AE. Ext. 90-9
May 1990
Stuart F. Smith Linda D. Putnam. Department of Agricultural Economics New York State College of Agriculture and Life Sciences A Statutory College of the State University Cornell University. Ithaca. New York 14853-7801 1989 DAIRY FARM BUSINESS SUMMARY
WESTERN PLAIN REGION
Table of Contents
INTRODUCTION
1
Program Objective .................................................
1
Format Features
1
SUMMARY AND ANALYSIS OF THE FARM BUSINESS ......... ...... ...............
2
Business Characteristics ..........................................
2
Income Statement ..................................................
2
Profitability Analysis ............................................
6
Farm and Family Financial Status ..... ....... .............. ........
8
Cash Flow Statement ...............................................
11 Repayment Analysis ................................................
12 Cropping Analysis .................................................
14 Dairy Analysis ....................................................
16 Capital and Labor Efficiency Analysis .............................
18 COMPARATIVE ANALYSIS OF THE FARM BUSINESS ..............................
19 Progress of the Farm Business .....................................
19 Farm Business Chart................................................
20 Financial Analysis Chart ..........................................
22 Comparisons by Type of Barn and Herd Size .........................
23 Herd Size Comparisons .............................................
23 IDENTIFY AND SET GOALS .................................................
37 1989 DAIRY FARM BUSINESS SUMMARY
WESTERN PLAIN REGION*
INTRODUCTION
Dairy farmers throughout New York State have been participating in
Cornell Cooperative Extension's farm business summary and analysis program
since the early 1950's. Each participating farmer receives a comprehensive
business summary and analysis of his or her farm business. The information
in this report represents an average of the data submitted from farms in the
Western Plain region.
Program Objective
The primary objective of the dairy farm business summary, DFBS, is to
help farm managers improve the business and financial management of their
farm through appropriate use of historical farm data and the application of
modern farm business analysis techniques. In short, DFBS identifies the
business and financial information farmers need and demonstrates how it
should be used in identifying and evaluating strengths and weaknesses of the
farm business.
Format Features
This regional report follows the same general format as in the 1989
DFBS printout received by all participating dairy farmers. Worksheets are
included to give non-DFBS participants an opportunity to summarize their
businesses. The analysis tables have an open column or section labeled My
Farm. It may be used by any dairy farm manager who wants to compare his or
her business with the average data of this region.
This report features:
(1) an income statement including accrual adjustments for farm business expenses and receipts, as well as measures of profitability with and without appreciation, (2) a complete balance sheet with analytical ratios,
(3) a cash flow summary including debt repayment ability,
(4) a cropping analysis,
(5) a dairy analysis, and
(6) capital and labor efficiency analysis.
Micro DFBS, a computer program which enables Cooperative Extension
agents and specialists to calculate and print individual farm business
reports in their offices, is now being used by the dairy farm management
field staff for 90 percent of the farms cooperating. This innovative
approach provides faster processing of farm record data and increased use of
the DFBS in farm management programs.
*The Western Plain Region of New York State, with the number of participating
farms in parentheses, is comprised of Erie (3), Genesee (6), Livingston
(10), Niagara (4), Orleans (2), and Wyoming (17) counties.
This report was written by Stuart F. Smith, Senior Extension Associate, Farm
Management. Linda Putnam was in charge of data preparation. Cindy Farrell
and Beverly Carcelli prepared the publication. Farm business data was
collected by Cooperative Extension agents Merville Button and David Thorp,
and regional specialists George Allhusen and Jonas Kauffman.
2
SUMMARY AND ANALYSIS OF THE FARM BUSINESS
Business Characteristics
Finding the right management strategies is an important part of operat­
ing a successful farm. Various combinations of farm resources, enterprises,
business arrangements, and management techniques are used by the dairy
farmers in this region. The following table shows important farm business
characteristics and the number of farmers reporting these characteristics.
BUSINESS CHARACTERISTICS 42 Western Plain Region Dairy Farms, 1989 Type of Farm
Dairy
Part-time dairy
Dairy cash-crop
Part-time cash-crop dairy
Number
Type of Ownership
Owner
Renter
Number
Type of Business
Single proprietorship
Partnership
Corporation
Number
16
18
Business Record System
ELFAC
Account Book
Agrifax (mail-in only)
On-Farm Computer
Other
Number
2
18
38
o
4
o
38
4
8
7
11
4
Type of Barn
Stanchion/Tie-Stall
Freestall
Combination
Number
Milking System
Bucket & carry
Dumping station
Pipeline
Herringbone parlor
Other parlor
Number
Milking Frequency
2x/day
3x/day
Other
Number
34
Production Records
DHIC
Owner-Sampler
Other
None
Number
28
7
29
6
o
o
17
22
3
8
o
10
3
1
The averages used in this report were compiled using data from all the
participating dairy farms in this region unless noted otherwise. There are
full-time dairy farms, part-time farms, dairy cash-crop farms, farm renters,
partnerships, and corporations included in the average. These specific
classifications are used to separate farms in the State Business Summary.
