Ag. Econ. Report 23
1969
Dairy Farm
Business Analysis
H 1":-e L i B R A R
FrZ 72
MUnv. of Florida
Department of Agricultural Economics
Florida Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville
John Holt
'''''''''''''''''''''''''''''''''''''''' -1 JC'91 -9--RCI -CdC 1-91PIp~311 1 gB
1971
ACKNOWLEDGMENTS
Farm records for this analysis were secured by the following
County Extension Directors and Agents, Florida Cooperative Extension
Service: Kenneth A. Clark, Albert D. Dawson, Donald A. George,
James Hand, Jackson A. Haddox, A. Luther Harrell, Oscar J. Hebert, Jr.,
Rollin H. McNutt, R. Kent Price, and David M. Solger. Mr. Charles
Anderson, Area Economist, also obtained some records. Tabulation of
the records and preparation of these data were by Mr. Steve Koch.
Mrs. Lisa Carleton typed this report. Appreciation is expressed to
Drs. R.A. Eastwood, C.E. Murphree, F.J. Prochaska, and C.N. Smith for
their review of this manuscript.
TABLE OF CONTENTS
INTRODUCTION .
SIZE OF DAIRIES .
PRODUCTION RATES .
LABOR EFFICIENCY .
LAND UTILIZATION .
INVENTORY, ADDITIONS,
USE OF CAPITAL .
OPERATING EXPENSES
INCOME SUMMARY .
APPENDIX . .
SUBTRACTIONS,
.......
. .e .
I
<
AND
* .
. i
> .
. .t
... ...
REPLACEMENTS
......
. .
FLORIDA COOPERATIVE EXTENSION SERVICE
Institute of Food and Agricultural Sciences
University of Florida
Gainesville, Florida
Page
1
2
4
4
5
7
7
9
17
19
* *
* *
RAISED.
* *
....
* .
* *
LIST OF TABLES
Table Page
1 Size of dairies in Peninsular Florida, 1969 . 3
2 Production rates in 21 dairies, Peninsular
Florida, 1969 . . . ..... ... 4
3 Labor efficiency per man in 21 dairies, Peninsular
Florida, 1969 . .... .. . . 5
4 Land utilization, 21 dairies, Peninsular
Florida, 1969 . . . . .. 6
5 Herd inventory additions, subtractions, and replacements
raised, 21 dairies, Peninsular Florida, 1969 . 7
6 Use of capital in 21 dairies, Peninsular
Florida, 1969 . . . .... ... 8
7 Operating expenses (dollars), 21 dairies, Peninsular
Florida, 1969 . . . . . 12
8 Operating expenses (percent), 21 dairies, Peninsular
Florida, 1969 . . . .... 13
9 Operating expenses and net return per gallon by 21
dairies, Peninsular Florida, 1969 . ... .14
10 Operating expenses and net return per 100 pounds of milk,
21 dairies, Peninsular Florida, 1969 . ... 15
11 Operating expenses and net return per cow, 21 dairies,
Peninsular Florida, 1969 .. ........ 16
12 Income summary, 21 dairies, Peninsular Florida, 1969 18
Appendix
1 Operating expenses and net return per gallon for 3.5
percent fat corrected milk, 21 dairies, Peninsular
Florida, 1969 . . . . .. 20
DAIRY FARM BUSINESS ANALYSIS, 1969
John Holt
INTRODUCTION
This study reports average cost and return data for 21 dairy farms
in peninsular Florida. Similar reports have been compiled since 1958
and may provide some trend information. However, this study is primarily
designed for use as a management tool for the cooperators. Individual
cooperators can compare their cost position for selected cost items to
the lowest cost producers and gain insight as to their relative effi-
ciency. This report can also be used in a similar manner by other dairy-
men whose records were not analyzed. Agribusiness professionals inter-
ested in dairies can also obtain planning information, such as capital
investments per farm or cows milked per man.
Users of this report should recognize that the data were obtained
from 21 cooperating dairymen, and their depreciation schedules, inven-
tory values, and values for certain inputs were subject to wide varia-
tion. The data reported are not averages for the area, since no scien-
tific sampling techniques were used in selecting the farms.
The cost and return data are reported as an average for all farms.
