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

John Hanchar, Farm Business Management Specialist
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.
IntroductionThe 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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The NWNY Team Blog

Our goal for this blog is to share with farmers and allied industry professionals, technical and applicable resources regarding all aspects of dairy farming, livestock and small farms, field crops and soils, and topics related to farm business management and precision agriculture.

The blog will feature Crop Alerts, Dairy Alerts, Bilingual (Spanish) Resources, Upcoming Events and more from our team members. This blog is free for everyone to use, explore and enjoy. When new material is published, subscribers will receive an email notification.

We hope you enjoy this new platform, and are looking forward to engaging with you in the future!
https://blogs.cornell.edu/nwny-dairy-livestock-field-crops/


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