Income Statement
In order for an income statement to accurately measure farm income, it
must include cash transactions and accrual adjustments (changes in accounts
payable, accounts receivable, inventories, and prepaid expenses).
Cash paid is the actual cash paid during the year and does not necessarily
represent the cost of goods and services actually used.
Change in inventory: An increase in inventory is subtracted in computing
accrual expenses because it represents purchased inputs not actually used
during the year. A decrease in inventory is added to expenses because it
represents the cost of inputs purchased in a prior year and used this year.
3
CASH AND ACCRUAL FARM EXPENSES
42 Western Plain Region Dairy Farms, 1989
Change in
Change in
Inventory
Accounts
or Prepaid
Cash
Payable
Expense* +
Paid +
$ 75,856
$
-182
$
97
Expense Item
Hired Labor
Feed
Dairy grain & conc.
Dairy roughage
Nondairy
Machinery
Mach. hire, rent/lease
Machinery repairs/parts
Auto expo (farm share)
Fuel, oil & grease
Livestock
Replacement livestock
Breeding
Vet & medicine
Milk marketing
Cattle lease/rent
Other livestock expense
Crops
Fertilizer & lime
Seeds & plants
Spray, other crop expo
Real Estate
Landjb1dg./fence repair
Taxes
Rent & lease
Other
Insurance
Telephone (farm share)
Electricity (farm share)
Interest paid
Miscellaneous
Total Operating
Expansion livestock
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
139,139
6,580
860
5,766
25,148
539
11,394
5,069
5,920
13 ,841
13,587
586
18,822
Accrual
Expenses
$75,771
-155
-1,015
2
o
134,426
4,775
862
o
143
-284
30
-770
-107
5,482
25,321
539
10,517
-4,558
-790
o
o
o
-60
-71
3
-388
-36
o
o
8
o
-115
-22
19,138
9,628
10,080
-1,180
-228
-1,340
-672
-6
7,592
7,747
13,235
-625
-125
-43
24
-140
6,100
668
9,924
31,873
6,793
$445,885
10,311
-353
o
o
-10
o
-385
$-11,018
o
-35
-1
2
42
269
-336
$ -2,394
o
5,009
5,852
13,417
13,595
586
18,685
17,286
9,394
8,705
6,991
7,482
13,191
5,747
670
9,956
32,142
6,072
$432,473
10,311
24,390
17.864
$485,038
Changes in prepaid expenses are a net change in non-inventory expenses that
have been paid in advance of their use, for example, 1990 rent paid in 1989.
If 1989 funds used to prepay 1990 rent exceeded the amount of 1989 rent pre­
paid in 1988, the amount of this excess is entered as a negative number to
exclude it from 1989 rental expenses. The excess prepaid rent should be
charged against the future year's business operation. A decrease in prepaid
rent is added to expenses because it represents use of resources during this
year that were paid for in past years but should be charged against this
year's operation.
Change in accounts payable: An increase in accounts payable from beginning to
end of year is added and a decrease is subtracted when calculating accrual
expenses.
Accrual expenses are the costs of inputs actually used in this year's produc­
tion. They are the total of cash paid, changes in inventory or prepaid
expenses, and changes in accounts payable.
4
CASH AND ACCRUAL FARM EXPENSES WORKSHEET Cash
Expense Item
Paid
Hired Labor
$_-­
Feed
Dairy grain & cone.
Dairy roughage
Nondairy
Machinery
Mach. hire, rent/lease
Machinery repairs/parts
Auto expo (farm share)
Fuel, oil & grease
Livestock
Replacement livestock
Breeding
Vet & medicine
Milk marketing
Cattle lease/rent
Other livestock expense
Crops
Fertilizer & lime
Seeds & plants
Spray, other crop
expense
Real Estate
Land, bldg., fence rep.