Additionally, "low cost" and "high cost" categories were calculated to
provide more insight into the relative differences in resource use
between the more and less efficient farms. The figure of 61( per gallon
was arbitrarily selected as the dividing point between low and high cost
categories. Low cost producers were those producing milk for less than
610 per gallon.
All farms analyzed were highly specialized dairy farms; therefore,
a "whole farm" cost of producing milk was used. On this basis, cost
allocations for such items as producing heifers and pasture are avoided.
Any profits or losses in nonmilk income are merged into the cost of the
major enterprise -- milk production. Income, other than from the sale
of milk, was considered a credit and deducted from total cost to determine
net costs.
John Holt is assistant professor of agricultural economics.
SIZE OF DAIRIES
Six measures of size are used in this report. They are as follows:
capital managed, capital owned, number of cows, quantity of milk sold,
man equivalents of labor, and acres operated. In comparing one dairy
farm with another, pounds and gallons of milk sold are considered good
measures of size. The number of cows is also a good measure of size.
An explanation of some basic concepts follows.
Capital managed included owned and rented capital. The amount of
these was calculated by placing values on the beginning and ending in-
ventories, adding the two inventories, and dividing by two.
Land is the farmer's estimate of its value for dairy farming. This
value was utilized in the absence of a study relating to land values,
although in some cases this may substantially underestimate the market
value of the land.
Machinery, equipment, buildings, fences, etc. is the net book value
as recorded in the farm inventory for reporting income tax.
Livestock is the farmer's estimate of the value of the cows, bulls
and heifers on his dairy.
Feed, supplies, and other is the value of these items based on
market price.
Number of cows is the average number of cows based on a thirteen
month inventory.
Pounds and gallons of milk sold represents the amount of 4 percent
fat corrected milk sold. It was calculated as follows: (.4 x pounds of
milk) plus (15 x pounds butterfat). All references to quantities of milk
are on the basis of 4 percent fat corrected milk.
Man equivalents of labor was calculated-by dividing 12 into the
total months of labor employed, including labor of the operator and his
family.
Acres operated includes all land used for the dairy enterprise
including owned and rented land.
Table 1 presents data on size of dairies.
Table l.--Size of dairies in Peninsular Florida, 1969a
Dv erage
Item All Low b High Your
dairies cost cost dairy
------------Dollars---------------
Capital owned
Livestock
Land
Machinery & equipment
Buildings, fences, etc.
Feed
Supplies
Other
Total
Capital managed
Livestock
Land
Machinery & equipment
Buildings, fences, etc.
Feed
Supplies
Other
Total
Number of cows
Pounds of milk sold
Gallons of milk sold
Man equivalents
Acres operated
118,655
60,313
29,992
29,312
5,844
12
45
244,173
118,655
86,706
29,992
34,456
5,844
12
45
275,710
294
2,694,898
313,360
7.10
449
116,502
59,496
28,326
29,556
7,565
17
79
241,541
116,502
86,025
28,326
32,098
7,565
17
79
270,612
291
2,699,248
313,866
7.18
472
121,526
61,402
32,213
28,986
3,550
6
247,683
121,526
87,613
32,213
37,600
3,550
6
282,508
298
2,689,099
312,686
7.02
420
aAverages in this table represent 21 dairies in Penisular Florida
and do not necessarily represent the average for the area.
bDairies were sorted on basis of cost per gallon of milk. The 12
dairies producing milk for less than 61 cents per gallon were classed
as low cost, with the remaining 9 dairies classed as high cost. All
references to "low" and "high" are based on this classification.
I
I
PRODUCTION RATES
Pounds and gallons of milk produced per cow were calculated by
dividing the sum of the quantity of milk sold and used on the dairy
by the average number of cows (Table 2).
Table 2.--Production rates in 21 dairies, Peninsular Florida, 1969
Av e r a g e
Item All Low High Your
dairies cost cost dairy
Pounds milk
per cow 9,191 9,298' 9,052
per day 25.18 25.47 24.80-
Gallons milk
per cow 1,069 1,081 1,053 _
per day 2.93 2.96 2.88
\--- -- -- -
LABOR EFFICIENCY
Measures of labor efficiency indicate how much the labor force
accomplishes. Cows per man, pounds and gallons of milk produced per man,
and heifers per man were calculated, respectively, by dividing number
of cows, pounds and gallons of milk produced, and heifers by man equiv-
alents. Acres of forage crops per man was calculated by dividing total
acres of crops harvested (including acres double-cropped) by man equiv-
alents. Acres of improved pasture per man was calculated by dividing
total acres of pasture (including temporary pasture, and pasture acreage
that was used for grazing and green chop, hay,or silage) by man equiv-
alents (Table 3).
