May 1984 A.E. Ext. 84~14 
CENTRAL PLAIN REGION 

1983 

e-n 
Wayne A. Knoblauch ­
Linda D. Putnam 
Deportment of Agricultural Economics 

New York State College of Agriculture and life Sciences 

" Sialulory College 01 Ine Slale Univ.";ly 

Cornell University. Ith aca, New York 14853 

DAIRY FARM BUSINESS SUMMARY 

Central Plain Region 

TABLE OF CONTENTS 

lnt roduction •••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1 

Program Objectives ••••••••••••••••••••••••••••••••••••••••••••••• 1 

Changes in Computation ••••••••••••••••••••••••••••••••••••••••••• 1 

Summary of The Farm Business •••••••••••••••••••••••••••••••••••••••••• 2 

Business Characteristics ••••••••••••••••••••••••••••••••••••••••• 2 

Inventory Accounting ••••••••••••••••••••••••••••••••••••••••••••• 3 

Receipts ••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 4 

Expenses ••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 5 

Farm Business Profitability...................................... 6 

Farm Family Financial Situation •••••••••••••••••••••••••••••••••• 8 

Analysis of the Farm Business ••••••••••••••••••••••••••••••••••••••••• 10 

Size of Business ••••••••••••••• II ••••••••••••••••••••••••••••••••• 10 

Rates of Production .............................................. 11 

Labor Efficiency ••••••••••••••••••••••••••••••••••••••••••••••••• 12 

Capital Efficiency ••••••••••••••••••••••••••••••••••••••••••••••• 13 

Cost Control ..................................................... 14 

Machinery, Labor and Miscellaneous Costs ••••••••••••••••••••••••• 15 

Yearly Cash Flow Planning and Analysis •••••••••••••••••••••••••••••••• 16 

Progress of the Farm Business ••••••••••••••••••••••••••••••••••••••••• 17 

Management Performance of Statewide Cooperators ••••••••••••••••••••••• 18 

Measure Your Management Performance ••••••••••••••••••••••••••••••••••• 26 

DAIRY FARM BUSINESS SUMMARY 

Central Plain Region 

INTRODUCTION 

Dairyfarmers throughout New York State submit business records for sum­
marization and analysis through Cooperative Extension's Farm Business Man­
agement Program. Each participating farmer receives an individual farm 
analysis report containing all the management information found in this 
publication. Averages from a compilation of the individual farm reports are 
published in several regional summaries and in a statewide summary. 
The year ahead will bring increased economic pressures on the dairy 
farming industry. The Dairy Production Stabilization Act of 1983 is expect­
ed to reduce milk prices two to three percent while production costs may 
increase four to six percent. Dairy farmers must continue to place emphasis 
on operating effiCiency and cost control in order to maintain adequate farm 
incomes. This year, more than ever, improving weak links in the business 
and prOjecting cash flows will be critical management steps to enhance 
business survival probabilities. 
Program Objectives 
Primary objectives of the dairy farm business management program are 
to (1) assist farmers in developing and maintaining more complete farm busi­
ness data for use in management decisions and (2) help farmers improve their 
management skills through appropriate use of farm record data and applica­
tion of modern decision-making techniques. This report is prepared in work­
book form for use in the systematic study of individual farm business 
performance. 
Changes in Computation 
The interest charge made for using equity capital in the farm business 
was changed in 1982 to five percent. This real ~ of interest reflects 
the long time average rate of return that a farmer might expect to earn in 
investments with comparable risk to farm businesses in an economy with 
little or no inflation. Labor and management income does not include 
appreciation of farm assets, therefore, appreciation has been excluded in 
determining the use charge for equity capital. 
Renting and leasing farm assets is becoming more common on New York 
dairy farms. Rental and lease payments are included as cash farm expenses. 
The discounted values of future financial lease payments have been added as 
a liability and an asset on the farm balance sheet to reflect the farmer's 
committed liability as well as the value of an asset. 
This summary was prepared by Wayne A. Knoblauch and Linda D. Putnam, 
Department of Agricultural Economics, New York State College of Agriculture 
and Life Sciences, Cornell University, in cooperation with Cooperative 
Extension Specialist Larry N. Davis. The Central Plain Region is comprised 
of Ontario, Seneca, Wayne, and Yates·Counties. 
1 
2 

SUMMARY OF THE FARM BUSINESS 
Business Characteristics 
The combination of resources and management techniques used to put 
resources to work is an important part of planning. The tables below show 
important farm business characteristics, the number of farms reporting these 
characteristics, and the average level of resources used in production. 
MANAGEMENT SYSTEMS, PRODUCTION TECHNOLOGY AND FARM SIZE 
19 Central Plain Region Dairy Farms, 1983 
Type of Business Number Business Records Number Dairy Records Number 
Proprietorship 12 CAMIS 5 D.H.I.C. 17 
Partnership 7 Account Book 7 Owner Sampler 2 
Corporation o Agrifax 3 Other o 
Agway 1 None o 
Owner 19 Other 3 
Renter o 
Barn Type Number Milking System Number Number 
Stanchion 7 Bucket &Carry o Herringbone 9 
Freestall 10 Dumping Station 3 Other Parlor 2 
Other 2 Pipeline 5 
_L_a~b~o_r_F_o~r_c~_e __________MyL-F_a~r__m__A_v_e_r~a~g~e _L~a_n_d_U_s__e ____________My~_F_a~rm~__A~v~e~r~a~g~e 
Operator 1. ---.;mo. 11 Total acres owned 3862. mo. 3 Total acres rented 155 
3. ---mo. 1 Total tillable acres 382 
Family paid mo. 4 Tillable acres rented------- 136 
Family unpaid -_-_--.....m. o. 2 
Hired mo. 19 Number of Cows My Farm Average
Total --'-";mo. 40 
Age of operator(s) 1. yrs. 44 Beginning of year 95 
2. yrs. 33 End of year 95 
3. yrs. 34 Average for year 95 
Capital Investment-Farm Inventory represents the market value of 
resources committed to the larm business at the beginning and end of the 
year. Increases in inventory occur with herd expansion, new machinery, and 
building additions and appreciation of land, buildings and livestock. 
CAPITAL INVESTMENT - FARM INVENTORY 
19 Central Plain Region Dairy Farms, 1983 
My Farm Average 
Item 1/1/83 1/1/84 1/1/83 1/1/84 
Livestock $_-­ $_-­ $152,180 $144,527 
Feed & supplies 51,059 50,433 
Machinery & equipment 123,195 127,204 
Land & buildings 340,250 340,566 
TOTAL $ $ $666,684 $662,730 
3 

Inventory Accounting 
The value of the dairy herd is influenced by market prices, herd quali ­
ty and quantity. Changes in market value caused by inflationary or defla­
tionary price changes, are separated from changes in inventory caused by 
changes in herd quality and quantity. 
CHANGE IN LIVESTOCK INVENTORY 

19 Central Plain Region Dairy Farms, 1983 

Item 	 My Farm Average 
End of year market value $_-­ $144,527 
less end at beginning prices -157,151 
Change due to price $_-­ $-12,624 
End inventory at beginning prices $_______ $157,151 
less beginning of year inventory -_______ -152,180 
Change due to quality 
& quantity $ $ 4,971 
Machinery and real estate inventories, based on current market values, 
include a depreciation charge and are balanced by the residual called 
appreciation. 
MACHINERY AND EQUIPMENT INVENTORY 

