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April 1977
RESEARCH
REPORT
FROM THE MICHIGAN STATE UNIVERSITY
AGRICULTURAL EXPERIMENT STATION EAST LANSING
Material-Energy Requirements and Production
Costs for Alternate Dairy Farming Systems'
J. B. Holtman, L. J. Connor, R. E. Lucas, F. J. Wolak2
The efficiency of an agricultural production tech-
nology is dependent upon the quantity and quality
of each resource required per unit of production.
However, the efficiency of a technology is also in-
fluenced by a resources scarcity. The variety of pro-
duction technologies available to the dairy farmer
allows a reduction in the consumption of a particular
form of energy or other resources. Most often savings
from the shift of one technology to another are ac-
companied by variations in consumption of several
energy forms and resources. Thus, the alternative
technologies offer opportunities for resource substi-
tutions.
An understanding of alternative physical implica-
tions can be gained by studying resource inter-
changeability. This can be illustrated via material-
energy budgets for each alternative. As the relative
degrees of a resource's scarcity shift in time, the
desire for technological adjustments can be assessed.
As used here, the material-energy budget refers
to the requirement or flow of each resource in the
production of a quantity of milk. Material-energy
'This research was financed by the Michigan Agricultural Experiment
Station and a grant from NSF-RANN entitled: Design and Management
of Rural Eco-Systems. G. C. Misener, Agriculture Canada, Fredericton,
New Brunswick, developed and programmed an earlier version of the
computer model used in this study. A preliminary version of this report
was presented at the Conference on Energy and Agriculture, Washing-
ton University, St. Louis, Missouri, June, 1976.
2Professor, Agricultural Engineering, Professor, Agricultural Economics,
Professor, Crop and Soil Sciences, Graduate Research Assistant, Agricul-
tural Engineering, Michigan State University.
budgets are presented for dairy farms growing most
of their own feed and returning animal wastes to
crop land. The organic feed requirements not pro-
duced on the farm are soybean meal and oats. The
material cycles confined to the farm are not included
in the budget.
Input resource requirements in the material-
energy budget include: direct fuel usage, electricity,
land, labor, inorganic fertilizers, purchased feed,
pesticides, seed, field machinery and farmstead physi-
cal plant depreciation. In addition to milk, other out-
puts which appear in the material-energy budget
are: cull stock (reflecting net production of beef in
dairying), soil loss from crop land, and the effect on
soil carbon level. This study considers only on-farm
requirements. Transport to and from the farm is not
included, although on-farm transport is considered.
An absolute ranking of technological alternatives
requires a common denominator for evaluating forms
of energy and other resources in the material-energy
budget. Estimates are provided of the type and de-
gree of resource substitutions possible in Central
Michigan (Conover or Miami loam soils) dairy farm-
ing with economically viable, production technologies.
System cost evaluations were made for each tech-
nological variation using current price data (1976).
The effect of the dramatic price increases in the last
three years is demonstrated via cost evaluations based
on 1973 price data.
TECHNOLOGICAL VARIATIONS EVALUATED
The alfalfa and corn silage mix in the rations was
varied (other ration ingredients were also varied for
ration balance) to evaluate the effect on the material-
energy budgets various degrees of legume sources
of energy and protein. While several components of
the mass-energy budget are affected, the interchange-
ability of land (solar energy) with nitrogen fertilizer
and feed supplement (terrestrial energy-rich) was of
particular interest.
Another technological variation is a capital stock
expenditure to reduce material losses or improve mate-
rial transformation efficiencies. Examples of this are:
a) liquid animal waste storage to increase the fraction
of nutrients excreted and available to the crops,
b) use of tower in place of bunker forage storage to
reduce spoilage losses and labor requirements (result-
ing from the associated feeding mechanization) and
c) use of more elaborate animal housing facilities to
improve feed efficiency by reducing animal feed
required for maintenance.
DAIRY FARM MODELS
To prepare the material-energy budgets describing
the technological variations, material flow models and
resource requirements of prototypal farms correspond-
ing to each technological variation were developed.
This approach enabled dairy production features to
remain constant, except for the technological variation
under study.
Farm resource consumption was defined as the
level required to sustain dairy production at a con-
stant level over an unlimited period of time. It is
assumed these production technologies can be prac-
ticed indefinitely without unforeseen adverse ecologi-
cal consequences. For example, with each crop
rotation and assumed set of yield levels, a fertility
level must be maintained. To ensure nutrient avail-
ability, large stores of phosphorous and potassium,
relative to the amount removed by the crops in one
year, must be maintained.
This analysis does not consider the inorganic fer-
tilizers required in a soil of low fertility or the mining
of fertilizers in a soil with an initially high fertility
level. The budgets do include the annual inorganic
fertilization required to maintain the steady-state
level.