Table 3.--Labor efficiency per man in 21 dairies, Peninsular Florida, 1969 a
Average
Item All Low High Your
dairies cost cost dairy
Cows 41 41 42
Pounds milk produced 380,578 376,824 384,252
Gallons milk produced 44,253 43,817 44,680
Acres forage crops 4.93 2.23 8.83
Acres improved pasture 55.92 56.69 54.42
Heifers 17.32 19.64 13.96
LAND UTILIZATION
Table 4 presents information on use of land
and acres per cow.
in terms of total acres
For purposes of this analysis, forage crops represents any crop pro-
duced for the dairy enterprise and not grazed. Acreage devoted to any
kind of grass for harvest, such as hay, green chop, or silage, and not
grazed is classed as a forage crop. Acreage in pastures includes any
crop grazed. In addition, some of the pasture might have been harvested
as hay, green chop, or silage.
Acres of forage crops double-cropped represent land devoted to two
crops during the year. Acres of pasture double-cropped represent land
devoted to two crops or two uses during the year. For example, pasture
acreage which was grazed and also harvested one or more times for hay
would be considered double-cropped.
Table 4.--Land utilization,21 dairies, Peninsular Florida, 1969
Item
Forage cropland
Forage crops double-cropped
Total forage crops
Improved pasture land
Pasture double-cropped
Total improved pasture
Unimproved pasture
Other land
Total operated
Forage cropland
Forage crops double-cropped
Total forage crops
Improved pasture land
Improved pasture double-
cropped
Total improved pasture
Unimproved pasture
Other land
Total operated
Average I
All 1Low IHigh Your
dairies cost I cost dairy
--------Acres per dairy----------
22 16 31
13 31
.35 16 62
337 348 321
60 59 61
397 407 382
53
37
449
66
42
472
37
31
420
--------- Acres per cow-----------
.07 .05 .10
.04 .10
.11 .05 .20
1.15 1.20 1.08
.'20 .20 .20"
1.35 1.40 1.28
.18 .23 .12
.13 .14 .10
1.53 1.62 1.40
INVENTORY ADDITIONS, SUBTRACTIONS, AND REPLACEMENTS RAISED
Years in herd was calculated by dividing the average number of cows
by the number of cows removed. Heifers per ten cows was calculated by
dividing the number of heifers by one tenth the average number of cows.
The number of heifers transferred to the herd divided by total additions
is the method used to calculate percent replacements raised (Table 5).
Table 5.--Herd inventory additions, subtractions, -and replacements raised,
21 dairies, Peninsular Florida, 1969
Average
Item All Low High Your
dairies cost cost dairy
--------------Number--------------
Cows beginning of year 295 282 311
Additions
Purchased 72 69 75
Raised 46 60 28
Total additions 118 129 103
Total supply 413 411 414
Subtractions
Sold 91 85 99
Died 13 10 18
Total subtractions 104 95 117
End of year 309 316 297
Total disposition 413 411 414
Heifers per dairy 123 141 98
Heifers per ten cows 4.18 4.85 3.29
Percent replacements 39 47 27
Years in the herd 2.83 3.06 2.55
USE OF CAPITAL
Interest on capital owned is a major item of cost for most agricul-
tural enterprises, and dairies are no exception. Interest costs per unit
of product vary with the type of agricultural enterprise, the value of in-
vested capital (for example, land value), and intensity of the use of cap-
ital among like dairies. Most agricultural enterprises have a slow capital
turnover. Dairies have faster capital turnovers than ranches, but usually
a slower capital turnover than poultry farms. Table 6 shows the use of
Table 6.--Use of capital in.21.dairies, Peninsular Florida, 1969
------------Dollars--------------
Capital managed
Per cow
Per man
Livestock managed
Per cow
Per man
Land managed
Per cow
Per man
Machinery & equipment
managed'
Per cow
Per man
Buildings & fences
managed
Per cow
Per man
938
38,832
404
16,712
295
12,212
102
4,224
117
4,853
930
37,690
400
16,226
296
11,981
97
3,945
110
4,470
948
40,243
408
17,311
294
12,480
108
4,589
126
5,356
------------Percent---------------
Capital turnover
Owned
Managed
Capital managed in
Livestock
Land
Machinery & equipment
Buildings, fences, etc.