19 Central Plain Region Dairy Farms, 1983 

Item 	 My Farm Average 
End of year market value (1)$___ $127,204 
Beginning market value $_-­ $123,195 
Plus machinery purchased +-----­ + 13,952 
Less machinery sold 994 
Less depreciation - 21,426 
Net end investment (2)$___ $114,727 
APPRECIATION (1 minus 2) $ $ 12,477 
The change in real estate value is affected by market forces, building 
depreciation, and lost capital which is the portion of a new building 
investment that is not reflected in the value of the farm. 
REAL ESTATE INVENTORY CALCULATIONS 

19 Central Plain Region Dairy Farms, 1983 

Item 	 My Farm Average 
End of year market value (1)$___ 	 $340,566 
Beginning market value $_-­ $340,250
Cost of new real estate $_-­ $5,067
Less lost capital -2,831 
Value of new added +-----­ + 2,236
Less building depreciation 7,481 
Less real estate sold 1,284 
Net end investment (2)$___ $333,721 
APPRECIATION (1 minus 2) $ $ 6,845 
4 

Receipts 
Receipts from the business should be large enough to cover all expens­
es and leave a reasonable return for the operator's labor and management. 
Cash receipts occur when farm products and livestock are sold or services 
are performed and payment is received during the year. Noncash receipts do 
not result from sales, but are due to appreciation in value or increases in 
physical quantities of inventories that occurred during the year. Most of 
these items could be readily transformed into cash. 
FARM RECEIPTS 

19 Central Plain Region Dairy Farms, 1983 

Item My Farm Per Farm Per Cow 
CASH RECEIPTS 
Milk sales $ $199,447 $2,099 
Crop sales 22,513 237 
Dairy cattle sold 13,084 138 
Calves & other livestock sales 5,606 59 
Gas tax refunds 264 3 
Government payments 5,010 53 
Custom machine work 448 5 
Other 4,969 52 
Total Cash Receipts $ $251,341 $2,646 
NONCASH RECEIPTS 
Increase in livestock inventoryl 4,971 52 
Increase in feed & supplies 
TOTAL FARM RECEIPTS ° ° 
EXCLUDING APPRECIATION $ $256,312 $2,698 
Livestock appreciation2 - 12,624 133 
Machinery appreciation3 12,477 131 
Real estate appreciation3 6,845 72 
TOTAL FARM RECEIPTS $ $263,010 $2,768 
I The increase in herd market value attributed to a change in numbers 
and/or a definite change in herd quality. 
2The increase in herd market value, caused by inflationary price increase. 
3Defined on page 3. 
Income AnaliSiS provides a means of examining the annual receipt 
producing capabi ity of the farm business. 
INCOME ANALYSIS 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Average price/cwt. milk sold $_--­ $13.33 $13.38
Milk and cattle sales per cow $2,296 $2,141 
Total cash receipts/worker $75,478 $68,879 
5 
Expenses 
All farm expenses, cash operating and overhead, are summarized below. 
FARM EXPENSES 
19 Central Plain Region Dairy Farms, 1983 
Item My Farm Per Farm Per Cow 
Hired Labor $_--­ $ 27,330 $ 288 
Feed 
--n&iry concentrate 45,055 474 
Hay and other 5,467 58 
Machinery 
Machine hire, rent and lease 2,264 24 
Machinery repairs 11,978 126 
Auto expense (farm share) 465 5 
Gas and oil 9,407 99 
Livestock 
Replacement livestock 1,549 16 
Breeding fees 2,863 30 
Veterinary and medicine 4,917 52 
Milk marketing 11 ,240 118 
Cat t le lease 42 (I 
Other livestock expense 8,836 93 
Crops 
Fertilizer and lime 12,875 136 
Seeds and plants 5,601 59 
Spray, other crop expense 5,897 62 
Real Estate 
Land, building, fence repair 2,924 31 
Taxes 5,518 58 
Insurance 3,557 37 
Rent and lease 4,276 45 
Other 
Telephone (farm share) 756 8 
Electricity (farm share) 5,003 53 
Interest paid 28,969 305 
Miscellaneous 3,109 33 
Total Cash Expenses $_--­ $209,898 $2,209 
Decrease in feed and supplies 626 7 
Expansion livestock 13 (I 
Machinery depreciation 21,426 226 
Building depreciation 7,481 79 
Unpaid family labor @$500/month 1.053 11 
TOTAL FARM EXPENSES EXCLUDING 
INTEREST ON EQUITY CAPITAL $____ 
 $240,497 $2,532 
Interest on equity capital @ 5% 19,698 207 
TOTAL FARM EXPENSES $--- ­ $260,195 $2,739 

6 

Farm Business Profitability 
The results of management are reflected in the net return from the 
business. Four common ways to measure the returns from a farm business are 
calculated. 
Net cash farm income reflects the cash available from the year's opera­
tion of the business. Family living has first claim on cash income followed 
by fixed payments on debts. A family may have additional cash available if 
they have nonfarm income. Cash flow is ~ a good measure of farm business 
profits, but it is useful when planning debt repayment programs. Guidelines 
for annual cash flow planning are presented on page 9. Monthly cash flow 
planning is also recommended and may be required in order to identify cash 
flow problems in the year ahead. This is particularly true when major 
changes in the business are planned or when the price of important factors 
such as milk or purchased grain are expected to change significantly. 
NET CASH FARM INCOME 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Cash Farm Receipts $ $251,341 $229,368 
Cash Farm Expenses 209,898 188,485 
NET CASH FARM INCOME $ $ 41,443 $ 40,883 
Labor and management income is the return to the operator for his or 
her labor and management input into the business. A five percent charge 
for the use of the operator's equity capital in the business has been 
included as a farm expense. This interest charge reflects the long term 
average rate of return that a farmer might expect to earn in investments 
with comparable risk to farm businesses in an economy with little or no 
inflation. Labor and management income is the measure used most commonly 
when comparing farm businesses. Appreciation in livestock, machinery and 
real estate inventories is included as ownership income, not return to 
operator labor and management. 
LABOR AND MANAGEMENT INCOME 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Total farm receipts excluding 
appreciation $ $256,312 $240,511 
Total farm expenses 260,195 234,491 
LABOR & MANAGEMENT INCOME $ $ -3,883 $ 6,020 
Full-time operator-manager 
equivalents s 1.32 1.41 
LABOR & MANAGEMENT INCOME PER 
OPERATOR-MANAGER $ $ -2,942 $ 4,270 
7 