In Table 1, annual fertilizer requirements for the
three feed crops are shown. These requirements are
met to the degree possible using animal manure
nutrients. Any nutrient deficits are satisfied via in-
organic fertilization. The fraction of each major
animal waste nutrient available to the crops for the
two waste storage systems is shown in Table 2.
Table 1. Annual Crop Yields and Fertilization Require-
ments
Crop
Corn Grain (15% Moist)
Corn Silage (68% Moist)
Alfalfa Haylage (50% Moist)
Fertility
Requirements
(Pound/acre)
Yield N P205 KO0
110 bu/acre 122 44 30
16 ton/acre 150 53 150
9 ton/acre -50(a) 50 200
(a) Assume that alfalfa is left for two years and the corn crop credit
following the alfalfa is 100 lb/acre. With an excess of nitrogen, how-
ever, the credit for alfalfa will reduce the external requirements to
zero. It is characteristic of the nitrogen fixing bacteria on legumes to
fix only what is needed.
Table 2. Fraction of Nutrients in Animal Wastes Avail-
able to Crops on a Continuous Basis (lb nutrient/
lb nutrient) (a)
N P205 K20
Liquid Waste System .66 .35 .75
Solid Waste System .36 .31 .65
(a) While not all will be available in the application year, it will be
available in three or four years; i.e., credit is given for wastes applied
in the immediate past years. On a long-term basis, the fraction of phos-
phorous eventually available, may be double the values shown.
The distribution of animal types in the herd is
also held at the steady-state level required to main-
tain production and provide replacement stock. The
average distribution is given in Table 3, although
fluctuations may occur. Some of the assumptions
employed in developing this distribution are: 1) 13
month calving intervals, 2) 30 percent of the cows
replaced each year (2 percent deaths), 3) 10 percent
calf death loss, and 4) 24 months from heifer birth
to freshening.
In Table 4, the annual animal sales resulting from
these practices are shown. The animal sales are a net
Table 3. The Average Distribution of Animal Numbers
on the Dairy Farm (a)
Animal Type
0 1.5 month calves
1.5- 8.25 month heifers
8.25 12.5 month heifers
12.5 17.25 month heifers
17.25 23 month heifers
23 24 month heifers
Dry Cows
Milking Cows
Total Number of Animals Per Milking Cow
(a) Adapted from Speicher and Brown (7).
Average Number of
Each Animal Type
Per Milking Cow
.08
.24
.16
.17
.22
.04
.15
1.00
2.06
Table 4. Annual Animal Sales
Animal
Cows
Bull Calves
Beef Heifers
Dairy Heifers
Number Sold Per
Milking Cow
.32
.52
.06
.06
Average Weight
of Animals (lbs)
1350
60
300
1200
production of beef and dairy stock in the material-
energy budgets.
The assumed milk production per lactation was
13,000 pounds (3.5% b.f.). Four alternative rations
formulated to achieve this production are shown in
Table 5. These rations are applicable to cold covered
housing. The high corn silage ration (Ration C) im-
plies a crop rotation having a small portion of legumi-
nous crops and will require large quantities of in-
organic manufactured nitrogen fertilizers and feed
supplements. The high alfalfa haylage crop rotation
(Ration A) will require much less nitrogen from ex-
ternal sources, but crop land requirements are higher.
Table 5. Dairy Rations Evaluated
Milking Cow) (a)
(Pounds Fed/Day/
Alfalfa Corn Corn Soybean
Haylage Silage(b) Grain Meal Oats
Moisture Content (%) 50 68 30 10 10
Ration C (Corn)
Milking Cows 7.2 54.1 16.5 1.8 0
Replacement Stock 3.7 26.4 2.1 .9 .2
Total 10.9 80.5 18.6 2.7 .2
Ration CA (Corn-Alfalfa)
Milking Cows 18.6 38.8 19.3 1.5 0
Replacement Stock 8.7 20.3 4.5 .4 .2
Total 27.3 59.1 23.8 1.9 .2
Ration AC (Alfalfa-Corn)
Milking Cows 29.6 21.3 22.4 1.1 0
Replacement Stock 14.2 9.7 6.4 .2 .2
Total 43.8 31.0 28.8 1.3 .2
Ration A (Alfalfa)
Milking Cows 42.4 0 26.8 .7 0
Replacement Stock 20.3 0 7.6 .2 .2
Total 62.7 0 34.4 .9 .2
(a) Personal Communication, J. R. Black, Agrciultural Economics,
Michigan State University.
(b) 12 pounds of 45% nitrogen urea were added to each ton of silage.