Feed
Supplies
Other
Total
82
73
43.03
31.45
10.88
12.50
2.12
.02
100.00
43.04
31.79
10.47
11.86
2.80
.01
.03
100.00
43.02
31.01
11.40
13.31
1.26
100.00
I---
OPERATING EXPENSES
The most important items of cost were feed, labor, fertilizer, depre-
ciation of machinery and equipment, interest on investment, operation of
machinery and equipment, and milk hauling.
The following tables show operating expenses:
Table 7 Operating Expenses Dollars
Table 8 Operating Expenses Percent
Table 9 Operating Expenses Net Return Cents per Gallon
Table 10 Operating Expenses Net Return Dollars per Cwt
Table 11 Operating Expenses Net Return Dollars per Cow
A brief explanation and discussion of certain items included in
expenses follow:
Labor was divided into three categories hired labor, unpaid family
labor, and operator's labor. Hired labor represented the amount of cash
payment for help on the farm. A value was placed by the farmer on unpaid
labor equivalent to the cash cost if it had been hired. Labor of the
operator represented the value he estimated for his labor and management.
Operation of machinery and equipment includes repairs, gas, oil,
grease, machine hire, and nonmilk hauling. The farm share of the operation
of the automobile was also included in this cost.
Seeds and plants, fertilizer and lime represent the cash outlay for
materials used on pastures and forage crops.
Feed expenditures were calculated as follows: (beginning inventory
plus purchases) less (ending inventory plus feed sold) equals (feed used).
This item is the only cash cost adjusted for inventory change.
Veterinary and medicine included medical supplies and services of
veterinarians.
Taxes include all taxes for operation of the farm business. Tax on
the operator's residence was not included. Social Security taxes were
included when data were available.
Insurance includes only insurance on farm property. Cost of life
insurance on the operator and his family and insurance on the operator's
house was not included.
Supplies includes sprays, disinfectants,and miscellaneous items.
Repair of buildings and fences includes noncapital costs for main-
tenance of these facilities.
Breeding fees include the cost for artificial breeding, although
some farmers do not use this service.
Milk hauling represents the cash cost for contract hauling of milk.
This item of cost is reflected in labor, machinery operation, machinery
depreciation, etc. for.farmers hauling their own milk.
Utilities represents the cash cost of electricity and telephone.
Rent is the amount paid for rented property.
Other cash costs includes such items as legal and accounting fees
organization dues, travel in interest of the farm business, and other
miscellaneous small items of cost.
Total cash costs is the total of all cash expensein operating the
farm business. As previously noted, feed was adjusted for inventory
change.
Depreciation of machinery and equipment was calculated from the de-
preciation schedule used for reporting income tax.
Depreciation of buildings and fences was calculated in the same
manner as depreciation for machinery and equipment.
Depreciation other includes lime that was capitalized and set up on
a depreciation schedule. It also includes roads and bridges or other items
not previously mentioned that were capitalized and depreciated.
Depreciation on the herd was calculated on a net change in the value
of cows, bulls, and heifers. The method used in calculating this item
was: (value of all livestock at the beginning of the year plus cost of
all purchases) minus ( value of all livestock at the end of the year plus
value of all animals sold and eaten) equals (net change in value for the
year). This is called the "whole herd" method of calculating appreciation
or depreciation. Farms raising a large percent of their replacements
usually have herd appreciation because the value of heifers produced ex-
ceeds cow depreciation. The sale of veal calves was not used in determin-
ing net depreciation or appreciation and was shown as a miscellaneous cash
receipt.
Unpaid labor represents the value of family labor equivalent to the
cash cost if it had been hired.
Interest on investment. A successful dairy business should pay all
cash costs, depreciation costs, and give the dairyman a fair return for
his labor and management; In addition, the farm business should provide
for a reasonable rate of return on capital investment. In calculating
costs, interest paid by the farmer on debts was not included but an
interest charge of six percent was made on all capital owned.
Total noncash expenditures include depreciation, unpaid family labor,
and interest on capital owned by the operator.
Total gross expenses are the sum of total cash and total noncash
costs.
