop expense 6,055 Number of operators 1.61
Real Estate: Land/building/ Labor 6c mgt. income/oper. $5,648
fence repair 2,087 Rate of return on equity
Taxes 4,377 capital including apprec. 1.9%
Insurance 3,503 BUSINESS FACTORS
Rent & lease 7,257 Number of cows 77
Other: Number of heifers 59
Telephone (farm share) 713 Worker equivalent 3.09
Electricity (farm share) 4,243 Total tillable acres 392
Interest paid 10,677 Milk sold per cow, lbs. 16,371
Miscellaneous 2.756 Hay DM per acre, tons 3.1
TOTAL OPERATING EXPENSES $146,753 Corn silage per acre, tons 14.9
Milk sold per worker, lbs. 409,804
Expansion livestock 3,121 Grain/conc. as % milk sales 14%
Machinery depreciation 21,276 Feed & crop exp./ewt. milk $3.60
Building depreciation 6.447 Labor & mach. costs/cow $1,084
TOTAL ACCRUAL EXPENSES $177,597 Average price/cwt. milk $12.57
ASSETS Jan. 1 Dec. 31 LIABILITIES Jan. 1 Dec. 31
Farm cash/chkg./sav. $ 6,974 $ 6,372 Accounts payable $ 3,065 $ 2,582
Accounts receivable 14,051 15,261 Operating debt 2,078 175
Feed 6c supplies 56,760 51,417 Short-term 5,705 5,110
Dairy cows ** 62,549 63,495 Intermediate*** 61,232 62,233
Heifers 22,739 24,623 Long-term** 64.209 57.063
Bulls & other lvstk. 331 260 Total Farm Liab. $136,289 $127,162
Machinery & equip.** 119,805 125,868 Nonfarm Liab.**** 2.756 3.355
FLB & PCA stock 3,004 2,846 Total Farm 6c Nonfarm
Coop stocks & cert. 7,376 7,604 Liabilities $139,045 $130,517
Land 6c buildings** 226.625 228.182
Total Farm Assets $520,214 $525,929 Farm Net Worth $383,926 $398,767
Nonfarm Assets**** 91.355 104.470 Farm 6c Nonfarm
Total Farm 6c Nonfarm Net Worth $472,524 $499,882
Assets $611,569 $630,399
*A farm is classified as dairy-cash crop if cash crop sales amounted to 10
percent or more of accrual milk sales. **Includes discounted lease payments.
***Includes FLB/PCA stock and discounted lease payments for cattle and_
machinery. ****Average of 13 farms reporting nonfarm assets and liabilities.
56
Table 58. FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
51 New York Dairy-■Renter Farms,* 1986
ACCRUAL EXPENSES ACCRUAL RECEIPTS
Labor: Hired $ 10,931 Milk sales $148,398
Feed: Dairy grain & cone. 33,849 Dairy cattle 15,363
Dairy roughage 3,448 Dairy calves 1,954
Other livestock 225 Other livestock 111
Machinery:Mach, hire/rent/lease 1r829 Crops 4,603
Mach, repairs/parts 7,462 Government receipts 3,452
Auto expense (farm share) 406 Custom machine work 197
Fuel, oil, grease 4,677 Gas tax refund 101
Livestock: Replacement lvstk 3,162 Other 1,161
Breeding 2,107 - Nonfarm noncash capital 19
Vet & medicine 2,809 TOTAL ACCRUAL RECEIPTS $175,321
Milk marketing 10,691
Cattle lease/rent 134 PROFITABILITY ANALYSIS 
Other livestock expense 6,890 Net farm inc. (w/o apprec.) $31,277
Crops: Fertilizer & lime 5,558 Net farm inc. (w/apprec.) $35,562
Seeds 6c plants 2,543 Labor 6c mgt. income/farm $22,792
Spray 6c other crop expense 2,273 Number of operators 1.42
Real Estate: Land/building/ Labor 6c mgt. income/oper. $16,051
fence repair 1,954 Rate of return on equity 
Taxes 1,152 capital Including apprec. 6.8%
Insurance 2,167 BUSINESS FACTORS
Rent 6c lease 12,776 Number of cows 75
Other: Number of heifers 52
Telephone (farm share) 555 Worker equivalent 2.64
Electricity (farm share) 3,865 Total tillable acres 236
Interest paid 5,723 Milk sold per cow, lbs. 15,575
Miscellaneous 1.858 Hay DM per acre, tons 2.6
TOTAL OPERATING EXPENSES $129,044 Corn silage per acre, tons 12.7
Milk sold per worker, lbs. 440,149