Labor, management and ownership income per operator reflects the com­
bined return to the farmer for his or. her triple role of worker-manager, 
financier and owner. Again, this is not a measure of the cash flow 
situation of the farm business. A satisfactory labor, management and 
ownership income does not eliminate cash flow problems if .liabilities are 
large and repayment is rapid. 
LABOR, MANAGEMENT AND OWNERSHIP INCOME 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Total farm receipts $_--­ $263,OlO $253,891 
Total farm expenses excluding 
interest on equity capital 240,497 215,407 
LABOR, MANAGEMENT AND OWNERSHIP 
INCOME PER FARM $_--­ $ 22,513 $ 38,484 
Full-time operator-manager 
equivalents 1.32 1.41 
LABOR, MANAGEMENT AND OWNERSHIP 
INCOME PER OPERATOR-MANAGER $ $ 17,055 $ 27,294 
Return on equity capital measures the net profit remaining for the 
farmer's owned or equity capital after earnings have been allocated to the 
owner-operator's labor and management. The earnings or amount of gross pro­
fit 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 computed including and excluding appreciation. 
RETURN ON EQUITY CAPITAL 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Labor, management & ownership 
income per farm $ $22,513 $38,484 
Less value of operator's labor 
& management 21,368 22,136 
Return on equity capital $ $ 1,145 $16,348 
RATE OF RETURN INCLUDING APPRECIATION % 0.3% 4.3% 
RATE OF RETURN EXCLUDING APPRECIATION % -1.4% 0.8% 
The rate of return on equity capital is computed as the amount returned 
divided by farm net worth or equity capital. 
8 
Farm Family Financial Situation 
The financial situation is an important part of the farm business sum­
mary. It has a direct affect on current cash outflow and future capital 
investment decisions. Financial lease obligations are included in the bal­
ance sheet. The present value of all future payments is listed as a liabil ­
ity since the farmer is committed to make the payments. The present values 
are also listed as assets, representing the future value the item has to the 
business. 
FARM FAMILY NET WORTH 
19 Central Plain Region Dairy Farms, January 1, 1984 
Item 	 My Farm Average 
Assets 
Livestock $ $144,527 
Feed and supplies 50,433 
Machinery and equipment 127,614 
(includes discounted lease payments) (410) 
Land and buildings 341,084 
(includes discounted lease payments) (518) 
Co-op investments 20,244 
Accounts receivable 16,660 
Cash and checking accounts 1,943 
Total Farm Assets $ 	 $ 702,505 
Savings accounts $ $ 	 4,775 
Cash value life insurance 6,176 
Stocks and bonds 4,227 
Nonfarm real estate 2,366 
Auto (personal share) 2,687 
All Other 6,571 
TOTAL FARM & NONFARM ASSETS $ 	 $729,301 
Liabilities 
Long term $_--­ $191,955
Intermediate 94,230 
Financial lease 928 
Short term 8,206 
Other farm accounts 7,220 
Total Farm Liabilities $_--­ $308,539
Nonfarm Liabilities 1,474 
TOTAL LIABILITIES $_--­ $310,013
FARM NET WORTH (EQUITY CAPITAL) $_--­ $393,966
FAMILY NET WORTH $ 	 $419,294 
9 

Payment ability is the most important consideration in determining if 
and how proposed investments should be financed. The farm business must 
produce sufficient cash income to meet operating expenses, to cover family 
or personal living expenses, to make payments on debts and to cover cash 
purchases of capital items that occur during the year. Interest paid and 
income from off-farm work are added to net cash farm income because planned 
or budgeted debt payments will include interest as well as principal. 
Estimate family living expenses for your farm to calculate cash available 
for debt payment and capital purchases made in cash. 
Some farms in the group have scheduled debt payments exceeding 50 
percent of the milk receipts. Committing this much cash inflow to debt 
payments can create a serious cash flow problem. 
FARM FAMILY DEBT REPAYMENT 

19 Central Plain Region Dairy Farms, January 1, 1984 

Item My Farm Average 
Payment Ability 
Net cash farm income $_--­ $41,443 
Plus interest paid 28,969 
Plus off-farm income 2,486 
CASH AVAILABLE FOR DEBT 
SERVICE AND LIVING $_--­ $72,898 
Less family living expenses* 23,913 
CASH AVAILABLE FOR DEBT PAYMENT 
AND CAPITAL PURCHASES $_--­ $48,985 
Scheduled Annual Debt Payments 
Long term $_--­ $22,961 
Intermediate 25,945 
Short term 7,634 
Other farm accounts 2,398 
TOTAL FARM DEBT PAYMENTS $_--­ $58,938 
Nonfarm debt payments 120 
TOTAL PAYMENTS PLANNED 1984 $_--­ $59,058 
Commitment and Measures of Debt 
Equity Position 
Farm debt payments planned per cow $_--­ $620 
Farm debt payments as % milk sales -----.,;% 30% 
Farm debt/asset ratio-long term 0.58 
Farm debt/asset ratio-intermediate 
and short term 0.29 
Farm debt per cow $_--­ $3,248 
Percent equity (total) % 57% 
*Estimated as $10,500 per family plus four percent of cash farm receipts. 
10 

ANALYSIS OF THE FARM BUSINESS 
When analyzing a farm business, a manager must consider measures or 
factors that reflect the performance of specified parts of the farm busi­
ness. To do this one must look at factors of size, rates of production, 
labor efficiency, capital efficiency and cost control. These measures and 
factors are detailed on the following pages. 
Size of Business 
Studies have shown that, in general, larger farms are more profitable 
than smaller farms. Larger businesses make possible more efficient use of 
overhead inputs such as labor and machinery and there are more units of pro­
duction on which to earn a profit. Profitable farm businesses with good 
management have the ability and incentive to become larger. Large farms are 
not necessarily more profitable however, and size increases are only profit ­
able with good management. 
MEASURES OF SIZE OF BUSINESS 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Number of cows 95 92 
Number of heifers 83 76 
Pounds of milk sold 1,496,400 1,348,100 
Worker equivalent 3.33 3.33 
Total work units 1,141 1,102 
Total tillable acres 382 371 
In the table below, the 572 New York farms for 1982 are sorted by 
number of cows and the labor and management income is shown for each size 
group. In general, the large farms paid better, but, variability of income 
was significant. 
COWS PER FARM AND LABOR AND MANAGEMENT INCOME 
572 New York Dairy Farms, 1982 
Number Ave. Number Number Percent Labor & Mgmt. Income 
of Cows of Cows of Farms of Farms Per Operator 
Under 40 34 76 13 $ 812 
40 to 54 47 128 22 -19 
55 to 69 61 107 19 3,225 
70 to 84 76 82 14 3,064 
85 to 99 90 52 9 2,152 
100 to 149 120 69 12 4,073 
150 to 199 169 33 6 -3,577 
200 to 249 230 15 3 27,218 
250 & over 363 10 2 45,479 
11 
Rates of Production 
Crop yields and rates of animal production are factors that have a 
significant impact on farm incomes. Here is a description of crops grown 
and yields along with the pounds of milk sold per cow. 
CROP YIELDS &MILK SOLD PER COW 

19 Central Plain Region Dairy Farms, 1983 

MI Farm Averase of Farms ReEortins 
Crop Acres Yield Farms Acres Yield/Acre 
Dry hay 19 (combined below) 
Hay crop silage 17 (combined below) 
Total hay crops 19 123 3.0 tons D.M. 
Corn silage 18 77 12.7 tons 
Other forage 2 124 0.6 tons D.M. 
Total forage crops 19 208 3.4 tons D.M. 
Grain corn 17 88 89.6 bushels 
Oats 8 35 51.2 bushels 
.Jibeat 9 37 46.4 bushels 
Other crops 5 42 
Tillable pasture 7 11 
Idle tillable land 11 82 
Milk sold per cow 15,752 pounds 
Tons of dry matter per acre from all hay and silage is a good measure 
of the overall rate of forage production. 
The importance of strong milk output per cow is shown in the table 
below. 
MILK SOLD PER COW AND LABOR AND MANAGEMENT INCOME 
572 New York Dairy Farms, 1982 
Pounds of Milk Number Number Labor & Mgmt. Labor, Mgmt., & Owner-