Operator's labor. A value for the operator's labor and management
was not included in gross expenses since this item was not deducted in
calculating labor income. Each dairyman placed a value on his labor and
management.
Total cost is the sum of total gross expenses and the cost of the
operator's labor.
Net cost of milk sold was obtained by subtracting nonmilk receipts
from total costs. Nonmilk receipts include miscellaneous cash receipts
from the sale of veal calves and feed sacks, conservation payments, gas
tax refunds, and other small items of receipts. In addition, this item
includes appreciation on the herd and land. If herd depreciation is
greater than herd appreciation, the cost is shown as herd depreciation
and is not subtracted from other receipts. Land appreciation occurs only
when a capital'improvement, such as establishing permanent pastures, is
made, and the cost of the improvement is shown as an operating expense.
Land appreciation as a result of increased land values is never shown.
Net return is the difference between net cost and the price received
for milk.
(
Table 7.--Operating 'expenses (dollars) 21 dairies, Peninsular Florida,
1969 a
A vAverage
Item All Low High Your
dairies cost cost dairy
------------Dollars--------------
Hired labor 30,809 32,120 29,497
Machinery & equipment 6,825 6,505 7,144
Seeds & plants 706 1,276 136
Fertilizer lime 2,483 3,192 1,773
Feed 86,143' 75,374 96,921
Veterinary & medicine 1,528 1,502 1,554
Taxes 2,839 2,888 2,789
Insurance 1,768 1,756 1,780
Supplies 4,026 4,454 3,597
Repair building, fences 4,417 4,436 4,397
Breeding fees 1,301 1,397 1,205
Hauling 5,324 5,319 5,328
Utilities 3,546 3,671 3,420
Rent 3,007 1,270 4,744
Other cash 5,389 4,690 6,087
Total cash 160,111 149,850 170,372
Depreciation mach. & equip. 6,729 6,236 7,222
Depreciation bldgs. & fences 2,503 2,648 2,358
Depreciation other -
Depreciation herd 3,122 6,243
Unpaid labor 915 983 846
Interest 14,676 14,492 14,861
Total noncash 27,945 24,359 31,530
Total gross expenses 188,056 174,209 201,902
Operator's labor 8,902 8,317 9,488
Total costs 196,958 182,526 211,390
Nonmilk Receipts 6,308 8,734 3,882
Net cost 190,650 173,792 207,508
aThese figures are for 21 dairies
represent an average for the area.
in Peninsular Florida and do not
Table 8.--Operating expenses (percent) 21 dairies, Peninsular Florida,
1969a
[ Average
Item
Hired labor
Machinery & equipment
Seeds & plants
Fertilizer lime
Feed
Veterinary & medicine
Taxes
Insurance
Supplies
Repair building, fences
Breeding fees
Hauling
Utilities
Rent
Other cash
Total cash
Depreciation mach. & equip.
Depreciation bldgs. & fences
Depreciation other
Depreciation herd
Unpaid labor
Interest
Total noncash
Total gross expenses
Operator's labor
Total costs
All Low High Your
airies cost cost dairy
-----------Percent---------------
15.64 17.60 13.95
3.47 3.56 3.38
.36 .70 .06
1.26 1.75 .84
43.73 41.29 45.85
.78 .82 .74
1.44 1.58 1.32
.90 .96 .84
2.04 2.44 1.70
2.24 2.43 2.08
.66 .77 .57
2.70 2.91 2.52
1.80 2.01 1.62
1.53 .70 2.24 _
2.74 2.57 2.88
81.29 82.09 80.59
3.42 3.42 3.42
s 1.27 1.45 1.12
1.59 2.95
.47 .54 .40
7.44 7.94 7.03
14.19 13.35 14.92
95.48 95.44 95.51
4.52 4.56 4.49
100.00 100.00 100.00
and do not
aThese figures are for 21 dairies in Peninsular Florida
represent an average for the area.
Table 9.--Operating expenses and net return per gallon by 21 dairies,
Peninsular Florida, 1969 a
IAv e r age
Item
Hired labor
Machinery & equipment
Seeds & plants
Fertilizer lime
Feed
Veterinary & medicine
Taxes
Insurance
Supplies
Repair buildings, fences
Breeding fees
Hauling
Utilities
Rent
Other cash
Total cash
Depreciation mach. & equip.