Taxes
Rent & lease
Other
Insurance
Telephone (farm share)
Electricity (farm share)
Interest paid
Miscellaneous
Total Operating
$_-­
Expansion livestock
Machinery depreciation
Building depreciation
TOTAL ACCRUAL EXPENSES
Change in
Inventory
or Prepaid
+ Expense +
Change in
Accounts Payable
Accrual
Expenses
$_-­
$_--­
$_-­
$_-­
$_-­
$_--­
$
5
CASH AND ACCRUAL FARM RECEIPTS 42 Western Plain Region Dairy Farms, 1989 Receipt Item
Cash
Receipts
+
Change in
Inventory
Change in
Accounts
Receivable
+
Milk sales
$510,031
Dairy cattle
34,811
$ 21,997
Dairy calves
9,301
Other livestock
1,194
-28
Crops
11,124
-9,572
Government receipts
10,605
0*
Custom machine work
628
369
Gas tax refund
Other
4,520
(-)
504
Less nonfarm noncash cap.**
Total Accrual Receipts
$582,582
$ 11,893
Accrual
Receipts
8,412
202
$
$518,444
57,010
9,304
1,166
4
o
-1,335
-252
21
25
2,745
9,823
$
217
10,353
650
394
7,265
(-)
504
$604,298
*Change in advanced government receipts.
**Gifts or inheritances of cattle or crops included in inventory.
Cash receipts include the gross value of milk checks received during the year
plus all other payments received from the sale of farm products, services,
and government programs. Nonfarm income is not included in calculating farm
profitability.
Changes in inventory are calculated by subtracting beginning of year values
from end of year values excluding appreciation. Increases in livestock in­
ventory caused by herd growth and/or quality are added, and decreases caused
by herd reduction and/or quality are subtracted. Changes in inventories of
crops grown are also included. Changes in advanced government receipts are
calculated by subtracting the end year balance from the beginning year bal­
ance (balances are listed with the current liabilities on the Balance Sheet).
Changes in accounts receivable are calculated by subtracting beginning year
balances from end year balances. The January milk check for this December's
marketings compared with the previous January's check is included as a change
in accounts receivable.
Accrual receipts represent the value of all farm commodities produced and
services actually generated by the farmer during the year.
CASH AND ACCRUAL FARM RECEIPT WORKSHEET
Receipt ItS!m
Cash
Receipts
Milk sales
$
Dairy cattle
Dairy calves
Other livestock
Crops
Government receipts
Custom machine work
Gas tax refund
Other
Less gifts of cattle & crops
Total Accrual Receipts
$
Change in
InvS!ntory
+
+
Change in
Accounts
RecS!ivable
$
Accrual
Receipts
$
$
(-)
$
(-)
$
$
6
Profitability Analysis
Farm operators contribute labor, management, and capital to their
businesses and the best combination of these resources maximizes income.
Farm profitability can be measured as the return to all family resources or
as the return to one or more individual resources such as labor and
management.
Net farm income is the return to the farm operators and other unpaid family
members for their labor, management, and equity capital. It is the farm
family's net annual return from working, managing, financing, and owning the
farm business. This is not a measure of cash available from the year's
business operation. Cash flow is evaluated later in this report.
Net farm income is computed both with and without appreciation. Appreciation
represents the change in values caused by annual changes in prices of live­
stock, machinery, real estate inventory, and stocks and certificates (other
than FLB and PCA). Appreciation is a major factor contributing to changes in
farm net worth and must be included for a complete profitability analysis.
NET FARM INCOME 42 Western Plain Region Dairy Farms, 1989 Item
Average
Total accrual receipts
Appreciation: Livestock
Machinery
Real Estate
Other Stock/Certificates
Total Including Appreciation
Total accrual expenses
Net Farm Income (with appreciation)
Net Farm Income (without appreciation)
My Farm
$604,298
12,621
3,256
15,444
499
$636,119
-485.038
$151,081
$119,261
$_-­
$_-­
$_-­
$_-­
Return to operators' labor, management. and equity capital measures the total
net farm income for the farm operator(s). It is calculated by deducting a
charge for unpaid family labor from net farm income. Operators' labor is not
included in unpaid family labor. Return to operators' labor, management, and
equity capital has been calculated both with and without appreciation.
Appreciation is considered an important part of the return to ownership of
farm assets.
RETURN TO OPERATORS' LABOR. MANAGEMENT, AND EQUITY
42 Western Plain Region Dairy Farms, 1989
Item
Net farm income
Family labor unpaid
@ $750 per month
Return to operators' labor,
management, & equity
Average
With
Without
Apprec.
Apprec.
$151,081
$119,261
1,393
1,393
$149,688
$117,868
My Farm
With
Without
Apprec.
Apprec.
$_-­
$_-­
$_-­
$_-­
7
Labor and manaiement income is the return which farm operators receive for
their labor and management used in operating the farm business. Appreciation
is not included as part of the return to labor and management because it
results from ownership of assets rather than management of the farm business.