Machinery, labor, building and material storage
requirements were estimated using a model from a
previous study of beef production (3). This model was
developed to produce designs representative of cur-
rent practice. No attempt was made to determine the
least cost system, but the procedures employed pro-
duce designs economically rational.
Some of the data required by the field machinery
selection model are illustrated in Table 6. A ten hour
working day and a scheduling efficiency of 85% was
assumed. The general approach to the calculation
procedure is: 1) Determine the minimum amount of
self-propelled equipment (combine, windrower and
tractor) required subject to the available working
time constraints, 2) Match the other equipment to a
tractor, and 3) Select a minimum number of units for
each piece of equipment.
Table 6. Design Data for Field Machinery Selection
Field Date Percent Unit
Operation Efficiency Constraint Usable Energy
(%') (Month/day) Days(a) Required
Moldboard Plow
for Corn and
Alfalfa 80 4/10-5/25 33 10 lb/in2
Disc-harrow for
Corn 90 4/10-5/25 33 250 lb/ft
Harrow for Corn 90 4/10-5/25 33 150 lb/ft
Plant Corn 65 4/24-5/25 33 400 lb/row
Windrower
(Self-propelled) 80 6/1-6/15 60 300 lb/ft
Alfalfa Haylage
Chopper 67 6/1-6/15 60 1.5 hp-hr/ton
Corn Cultivator 80 6/18-6/30 49 250 lb/row
Fertilize Alfalfa 80 6/18-6/30 49 80 lb/ft
Windrower
(Self-propelled) 80 7/16-7/29 60 300 lb/ft
Alfalfa Haylage
Chopper 67 7/16-7/29 60 1.5 hp-hr/ton
Disc-harrow for
Alfalfa 90 7/30-8/15 59 250 lb/ft
Harrow for Alfalfa 90 7/30-8/15 59 100 lb/ft
Drill Alfalfa 70 7/30-8/15 59 105 lb/ft
Windrower
(Self-propelled) 80 8/27-8/31 60 300 lb/ft
Alfalfa Haylage
Chopper 67 8/27-8/31 60 1.5 hp-hr/ton
Chop Corn Silage 67 9/1-9/24 46 1.5 hp-hr/ton
Combine Corn
Grain 67 9/25-10/24 62 (b)
Stalk cut 82 10/25-12/14 8 3 hp-hr/ft/mph
Fall Moldboard
Plow 80 10/25-12/14 8 10 lb/in2
(a) Percent of calendar days which are suitable for field work. This
quantity of time will be available in 85% of all crop seasons.
(b) 13 hp-hr/bu + 61.6 Rolling Resistance.
Labor requirements were estimated for field work,
materials transport (crops and animal waste), animal
husbandry and management. The procedure for esti-
mating field labor requirements begins with the cal-
culation of total field machine operator time. This
value was increased by 30% to account for scheduled
machinery maintenance and labor requirements asso-
ciated with unproductive events (e.g., field labor re-
quirements resulting from weather interruptions).
Annual management labor was assumed to be 1,000
manhours. Other labor requirements (primarily ani-
mal husbandry) were calculated from actual estimated
working hours.
The solid waste system consists of tractor scraping
free stall alleys into an outside open paved walled
storage. The liquid waste system is tractor scraping
free stall alleys into an underground storage. For
either system, wastes are distributed on crop land
at six month intervals.
The animal housing model permits the selection
of three options: 1) partially covered with paved lot
(solid waste option only), 2) cold covered, and 3) warm
enclosed (liquid waste option only). The effect of
housing on milk production or feed requirements was
not included. There is general agreement that the
optimum temperature (with respect to milk produc-
tion and feed requirements) for dairy cows is between
400 and 600 F (8). However, only under extreme
temperature conditions is production significantly
affected.
Furthermore, even in northern climates, heat
causes greater losses than cold. In Michigan, the
extreme deleterious cold conditions are infrequent in
the above housing systems, although the partially
covered housing has a higher level of cold weather
losses. Because this model does not consider these
effects, the analysis of housing systems is incomplete
and scantily considered in this report.
Crop losses in harvesting, transport and handling
were 5% for all crops. The corn grain was stored in
sealed tower silos. Thus, no crop drying was required.
Storage losses in tower silos for corn silage and alfalfa
haylage were 5 and 9%, respectively. Storage losses
in bunker silos for corn silage and alfalfa haylage
were 10 and 15%, respectively. To take full advantage
of the tower silos, automated auger feeding was as-
sumed. Tractor and feed wagon feeding was assumed
for the bunker silo option.
