A2O-Uncaßt*F farming, Saturday, Neverl*r-18^19M
The Business Side of Dairy Fanning
A Perspective from the Plain Community
(November 1995)
Have you ever figured out what it costs you to grow a
ton of com silage or hay? It’s pretty simple once you do it
several times. There are several ways to calculate depre
ciation, land value, and other costs, but we will explain
the method we use.
First, we make a list like this:
Alfalfa Hay
Seed
Fertilizer
Chemicals
Lime
Preservative
Baler Twine
Crop Consultant
Horse Feed & Hay
Fuel
Equipment & Mules
Rent SO acres @ $3O/arre
9% interest
Equipment Repairs
Labor-433 hours @ $4.50/hour
Total cost for SO acrcs=
$17,912 50=5358.24/acre
1995 yield: 3.4 toqs/acre
$358.24 3.4=5105.36/ton
It is important to use accurate figures for yields, not
averages or estimates, but the actual yield. Otherwise, the
calculation will not be realistic enough to be useful.
Because we pay for seed, fertilizer and other inputs in
December or January (we get at least a 1% price break for
buying early), we include 9% interest on the amount we
borrow until the first harvest (six months for hay, nine
months for com). '
To figure the cost for equipment and mules, we list all
the equipment needed for each crop with die current
market values (what we think we could get if we sold the
equipment now). Here’s the list for hay:
Mower crimper w/engine $5500
Rollcrbar rake $2OOO
Manure spreader $llOO
Wagons $2300
Plow $9OO
Mules (2) $4350
Elevator w/hydraulic unit $2200
Culler $l2OO
Forccarts & harnesses $2OOO
This is only part of the list, but it shows how it may be
November 20
Willow Street
Willow Valley Restaurant
Featuring: Dr. Linda Baker, VMD, Research Associate in Nutrition and
* Lunch will be provided * Come listen to the advantages of MUN testing
Crop Costs
PADHIA
Invites all Lancaster and surrounding
county dairymen to attend the
Milk Urea Nitrogen
workshops on
Animal Health Economics
Workshop times are 11:00 a.m. -1:00 p.m.
done. Some of the equipment is used for both hay and
com silage, so we have totals for three categories; Hay
only equipment (baler, mower, etc.): $10,140; Corn-only
equipment (binder, planter, etc.): $1,440; Equipment for
hay and com silage: $26,132.
To adjust the cost for equipment used for both croja,
we divide the total value of all equipment by the total
number of crop acres and multiply that amount by the
number of acres for each crop (we have SO acres of hay
and 20 of com):
$26,132 70x50 = $18,665.71 for hay
$26,132 70x20 = $7,466.29 for com
Then we add those amounts to the hay and com only
totals:
$414.16
1768.67
448.19
251.09
320.96
180.72
383.78
1051.53
481.93
4115.09
1500.00
152.00
4895.04
1949.10
$17.912.2ff
Total Value of Hay Equipment:
$10.140H8.665.71®528,805.71
Total Value of Com Equipment:
$1,440+7,466.29=58,906.29
Assuming the hay equipment will last seven years
before we need to replace it, we divide these total values
by seven to get a cost per year ($28,805.71
7=54,515.10/ycar for hay equipment).
The figure for equipment repairs for each crop is also
calculated by dividing the total amount spent for repairs
by the total crop acreage, then multiplying that figure by
the number of acres for each crop.
Here’s our list of crops for corn silage:
Seed
Fertiliser
Chcm .cals
Crop consultant
Binder twine
Rent 20 acres @ $3O/acre
Horse feed
Fuel
Equipment & mules
MANHEIM (Lancaster
Co.) —Lancaster DHIA annual
meeting and banquet will be held
Tuesday, Dec. 5, at 11:30 a.tn. at
Good ’n Plenty Restaurant in
Smoketown.
A delicious ham dinner will be
served followed by a short busi-
November 21
New Holland
Yoder’s Restaurant
1-800-DHI-TEST
(1-800-344-8378)
Lancaster DHIA To
November 22
Mount Joy
Country Table Restaurani
WESTFAUA
Equipment repairs
9% interest
Preservative (urea)
Labor (464 hours @ $4.50/hr.)
Total cost for 20 acres:
Cost/acre: $475.37
1995 com silage yield/acre: 18.1 tons
Cost/ton: $26.26
You may notice that some of our input costs arc differ
ent from your own. For example, because we can make a
profit by making hay but could buy com silage cheaper
than whit we can grow it, we have decided to put as many
acres in hay as possible. We now have each field in com
only one year before we pat it back into hay. Therefore,
our fertilizer costs may be a bit lower.
This spring we tried one field that was in alfalfa last
year and sprayed with Roundup last fall, sowing alfalfa
back into it. and it appears as though it worked. Because
we know what our costs are, we would like to switch to
all hay if it works out for us. So next spring we may try
two fields alfalfa to alfalfa and see how that works.
The reason we quit raising com for picking several
years ago was because taking $475.37 per acre and divid
ing by 4 tons per acre, our cost was $ 118.84 per ton of ear
com! Even this year with the price of com high, we can
buy all the ear com we want for $BO-$9O per ton.
Most fanners would probably be surprised at what the
cost of production for each crop actually is. By knowing
exactly what the cost is, crops or cropping rotation can be
changed to make more profit based on facts instead of
some wild guess. Have fun calculating, and if you want
to, please let us know what you find.
Send your ideas or questions in letters addressed: Busi
ness Side Column, c/o Lancaster Farming, Box 609,1 E.
Main St, Ephrata, PA 17522, See you next month!
$369.93
153.51
1461.34
153.51
69.28
600.00
420.61
365.10
1309.19
ness meeting.
All members and friends are
invited to come and leant about
new events happening in Lancas
ter DHIA. New by-laws will be
Meet
approved at this meeting.
Tickets can be purchased at the
cost of $11.50 from any Lancaster
DHIA technician or by calling the
office at (717) 665-5960.
r CABLE SCRAPER 1
SYSTEM FOR FREE STALL BARN
WE CUSTOM DESIGN SYSTEMS FOR YOU
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186.8 S
372.07
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