Labor and management income is calculated by deducting the opportunity cost
of using equity capital at a real interest rate of five percent, from the
return to operators' labor, management, and equity capital excluding
appreciation. The interest charge of five percent reflects the long-term
average rate of return above inflation that a farmer might expect to earn in
comparable risk investments.
LABOR AND MANAGEMENT INCOME 42 Western Plain Region Dairy Farms, 1989 Item
Return to operators' labor, management,
& equity without appreciation
Real interest @ 5% on $713,590
average equity capital
Labor & Management Income
Labor & Management Income per
1.73 Operator/Manager
Averaie
My Farm
$117,868
$-----­
- 35,680
$ 82,189
$ 47,508
$-----­
Return on equity capital measures the net return remaining for the farmer's
equity or owned capital after a charge has been made for the owner-operator's
labor and management. The earnings or amount of net farm income allocated to
labor and management is the opportunity cost of operators' labor and
management estimated by the cooperators. Return on equity capital is
calculated with and without appreciation. The rate of return on equity
capital is determined by dividing the amount returned by the average farm net
worth or equity capital. Return on total capital is calculated by adding
interest paid to the return on equity capital and then dividing by average
farm assets to calculate the rate of return on total capital,
RETURN ON EQUITY CAPITAL AND RETURN ON TOTAL CAPITAL
42 Western Plain Region Dairy Farms, 1989
Item
Return to operators' labor, management,
& equity capital with appreciation
Value of operators' labor & management
Return on equity capital with appreciation
Interest paid
Return on total capital with appreciation
Return on equity capital without appreciation
Return on total capital without appreciation
Rate of return on average equity capital:
with appreciation
without appreciation
Rate of return on average total capital:
with appreciation
without appreciation
Average
$149,688 - 44,173 $105,515
$ 32,142
$137,657
$ 73,695
$105,837
My Farm
$
$
$
$
$
$
14.8%
10.3%
%
%
13.0%
10.0%
%
%
8
Farm and Family Financial Status
The first step in evaluating the financial position of the farm is to
construct a balance sheet which identifies all the assets and liabilities of
the business. The second step is to evaluate the relationship between
assets, liabilities, and net worth and changes that occurred during the year.
1989 FARM BUSINESS & NONFARM BALANCE SHEET 42 Western Plain Region Dairy Farms, January 1, 1990 Farm Liabilities
Farm Assets
Jan. 1
Current
Farm cash, checking
& savings
$ 18,167
Accounts rec.
45,880
Prepaid exp.
1,984
Feed & supplies
102,774
Total
$168,805
Intermediate
Dairy cows:
owned
$158,782
leased
o
Heifers
70,742
2,347
Bulls/other Ivstk.
Mach./eq. owned
170,922
Mach./eq. leased
2,739
FLB/PCA stock
6,284
35,173
Other stock/cert.
Total
$446,989
Long-Term
Land/buildings:
owned
$390,832
leased
380
Total
$391,212
Total Farm
Assets
Dec. 31
$ 15,844
55,703
2,695
103,507
$177,749
$183,921
1,030
80,181
2,361
193,112
5,635
5,306
38,240
$509,785
$424,806
45
$424,851
$1,007,006 $1,112,385
(Average for 14 farms reporting)
Nonfarm Assets*
Jan. 1
Dec. 31
& Net Worth
Jan. 1
Current
Accounts payable $ 10,743
Operating debt
29,617
Short-term
1,255
Advanced govt. rec. _ _~O
Total
Intermediate
Structured debt
1-10 years
Financial lease
(cattle/mach.)
FLB/PCA stock
Total
Long Term
Structured debt
~10 yrs
Financial lease
(structures)
Total
Total Farm Liab.
FARM NET WORTH
$
8,347
37,684
4,010
0
$ 41,615
$ 50,042
$152,309
$147,386
2,739
6,284
6,664
5,306
$161,332
$159,356
$135,309
$144,132
380
$135,689
45
$144,177
$338,636
$668,370
$353,575
$758,810
Nonfarm Liabi1ities* Net Worth
Jan. 1
&
Dec. 31
Dec. 31 Personal cash, chkg.
Nonfarm Liab.
$ 2,800 $ 3,815 & savings
$ 3,963 $ 4,567
NONFARM NET WORTH $ 35,175 $ 35,454 Cash value life ins.
5,965
6,675
Nonfarm real estate
8,857
8,857
FARM & NONFARM*
Jan. 1
Dec. 31 Auto (personal sh.)
5,178
Total Assets
$1,044,981$1,151,654 7,180
Stocks & bonds
3,798
4,255
Total Liabilities 341,436
357.390
Household furn.