An important component unique to the dairy farm
is the milking parlor. A semi-automated double-8
herringbone parlor was used for all tests. This level
of parlor mechanization includes: the crowd gate,
milking machine detachment, feedbowl covers, power
gates, and udder stimulation. The system is described
by Bickert, et al., (1). This parlor provides a labor
efficiency of 77 cows/man-hour, neglecting cleaning
labor.
The effects of crop rotations on annual soil loss
and soil carbon level were evaluated using the model
presented by Lucas, et al. (6). The steady-state values
are used to describe these effects.
Total production costs were also estimated for
each technological variation. All expenditures re-
quired to sustain production for an indefinite period
at constant price levels were included. Annual in-
terest rates of 8.5% (14) for 1976 and 7.5% for 1973
on long term capital (land, buildings and equipment)
were assumed. Short term capital (capital tied up for
12 months or less) annual interest rates were 9% (14)
for 1976 and 8% for 1973. Interest charges were
applied to the average capital requirements for the
entire operation.
The average capital requirements were the pur-
chase value of land, animals, and short term capital
plus one-half of the purchase value of buildings and
equipment. Annual property taxes were 1.8% (36
mills) of the land and buildings purchase value. The
reported total production costs of milk production
include a reduction for the value of beef produced.
Price data used in the cost evaluation are cited in the
appendix.
Results are presented for dairy farms having 120
cows milking simultaneously. This corresponds to a
herd size of 138 mature cows.
The models were programmed in FORTRAN to
facilitate the evaluation of several alternative dairy
farming systems. While this program could be used
to consider the effects of variations in environment
(e.g., soils and climate), the results presented are all
specific to the environment assumed.
MATERIAL-ENERGY REQUIREMENTS
The major elements of the dairy farm material-
energy budgets are given in Table 7. One of the
most striking features of the budget is the variation
in crop land requirements with ration. The total acre-
age devoted to corn remains relatively constant over
all rations. As the silage component decreases, the
nitrogenous feed supplement requirements (soybean
meal and urea, respectively) are also decreased. How-
ever, large additional allocations of land to alfalfa
are required.
The labor requirements and field machinery select-
ed suggest that these farms would employ two workers
full-time with 5-10 percent of the labor being tem-
porary. Forage harvesting operations, in particular,
require a considerable amount of part time labor.
While the liquid waste system involves trans-
porting large quantities of water, slightly less total
labor is required due to reduced scraping. The cal-
culated effect of ration on labor requirements is in-
fluenced by the system design criteria. As the system
design procedure generally minimized machinery
requirements subject to time constraints, labor require-
ments may be slightly higher than is typical for some
systems. In particular, those systems with a more
balanced rotation (resulting from ration balances)
require less field machinery per unit of production. If
less machinery capacity results in smaller machine
unit sizes, labor requirements per unit of production
are increased. This relationship is apparent for both
field and crop transport labor. The effect of ration
balance is also manifested in lower farmstead and field
machinery requirements for intermediate rations.
Land and material requirements for forage pro-
duction were reduced by the use of the tower silos.
Gasoline and electricity use was increased, however.
Gasoline engines are used to power the forage
blowers used in filling the tower silos. Electric motors
are used on the silo unloaders and the feed auger
equipment. Because of the substantial savings in
Table 7. Effect of Ration, Waste and Forage Storage on Annual Material Flows and Resource Requirements on 120-
Milking Cow Dairy Farms (Cold Covered Housing)
Ration C CA AC A C CA. AC A C
Waste Storage Solid Solid Solid Solid Liquid Liquid Liquid Liquid Solid
Forage Storage Bunker Bunker Bunker Bunker Bunker Bunker Bunker Bunker Tower
Fertilizer, N (lb)
Fertilizer, P2Os (lb)
Fertilizer, K.O (lb)
Corn Seed (bu)
Alfalfa Seed (lb)
Corn Pesticide (a)
Alfalfa Pesticide, Furadan (lb)
Oats for Calves (lb)
Urea as Corn Silage Supplement (lb)
44% Protein Soybean Meal (lb)
Depreciated Capitol (1976 prices, $)
Capital (New Purchase 1976 prices, $)
Farmstead Machinery
Farmstead Buildings
Cattle
Field Machinery
Land
Short Term
Total
Gasoline Consumption (gal)
Waste Transport
Crop Transport
Farmstead
Field
Total