Depreciation bldg. & fences
Depreciation other
Depreciation herd
Unpaid labor
Interest
Total noncash
Total gross expenses
Operator's labor
Total costs
Nonmilk receipts
Net cost
Price received
Net return
All Low High Your
dairies cost cost dairy
-------------Cents---------------
9.83 10.26 9.43
2.18 2.07 2.28
.23 .41 .04
.79 1.02 .57
27.48 24.01 31.00
.49 .48 .50
.91 .89
.56 .56 .57
1.28 1.42 1.15
1.41 1.41 1.41
.42 .45 .39
1.70 1.69 1.70
1.13 1.17 1.09
.96 .40 1.52
1.72 1.49 1.95
51.09 47.76 54.49
2.15 1.99 2.31
.80 .84 .75
1.00 2.00
.29 .31 .27
4.68 4.62 4.75
8.92 7.76 10.08
60.01 55.52 64.57
2.84 2.65 3.03
62.85 58.17 67.60
2.01 2.78 1.24
60.84 55.39 66.36
63.83 63.40 64.43
2.99 8.01 -1.93
aThese figures are for 21 dairies
in Peninsular Florida and do not
Table 10.--Operating expenses and net return per 100 pounds of milk,
21 dairies, Peninsular Florida, 1969
Average
Item All Low High Your
dairies cost cost dairy
Hired labor 1.14 1.19 1.10
Machinery & equipment .25 .24 .27
Seeds & plants .03 .05 .01
Fertilizer lime .09 .12 .07
Feed 3.19 2.77 3.59
Veterinary & medicine .06 .06 .06
Taxes .11 .11 .10
Insurance .07 .07 .07
Supplies .15 .17 .13
Repair buildings, fences .16 .16 .16
Breeding fees .05 .05 .04
Hauling .20 .20 .20
Utilities -.13 .14 .13
Rent .11 .05 .18
Other cash .20 .17 .23
Total cash 5.94 5.55 6.34
Depreciation mach. & equip. .25 .23 .27
Depreciation bldgs. & fences .09 .10 .09
n-' i i n t-t- h -
Depreciation herd
Unpaid labor
Interest
Total noncash
Total gross expenses
Operator's labor
Total costs
Nonmilk receipts
Net cost
Price received
Net return
.12
.03
.55
1.04
6.98
.33
7.31
.24
7.07
7.42
.35
.04
.53
.90
6.45
.31
6.76
.32
6.44
7.37
.93
.23
.03
.55
1.17
7.51
.35
7.86
.14
7.72
7.49
-.23
aThese figures are for 21
represent an average for the
dairies
area.
Ni
in Peninsular Florida and do not
~
--
Table ll.--Operating expenses and net return per cow, 21 dairies,
Peninsular Florida, 1969 a
Ave r a g e
Item
Hired labor
Machinery & equipment
Seeds & plants
Fertilizer lime
Feed
Veterinary & medicine
Taxes
Insurance
Supplies
Repair buildings, fences
Breeding fees
Hauling
Utilities
Rent
Other cash
Total cash
Depreciation mach. & equip.
Depreciation bldgs. & fence
Depreciation other
Depreciation herd
Unpaid labor
Interest
Total noncash
Total gross expenses
Operator's labor
Total costs
Nonmilk receipts
Net cost
Price received
Net return
All Low High Your
dairies cost cost dairy
------------Dollars--------------
104.80 110.38 98.98
23.21 22.35 23.97
2.40 4.38 .46
8.45 10.97 5.95
293.00 259.02 325.24
5.20 5.16 5.21
9.66 9.92 9.36
6.01 6.03 5.97
13.69 15.31 12.07
15.02 15.24 14.76
4.43 4.80 4.04
18.11 18.28 17.88
12.06 12.62 11.48
10.23 4.36 15.92
18.33 16.12 20.43
544.60 514.94 571.72
22.89 21.43 24.23
s 8.51 9.10 7.91
10.72 20.95
3.11 3.38 2.84
49.82 49.80 49.87
95.05 83.71 105.80
639.65 598.65 677.52
30.28 28.58 31.84
669.93 627.23 709.36
21.46 30.01 13.02
648.47 597.22 696.34
680.30 683.55 676.08
31.83 86.33 -20.26
aThese figures are for 21 dairies in Peninsular Florida and do not
the area.