8,979
7,714
All other
1.236
TOTAL FARM & NON­
21
Total Nonfarm $ 37,975 $ 39,269 FARM NET WORTH $703,545 $794,264
*Assumes that average nonfarm assets and liabilities for the nonreporting
farms were the same as for those reporting.
Financial lease obligations are included in the balance sheet. The
present value of all future payments is listed as a liability since the
farmer is committed to make the payments by signing the lease. The present
value is also listed as an asset, representing the future value the item has
to the business. For 1989, leases were discounted by 11.5 percent.
9
Advanced government receipts are included as current liabilities.
Government payments received in 1989 that are for participation in the 1990
program are the end year balance and payments received in 1988 for
participation in the 1989 program are the beginning year balance.
Date ______________________________
1989 FARM BUSINESS & NONFARM BALANCE SHEET
Fam Assets
Jan. 1
De", 31
Farm Liabilities
Net Rortb
~
Jan, 1
Dec, 31
Current
Accounts payable
Operating debt:
Cuq;:~nt
Farm cash, checking
& savings
Accounts rec.
Prepaid expense
Feed & supplies
Total
Short Term:
Adv. govt. rec.
Total
Intermediate
Intermediate
Dairy cows:
owned
leased
Heifers
Bulls/other lvstk.
Mach./eq. owned
Mach./eq. leased
FLB/PCA stock
Other stock/cert.
Total
Financial lease
(cattle/mach. )
FLB/PCA stock
Total
Long-Term
Long-Te,m
Land/buildings:
owned
leased
Financial lease
(structures)
Total
Total Farm Liab.
FARM NET WORTH
Total
Total Farm Assets
Nonfarm Asset§
Jan. 1
D~c,
21
Personal cash, chkg.
& savings
Cash val. life ins.
Nonfarm real est.
Auto (pres. share)
Stocks & bonds
Household furn.
All other
Total Nonfarm
TOTAL FARM ~ NONFARM
Total Farm & Nonfarm Assets
Less Total Farm & Nonfarm Liabilities
Farm & Nonfarm Net Worth
Nonfarm Liabilities
Jan. 1
Net Wgrth
~
O~c,
Nonfarm Liab. :
Total Nonfarm
Liabilities
Nonfarm
Net Worth
Jan. 1
Dec, 31
31
10 Balance sheet analysis involves examination of relative asset and debt levels
for the business. Percent equity is calculated by dividing end of year net
worth by end of year assets. The debt to asset ratio is compiled by dividing
liabilities by assets. Low debt to asset ratios reflect business solvency
and the potential capacity to borrow. Debt levels per productive unit
represent old standards that are still useful if used with measures of cash
flow and repayment ability. The change in farm net worth without
appreciation is an excellent indicator of farm generated financial progress.
BALANCE SHEET ANALYSIS 42 Western Plain Region Dairy Farms, January 1, 1990 Item
Financial Ratios - Farm: Percent equity
Debt/asset ratio: total
long-term
intermediate/current
Change in Net Worth:
Without appreciation
With appreciation
Farm Debt Analysis:
Accounts payable as % of total debt
Long-term liabilities as a % of total debt
Current & inter. liab. as a % of total debt
Farm Debt Levels:
Per Cow
Total farm debt
$ 1,759
Long-term debt
717
Intermediate & current debt
1,042
Average
My Farm
68% 0.32
0.34
0.30
----_%
$ 58,620
90,440
$
$
2%
41%
59%
Per Tillable
Acre Owned
$ 1.272
519
753
%
%
Per Cow
$
Per Tillable
Acre Owned
$
Farm inventory balance is an accounting of the value of assets used on the
balance sheet and the changes that occur from the beginning to end of year.
Changes in the livestock inventory are included in the dairy analysis. Net
investment indicates whether the capital stock is being expanded (positive)
or depleted (negative).
FARM INVENTORY BALANCE 42 Western Plain Region Dairy Farms, 1989 Item
b,vg, of Regional Farms
Mach, LEg.
.R..A..
Value beg, of year
$390,832
$170,922
Purchases
$ 47,060*
$ 43,606
$
Gift/inheritance +
0
238
+
+
Lost capital
8,432
Sales
1,363
519
Depreciation
- 17,864
- 24,390
Net investment
- 19,401
- 18,935
Appreciation
+ 14,574**
+ 3,256
Value end of year
$424,806
$193,112
My Farm
R.E,
Mach, LEg.
$
$
$
+
-+
$
-+
+
$
*$ 13,602 land and $ 33,458 buildings and/or depreciable improvements.