Electricity (kwh)
Land (Acre-years)
Corn Silage
Corn Grain
Alfalfa
Farmstead
Total
Labor (man-hours)
Milking
Feeding
Scraping
Waste Transport
Crop Transport
Management Functions
Field (crop production)
Total
Beef Produced on the Farm (lb)
Soil Loss to Environment on 2%
Slopes (ton/acre)
Milk Produced on the Farm (cwt)
19003
10404
16526
69
161
243
12
10512
23268
116508
27892
146138
202826
108360
87032
264810
108458
917624
78
244
722
2791
3835
118732
127
115
48
1
291
1964
927
1201
68
544
1000
998
6702
14300
12130
18517
69
401
241
30
10512
17076
84096
27423
139066
208850
108360
74822
329420
105171
965689
87
276
760
3141
4264
119584
93
147
121
1
362
1964
940
1201
72
564
1000
1083
6824
66240 66240
3 3
8354
13385
19461
65
644
227
48
10512
8956
58254
27878
145602
212014
108360
75154
383110
101957
1026197
1336
14805
20513
61
921
213
69
10512
0
39858
28133
150010
212043
108360
77717
445900
101428
1095458
8797
10011
14748
69
161
243
12
10512
23268
116508
29893
158387
220579
108360
87032
264810
105050
944218
3174
16698
16236
69
401
241
30
10512
17076
84096
29423
151315
226603
108360
74822
329420
101434
991954
0
12930
16747
65
644
227
48
10512
8956
58254
29878
157851
229767
108360
75154
383110
98880
1053122
0
14317
17267
61
921
213
69
10512
0
39858
30183
162259
229796
108360
77717
445900
100205
1124237
18219
10014
15323
68
152
237
11
10512
22210
116508
31312
175734
228262
108360
82214
257530
105820
957920
96 102 585 648 696 750 78
286 296 244 276 286 296 231
727 761 588 626 594 628 866
3368 3637 2791 3141 3368 3637 2715
4477
102402
49
178
193
1
421
1964
934
1201
74
541
1000
1056
6770
66240
3
4796
121312
0
213
276
1
490
1964
930
1201
78
472
1000
993
6638
66240
2
4208
118732
127
115
48
1
291
1964
927
866
325
544
1000
998
6624
4691
119584
93
147
121
1
362
1964
940
866
346
564
1000
1083
6763
66240 66240
3 3
4944
120402
49
178
193
1
421
1964
934
866
362
541
1000
1056
6723
66240
3
5311
121312
0
213
276
1
490
1964
930
866
380
472
1000
993
6605
66240
2
17940 17940 17940 17940 17940 17940 17940 17940
3890
126074
122
115
45
1
283
1964
510
1201
68
561
1000
1016
6320
66240
3
17940
(a) Corn pesticide units are: 2 quarts Lasso, 1.5 pound Atrazine and 2.5 pound Sevin, which is the annual application/acre.
feeding labor, total labor requirements were lower
with tower silos.3
To illustrate the energy intensities of the alterna-
tive technologies, the energy required to manufacture
those energy intensive budget elements which vary
3The reader may be puzzled by the slightly higher field labor require-
ments for tower silos (1016 vs 998). This is another manifestation of
the field machinery selection method used. Because of the reduced crop
acreage, a smaller tractor was selected which had the net effect of
requiring a few additional labor hours.
419, 1.5 and 1.1 therms per 100 pounds of anhydrous ammonia, triple
superphosphate and potash, respectively.
513.6 therms per 100 pounds of urea.
substantially across the technologies was evaluated.
The high alfalfa haylage (Ration A) and the high corn
silage ration (Ration C) were evaluated for solid and
liquid waste storage. The natural gas requirements
for the manufacture of fertilizers and urea as a feed
supplement are given in Table 8. These fertilizer
values were estimated from manufacturing require-
ments by Commoner, et al. (2).4 The value for urea
reflects the increased processing required for nitrogen
stabilization (4).5
Table 8. Natural Gas Requirements for the Manufacture
of Selected Elements of the Dairy Farm Mate-
rial-Energy Budgets (Therms)
Solid Waste Liquid Waste
High Corn High Alfalfa High Corn High Alfalfa
Silage Haylage Silage Haylage
Ration Ration Ration Ration
Fertilizer
N 4403 310 2038 0
P205 339 483 326 467
K2O 303 376 270 317
Urea 3163 0 3163 0
Total 8208 1169 5797 784
The other forms of energy (electricity, fuel oils,
distillate oils) required in these processes were also
calculated. The total requirements for these budget
elements for each technology were found to be very
similar. The variation in natural gas requirements for
fertilizers and urea is quite significant, however. One
therm represents approximately 80% of the heating
value of one gallon of regular gasoline. Thus, the
fossil energy differential required for nitrogen manu-
facture dramatically overshadows the higher gasoline
requirements for the high alfalfa haylage ration.
The difference between the two ration fossil energy
requirements for soybean meal protein supplement
production is also substantial. The energy require-
ments for fertilizer, field equipment production, gaso-
line for field equipment, and bean processing will also
be substantial. While other elements of the budgets
do vary over the alternative technologies, the fossil
energy variations required for their production are
relatively insignificant compared to those discussed.
