C4-Lancaster Farming, Saturday, June 5, 1993
TERRY MADDOX
Huntingdon Co. Extension
Changes in dairy production
technology and rising production
costs present some Pennsylvania
dairy farmers with an ultimatum
for the future: get bigger, or get
out of the business, says an agri
cultural economist in Penn State’s
College of Agricultural Sciences.
“Dairy farming is Pennsylvani
a’s leading agricultural industry,”
says Milton Hallbeig, professor of
agricultural economics. “The
state’s 12,000 dairy farms have
milk, dairy beef, and veal sales of
SI.S to $1.6 billion annually
that’s 44 to 45 percent of total
cash receipts of farmers in Pen
nsylvania. But developments in
dairy technology and policy over
the past several decades are conti
nuing to put pressure on the state’s
producers.
“The push to get bigger or get
out is by no means a new phe
nomenon it’s a process that
began 20 years ago.” he says. “But
it does highlight a continuing
challenge facing Pennsylvania
dairy farmers.”
Relatively small dairy farms.
-n
PARMAK
standard 12
■■l (Model STD-12)
WflV | 12-V. Bat. Operated
A new addition to the
! Parmak line of top quality
electric fencers This low
cost 100% solid state mod
el is for indoor installation.
L ==»' Charges long lengths of
J fence. Housed in heavy
v —-—deep drawn steel case with
Vg attractive baked enamel
finish. Charges up to 15
miles of fence. UL listed.
SALES AND SERVICE ' "■
PEQUEA BATTERIES
1038 N. Rentes Rd, Ronks, PA 17572
717-687-0880
Distributor & Warranty Station For Parmak
ADC Meets Farmers’ Needs
More Than $129 Million in Extra Payments
"At Atlantic Dairy Cooperative, our mission
is to maximize returns to members. In the past
six years, we returned more than $129 million
to members in equity payments, over-order
premiums and quality bonuses. That’s an
average of $36,600 per member. And these
extra dollars are continuing at the rate of $1.7
million a month.
"When non-members ask me why they
should belong to Atlantic Dairy Cooperative,
I am happy to report that we are financially
healthy, strong in membership and growing in
sales. ADC is the region’s largest and most
fiscally-sound cooperative, with a guaranteed
market and outstanding benefits.
"More dairy farmers joined us last year than at any time in the
past decade. If you are not an ADC shipper and are worried about
your own milk market, then you should talk to the cooperative that
is facing the future with confidence.”
?adcl
Allude Ddry Coop—Mw
Changes Challenge Small
like most in Pennsylvania, are
fairly efficient. Hallberg says.
“But declining milk prices, over
production, global agricultural
trade liberalization and new tech
nologies like bovine somatotropin
may force farmers to expand their
operations. As income per cow
falls, many Pennsylvania dairy
farms will need to get larger just to
maintain enough income to sup
port a family.”
Forty-nine percent of the state’s
dairy firms have herds of 49 cows
or less. “This small herd size
enables farmers to save money on
labor since they don’t have to hire
as many workers from off the
farm,” he says. “But rising pro
duction costs may overwhelm any
savings in labor costs.” In 1991,
the average Pennsylvania cow
produced 14,800 pounds of milk
and generated $1,954 of milk sales
at the 1991 price of $13.20 per
cwt. Using those figures, the aver
age SO cow herd generated
$97,680 in gross sales annually.
“That may sound like a lot of
Atlantic Dairy Cooperative
1225 Industrial Highway, Southampton, PA 18966
1-800-645-MILK
money,” Hallberg says. “But
annual cash costs of milk produc
tion total $1,600 per cow. When
you subtract those costs, it slashes
net cash income from milk sales to
just $17,680. Even if the farm
earns another $lO,OOO to $12,000
in dairy beef and veal sales, that’s
a modest income for a family of
three or four.”
Expansion, even when possible,
is expensive. “Capital investment
per cow has risen from near
$2,000 per cow in the 1960*s and
1970’s to over $7,000 per cow
today,” Hallberg says. “That high
investment cost suggests that
increasing the size of the opera
tion won’t be easy, even if physi
cal resources like land and labor
are available. Some small produc
ers will likely leave dairy
farming.”
Among other things, expansion
requires more farm labor. “The
relatively small size of Pennsylva
nia dairy farms allows the farm
family to provide most labor,”
Hallbeig says. “This can be an
CONTACT US
For
• DOUBLE CHAIN PIT
ELEVATORS
HYD. TILT AVAILABLE
• COMPACT ROTO BEATERS
• WISCONSIN & ALLIS
CHALMER POWER UNITS
• HAND-O-MATIC BUNK
FEEDERS
• COMBINATION MOWER
AND CRIMPER UNITS
• 455 AND 456 MOWERS
• NEW IDEA CRUSHERS
• LARGE SHOP LATHE
40 TON PUNCH PRESS
• CRIMPING ROLLS TO FIT
TOUR NEW IDEA CRUSHER
SMUCKER
WELDING & MANUFACTURING
2110 Rockvala Road, Lane., PA 17602
Robert B. McSparran
President
Dairy Farms
advantage because the farm’s pro
duction costs aren’t greatly
affected by off-farm wages and
the farmer doesn’t need to worry
about hiring reliable labor from
off the farm. That will change as
dairy farms get larger.”
Some of the cows and perhaps
some of the land from these small
er dairy farms will be purchased
by those who stay in the business
and expand their operations, Hall
berg says. But some of the cows
will not need to be kept in milk
production as technological inno
vations lead to increased milk out
put per cow.
The economic importance of
MILK.
IT DOES A
BODY good:
fibcrdoimr,
...madt It fast po - 001163551
Contact your nearest dealer.
SOLLENBERGER SILO HOOVER EQUIPMENT
Chambaraburg, PA Tyrona, PA
717-264-9588 814-684-1777
ROVENDALEAG A
BARN SUPPLY
Wataontown, PA
717-538-9564
NISSLEY FEEDING
EQUIPMENT
Willow at, PA
717-786-7654
DETWILER SILO
Nowvillo, PA
717-776-6321
FICKES SILO CO.
Nawvltlo, PA
717-776-3129
SOMERSET BARN
EQUIPMENT
Somaraat, PA
814-445-5555
Pennsylvania’s dairy industry
does not stop at the farm gate.
“Farmers buy feed, seed, fertiliz
er, machines, buildings, milking
equipment and veterinary ser
vices, which generates secondary
economic activity,” Hallberg says.
“Milk processors and bottlers
also generate considerable value
and employ a sizable workforce,”
he says. “In 1987, processors
added $6OO million to the value of
milk and other inputs and employ
ed nearly 8,000 people who
earned $lBO million in salaries
and wages. If the local dairy
industry fails, the processors, bot
tlers and other related businesses
in that area soon will follow.”
Tibe'rdome
LANCASTER SILO
LancuMr, PA
717-299-3721
McMILLEN BROTHERS
Loyovllla, PA
717-789-3961
GNEGY SURGE
SERVICE
Washington, PA
412-222-0444
BRENNER DAIRY
EQUIPMENT
Spartanoburg, PA
814-654-7309
JAMES L. GOOD
CEDAR CREST EQUIP. SAL £f, k tnaPA CE
Lebanon, PA
717-270-6600 412-459-8052
Inorpffi
BIG VALLEY
FEED i GRAIN
Belleville, PA
717-935-2163
BENCE’S FARM
EQUIPMENT
Bedford, PA
814-623-8601
WIGGERS FARM
EQUIPMENT
Carry, PA
814-664-2661
BADGER SALES
* SERVICE
Spring Mill*, PA
814-422-8279