**Excludes $870 of appreciation on assets sold during the year.
11 Cash Flow Statement
Completing an annual cash flow statement is an important step in
understanding the sources and uses of funds for the business. Understanding
last year's cash flow is the first step toward planning and managing cash
flow for the current and future years.
The annual cash flow statement is structured to compare all the cash
inflows with all the cash outflows for the year. A complete list of cash
inflows and cash outflows are identified in the following table. By
definition, total cash inflows must equal total cash outflows when beginning
and ending balances are included. Any imbalance is, therefore, the error
from incorrect accounting of cash inflows and cash outflows. Whenever an
imbalance exists, all other financial measures may also be in error.
ANNUAL CASH FLOW STATEMENT 42 Western Plain Region Dairy Farms, 1989 Item
Average
Cash Inflows
Beginning farm cash, checking & savings
Cash farm receipts
Sale of assets: Machinery
Real estate
Other stock & certificate
Money borrowed (intermediate & long-term)
Money borrowed (short-term)
Increase in operating debt
Nonfarm income
Cash from nonfarm capital used in the business
Money borrowed - nonfarm
Total
Cash Outflows
Cash farm expenses
Capital purchases: Expansion livestock
Machinery
$ 18,167
582,582
519
2,072
2,019
60,266
6,458
My Farm
$_--­
8,067
1,527
1,472
571
$683,720
$_--­
$445,882
10,311
43,606
$_--­
Real estate
47,060
Other stock & certificate
Principal payments (intermediate & long-term) Principal payments (short-term) Decrease in operating debt 4,587
56,366
3,702
o
Personal withdrawals & family expenditures including nonfarm debt payments
52,215
15,844
Ending farm cash, checking & savings
Total
$679,573
Imbalance (error)
$
4,147
$_--­
12 Repayment Analysis
The second step in cash flow analysis is to compare the debt payments
planned for the last year with the amount actually paid. The measures listed
below provide a number of different perspectives on the repayment performance
of the business. However, the critical question to many farmers and lenders
is whether planned payments can be made in 1990. The cash flow projection
worksheet on the next page can be used to estimate repayment ability, which
can then be compared to planned 1990 debt payments shown below.
FARM DEBT PAYMENTS PLANNED
Same 32 Western Plain Region Dairy Farms, 1988 and 1989
Debt Payments
Long-term
Interm ediate-term
Short- term
Operating (net
redu ction)
Accounts payable
(net reduction)
Total
,t2.veraie
1989 Payment§
Planned
Made
Planned
1990
$ 20,458
48,755
7,892
$ 25,508
65,598
1,923
$ 19,162
51,097
931
1~,293
0
7,820
1.707
1.074
1.088
$ 91,104
$ 94,103
$ 80,098
Per cow
$
Per cw t. 1989 milk $
Percen t of total
1989 receipts
Percen t of 1989
milk receipts
456
2.38
$
$
471
2.46
14%
15%
16%
17%
My Farm
1989 Payments
Made
Planned
Planned
1990
$
$
$
$
$
$
$
$
$
$
The ca§h flow coverage ratio measures the ability of the farm business
to meet its planned debt payment schedule. The ratio shows the percentage of
planned payments that could have been made with last year's available cash
flow. Farmers who did not participate in DFBS last year will find in their
report a cash flow coverage ratio based on planned debt payments for 1990.
CASH FLOW COVERAGE RATIO
Same 32 Western Plain Region Dairy Farms, 1988 and 1989
Item
Cash farm receipts - Cash farm expenses + Interest paid - Net personal withdrawals from farm** (A) - Amount Available for Debt Service
(B) - Debt Payments Planned for 1989
(as of December 31, 1988)
(A + B) - Cash Flow Coverage Ratio for 1989
Average
$617,949
464,288
34,634
52.808
$135,487
$ 91,104
1.49
My
Farm
$_--­
$_--­
$_--­
**Personal withdrawals and family expenditures less nonfarm income and
nonfarm money borrowed. If family withdrawals are excluded, or
inaccurately included, the cash flow coverage ratio will be incorrect.
13
ANNUAL CASH FLOW WORKSHEET
Regional
Average
(per cow)
190
Item
Average number of cows
Accrual Oper. Receipts
Milk
Dairy cattle
Dairy calves
Other livestock
Crops
Misc. receipts
Total
Accrual Oper. Expenses
Hired labor
Dairy grain & conc.
Dairy roughage
Nondairy feed
Mach. hire/rent/lease
Mach. rpr./parts & auto
Fuel, oil & grease
Replacement 1vstk.
Breeding
Vet & medicine
Milk marketing
Cattle lease
Other livestock exp.