In estimating energy required to produce addi-
tional soybean meal, the energy attributed to the oil
removed from the beans must be subtracted from the
total energy used for meal and oil production. If the
energy attributed to production of additional meal is
equal to the gasoline required for the high alfalfa
haylage, then the high corn silage ration requires
7000 more therms of energy when the solid waste
system is used.
The major non-fossil energy production require-
ment variation across the two rations is the land
required for feed production. Even after an addi-
tional fifty acres is charged to the high corn silage
ration for extra soybean meal production, the differen-
tial is approximately 150 acres. Thus, the greatest
ration variation would permit a resource substitution
of approximately 150 acres of land for 7000 therms of
energy using a solid waste system under the above
assumptions.
The steady-state soil carbon contents resulting
from the crop rotations ranged from 1.9% for the
high corn silage to 2.2% for the high alfalfa haylage
ration. While the harvest of large quantities of corn
silage normally implies a substantial soil carbon de-
pletion, much of this carbon returns to the soil from
animal waste.
Budgets were also prepared for the alternative
animal housing systems for the high corn silage ration.
Since effects on feed efficiency were not included, all
factors affecting production costs were not considered.
In comparison to the cold enclosed solid waste system,
the partially enclosed unit required less total capital
($18,817), annual depreciated capital ($1,315) and
labor (234 hours). While there was an increase in
labor for collecting cows prior to milking, a greater
decrease in scraping and bedding labor exists. Com-
pared to the cold enclosed liquid waste system, the
warm insulated and mechanically ventilated structure
required more total capital ($17,045) and annual de-
preciated capital ($1,136).
PRODUCTION COSTS
The contributions to total production costs for each
factor of production are shown in Table 9 for 1976
price levels. Each value is proportional to the input's
purchase value. The table can be used to estimate
the effect on total costs for a change in an input price.
While the nitrogen input was significant energeti-
cally, this input is less significant economically. The
dominant cost variations over the ration variation are
land and soybean meal costs.
There is a predicted economic advantage for the
high corn silage ration. However, these levels of cost
differences do exist among commercial firms employ-
ing nearly identical technologies. Furthermore, it is
possible that different land and climate conditions
(which would change the relative relationship of
alfalfa and corn silage yields), could show a cost ad-
vantage for the high alfalfa haylage rations. On land
subject to erosion, the intensive corn silage rations
may not be appropriate.
These results suggest interchangeable technologies
which are energy intensive and land intensive in
producing a fixed quantity of milk, and maintain very
similar production costs. However, changes in the
relative prices of the production factors can alter pro-
duction cost relations. Production costs are shown in
Table 10 for 1973 price levels. While these price levels
are indicative of the situation prior to the rise in
energy prices, the cost differences among alternative
technologies are very similar to the 1976 situation.
Land value increases counterbalanced the effects of
energy price increases.
Not shown in Table 9 is the effect of animal hous-
ing on production costs. Total costs were 24.40/cwt
lower for the partially enclosed housing than the
comparable cold enclosed structure. The warm struc-
Table 9. Effect of Ration, Waste Storage and Forage Storage on Production Costs on 120-Milking Cow Dairy Farm with
Cold enclosed Housing ($/cwt of milk produced, price levels used indicated in the appendix)
1976 PRICES
Ration C CA AC A C CA AC A C
Waste Storage Solid Solid Solid Solid Liquid Liquid Liquid Liquid Solid
Forage Storage Bunker Bunker Bunker Bunker Bunker Bunker Bunker Bunker Tower
Nitrogen .148 .112 .066 .011 .069 .025 .000 .000 .142
Phosphorus .105 .121 .134 .149 .100 .118 .130 .144 .100
Potassium .083 .093 .098 .104 .074 .081 .084 .087 .077
Corn Seed .162 .161 .153 .143 .162 .161 .153 .143 .158
Alfalfa Seed .010 .025 .041 .058 .010 .025 .041 .058 .009
Alfalfa Pest .005 .015 .025 .034 .005 .015 .025 .034 .005
Corn Pest .122 .121 .114 .107 .122 .121 .114 .107 .118
Oats .030 .030 .030 .030 .030 .030 .030 .030 .080
Urea .097 .071 .037 .000 .097 .071 .037 .000 .093
Soybean .811 .584 .406 .277 .811 .584 .406 .277 .811
Field Machinery (a) .880 .787 .770 .780 .880 .787 .770 .778 .833
Farmstead Machinery (a) 1.150 1.095 1.145 1.180 1.247 1.190 1.242 1.276 1.383
Livestock (b) .513 .513 .513 .513 .513 .513 .513 .513 .513
Farmstead Building (c) 1.801 1.851 1.881 1.881 1.958 2.012 2.039 2.040 2.026
Short-Term .273 .264 .256 .254 .264 .254 .248 .251 .265
Land (d) 1.520 1.891 2.200 2.560 1.520 1.891 2.200 2.560 1.479
Labor 1.624 1.653 1.640 1.609 1.604 1.637 1.627 1.599 1.533
Gas .089 .098 .104 .113 .099 .109 .116 .124 .089
Electricity .222 .224 .225 .226 .222 .224 .225 .226 .235
Breeding Veterinary and Medicine .301 .301 .301 .301 .301 .301 .301 .301 .301
Animals Sold (Revenue) -1.292 -1.292 -1.292 -1.292 -1.292 -1.292 -1.292 -1.292 -1.292
Total Production Costs 8.654 8.718 8.847 9.038 8.796 8.857 9.009 9.256 8.908
(a) Depreciation, Interest Repairs, Insurance and Shelter.