Sold Per Cow of Farms of Cows Income/Oper. shiE Income/Operator 

Under 11,000 52 53 $-6,028 $-1,924 
11,000 to 11,999 27 55 -3,637 5,492 
12,000 to 12,999 50 74 -4,893 7,908 
13,000 to 13,999 88 88 348 15,624 
14,000 to 14,999 109 86 2,475 15,311 
15,000 to 15,999 117 87 6,453 22,074 
16,000 to 16,999 64 88 10,715 26,851 
17,000 to 17,999 43 97 7,024 26,668 
18,000 & over 22 91 22,966 49,864 
12 
Labor Efficiency 
Labor input is an important factor in farm production. Several mea­
sures of accomplishment per worker (labor efficiency) are shown below. 
MEASURES OF LABOR EFFICIENCY 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Worker equivalent 3.33 3.33 
Cows per worker 29 28 
Lbs. milk sold per worker 449,369 404,835 
Work units per worker 343 331 
Number of cows per worker is calculated by dividing the average number 
of cows by the worker equivalent which represents the total farm labor 
force. Pounds of milk sold per worker is an important measure of labor 
efficiency on the dairy farm. It measures the ability of the labor force to 
handle a large number of cows without sacrificing milk output per cow. 
It is important to look at other measures of labor efficiency, such as 
work units per worker because all dairy farms do not have the same relation­
ship between cows, heifers, and crops grown. 
Labor efficiency depends on a number of things. Among these are the 
amount of mechanization, the field and building layout, the work methods, 
and the abilities of the workers. All of these are management items under 
the control of the operator. 
Another factor which may influence the productivity of labor is the 
wage paid to employees. A productive employee will require a reasonable and 
competitive wage. 
MILK SOLD PER WORKER AND LABOR AND MANAGEMENT INCOME 
572 New York Dairy Farms, 1982 
Labor &Mgmt. Labor, Mgmt. & 
Pounds of Milk Number Number Lbs. Milk Income Ownership Inc. 
Sold Per Worker of Farms of Cows Per Cow Per Of!rator Per Operator 
Under 250,000 73 43 11,553 $-3,985 $ 2,967 
250,000 to 299,999 55 54 13,296 -4,001 3,414 
300,000 to 349,999 60 59 13,854 -957 10,220 
350,000 to 399,999 92 73 14,625 2,010 13,878 
400,000 to 449,000 101 77 15,090 3,319 18,200 
450,000 to 499,999 68 98 14,979 2,949 21,393 
500,000 to 599,999 86 111 15,317 7,271 23,823 
600,000 & over 37 180 15,917 31,180 65,277 
13 

Capital Efficiency 
Capital is a key resource in dairy farm businesses and a manager must 
continually analyze its use in the business. The measures of capital 
efficiency shown in the following table include owned as well as borrowed 
capital. It is possible for the business to be undercapitalized, but 
investing too much capital per productive unit is a more common problem. 
MEASURES OF CAPITAL EFFICIENCY 
Central Plain Region Dairy Farms, 1983 & 1982 
19 Farms 22 Farms 
Item My Farm 1983 1982 
Farm capital per worker $ $199,018 $194,599 
Farm capital per cow $ 
 6,976 6,750 
Machinery investment per cow $ 
 1,339 1,182 
Machinery per tillable acre $ 
 333 306 
Land & buildings per cow $ 
 3,585 3,567 
Land & buildings per tillable 
acre owned $ 
 1,384 1,381 
Cash flow coverage ratio 0.83 0.79 
Land and building investment per crop acre owned shows the relationship 
between investments in land and buildings. The farmer who owns little crop­
land but builds many farm buildings will have a relatively large land and 
building investment per crop acre owned. This could be an indication that 
capital use is out of balance. 
The Cash Flow Coverage Ratio measures the amount available for debt 
service per dollar of scheduled annual debt payment. A high cash flow ratio 
indicates a strong capacity to repay debt. Compute it by dividing the net 
cash flow available for debt service in the current year by the payments 
planned for the coming year. To determine net cash available for debt 
service, farm family living expenses are deducted from cash available for 
debt payments and family living. Estimate your family living expenses (see 
page 9) and calculate the Cash Flow Coverage Ratio for your farm. 
CASH FLOW COVERAGE RATIO AND LABOR AND MANAGEMENT INCOME 
572 New York Dairy Fa~s, 1982 
Cash Flow Labor & Mgmt. 
Coverase Ratio Number of Pounds of Milk Sold Income 
Ranse Averase Farms Cows Per Cow Per Worker per Operator 
Less than 0 -0.41 29 52 11,517 247,479 $-12,260 
o - 0.49 0.35 144 65 13,948 362,640 -4,696 
0.5 - 0.99 0.72 189 85 14,701 416,533 2,333 
1.0 - 1.49 1.23 101 97 15,212 479,091 11 ,824 
1.5 - 1.99 1.71 41 83 15,886 451,541 9,090 
2.0 or more 3.17 68 101 15,322 476,154 15,301 
14 

Cost Control 
The control of costs is a big factor in the success of modern commer­
cial dairy operations. Feed, machinery and labor costs are major items and 
should be examined in detail. It is important to check all cost items both 
large and small. Expenses should be incurred only when the returns from the 
expense are expected to be greater than the cost incurred. 
Feed Costs 
Purchased feed is the largest single expenditure on most dairy farms. 
Two considerations are important in keeping the feed bill down: (1) Be 
careful that only nutrients required by the cow are being fed. A dairy 
farmer cannot afford to buy a feed mix that overfeeds energy or protein. 
(2) Be certain that the required nutrients are being obtained from their 
least expensive source. For example, is the lowest cost source of protein, 
urea, soybean meal or a commercial protein? Help in answering these 
questions can come from budgeting, from agribusiness people selling feeds, 
and from dairy and management extension agents. Extension is supporting 
computerized decision aids to assist in answering these questions including 
the NEWPLAN program, Least-Cost Balanced Dairy Rations, and the dairy ration 
analyzers. 
The size and productivity of the cropping program has an important 
influence on the amount of the purchased feed bill. Increased production of 
either roughages or grains should reduce the purchased feed expense unless 
cow numbers are increased. Also, heifer raising practices affect feed 
costs. The overall feed situation must be examined and evaluated as a 
"system"• 
FEED COSTS AND RELATED MEASURES 

Central Plain Region Dairy Farms, 1983 & 1982 

19 Farms 22 Farms 
Item My Farm 1983 1982 
Dairy concentrate purchased 
per cow $ $474 $412 
Dairy concentrate purchased per 
cwt. of milk sold $ $3.01 $2.81 
Percent dairy concentrate is of 
milk receipts % 23% 21% 
Crop expense per cow $ $257 $240 
Feed & crop expense/ewt. milk $ $5.01 $4.72 
Forage dry matter harv./cow (tons) 7.4 8.0 
Acres of forage per cow 2.2 2.2 
Total tillable acres per cow 4.0 4.0 
Fertilizer and lime/ tillable acre $ $34 $33 
Heifers as % of cow numbers % 87% 83% 
15 
Machinery, Labor and Miscellaneous Costs 
Labor and machinery operate as a team on a dairy farm. The challenge 
is to obtain an efficient combination of these two inputs that will result 
in a low cost per unit of output. 
MACHINERY AND LABOR COSTS 

