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Performance of WNY Dairy Farm Businesses in 2012 - Progress of the Farm Business

John Hanchar, Farm Business Management
Northwest New York Dairy, Livestock & Field Crops

July 8, 2013

Summary
  • While milk sold per cow rose about 2.5 percent, gross milk sales per hundredweight (cwt.) fell $2.03 to $19.76 in 2012 when compared to 2011.
  • In 2012, the total cost of producing a cwt. of milk was $19.00, a decrease of 10 cents per cwt. relative to 2011.
  • Preliminary results compiled on April 4, 2013 suggest that the same 46 WNY farms achieved decreased levels of profitability in 2012 compared to 2011 -- for example, in 2012, the rate of return on all capital without appreciation averaged 6.4 percent compared to 11.2 percent in 2011.
Introduction
The following preliminary results were compiled by Linda Putnam, Extension Support Specialist, The Charles H. Dyson School of Applied Economics and Management, Cornell University, on April 4, 2013 using data from Cornell University Cooperative Extension's DFBS Program. The results were reported to, and used by participants during the WNY Region's meeting for cooperators in April 2013. Participants used results to identify strengths and weaknesses of their businesses. The results reported below represent averages for the same 46 WNY Region farms cooperating in 2011 and 2012.

Profitability
  • Net farm income without appreciation per cwt. of milk averaged $2.97 in 2012, a decrease of about 38 percent compared to 2011.
  • Rate of return on equity capital without appreciation fell to 7.6 percent in 2012 from 14.8 in 2011.
  • In 2012, the rate of return on all capital without appreciation was 6.4 percent, a decrease of 43 percent relative to 2011.

Income Generation
  • Gross milk sales per cow decreased from $5,462 in 2011 to $5,074 in 2012, a decrease of 7.1 percent.
  • Gross milk sales per hundredweight (cwt.) fell from $21.79 to $19.76.

Rates of Production
  • Milk sold per cow rose from 25,060 pounds in 2011 to 25,681 pounds in 2012, a change of 2.5 percent.
  • Hay dry matter per acre averaged 3.2 tons, down 11 percent from 2011, while corn silage per acre increased from 16.6 to 17.5 tons.

Cost Control
  • Dairy feed and crop expense per cwt. of milk rose from $7.55 in 2011 to $8.24 in 2012, an increase of 9.1 percent.
  • In 2012, purchased input cost of producing a cwt. of milk was $16.79, a decrease of 1 percent relative to 2011.
  • Total cost of producing a cwt. of milk fell from $19.10 to $19.00.

Size of Business
  • The average number of cows per farm rose 4.6 percent.
  • Worker equivalents per farm rose about 7.5 percent to 16 in 2012, while cows per worker fell slightly from 48 to 47.
  • Total tillable acres increased 4.1 percent. 

Final Thoughts

Owners of dairy farm businesses cooperate in Cornell University Cooperative Extensionís DFBS Program for purposes of identifying strengths and weaknesses by comparing their results to results of other cooperators. Are you interested in realizing the benefits of DFBS participation? To learn more contact John Hanchar Ė for contact information please see information at the front of this newsletter.

For other preliminary results see the teamís website under AgFocus.




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calendar of events

Upcoming Events

Beginning Farmer/Hobby Farmer Workshop $5/pp, class size is limited, so pre-register by April 15th!

April 27, 2019
9:00 am - 1:00 pm
Canandaigua, NY

This hands-on workshop is for beginning or part-time farmers who would like to improve their farm machinery skills, learn to properly and safely maintain their equipment to protect their investment. If you have been thinking about buying a tractor, new or used, two-wheel or four-wheel drive, compact or utility or more come join us. Topics include: selecting the right size/type tractor for the job; basic maintenance; staying safe around tractors and equipment; attaching implements properly; and information about ROPS and SMV's. There will be time for questions.

Pre-registration requested by April 15, 2019 email Amy with your name, address, and phone number or call 585-394-3977 x 429.
Fee: $5.00/person. Class size is limited.

2019 Pastured Poultry Seminar, lunch included so please register by May 10th! $25/person

May 18, 2019
Registration begins at 8:00 a.m.w/ coffee & donuts with the Program running from 9:00 a.m. - 5 p. m.
Attica, NY

The main speaker this year is Eli Reiff of Mifflinburg Pennsylvania. Eli raises broilers, turkeys, sheep, and beef, all on pasture. Topics to be covered will include the pasture, feed and nutrition, marketing, costs, and much more. As we grow as farm operators and get bigger, we may not pay as much attention to the basics as we should. So those areas are where we will start, and then expand to cover the group's interests.

Mike Badger, Director of the American Pastured Poultry Producers Association will also be available for a round-table discussion. Plans are to have representatives from Farm Bureau, NYCAMH for farm health and safety, Wyoming County Chamber of Commerce, and Cornell Cooperative Extension of Wyoming County, as well as others.

