B2—Lancaster Farming, Saturday, January 31,1981 How dairymen can beat inflation BYDONCUNNION LANCASTER Thinking about adding a few more cows to your dairy herd as a way to bring m more dollars and stave off some of the inroads of inflation’ Before you do, maybe you’d better stop and do a little figuring, suggest dairy management experts. You’ll probably find it makes more sense to pay more attention to mcreasmg the production level of the cows you’ve got already. Dick Denison, who heads up the Farm Management and Business Analysis Service for the Pennsylvania Farmers Association, says there are four simple reasons why you should carefully consider “getting better before you get biggtr”: 1 High costs for new housing and animals 2. High interest rates. What higher cow production can do for you Glenn A Shirk, Lancaster County dairy specialist, took 1978-79 DHIA figures and adjusted them for 1979- 80 inflation. He valued milk at $l3 per cwt for a herd of 60 cows. He allowed $15,000 for family living expenses HERD AVERAGES 10,123 Milk sales $1,316 Cattle sales 150 Total income per cow 1,466 Feed costs Other costs Total costs per cow 1,383 Pi ofit per cow Profit for 60 cows 4,980 Margin after Living ($15,000) -10,020 Cost of 15% inflation 12,447 Margin after inflation Debt servicing ability WEDNESDAY IS DAIRY i?x DAY AT NEW HOLLAND SALES STABLES. INC. New Holland, PA If you need 1 cow or a truck load, we have from 100 to 200 cows to sell every week at your price Mostly fresh and close springing hols teins Cows from local farmers and our regular ship pers include Marvin Eshleman Glenn Fite, Kelly Bowser, Bill Lang, Blaine Hoffer, Dale Hostetter, H D. Matz, and Jerry Miller SALE STARTS - 12:00 SHARP Also Every Wednesday, Hay, Straw & Ear Corn Sale -12:00 Noon All Dairy & Heifers must be eligible for Pennsylvania Health Charts For arrangements for special sales or herd dispersals at our barn or on your farm, contact Abram Oiffenbach, Mgr. 717-354-4341 OR .. Norman Kolb 7 17-397-5538 They’ve never been higher. 3 Additional labor costs 4 Additional feed costs By way of example, Denison picks a dairyman who has an 80-cow herd and feels the need to increase his gross farm income by about $30,000. The present herd averages $12,000 pounds for a total output of 960,000 pounds. At $l3 per cwt., the gross return totals $124,800. By adding 20 more cows and getting the same output per cow this farmer will produce 240,000 pounds more milk and take in an additional $31,200. What will it cost to make this move 7 Dick says the tab will look like this. 20 cows @ $1,500 per cow $30,000, Additional housing for 20 cows $lO,OOO, Interest on capital costs @12% $4,800; Additional labor required $5,000; Additional 12,687 $1,650 15,339 $1,994 250 1,900 400 2,394 911 ' 830 553 1,013 675 16,88 607 1,518 382 22,920 706 42,360 7,920 13,662 27,360 15,192 -22,467 -5,742 12,168 83,917 229,366 Milk 9 not cows 9 is the key feed required $7,000, Total cost $56,800 That means spending an additional $56,800 to add $30,000 more gross per year. But, Denison says, you get a completely different picture when you thmK about doing a better management job and increasing the yield of your present hero “Nearly every dairy cow in Pennsylvania has the genetic potential to produce 15,000 pounds of milk,” he says, “so let’s take a look at what it would mean to get another 3000 pounds a year out of the herd that’s now averaging only 12,000 “That herd of 80 cows producing 15,000 pounds of milk per cow will produce a total of 1,200,000 pounds for the year, instead of just 960,000 pounds. At $l3 cwt, that comes to a total gross of $156,000'- or $31,500 more 19,245 $2,502 .A 600 3,102 1,199 799 1,998 1,104 66,240 '*‘**~'**~' m w&*m ~ '--W - 51,240 17,982 . . i- * 33,258 A T I lOT f A ROW CROP PLANTER DESIGNED FOR THE FORM OF CONSERVATION Ml LHU I ■ TILLAGE WHICH WORKS BEST ON YOUR FARM! TILLAGE PROGRAM No-Till Ridge Plant (Till-Plant) Minimum Conventional Available in 4,6, and 8 row models; 30” to 40” row spacing. Exclusive weight transfer system permits infinite setting of weight to tillage components. Obtain exact penetration necessary for soil type & condition, residue present, & planting speed. .f" COMPONENTS USED Fluted Coulter Fluted Coulter & Cleaning Disks Fluted Coulter And/Or Cleaning Disks None FOR MORE INFORMATION AND PRICES CONTACT: WINDY HILL ACRES than before And what will it cost 7 "It won’t cost more for housing. We already have capacity for 80 cows “It won’t cost any more for cows We’ve already got 80 “It won’t increase any bank payments we’re already making “It won’t cost any more labor. We’ll still be handling the same number of cows. “It will cost more for feed, but not the $7OOO we’d need by adding 20 more cows. Better than 60 percent of a cow’s feed goes for body maintenance alone.” Glenn Shirk, dairy specialist in Lancaster County, the state’s number one milk county, warns that “a wide margin of profit is necessary for survival m these times of rapidQy rising costs” and adds that the only way to obtain adequately- > CONSERVATION OW CROP PLANTER Fluted Coulter Is Close Coupled To Seed Opener So Opener Tracks In Prepared Slot Adjustable Weight Assures Coulter Penetration Without Adding Rock Tractor Weights. Etc. Rolling Row Cleaning Disks Keep Going In Residue Conditions Which May Plug Sweep Planters. Gauge Stabilizer, Cleaning Disks, And Fluted Coulter Roll Over Obstructions Which Often Catch Sweeps, Shovels, Etc Eliminate Time And Fuel Consuming Secondary Tillage. Follow Single Chisel Or Disk Pass With The Hmiker Planter. Single Pin Lockout Of Tillage Unit Allows Conventional Planting On Prepared Seedbed. RDI, Box 468, Liverpool, PA 17045 Phone-717-444-3447 sized profits is to increase output per cow - not add more cows Adjusting 1978-79 DHIA figure to take into account the inflationary spiral of 1979-80, and putting the value of milk as $l3 cwt., Shirk shows that the profit per cow at 10,123 pounds came to only $B3 But the profit jumps to $382 per cow when production went up to 12,687 pounds At 15,339 pounds the profit level hit $706 and at $19,245 it came to a whoppmg $llO4. The answer, of course, lies in the fact that the cost of feed and other inputs does not go up in direct proportion to milk output. As you’d expect, the most dramatic example came in the boost from 10,123 pounds to 12,687 pounds, showing an increase of 25 percent in HINIKER ADVANTAGE output versus an increase of only 10 percent in costs But even going from an average of 15,339 pounds to 19 245 pounds paid off That represents an increase in production of about 25 percent with added costs of 18 percent. Say you’d like to show a $20,000 profit. Based on (Turn to Page B 3)
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