Central Plain Region Dairy Parms, 1983 & 1982 

19 Parms 22 Farms 
Item My Parm 1983 1982 
Machinery: Depredation1 $ $21,426 $18,169 
Interest2 6,260 5,689 
Operating expense3 24,114 25,050 
Total machinery $ $51,800 $48,908 
Per cow $545 $532 
Labor: Value of operators4 $ $11,092 $12,000 
Unpaid family5 1,053 727 
Hired 27,330 29,072 
Total labor $ $39,475 $41,799 
Per cow $416 $454 
Per cwt. milk $2.64 $3.10 
Labor & machinery costs per cow $961 $986 
Labor & machinery costs/cwt. milk $ $6.10 $6.73 
lRegular depreciation from last year's tax plus 10 percent of new 
purchases. 
2Five percent of average machinery investment. 
~chine hire, repairs, farm share auto expense, and gas and oil. 
4$750 per month. 
5$500 per month. 
MISCELLANEOUS COST CONTROL MEASURES 
Central Plain Region Dairy Farms, 1983 & 1982 
19 Farms 22 Farms 
Item My Farm 1983 1982 
Livestock expense per cow $ $294 $218 
Real estate expense per cow $ $171 $153 
Total farm expense per cow $ $2,739 $2,549 
Livestock expense per cow includes breeding fees, veterinary and med­
icine, milk marketing, dairy supplies, bedding and DHIC fees. Real estate 
expenses include repairs, taxes, insurance and rent. 
16 
YEARLY CASH FLOW PLANNING & ANALYSIS 
This worksheet is a valuable tool in financial planning, expansions 
and for setting goals for improving the farm business. The average is from 
19 Central Plain Region farms. 
Average My Farm, Cows 
Item Per Cow Pe
~r ~Cow~ ~T~ota=l =~~Go-al -
CASH RECEIPTS 
Milk sales $2,099 $_-- $_-- $_-­
Crop sales 237 
Dairy cattle 138 
Calves & other livestock 59 
Other 113 
Total Cash Receipts $2,646 $_-- $_-- $_-­
CASH EXPENSES 
Hired labor $ 288 $------$-----$_---­
Dairy concentrate 474 
Hay and other 58 
Machine hire 24 
Machine repair & auto expense 131 
Gas & oil 99 
Replacement livestock 16 
Breeding fees 30 
Vet & medicine 52 
Milk marketing (ADA, Dues) 118 
Other livestock exp. (incl. <$1 lease) 93 
Fertilizer & lime 136 
Seeds & plants 59 
Spray & other 62 
Land, bldg. fence repair 31 
Taxes 58 
Insurance 37 
Rent 45 
Telephone & elec. (farm share) 61 
Mis ce llaneous 33 
Total Cash Expenses1 $1,905 $- -- $- --- $- ---
Total Cash Receipts $2,646 
Total Cash Expenses 1 -1,905 
Net Cash Flow $ 741 $----- $---_$_-­
Cash Family Living Expense2 252 
Amount Left for Debt Service, 
Capital Investment & 

Retained Earnings $ 489 
 $ $ $ 
Scheduled Debt Service 620 --- ----- ----
Available for Capital Investment $ (131) $ $ $ 
Planned Expansion Livestock Purch. ----
Planned Equipment Purchase 
Borrowed or Equity Funds Needed $ $ $ 
lInterest paid exclUded for it is contained in Scheduled Debt Service. 
2Estimated: $10,500 per family and four percent of cash farm receipts. 
17 
PROGRESS OF THE FARK BUSINESS 
Comparing your business with that of other farmers is one part of a 
business checkup. It is equally important to compare your current year's 
business with that of earlier years to show the progress you are making, 
and to plan ahead, by setting business targets or goals. 
Item 1981 1982 1983 1984 Goal 
Size of Business 
Number of cows 
Number of heifers 
Pounds of milk sold 
Worker equivalent 
Total tillable acres 
Rates of Production 
Lbs. milk sold per cow 
Tons hay D.M. per acre 
Tons corn silage per acre 
Labor Efficiency 
Cows per worker 
Lbs. milk sold per worker 
Cost Control 
Purch. feed as % milk sold $_-­ $_-­ $_-­ $_-­
Feed & crop exp./cwt. milk $_-­ $_-­ $_-­ $_-­
Labor & mach. cost per cow $_-­ $_-­ $_-­
Capital Efficiency 
Farm capital per cow $_-­ $_-­ $_-­ $_-­
Capital turnover $_-­ $_-­ $_-­ $_-­
Price 
Price per cwt. milk $_-­ $_-­ $_-­ $_-­
Financial Summary 
Net cash farm income $_-­ $_-­ $_-­ $_-­
Labor & mgmt. inc./oper. $_-­ $_-­ $_-­ $_-­
Farm net worth $_--­ $_-­ $_-­
Rate of return on equity ----% % % % 
Percent equity ----% % % % 
Farm debt per cow $ $ $ $_-­
18 

MANAGEMENT PERFORMANCE OF STATEWIDE COOPERATORS 
The Farm »usiness Chart is a tool which can be used in analyzing a 
business by drawing a line through the figure in each column which repre­
sents the current level of management performance. The figure at the top 
of each column is the average of the top 10 percent of the 572 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. 
FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS 
572 New York Dairy Farms, 1982 
Size of Business Rates of Production Labor Efficiency 
Worker No. Pounds Pounds Tons Tons Corn Cows Pounds 
Equiv­ of Milk Milk Sold D.M./ Silage Per Milk Sold 
valent Cows Sold Per Cow Acre Per Acre Worker Per Worker 
6.2 219 3,391,200 18,100 4.6 20 44 659,100 
4.0 125 1,844,000 16,600 3.6 18 36 537,600 
3.3 94 1,415,700 15,900 3.2 16 33 484,700 
3.0 80 1,188,900 15,400 2.8 15 30 445,100 
2.7 70 1,020,000 14,900 2.6 15 28 416,100 
2.4 61 902,800 14,400 2.3 14 26 388,600 
2.1 54 784,800 13,900 2.1 12 25 357,100 
2.0 48 662,200 13,200 1.9 12 23 315,200 
1.7 41 545,500 12,100 1.7 10 20 266,200 
1.3 33 379,400 9,700 1.3 7 16 192,800 
Feed %Feed is Machinery Labor and Feed and Crop 
Bought of Milk Cost Machinery Expense Per 
Per Cow Receiets Per Cow Cost Per Cow Cwt. Milk 
$197 10% $231 $ 517 $2.79 
290 15 304 613 3.39 
357 19 341 666 3.83 
407 22 372 719 4.15 
456 24 407 755 4.44 
--------------------------------------------------------------------------
501 26 439 792 4.67 
544 29 469 840 4.93 
593 31 512 883 5.21 
651 33 564 962 5.60 
791 39 696 1,158 6.53 
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. 
19 