Calling all 9th-12th graders! 4th Annual Precision Agriculture Day at Genesee Community College

May 21, 2019
9:00 am - 1:30 pm Register by Friday May 10th! $15/per person includes lunch
Batavia, NY

Calling all 9th-12th graders!  We have an exciting new program for students interested in technology, science, engineering, and agriculture!
Would you like to:
  • Learn about how Drones collect information
  • Check out some potential career opportunities that have new and ever-changing technology
  • Learn how these technologies can be used in our own backyards in WNY
  • Discover potential and exciting career opportunities

Announcements

Producers Previously Enrolled in the LGM Program Now Eligible for MPP

Dairy Producers Previously Enrolled in the Livestock Gross Margin Program Now Eligible for 2018 Margin Protection Program
The U.S. Department of Agriculture (USDA) today announced that dairy producers who elected to participate in the Livestock Gross Margin for Dairy Cattle Program (LGM-Dairy) now have the opportunity to participate in the Margin Protection Program for Dairy (MPP-Dairy) for 2018 coverage. Sign-up will take place March 25 through May 10, 2019.
Eligible producers can enroll during the sign-up period at their local USDA service center. To locate your office, visit farmers.gov.


Smart Farming Team Technical Assistance Grant Application

The Labor Ready Farmer Project is offering grants to provide up to 12 hours of Technical Assistance (TA) consulting services to farms who want to make improvements to their farm's processes in hiring, training, managing or evaluating employees. Applicants will choose from one of the following four areas for TA assistance and identify a specific project. If selected they will be matched with a "Smart Farming Team" of consultants who will provide one on one technical assistance.
  • HIRING EMPLOYEES 101 - GETTING OFF TO A GOOD START
  • ONBOARDING & TRAINING EMPLOYEES QUICKLY AND EFFECTIVELY
  • FINE-TUNING & IMPROVING THE WORKING ENVIRONMENT
  • H2-A READINESS
Please complete this application and send to Nicole Waters, Beginning Farm Project Coordinator for the Cornell Small Farms Program. The form can be submitted by email, mail or in-person at the address listed below. Please feel free to call or email with any questions.

Nicole Waters - Beginning Farmer Project Coordinator
Plant Science Building, Room 15b
Tower Road, Cornell University
Ithaca, NY 14853
Phone: 607-255-9911
Email: nw42@cornell.edu

Applications accepted on a rolling basis.



USDA Announces January Income over Feed Cost Margin Triggers First 2019 Dairy Sa

WASHINGTON, March 6, 2019 ? The U.S. Department of Agriculture's Farm Service Agency (FSA) announced this week that the January 2019 income over feed cost margin was $7.99 per hundredweight, triggering the first payment for eligible dairy producers who purchase the appropriate level of coverage under the new but yet-to-be established Dairy Margin Coverage (DMC) program.

DMC, which replaces the Margin Protection Program for Dairy, is a voluntary risk management program for dairy producers that was authorized by the 2018 Farm Bill. DMC offers protection to dairy producers when the difference between the all milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

Agriculture Secretary Sonny Perdue announced last week that sign up for 
DMC will open by mid-June of this year. At the time of sign up, producers who elect a DMC coverage level between $8.00 and $9.50 would be eligible for a payment for January 2019.

For example, a dairy operation with an established production history of 3 million pounds (30,000 cwt.) that elects the $9.50 coverage level for 50 percent of its production could potentially be eligible to receive $1,887.50 for January.

Sample calculation:
$9.50 - $7.99 margin = $1.51 difference
$1.51 times 50 percent of production times 2,500 cwt. (30,000 cwt./12) = $1,887.50

The calculated annual premium for coverage at $9.50 on 50 percent of a 3-million-pound production history for this example would be $2,250.

Sample calculation:
3,000,000 times 50 percent = 1,500,000/100 = 15,000 cwt. times 0.150 premium fee = $2,250

Operations making a one-time election to participate in DMC through 2023 are eligible to receive a 25 percent discount on their premium for the existing margin coverage rates.

"Congress created the Dairy Margin Coverage program to provide an important financial safety net for dairy producers, helping them weather shifting milk and feed prices," FSA Administrator Richard Fordyce said. "This program builds on the previous Margin Protection Program for Dairy, carrying forward many of the program upgrades made last year based on feedback from producers. We're working diligently to implement the DMC program and other FSA programs authorized by the 2018 Farm Bill."

Additional details about DMC and other FSA farm bill program changes can be found at farmers.gov/farmbill.


New Guidance for Mortality Disposal Issued

NYS Department of Ag and Markets has posted guidelines on disposal of livestock carcasses, in response to reports that some rendering companies have halted pickups from farms.

https://nwnyteam.cce.cornell.edu/submission.php?id=761&crumb=dairy|1