INCOME SUMMARY
Receipts are placed in two categories milk and other (Table 12).
Milk receipts represent the gross amount received by the farmer from the
sale of his milk. Other receipts represent income directly connected
with the farm business. This includes sale of veal calves, conservation
payments, machine hire or trucking, sale of feed sacks, gas tax refunds,
and other miscellaneous small items. Land and herd appreciation is also
included in other receipts.
Labor income is the return to the operator for his labor and manage-
ment after deducting all expenses including a charge for unpaid family
labor and interest on capital owned by the operator. It is calculated
by deducting total gross expenses from total receipts.
Dairy income is the return to the operator for his labor, management,
and capital. This measure of return is calculated by adding interest on
capital owned by the operator to labor income.
Net return is the difference between total receipts and total costs.
Return to capital is the return to the operator for capital invested
in the farm business. It is calculated by subtracting the value of the
operator's labor from dairy income.
Issued in furtherance of Cooperative Extension work, Acts of May 8 and
June 30, 1914, in cooperation with the U. S. Department of Agriculture,
J. N. Busby, Dean for Extension, Cooperative Extension Service, University
of Florida, Gainesville, Florida.
Table 12.--Income summary, 21 dairies, Peninsular Florida, 1969 a
Item
Milk receipts
Other receipts
Total receipts
Cash expenses
Noncash expenses
Total gross expenses
Labor income
Interest on investment
Dairy income
Operator's labor
Net return
Return to capital
A v e r a g e, --I
All Low High Your
dairies cost cost dairy
--------Dollars per farm---------
200,008 198,912 201,471
6,308 8,748 3,882
206,316 207,660 205,353
160,111 149,850 170,372
27,945 24,359 31,530
188,056 174,209 201,902
18,260 33,451 3,451
14,676 14,492 14,861
32,936 47,943 18,312
.8,902 8,317 9,488
9,358 25,134 -6,037
24,034 39,626 8,824
--------Cents per gallon---------
Labor income 5.83 10.66 1.10
Dairy income 10.51 15.28 5.86
Net return 2.99 8.01 -1.93
Return to capital 7.67 12.63 2.82
--------Dollars per cow----------
Labor income 62.11 114.95 11.58
Dairy income 112.03 164.75 61.45
Net return 31.83 86.37 -20.26
Return to capital 81.75 136.17 29.61
aThese figures are for 21 dairies in Peninsular Florida and do not
represent an average for the area.
APPENDIX
Appendix Table 1 show costs and returns per gallon on the basis of
3.5 percent fat corrected milk. This is the only reference to 3.5 percent
milk in the entire publication. Three and a half percent milk is cal-
culated by using the following formula:
3.5 percent FCM = (quantity of milk) x (.4324 + .1622 x Fat)
Appendix Table l.--Operating expenses and net return per gallon for 3.5
percent fat corrected milk, 21 dairies, Peninsular
Florida, 1969 a
Average
Item All Low High Your
dairies cost cost dairy
Hired labor 9.10 9.48 8.73
Machinery & equipment 2.02 1.92 2.11
Seeds & plants .21 .38 .04
Fertilizer lime .73 .94 .52
Feed 25.45 22.25 28.67
Veterinary & medicine .45 .44 .46
Taxes .84 .85 .83
Insurance .52 .52 .53
Supplies 1.19 1.31 1.06
Repair buildings, fences 1.31 1.31 1.30
Breeding fees .38 .41 .36
Hauling 1.57 1.57 1.58
Utilities 1.05 1.08 1.01
Rent .89 .37 1.40
Other cash 1.59 1.38 1.80
Total cash 47.30 44.21 50.40
Depreciation mach. & equip.. 1.99 1.84 2.14
Depreciation.bldgs. & fences .74 .78 .70
Dfnr. inti, another -
Depreciation herd
Unpaid labor
Interest
Total noncash
Total gross expenses
Operator's labor
Total costs
Nonmilk receipts
Net cost
Price received
Net return
.92
.27
4.34
8.26
55.56
2.63
58.19
1.86
56.33
59.09
2.76
.29
4.28
7.19
51.40
2.48
53.88
2.58
51.30
58.72
7.42
1.85
.25
4.39
9.33
59.73
2.80
62.53
1.14
61.39
59.60
-1.79
aThese figures are for 21
represent an average for the
dairies in Peninsular Florida and do not
area.
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