OS— Lancaster Fannins, Saturday, February 9,1980
INCOME-MINUS
OUTGO = WHAT’S LEFT
One of the most important
equations in all mathematics
is used by just about
everyone. It can be ex
pressed in many forms and
expanded to cover a lot of
variables, but always works
out to the same critical
answer. The quality of life
for you and your family will
depend on the profits from
your business, after the
expenses are paid.
Why discuss anything so
obvious? Mainly, to try to
get a handle on what factors
have the most affect on dairy
farm ujcome and profits.
Most important, how to get a
good grip on the handle so we
can control the aim.
The pace of milk has a
major influence on dairy
income, obviously. But it is
pretty well regulated and we
don’t have a lot of control
over it. So, let’s take a look
at some things we can
control, such as size of the
herd, production per cow,
milk produced per worker,
and the farm debt load.
An analysis of 1467 dairy
farms by Penn State Farm
Management Specialists last
year listed herd size,
production per cow, labor
efficiency and farm business
liabilities as having the
biggest influence on profits.
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Tlje
Dairy
Business
By
Newton Bair
This is not necessarily the
order of importance,
however, since there are
variable limits to all of these
on every farm.
For example, take herd
size. Herds with 20 to 29 cows
listed average assets of
$167,684, liabilities of $34,364,
leaving a net worth of
$133,320. But averages don’t
mean much because nobody
is really “average”. It’s the
range of values that opens
your eyes. In this herd size
group, the range in milk
sales ran from a low of
$14,547 to a high of $54,822!
And cash expenses ran from
$10,182 to nearly $64,000.
Highs and lows in income
and expenses are not
necessarily matched, so a
low income farm can also
have one of the higher ex
pense ratings, leavmg a
rather narrow margin of
profit to live on.
Farms with 90 to 109 cows
produced the highest family
labor and management
income - $18,845. Compare
this with the family income
on the smaller farms, which
averaged $2,127. Of course,
the larger farms also had a
wide range of income; from
$73,000 low to $226,000 high.
Expenses on the 100 cow
herds ranged from $63,000 to
$lBB,OOO per farm. Size alone
is not the answer to profits 1
•intment
Much more important to
the profit equation is overall
production when measured
per acre, per cow and per
man. About 93% of all cash
receipts on a dairy farm
comes from the sale of milk.
Regardless of cow numbers
or farm size, it isn’t hard to
see the vast differences m
income per cow between a
10.000 pound herd and one
producing 16,000 pounds per
cow. At $12.00 per hundred,
that’s a difference of $720
income per cow. Income
alone is only part of the
equation.
The real clincher is profit.
Dairy Herd Improvement
figures are reported as profit
over feed cost. Using records
from a few random herds,
we see a profit over feed cost
of between $5OO and $6OO, for
a 10,000 pound herd. For
16.000 pound herds, the
figure is $1,200 to $1,300 -
more than twice as much
profit per cow.
And then there is the
matter of labor efficiency.
Here is where the real dif
ferences between small (20-
30 cows) and large (100 or
more cows) herds show up.
The management income
per hour on the smaller
herds is 80 cents compared
to $4.99 for the large herds. !
This is obtained by dividing
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Maybe it's time you
switched fertilizer tanks
Switch to a Calumet
Vacuum Tank
Commercial fertilizer sup
plies probably won’t in
crease during the next de
cade. But it’s a safe bet their
prices will
That’s why it makes sense
to take advantage of the one
source of fertilizer that won’t
run out—manure When 500
hogs can save over a thou
sand ddHars in commercial
fertilizer costs, manure is
just too valuable to waste
A Calumet vacuum tank
with a 4-shank soil injector
lets you make the most of
manure’s nutrients Soil in
jection can help retain four
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DISTRIBUTOR RD 3 - Box 84, Mifflinburg, Pa. 17844 -Phorte: 717-966-2736
Basic nutrition series offered
MEDIA - Fats will be the the Penn State Extension calories from fats. In ths>j
topic of the third of a series Service. Greta C. Vairo, U.S. Dietary Goals it is
of meetings on basic Extension Home Economist, suggested that the per
nutrition being offered by says that this talk which is centage of fat be decreased
open to the public will be from the present 40 to 30
held from 10 A.M. to noon on percent of total calories. At
Friday, December 7, in the this talk you will learn about
Toal Building Auditorium, saturated, and unsaturated
comer of 2nd & Orange fats and why it is important
Streets, Media. Parking is to limit use of foods con
available in the county taining cholesterol. Are you
garage at 3rd and Olive aware that many of these
Streets. fats are hidden 9 There is no
Many nutritionists feel charge for this meeting. The
that the American diet is public is invited to attend the
made up of too many entire series.
DIO YOU EVER SEE rIBEIwT^^
the family labor and
management income per
man equivalent by 3,000
hours.
Pounds of milk sold per
man is a very meaningful
measure of labor efficiency
on a dairy farm. When you
get to the bottom line, it’s the
combination of herd size and
production per cow that
indicates a true measure of
efficiency.
We must admit that the
profitability of a dairy en
terprise depends on many
related factors. Low income,
for example, can result from
too small a business, low
production, high feed cost,
expensive buildings, too
much machinery, a high
debt load, or any com
bination of these. The
“what’s left” side of the
equation can be a pretty mce
figure if these combinations
are balanced up properly.
(You can get a copy of the
latest Pennsylvania Dairy
Farm Business Analysis
report from any County
Extension Office. Ask for
Form Management 61.)
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times the nitrogen that’s
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Call for information on the
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Look For
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FEB. 13 & 14, Host Farm, Lancaster
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