Fertilizer & lime
Seeds & plants
Spray/other crop exp.
Land, bldg. ,fence repair
Taxes
Real estate rent/lease
Insurance
Utilities
Miscellaneous
Total Less Int. Paid
$
2,736
301
49
My Farm
Total
Per Cow
$_ __
$_-
$_--­
$_ __
$_-­
$_--­
$_ __
$_­
$_--­
6
1
$
$
98
3,191
400
709
25
5
29
136
55
26
31
71
72
3
$
99
91
50
46
37
39
70
30
56
32
2,112
Net Accrual Operating Income
(total)
(without interest paid)
$204,472
- Change in 1vstk./crop inv.*
11,893
- Change in accts. rec.
9,823
+ Change in feed/supply inv.**
-11,018
+ Change in accts. payab1e***
-2,663
NET CASH FLOW
$169,075
- Net personal withdrawals from
farm (see footnote on pg. 12) 50,117
Available for Farm Debt
Payments & Investments
$118,958
- Farm debt payments
90,899
Available for Farm Investment
$ 28,059
- Capital purchases: cattle,
machinery & improvements
$105,564
Additional Capital Needed
$_--­
$_--
$_--­
$_--
$_--­
$
$
$
$
$
$
*Inc1udes change in advance government receipts.
**Inc1udes change in prepaid expenses.
***Exc1udes change in interest account payable.
---
Expected
1989
Change Projection
- - - - - - - - - - - - - - - - - - - - - - - - - - - - -
14 Cropping Analysis
The cropping program is an important part of the dairy farm business
which is often inadequately managed. A complete evaluation of what the
available land resources are, how they are being used, how well crops are
producing. and what it costs to produce them is required to evaluate
alternative cropping and feed purchasing choices.
LAND RESOURCES AND CROP PRODUCTION 42 Western Plain Region Dairy Farms, 1989 My Farm
Average
Item
Owned
218
31
61
316
Land
Tillable
Nontillable
Other nontil1ab1e
Total
Crop Yields
Hay crop
Corn silage
Other forage
Total forage
Corn grain
Oats
Wheat
Other crops
Tillable pasture
Idle
Total Tillable Acres
Rented
261
3
16
286
Farms
42
42
Acres
203
115
8
42
23
22
382
93
24
51
50
28
13
19
11
14
31
42
Total
546
33
83
662
Progt:Acre
2.82 tn
11.96 tn
3.84 tn
1.46 tn
3.21 tn
96.49 bu
52.03 bu
44.44 bu
Owned
Rented
Acres
DM
DM
DM
DM
---
Total
Prodt:Acre
tn DM
tn
tn DM
tn DM
tn DM
bu
bu
bu
11
546
Average crop acres and yields compiled for the region are for the farms
reporting each crop. Yields of forage crops have been converted to tons of
dry matter using dry matter coefficients reported by the farmers. Grain
production has been converted to bushels of dry grain equivalent based on dry
matter information provided.
The following measures of crop management indicate the relationship
between forage production, forage production resources and the dairy herd.
CROP MANAGEMENT FACTORS
42 Western Plain Region Dairy Farms, 1989
Item
Total tillable acres per cow
Total forage acres per cow
Harvested forage dry matter, tons per cow
Average
2.88
2.02
6.60
My Farm
15 Cropping Analysis (continued)
A substantial number of cooperators have allocated crop expenses among
the hay crop, corn, and other crops produced. Fertilizer and lime, seeds and
plants, and spray and other crop expenses have been computed per acre and per
production unit for hay and corn. Additional expense items such as fuels,
labor, and machinery repairs are not included.
CROP RELATED ACCRUAL EXPENSES Vestern Plain Region Dairy Farms Reporting, 1989 Total
Per
Till.
Ac,~
lum
Number of farms
reporting
Average number
of acres
Fertilizer & lime $
Seeds & plants
Spray & other crop
expense
Total
$
HiY C[QP
Per
Per
Ion ~M
A",e
42
Corn
Grain
Per Dry
Sh~ll Bu,
21
21
546
31.68 $
17.22
163
20.58 $
10.99
8.00
4.27
1~.92
6 , Z2
38.30 $
2.61
14.89
64.85 $
Corn
Silage
Per Ton
DM;
All
Corn
Per
A,,[e
$
$
177
47.22 $
23.91
13.63
6.90
28,81
99.94 $
8.32
28.85
$
$
0.53
0.27
0.32
1.12
My Firm:
Fertilizer & lime $ _ ­
Seeds & plants
Spray & other crop
expense Total $==
$_-
$==
$_­
$==
$_-
$_­
$­
$-
----$­
$_­
Most machinery costs are associated with crop production and should be
analyzed with the crop enterprise. Total machinery expenses include the
major fixed costs (interest and depreciation), as well as the accrual
operating costs. Although machinery costs have not been allocated to
individual crops, they are shown below per total tillable acre..