FINANCIAL ANALYSIS CHART 

572 New York Dairy Farms, 1982 

Liquidity (Repayment) 
Available for Cash Flow 
 Debt Payments 
Debt Payments Debt Service Coveragy 
 as Percent ~f Debt 
Per Cow Per Cow Ratio 
 Milk Sales Per Cow 
$ 53 $828 8.55 3 $ 160 
207 647 2.02 11 774 
296 557 1.40 16 1,237 
367 486 1.lO 19 1,683 
436 425 .91 23 2,035 
493 371 .75 26 2,364 
557 307 .61 30 2,772 
635 244 .46 35 3,177 
768 145 .29 42 3,751 
l,OlO -82 -.66 60 4,849 
Solvencx Efficiency & Profitabilitx 
Debt7Asset Ratio Capital 6 Rate of Return on 
Leverag§ Percent Current & Long Turnover 
Ratio Equitl Intermediate4 TermS (x:ears ) Eguitx 7 Investment8 
.03 97 .00 .00 1.36 14% 12% 
.15 87 .05 .06 1.95 6 8 
.27 78 .11 .19 2.16 4 6 
.41 71 .18 .34 2.36 1 5 
.56 64 .23 .44 2.55 - 1 3 
.72 58 .30 .54 2.70 - 3 2 
.95 51 .37 .63 2.90 - 5 1 
1.25 44 .45 .73 3.23 - 9 - 1 
1.81 36 .56 .87 3.69 -17 - 3 
8.50 20 .79 1.25 5.68 -81 - 8 
1Amount available for debt service per dollar of annual scheduled debt 
payment, computed by dividing the available dollars by the annual payments 
planned. A high positive ratio indicates a strong capacity to repay 
debt. 
2Amount of milk income committed to debt repayment, calculated by divid­
ing scheduled debt payments by total milk sales ($). 
3Dollars of debt per dollar of equity, computed by dividing total liabil ­
ities by total equity. 
4All farm liabilities on less than 10 year repayment divided by all farm 
assets excluding real estate and other long term assets. 
5Farm liabilities on 10 years or more repayment, including all real 
estate mortgages, divided by the value of farm real estate and other long 
term assets. 
6Year-end farm inventory divided by total farm receipts. 
7Return on equity capital, including appreciation, divided by farm net 
worth. 
8Return on all farm capital (no deduction for interest paid) divided by 
total farm assets. 
20 
FARM BUSINESS SUMMARY BY HERD SIZE 
572 New York Dairy Farms, 1982 
Item Farm Size: 
Less than 40 to 55 to 70 to 
40 cows 54 cows 69 cows 84 cows 
Capital Investment (end of year) 
Livestock $ 49,013 $ 72,347 $ 94,025 $115,565 
Feed & supplies 9.858 16,105 24,793 32,663 
Machinery & equipment 41,258 57,949 78,186 92,761 
Land & buildings 111,530 149,346 187,417 217,564 
TOTAL INVESTMENT $211,659 $295,747 $384,421 $458,553 
Receipts 
Milk sales $ 59,250 $ 88,659 $124,138 $152,408 
Dairy cattle sold 3,693 5,845 7,377 9,537 
Other livestock sales 1,363 1,619 1,655 1,731 
Crop sales 293 767 1,408 1,134 
Miscellaneous receipts 792 1,623 1,934 1,898 
Total Cash Receipts $ 65,391 $ 98,513 $136,512 $166,708 
Increase in livestock 1,622 3,541 4,838 5,835 
Increase in feed & supplies 1,158 325 559 2,030 
Appreciation 571 470 4,956 3,656 
TOTAL FARM RECEIPTS $ 68,742 $102,849 $146,865 $178,229 
TOTAL FARM REC. EXCL. APPREC. $ 68,171 $102,379 $141,909 $174,573 
Expenses 
Hired labor $ 2,352 $ 4,584 $ 8,441 $ 12,087 
Dairy grain & concentrate 16,910 23,255 29,338 36,011 
Other feed 761 1,164 1,285 1,075 
Machine hire 479 795 1,417 1,235 
Machinery repair 2,476 4,454 5,916 8,277 
Auto expense (farm share) 393 432 479 407 
Gas & oil 2,422 3,760 5,408 6,489 
Replacement animals 1,136 1,318 1,542 1,638 
Breeding fees 881 1,350 1,975 2,184 
Veterinary & medicine 1,087 1,837 2,545 2,873 
Milk marketing 2,272 3,550 4,399 5,690 
Cattle lease 25 154 93 106 
Other livestock expense 2,158 4,103 4,825 5,690 
Fertilizer & lime 2,008 4,061 6,619 8,097 
Seeds & plants 699 1,318 2,107 2,745 
Spray & other crop expense 442 948 1,774 1,980 
Land, bldg., fence repair 927 1,375 1,940 2,882 
Taxes & insurance 3,218 4,268 5,457 6,685 
Electricity & phone (farm share) 1,956 2,694 3,472 4,124 
Interest paid 7,234 11,166 13,687 17,070 
Miscellaneous expenses 1,394 2,766 3,635 5,188 
Total Cash Expenses $ 51,230 $ 79,352 $106,354 $132,533 
Expansion livestock 275 688 1,154 1,101 
Machinery depreciation 5,530 8,072 11,158 14,286 
Building depreciation 1,600 2,794 4,638 5,699 
Unpaid family labor 1,647 2,199 1,537 2,021
Interest on equity @5% 7,004 9,296 12,843 14,888 
TOTAL FARM EXPENSES $ 67.286 $102,401 $137,684 $170, 528 
Financial summar~ 
NET CASH FARM IN OME $ 14,161 $ 19,161 $ 30,158 $ 34,175 
Labor & Management Income $ 885 $ -22 $ 4,225 $ 4,045 
Number of Operators 1.09 1.15 1.31 1.32 
LABOR & MGT. INCOME/OPER. $ 812 $ -19 $ 3,225 $ 3,064 
LABOR, MGT. & OWNSHP. INC./OPER. $ 7,761 $ 8,473 $ 16,812 $ 17 ,113 
21 
FARM BUSINESS SUMMARY BY HERD SIZE 
572 New York Dairy Farms, 1982 
Farms with.•  998 5 to 100 to 150 to 200 to 250 or Item cows 149 cows 199 cows 249 cows more cows 
Capital Investment (end of year) 
Livestock $128,477 $174,890 $239,287 $ $353,216 $ 548,827 
Feed & supplies 35,862 48,670 69,777 102,643 165,130 
Machinery & equipment 98,966 128,766 170,864 178,901 264,266 
Land & buildings 244,040 302,448 410,347 592,648 956,913 
TOTAL INVESTMENT $507,345 $654,774 $890,275 $1,227,408 $1,935,136 
Receipts 
Milk sales $179,475 $239,089 $343,973 $473,489 $ 800,529 
Dairy cattle sold 13,825 15,795 23,513 36,501 52,819 
Other livestock sales 1,450 4,291 4,666 5,689 9,295 
Crop sales 2,030 2,066 4,882 4,958 12,984 
Miscellaneous receipts 3,004 4,075 6,258 10,459 16,016 
Total Cash Receipts $199, 784 $265,316 $383,292 $531,096 $ 891,643 
Increase in livestock 2,783 9,854 8,400 26,065 56,563 
Increase in feed & supplies (717) (1,868) (3,636) 3,561 11 ,030 
Appreciation 544 1,486 4,746 8,263 51,414 
TOTAL FARM RECEIPTS $202,394 $274,788 $392,802 $568,985 $1,010,650 
TOT. FARM REC. EXCL. APPREC.$201,850 $273,302 $388,056 $560,722 $ 959,236 
Expenses 
Hired labor $ 15,498 $ 25,288 $ 45,839 $ 65,575 $125,058 
Dairy feed & concentrate 42,613 53,405 78,634 117,640 199,718 
Other feed 1,214 3,736 2,842 3,209 5,040 