Expansion livestock 3,492 Grain/conc. as % milk sales 23%
Machinery depreciation 10,286 Feed 6c crop exp./ewt. milk $4.10
Building depreciation 1.222 Labor 6c mach. costs/cow $736
TOTAL ACCRUAL EXPENSES $144,044 Average price/cwt. milk $12.77
ASSETS Jan. 1 Dec. 31 LIABILITIES Jan. 1 Dec. 31
Farm cash/chkg./sav. $ 2,863 $ 3,819 Accounts payable $ 2,902 $ 2,878
Accounts receivable 11,799 13,682 Operating debt 3,045 2,147
Feed 6c supplies 30,999 31,967 Short-term 2,220 3,069
Dairy cows** 52,348 58,440 Intermediate*** 47,190 49,317
Heifers 16,687 19,152 Long-term** 12.296 9.978
Bulls 6: other lvstk. 307 358 Total Farm Liab. $ 67,653 $ 67,389
Machinery 6c equip** 66,708 69,093 Nonfarm Liab.**** 4.279 4.023
FLB 6c PCA stock 1,818 1,710 Total Farm 6c Nonfarm
Coop stocks 6c cert. 4,739 5,427 Liabilities $ 71,932 $ 71,412
Land 6c buildings** 11.029 10.278
Total Farm Assets $199,297 $213,926 Farm Net Worth $131,644 $146,537
Nonfarm Assets**** 24.721 25.500 Farm 6: Nonfarm
Total Farm 6c Nonfarm Net Worth $152,086 $168,014
Assets $224,018 $239,426
*A farm is classified as a renter if no farm real estate is owned at the end of
the year or no tillable land is owned. **Includes discounted lease payments.
***Includes FLB/PCA stock and discounted lease payments for cattle and
machinery. ****Average of 27 farms reporting nonfarm assets and liabilities.
57
Table 59. FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
Top 10 Percent of the Farms by Net Farm Income (without appreciation)
41 New York Dairy Farms, 1986
ACCRUAL EXPENSES ACCRUAL RECEIPTS 
Labor: Hired $ 74,532 Milk sales $539,217
Feed: Dairy grain & cone. 125,159 Dairy cattle 48,326
Dairy roughage 5,983 Dairy calves 5,703
Other livestock 444 Other livestock 788
Machinery:Mach. hire/rent/lease 3,524 Crops 16,421
Mach, repairs/parts 24,466 Government receipts 8,787
Auto expense (farm share) 749 Custom machine work 371
Fuel, oil, grease 11,788 Gas tax refund 323
Livestock: Replacement lvstk. 2,496 Other 6,846
Breeding 7,852 - Nonfarm noncash capital 0
Vet & medicine 12,797 TOTAL ACCRUAL RECEIPTS $626,782
Milk marketing '33,781
Cattle lease/rent 276 PROFITABILITY ANALYSIS 
Other livestock expense 21,235 Net farm inc. (w/o apprec.) $112,485
Crops: Fertilizer 6c lime 19,899 Net farm inc. (w/apprec.) $131,024
Seeds 6c plants 8,854 Labor 6c mgt. income/farm $71,251
Spray 6c other crop expense 9,137 Number of operators I. 79 
Real Estate: Land/building/ Labor 6s mgt. income/oper. $39,805
fence repair 6,429 Rate of return on equity 
Taxes 9,481 capital including apprec. II. 1%
Insurance 6,598 BUSINESS FACTORS 
Rent 6c lease 8,598 Number of cows 232
Other: Number of heifers 194
Telephone (farm share) 2,031 Worker equivalent 6 . 0
Electricity (farm share) 10,787 Total tillable acres 609
Interest paid 41,203 Milk sold per cow, lbs. 18,209
Miscellaneous 7,142 Hay DM per acre, tons 3.1
TOTAL OPERATING EXPENSES $455,241 Corn silage per acre, tons 16.1
Milk sold per worker, lbs. 705,028
Expansion livestock 5,955 Grain/cone. as % milk sales 23%
Machinery depreciation 33,577 Feed 6s crop exp./ewt. milk $4.00
Building depreciation 19.524 Labor 6s mach. costs/cow $765
TOTAL ACCRUAL EXPENSES $514,297 ■Average price/cwt. milk $12.75
ASSETS Jan. 1 Dec. 31 LIABILITIES Jan. 1 Dec. 31
Farm cash/chkg./sav. $ 5,031 $ 9,030 Ac counts payable $ 7,853 $ 8,924
Accounts receivable 45,347 53,036 Operating debt 14,383 23,417
Feed 6t supplies 118,929 132,228 Short-term 6,571 8,622
Dairy cows* 191,386 201,808 Intermediate** 189,653 184,997