(b) Interest.
(c) Depreciation, Interest, Repairs, Insurance, and Property Taxes.
(d) Interest and Property Taxes.
Table 10. Effect of Ration, Waste Storage and Forage Storage on Production Costs on 120-Milking Cow Dairy Farm with
Cold Enclosed Housing ($/cwt of milk produced, price levels used are indicated in the appendix)
1973 PRICES
Ration C CA AC A C CA AC A C
Waste Storage Solid Solid Solid Solid Liquid Liquid Liquid Liquid Solid
Forage Storage Bunker Bunker Bunker Bunker Bunker Bunker Bunker Bunker Tower
Nitrogen Fertilizer .095 .072 .042 .007 .044 .016 .000 .000 .091
Phosphorous Fertilizer .064 .074 .082 .091 .061 .072 .079 .088 .061
Potassium Fertilizer .055 .062 .065 .069 .049 .054 .056 .058 .051
Corn Seed .116 .115 .109 .102 .116 .115 .109 .102 .113
Alfalfa Seed .009 .022 .036 .051 .009 .022 .036 .051 .008
Alfalfa Pesticide .004 .001 .018 .025 .004 .011 .018 .025 .004
Corn Pesticide .089 .088 .083 .078 .089 .088 .083 .078 .086
Oats .018 .018 .018 .018 .018 .018 .018 .018 .018
Urea .049 .036 .019 .000 .049 .036 .019 .000 .047
Soybean Meal .390 .281 .195 .133 .390 .281 .195 .133 .390
Field Machinery (a) .535 .479 .468 .474 .535 .479 .468 .474 .506
Farmstead Machinery (a) .693 .660 .690 .711 .752 .718 .749 .770 .834
Livestock (b) .392 .392 .392 .392 .392 .392 .392 .392 .392
Farmstead Building (c) 1.140 1.172 1.191 1.191 1.240 1.274 1.291 1.292 1.282
Short-Term Capital .150 .148 .145 .145 .145 .143 .140 .143 .146
Land (d) .981 1.220 1.419 1.652 .981 1.220 1.419 1.652 .954
Labor 1.251 1.272 1.263 1.239 1.235 1.260 1.252 1.231 1.181
Gasoline .053 .059 .062 .067 .059 .065 .069 .074 .053
Electricity .149 .150 .151 .152 .149 .150 .151 .152 .158
Breeding Veterinary and Medicine .220 .220 .220 .220 .220 .220 .220 .220 .220
Animals Sold (Revenue) -1.182 -1.182 -1.182 -1.182 -1.182 -1.182 -1.182 -1.182 -1.182
Total Production Costs 5.271 5.369 5.486 5.635 5.355 5.452 5.582 5.771 5.413
(a) Depreciation, Interest Repairs, Insurance and Shelter.
(b) Interest.
(c) Depreciation, Interest, Repairs, Insurance, and Property Taxes.
(d) Interest and Property Taxes.
ture had production costs which were 16.50/cwt
higher than its cold enclosed counterpart. These dif-
ferentials indicate the feed efficiency savings which
must be achieved to economically justify more elabo-
rate housing.
SUMMARY
Resource requirements for Central Michigan dairy
farms on loam soils employing alternative ration,
waste handling, forage storage and housing tech-
nologies were estimated. The material-energy budgets
for the farms show the interchangeability of land and
other resources in milk production. An analysis of
the energy required to supply the resources in the
budgets suggested that the natural gas for nitrogen
production (fertilizer and feed supplement) was the
dominant factor.
Estimates of production costs for each of the farms
indicated that while none had a strong economic
advantage over the others, the rations using more
corn silage (i.e., the more energy intensive) did have
lower production costs. None of the technological
variations were superior to the others in minimizing
all energy inputs (terrestrial and solar). The results
indicate complex trade-offs in resources in evaluating
alternative farm production systems.