Machine hire 1,290 1,949 2,959 3,402 7,679 

Machinery repair 9,801 12,681 18,860 26,189 35,401 

Auto expense (farm share) 461 647 480 436 651 

Gas & oil 8,514 10,550 15,190 17,942 33,572 

Replacement animals 1,891 4,450 5,425 4,407 8,085 

Breeding fees 2,371 3,119 4,284 6,997 10,348 

Veterinary & medicine 3,444 4,995 7,484 13,727 19,137 

Milk marketing 7,524 8,797 13,127 15,942 23,456 

CattIe lease 382 72 284 347 0 

Other livestock expense 6,477 8,379 12,027 16,256 30,513 

Fertilizer & lime 9,727 13,053 19,779 26,312 41,403 

Seeds & plants 2,911 4,394 7,201 9,096 12,189 

Spray & other crop expense 2,744 3,297 5,441 5,990 10,462 

Land, bldg., fence repair 3,265 3,824 5,881 5,987 5,668 

Taxes & insurance 7,318 9,983 13,582 17,426 23,832 

Elec. & phone (farm share) 4.701 5,979 8,146 9,060 14,792 

Interest paid 21,779 26,397 36,645 44,507 99,366 

Miscellaneous expenses 5,765 8,214 11,649 12,221 28,157 

Total Cash Expenses $159.690 $213,209 $315,759 $422,668 $734.527 
Expansion livestock 931 4,540 6,025 7,528 19,319 
Machinery depreciation 14,249 18.857 28,192 30,454 49,337 
Building depreciation 5,952 9,130 11 ,857 18,398 27,895 
Unpaid family labor 1,788 949 939 667 50 
Interest on equity @5% 16,098 20,955 31,043 39,364 55,342 
TOTAL FARM EXPENSES $198,708 $267,640 $393,815 $519,079 $886,470 
Financial Summarl 
NET CASH FARM INCOME $ 40,094 $ 52,107 $ 67,533 $108,428 $157,116 
Labor & Management Income $ 3,142 $ 5,662 $ -5,759 $ 41,643 $ 72,766 
Number of Operators 1.46 1.39 1.61 1.53 1.60 
LABOR & MGT. INCOME/OPER. $ 2,152 $ 4,073 $ -3,577 $ 27,218 $ 45,479 
LABOR, MGT. & OWNSBP. INC/OP.$ 13,551 $ 20 z218 $ 18,652 $ 58,346 $112,201 
22 
SELECTED BUSINESS FACTORS BY HERD SIZE 

572 New York Dairy Farms, 1982 

Farms with: 

Less than 40 to 55 to 70 to 
Item 40 cows 54 cows 69 cows 84 cows 
Number of farms 76 
 128 
 107 
 82 

Size of Business 
Number of cows 34 
 47 
 61 
 76 

Number of heifers 26 
 38 
 51 
 64 

Pounds of milk sold 440,100 
 660,600 
 928,900 
 1,124,500 

Worker equivalent 1.67 
 2.00 
 2.42 
 2.75 

Total work units 374 
 539 
 687 
 867 

Total tillable acres 116 
 171 
 211 
 256 

(Tillable acres rented) (27) (42) (63) (82) 
Rates of Production 
Milk sold per cow 12,944 14,055 15,228 14,796 
Tons hay crop per acre 2.0 2.2 2.5 2.5 
Tons corn silage per acre 
 11.8 12.7 13.3 13.1 
Bushels of oats per acre 
 29.1 57.1 60.5 54.3 
Labor Efficiency 
Cows per worker 20 
 24 
 25 
 28 

Pounds milk sold per worker 263,533 
 330,300 
 383,843 
 408,909 

Work units per worker 224 
 270 
 284 
 315 

Feed Costs 
Feed purchased per cow $497 $495 $481 $474 
Crop expense per cow $93 $135 $172 $169 
Feed cost per ewt. milk $3.84 $3.52 $3.16 $3.20 
Feed & crop expo per cwt. milk $4.73 $4.65 $4.43 $4.44 
%feed is of milk receipts 29% 26% 24% 24% 
Tons forage dry matter per cow 6.8 7.6 7.7 8.2 
Tillable acres per cow 3.4 3.6 3.5 3.4 
Fertilizer & lime per crop acre $17 $24 $31 $32 
Machinery & Labor Costs 
Total machinery costs $13,337 $20,376 $28,204 $35,234 
Machinery cost per cow $392 $434 $462 $464 
Machinery cost per cwt. milk $3.03 $3.08 $3.04 $3.13 
Labor cost per cow $406 $364 $353 $338 
Labor cost per cwt. milk $3.14 $2.59 $2.32 $2.29 
Capital Efficiency 
Investment per worker $126,742 $147,874 $158,852 $166,747 
Investment per cow $6,047 $6,036 $6,007 $5,804 
Investment per cwt. milk $48 $45 $41 $41 
Land & buildings per cow $3,187 $3,048 $2,928 $2,754 
Machinery investment per cow $1,179 $1,183 $1,222 $1,174 
Capital turnover 3.1 2.9 2.6 2.6 
Other 
Price per ewt. milk sold $13.46 
 $13.42 
 $13.36 
 $13.55 