Heifers 79,848 84,464 Long-term* 206.330 225.259
Bulls 6c other lvstk. 1,167 1,443 Total Farm Liab. $424,790 $451,219
Machinery 6c equip* 198,173 205,779 Nonfarm Liab.*** 0 1.386
FLB 6c PCA stock 9,006 9,154 Total Farm 6c Nonfarm
Coop stocks 6c cert. 19,906 30,106 Liabilities $424,790 $452,605
Land 6c buildings* 537.065 564.391
Total Farm Assets $1,205,858 $1,291,439 Farm Net Worth $781,068 $840,220
Nonfarm Assets*** 45.656 50.311 Farm 6c Nonfarm
Total Farm 6c Nonfarm Net Worth $826,724 $889,145
Assets $1,251,514 $1,341,750
^Includes discounted lease payments. **Includes FLB/PCA stock and discounted
lease payments for cattle and machinery. ***Average of 13 farms reporting
nonfarm assets and liabilities.
58
Table 60. FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION
Average of 414 New York Dairy Farms, 1986
ACCRUAL EXPENSES ACCRUAL RECEIPTS
Labor: Hired $ 21,281 Milk sales $194,522
Feed: Dairy grain & cone. 45,789 Dairy cattle 15,431
Dairy roughage 1,819 Dairy calves 2,378
Other livestock 760 Other livestock 573
Machinery:Mach, hire/rent/lease 1.838 Crops 2,303
Mach. repairs/parts 9,660 Government receipts 3,329
Auto expense (farm share) 565 Custom machine work 232
Fuel, oil, grease 5,282 Gas tax refund 152
Livestock: Replacement Ivs tk. 1,964 Other 2,471
Breeding 2,848 - Nonfarm noncash capital 190
Vet 6c medicine 4,300 TOTAL ACCRUAL RECEIPTS $221,201
Milk marketing 12,966
80 PROFITABILITY ANALYSISo a u u r e  l e a s e / i e i L L  
Other livestock expense 7,988 Net farm inc. (w/o apprec.) $23,853
Crops: Fertilizer 6c lime 7,536 Net farm inc. (w/apprec.) $40,756
Seeds & plants 3,272 Labor 6c mgt. income/farm $4,988
Spray & other crop expense 3,040 Number of operators 1.3
Real Estate: Land/building/ Labor 6e mgt. income/oper. $3,837
fence repair 2,438 Rate of return on equity 
Taxes 5,076 capital including apprec. 4.3%
Insurance 3,421 BUSINESS FACTORS
Rent 6c lease 3,894 Number of cows 95
Other: Number of heifers 77
Telephone (farm share) 770 Worker equivalent 3.09
Electricity (farm share) 5,187 Total tillable acres 288
Interest paid 18,114 Milk sold per cow, lbs. 16,237
Miscellaneous 2.552 Hay DM per acre, tons 2.7
TOTAL OPERATING EXPENSES $172,440 Corn silage per acre, tons 14.3
Milk sold per worker, lbs. 497,555
Expansion livestock 1,228 Grain/conc. as % milk sales 24%
Machinery depreciation 15,545 Feed 6c crop exp./ewt. milk $4.00
Building depreciation 8.135 Labor 6c mach. costs/cow $785
TOTAL ACCRUAL EXPENSES $197,348 Average price/cwt. milk $12.65
ASSETS Jan. 1 Dec. 31 LIABILITIES Jan. 1 Dec. 31
Farm cash/chkg./sav. $ 3,283 $ 4,120 Accounts payable $ 5,563 $ 6,346
Accounts receivable 16,556 18,136 Operating debt 3,783 4,598
Feed & supplies 42,670 43,722 Short-term 2,391 3,028
Dairy cows* 76,909 80,370 Intermediate** 82,273 81,839
Heifers 31,276 32,817 Long-term* ......114,830 114.758
Bulls & other lvstk. 1,028 1,050 Total Farm Liab. $208,840 $210,570
Machinery 6c equip.* 100,070 101,118 Nonfarm Liab.*** 1,595 1.694
FLB 5: PCA stock 4,071 4,107 Total Farm 6c Nonfarm
Coop stocks 6c cert. 5,871 7,449 Liabilities $210,435 $212,264
Land 6: buildings* 255.739 266.591
Total Farm Assets $537,474 $559,479 Farm Net Worth $328,634 $348,909
Nonfarm Assets*** 41.843 44.814 Farm 6c Nonfarm
Total Farm 6c Nonfarm Net Worth $368,882 $392,029
Assets $579,317 $604,293
^Includes discounted lease payments. **Includes FLB/FCA stock and discounted
lease payments for cattle and machinery. ***Average of 268 farms reporting
nonfarm assets and liabilities.