By using dairy farming system designs, rather than
operating data of existing firms, it was possible to
estimate the effects of a particular technological varia-
tion, holding all other features of dairy production
constant. However, it should be understood that some
of the details developed in following this approach
may be atypical of current practice. Compared to
averages based on unpublished data from Michigan
dairy farms of comparable size, the designs suggested
lower labor and higher capital requirements.
REFERENCES
1. Bickert, W. G., J. B. Gerrish and D. V. Armstrong, 1972.
"Semi-Automatic Milking in a Polygon Parlor: A Simula-
tion," Transactions of the ASAE, 15(2):355-357, 360.
2. Commoner, B., et al., 1974. "The Effect of Recent Energy
Price Increases on Field Crop Production Costs," Rpg.
CBNS-AE1. Center for the Biology of Natural Systems,
Washington University, St. Louis, Missouri.
3. Connor, L. J., et al., 1976. "Beef Feedlot Design and
Management in Michigan," Research Report 292, Agri-
cultural Experiment Station, Michigan State University.
4. Hoeft, R. G., and J. C. Siemens, 1975. "Energy Consump-
tion and Return from Using Nitrogen Fertilizer on Corn,"
Illinois Fertilizer Conference Proceedings, Urbana, Illinois,
Jan. 29-30, 1975, p. 32.
5. Knoblauch, W., et al., 1976. "Enterprise Budgets," Agri-
cultural Economics Report Number 295, May, Department
of Agricultural Economics, Michigan State University.
6. Lucas, R. E., J. B. Holtman and L. J. Connor, 1976. "Soil
Carbon Dynamics and Crop Productivity," Presented at
Conference on Energy and Agriculture, Center for the
Biology of Natural Systems, Washington University, St.
Louis, Missouri.
7. Speicher, J. A. and L. H. Brown, 1969. "A Dairy Budget
Guide, Feasibility of Dairy Expansion," Dairy and Agri-
cultural Economics Departments, Michigan State Univer-
sity.
8. Speicher, J. A. and L. H. Brown, Undated. "Cold Versus
Warm Barns for Dairy Cows," D-223, Dairy and Agricul-
tural Economics Departments, Michigan State University.
9. United States Department of Agriculture, 1974. "Agricul-
tural Prices, Andual Summary 1973," Statistical Reporting
Service, Washington, D. C.
10. United States Department of Agriculture, 1976. "Agricul-
tural Prices," January, Statistical Reporting Service, Wash-
ington, D. C.
11. United States Department of Agriculture, 1976. "Farm
Real Estate Market Developments," February, Statistical
Reporting Service, Washington, D. C.
12. United States Department of Agriculture, 1976. "Agricul-
tural Prices," April, Statistical Reporting Service, Wash-
ington, D. C.
13. United States Department of Agriculture, 1976. "Agricul-
tural Prices," July, Statistical Reporting Service, Wash-
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tural Finance Statistics," July, Economic Research Service,
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APPENDIX
Resource Prices Used in Cost Calculations
1976 price(a) Source
Resource 1976 price 1973 price 1976 price
N ($/lb) .14 1.56 5
P205 ($/lb) .18 1.64 5
K20 ($/lb) .09 1.5 5
Corn Seed ($/bu) 42 1.4 5
Alfalfa Seed ($/lb) 1.13 1.13 12
Alfalfa Pesticide ($/lb)
(Furadan) 9.00 1.37 13(b)
Corn Pesticide ($/unit) 9.00 1.37 13(b)
Oats ($/lb) .05 1.67 13
Urea ($/lb) .08 2.1 12
Soybean Meal ($/lb) .125 2.08 13
Field Machinery See Table 7
for total 1.60 13
Farmstead Machinery See Table 7
for total 1.60 13
Livestock ($, total) 108360 1.15 13
Farmstead Building See Table 7
for total 1.53 13
Land ($/acre) 910 1.40 11
Labor ($/hour) 4.00 1.33 13
Gasoline ($/gal) .42(c) 1.68 13
Electricity ($/kwh) .0335 1.49 10
Breeding, Veterinary and
Medicine ($/lb milk) .301 1.37 13(b)
Animals Sold .35 1.09 13
(a) 1973 prices were those provided in an earlier unpublished version
of the computer model written by G. C. Misener, Agriculture Canada,
Fredericton, New Brunswick. These values are approximately equal to
those in (9).
(b) Farm Service and Supply Index.
(c) Cost to producer accounting for gasoline tax refund.
The Michigan State University Agricultural Experiment Station is an equal opportunity employer and complies with Title VI of the Civil Rights Act of 1964.
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