Acres hay crops 83 
 103 
 109 
 142 

Acres corn silage* 14 
 31 
 44 
 60 

*Average of all farms. 
--~.. ----~- ............. ~--~-- .. ~.. -~~---~ -- ­
23 
SELECTED BUSINESS FACTORS BY HERD SIZE 
572 New York Dairy Farms, 1982 
Farms With: 
85 to 100 to 150 to 200 to 250 or 
Item 99 cows 149 cows 199 cows 249 cows more cows 
Number of farms 52 69 33 15 10 
Size of Business 
Number of cows 90 120 169 230 363 
Number of heifers 70 98 127 212 284 
Pounds of milk sold 1,303,200 1,753,400 2,528,300 3,464,100 5,868,500 
Worker equivalent 3.08 3.67 4.83 6.25 8.75 
Total work units 999 1,338 1,854 2,536 3,915 
Total tillable acres 290 368 527 577 913 
(Tillable acres rented)* (106) (132) (181) (184) (348) 
Rates of Production 
Milk sold per cow 14,480 14,612 14,960 15,061 16,167 
Tons hay crop per acre 2.9 2.8 2.9 3.0 2.9 
Tons corn silage per acre 13.5 13.8 15.6 15.6 15.4 
Bushels of oats per acre 66.1 49.9 46.7 81.8 95.7 
Labor Efficiency 
Cows per worker 29 33 35 37 41 
Pounds milk sold per worker 423,117 477,766 523,458 554,256 670,686 
Work units per worker 324 365 384 406 447 
Feed Costs 
Feed purchased per cow $473 $445 $465 $511 $550 
Crop expense per cow $171 $173 $192 $180 $176 
Feed cost per cwt. milk $3.27 $3.05 $3.11 $3.40 $3.40 
Feed & crop expo per cwt. milk $4.54 $4.44 $4.50 $4.68 $4.58 
% feed is of milk receipts 24% 22% 23% 25% 25% 
Tons forage dry matter per cow 8.0 8.1 8.3 7.8 8.0 
Tillable acres per cow 3.2 3.1 3.1 2.5 2.5 
Fertilizer & lime per crop acre $34 $35 $38 $46 $45 
Machinery & Labor Costs 
Total machinery costs $39,237 $51,045 $74,134 $87,122 $139,530 
Machinery cost per cow $436 $425 $439 $379 $384 
Machinery cost per cwt. milk $3.01 $2.91 $2.93 $2.51 $2.38 
Labor cost per cow $337 $321 $361 $348 $384 
Labor cost per cwt. milk $2.33 $2.20 $2.41 $2.31 $2.38 
Capital Efficiency 
Investment per worker $164,722 $178,413 $184,322 $196,385 $221,158 
Investment per cow $5,515 $5,156 $5,058 $5,072 $5,079 
Investment per cwt. milk $39 $37 $35 $35 $33 
Land & buildings per cow $2,653 $2,381 $2,332 $2,449 $2,512 
Machinery investment per cow $1,076 $1,014 $971 $739 $694 
Capital turnover 2.5 2.4 2.2 2.2 1.9 
Other 
Price per cwt. milk sold $13.77 $13.64 $13.60 $13.67 $13.64 
Acres hay crops 147 179 243 231 290 
Acres corn silage* 69 102 131 209 406 
*Average of all farms. 
24 
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 
572 New York Dairy Farms, January 1, 1983 
Farms with: Less than 40 to 55 to 
70 to 85 to
Item 40 cows 54 cows 69 cows 84 cows 99 cows 
Number of farms 76 128 107 82 52 
Assets 
Livestock (includes discounted$ 49,013 $ 72,347 $ 94,219 $115,659 $128,688 
lease payments) (0) (0) (194) (94) (211) 
Feed & supplies 9,858 16,105 24,793 32,663 35,862 
Machinery & equipment (includes 41,577 58,063 78,479 93,274 99,079 
discounted lease payments) (319) (114) (293) (513) ( 113) 
Land & buildings (includes 112,775 152,316 188,190 220,546 245,889 
discounted lease payments) (1,245) (2,970) (773) (2,982) (1,849) 
Co-op investment 1,410 2,432 4,676 5,573 10,389 
Accounts receivable 4,511 7,481 10,283 13,244 17 ,670 
Cash & checking accounts 1,128 2,110 2,627 2,929 2,737 
Total Farm Assets $220,272 $310,854 $403,267 $483,888 $540,314 
Savings accounts 2,422 1,907 3,258 3,124 3,253 
Cash value life insurance 1,750 1,973 2,360 2,164 2,825 
Stocks & bonds 1,581 1,396 1,634 1,275 5,075 
Nonfarm real estate 2,243 1,871 8,140 4,901 4,077 
Auto (personal share) 1,130 1,273 1,745 1,596 1,503 
All other 8,064 5,834 5,140 7,652 5,947 
Total Nonfarm Assets $ 17,190 $ 14,254 $ 22,277 $ 20,712 $ 22,680 
TOTAL ASSETS $237,462 $325,108 $425,544 $504,600 $562,994 
Liabilities 
Long term $ 48,724 $ 76,905 $ 85,899 $111 ,280 $119,743 
Intermediate 25,868 39,341 52,120 62,618 86,166 
Financial lease 1,564 3,084 1,260 3,589 2,173 
Short-term 1,548 1,941 3,204 4,211 3,035 
Other farm accounts 2,486 3,665 3,927 4,426 7,246 
Total Farm Liabilities $ 80,190 $124,936 $146,410 $186,124 $218,363 
Total Nonfarm Liabilities 542 384 743 30 129 
TOTAL LIABILITIES $ 80,732 $125,320 $147,153 $186,154 $218,492 
Farm Net Worth (Eq. Cap.) $140,082 $185,918 $256,857 $297,764 $321,951 
FAMILY NET WRTH $156,730 $199,788 $278,391 $318,446 $344,502 
Financial Measures 
Percent equity 66% 61% 65% 63% 61% 
Farm debt per cow $2,291 $2,550 $2,288 $2,356 $2,374 
Available for debt service 
& living $23,188 $31,689 $44,556 $52,660 $62,205 
Scheduled annual debt payment $17,192 $24,924 $30,696 $40,160 $46,649 
Scheduled debt payments/cow $487 $504 $477 $496 $506 
Payment as %of milk check 29% 28% 25% 26% 26% 
Debt/Asset ratio - long term 0.43 0.50 0.46 0.50 0.49 
Debt/Asset ratio - intermediate 
& short-term 0.27 0.28 0.26 0.27 0.31 
Cash flow coverage ratio 0.55 0.64 0.84 0.81 0.84 
25 
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE 
572 New York Dairy Farms, January 1, 1983 
100 to 150 to 200 to 250 or 
Item 149 cows 199 cows 249 cows more cows 
Number of farms 69 33 15 10 
Assets 
Livestock (includes discounted $174,890 $240,172 $ 353,216 $ 548,827 
lease payments) (0) (885) (0) (0) 
Feed & supplies 48,670 69,777 102,643 165,130 
Machinery & equipment (includes 129,350 171,650 178,901 266,207 
discounted lease payments) (584) (786) (0) (1,941) 
Land & buildings (includes 306,021 412,803 596,034 956,913 
discounted lease payments) (3,573) (2,456) (3,386) (0) 
Co-op investment 9,503 19,241 23,975 40,200 
Accounts receivable 20,977 28,611 44,462 75,160 
Cash & checking accounts 3,466 3,109 1,818 8,184 
Total Farm Assets $692,877 $945,363 $1,301,049 $2,060,621 
Savings accounts 2,609 6,233 768 1,193 
Cash value life insurance 3,699 4,917 2,344 2,566 
Stocks & bonds 3,750 7,606 4,970 4,574 
Nonfarm real estate 10,648 13,030 3,592 0 
Auto (personal share) 1,896 2,852 1,983 985 
All other 7,029 7,788 1,534 5,476 
Total Nonfarm Assets $ 29,631 $ 42,426 $ 15,191 $ 14,794 
TOTAL ASSETS $722,508 $987,789 $1,316,240 $2,075,415 
Liabilities 
Long term $150,060 $155,699 $295,671 $490,215 
Intermediate 105,394 149,339 193,044 352,098 
Financial lease 4,157 4,127 3,386 1,941 
Short-term 6,621 4,664 10,120 94,030 
Other farm accounts 7,554 10,672 11 ,545 15,505 
Total Farm Liabilities $273,786 $324,501 $513,766 $953,789 
Total Nonfarm Liabilities 301 2,986 0 0 
TOTAL LIABILITIES $274,087 $327,487 $513,766 $953,789 
Farm Net Worth (Equity Cap.) $419,091 $620,862 $787,283 $1,106,832 
FAMILY NET WORTH $448,421 $660,302 $802,474 $1,121,626 
Financial Measures 

Percent equity 
 62% 67% 61% 54% 
Farm debt per cow 
 $2,156 $1,844 $2,123 $2,503 
Available for debt service 

& living 
 $79,512 $106,142 
 $155,997 $258,528 
Scheduled annual debt payment 
 $57,850 $71,442 
 $109,206 $185,677 
Scheduled debt payments/cow $454 $404 
 $451 $487 
Payment as % of milk check 24% 21% 23% 23% 
Debt/Asset ratio - long term 0.49 0.38 0.50 0.51 
Debt/Asset ratio - intermediate 
& short-term 
 0.30 0.30 0.29 0.41 
Cash flow coverage ratio 
 0.95 1.04 1.09 1.11 
26 

MEASURE YOUR PERFORMANCE 
After you have entered your farm business data on the pages of this work­
book, categorize your farm business performance into three groups. List the 
strong points, those which indicate average performance and those areas which 
need improvement. Your business factors that exceed the regional average should 
be listed as strong points, factors that are close to the regional average 
should be identified as average, and factors that are below average should be 
listed under need improvement. 
The Farm Business Chart on the page 18 and the Financial Analysis Chart on 
page 19 can be used to identify strengths and weaknesses by comparing your busi­
ness with a large number of New York dairy farms summarized for the previous 
year. It is recommended that you use more than one standard for comparison when 
analyzing the farm business. 
STRONG POINTS: 	 AVERAGE: 
NEED IMPROVEMENT: 
After identifying opportunities for improvement, consider alternative ways 
of solving each problem. List each alternative and analyze the consequences in 
detail. Extension conducts many schools, meetings, and provides many printed 
materials that should be of assistance. Local agribusinesses often provide 
helpful information and assistance. Seek out information related to the problem 
under consideration. 
Another way to measure your management performance is to compare your cur­
rent business factors with those from previous years. Page 17 is provided for 
this purpose. Answering the following questions may also help evaluate your 
farm business progress. 
1) 	 Do livestock numbers, labor force, and crop acres make up a well balanced 
unit of resources? 
2) 	 Have rates of production shown a steady increase? 
3) 	 When will milk output per worker reach 600,000 pounds? 
4) 	 Have increases in costs been limited to the effects of inflation? 
5) 	 Is growth in net worth keeping up with increased capital investment? 
6) 	 Is net cash farm income increasing fast enough to meet your needs? 
7) 	 Have you reached the business goals set for 1982 and have you set new goals 
for 	1983?