59
Table 61. FARM BUSINESS SUMMARY AND FARM FAMILY FINANCIAL SITUATION 
Average per Cow, 414 New York Dairy Farms, 1986
ACCRUAL EXPENSES ACCRUAL RECEIPTS
Labor: Hired $ 225 Milk sales $2,054
Feed: Dairy grain & cone. 484 Dairy cattle 163
Dairy roughage. 19 Dairy calves 25
Other livestock 8 Other livestock 6
Machinery:Mach. hire/rent/lease 19 Crops 24
Mach. repairs/parts 102 Government receipts 35
Auto expense (farm share) 6 Custom machine work 3
Fuel, oil, grease 56 Gas tax refund 2
Livestock: Replacement lvstk. 21 Other 26
Breeding 30 - Nonfarm noncash capital 2
Vet & medicine 45 TOTAL ACCRUAL RECEIPTS $2,336
Milk marketing 137
Cattle lease/rent 1 PROFITABILITY ANALYSIS
Other livestock expense 84 Net farm inc. (w/o apprec.) $252
Crops: Fertilizer & lime 80 Net farm inc. (w/apprec.) $430
Seeds & plants 34 Labor St mgt. income/farm $53
Spray & other crop expense 32 Number of operators (1.30)
Real Estate: Land/building/ Labor & mgt. income/oper. $41
fence repair 26 Rate of return on equity
Taxes 54 capital including apprec. 4.3%
Insurance 36
Rent & lease 41 BUSINESS FACTORS
Other: Number of cows (95)
Telephone (farm share) 8 Number of heifers 0.81
Electricity (farm share) 55 Worker equivalent 0.033
Interest paid 191 Total tillable acres 3.0
Miscellaneous 27 Milk sold, lbs. 16,237
TOTAL OPERATING EXPENSES $1,821 Hay DM, tons 4.2
Corn silage, tons 10.0
Expansion livestock 13 Dairy feed & crop expense $649
Machinery depreciation 164 Labor & mach. costs $785
Building depreciation 86 Total debt $2,171
TOTAL ACCRUAL EXPENSES $2,084 Debt payment $572
ASSETS Jan.. 1 Dec. 31 LIABILITIES Jan. 1 Dec. 31
Farm cash/chkg./sav. $ 35 $ 43 Ac counts payable $ 59 $ 67
Accounts receivable 175 192 Operating debt 40 49
Feed & supplies 450 462 Short-term 25 32
Dairy cows* 812 849 Intermediate** 869 864
Heifers 330 347 Long-term* 1.213 1.212
Bulls & other lvstk. 11 11 Total Farm Liab. $2,206 $2,224
Machinery & equip.* 1,057 1,068 Nonfarm Liab.*** 17 18
FLB & PCA stock 43 43 Total Farm & Nonfarm
Coop stocks & cert. 62 79 Liabilities $2,223 $2,242
Land & buildings* 2,701 2.815
Total Farm Assets $5,676 $5,909 Farm Net Worth $3,470 $3,685
Nonfarm Assets*** 442 473 Farm & Nonfarm
Total Farm St Nonfarm Net Worth $3,895 $4,140
Assets $6,118 $6,382
^Includes discounted lease payments. **Includes FLB/PCA stock and discounted
lease payments for cattle and machinery. ***Average of 268 farms reporting
nonfarm assets and liabilities.
60
NOTES