ACCRUAL MACHINERY EXPENSES
42 Western Plain Region Dairy Farms, 1989
Machinery
Expense Item
Fuel, oil & grease
Machinery repairs & parts
Machine hire. rent & lease
Auto expense (farm share)
Interest (5%)
Depreciation
Total
Average
Total
Per Til.
Expenses
Acre
$ 10,517
25,321
5,482
539
9,101
24.390
$ 75,348
19.27
46.41
10.05
0.99
16.68
44,70
138.10
$
$
My Farm
Total
Per Til.
Expenses
Acre
$_-­
$_-­
$_-­
16 Dairy Analysis
Analysis of the dairy enterprise can tell a great deal about the
strengths and weaknesses of the dairy farm business. Information on this
page should be used in conjunction with DRI and other dairy production
information. Changes in dairy herd size and market values that occur during
the year are identified in the table below. The change in inventory value
without appreciation is attributed to physical changes in herd size and
quality. Any change in inventory is included as an accrual farm receipt when
calculating all of the profitability measures on pages 6 and 7.
DAIRY RERD INVENTORY
42 Western Plain Region Dairy Farms, 1989
Dairy Cows
Valuiil
Reifeu
On en
No. Value
Calves
No. Value
55 $ 39,076
6,234
1,814
70 $ 47,124
52 $ 21,354
-2,429
1,264
43 $ 20,189
42 $ 10,313
1,703
852
12,868
48 $
~t:iild
Item
No.
Beg. year (owned)
+ Change w/o apprec.
+ Appreciation
End year (owned)
End incl. leased
Average number
183
200
201
190
Valuiil
$158,782
16,488
8,651
$183,921
No.
159 (all age groups)
My Farm:
Beg. of year (owned)
+ Change w/o apprec.
+ Appreciation
End of year (owned)
End including leased
Average number
$_­
$_­
$_­
$_­
$_­
$_­
$_­
$_­
(all age groups)
Total milk sold and milk sold per cow are extremely valuable measures
of productivity on the dairy farm. These measures of milk output are based
on pounds of milk marketed during the year. Farm managers on DRI should
compare milk sold per cow with their rolling herd average on the test date
nearest December 31 to see how close the DRI estimate of milk produced is to
actual milk sales.
MILK PRODUCTION
42 Western Plain Region Dairy Farms, 1989
Item
Total milk sold, 1bs.
Milk sold per cow, 1bs.
Average milk plant test, percent butterfat
Average
3,563,617
18,803
3.62
My Farm
17 The cost of producins milk has been compiled using the whole farm method and
is featured in the following table. Accrual receipts from milk sales can be
compared with the accrual costs of producing milk per cow and per
hundredweight of milk. Using the whole farm method, operatins costs of
producins milk are estimated by deducting nonmi1k accrual receipts from total
accrual operating expenses including expansion livestock purchased. Total
costs of producing milk include the operating costs of producing milk plus
depreciation on machinery and buildings, the value of operators' labor and
management, and the interest charge for using equity capital. Note that the
cost of labor, management, and equity capital has been excluded in the
intermediate calculation.
ACCRUAL RECEIPTS FROM DAIRY AND COST OF PRODUCING MILK
42 Western Plain Region Dairy Farms, 1989
Item
Accrual Costs of
Producing Milk
Operating costs
Total costs w/o
opers' labor,
mgmt. &: capital
Total Costs
Accrual Receipts
From Milk
Total
Average
Per Cow
Per Cwt,
Total
My Farm Per Cow
Per Cwt. $356,929
$
1,883
$
10.02
$_-­
$400,576
$480,428
$
$
2,114
2,535
$
$
11.24
13.48
$_-­
$_-­
$_-­
$_--
$_-­
$_-­
$518,444
$
2,736
$
14.55
$_-­
$_--
$_-­
The accrual operating expenses most commonly associated with the dairy
enterprise are listed in the table below. Evaluating these costs per unit of
production enables an evaluation of the dairy enterprise.
DAIRY RELATED ACCRUAL EXPENSES 42 Western Plain Region Dairy Farms, 1989 Average
Item
Purchased dairy grain
&: concentrates
Purchased dairy roughage
Total Purchased
Dairy Feed
Purchased grain &: conc,
as % of milk receipts
Purchased feed &: crop expo
Purchased feed &: crop expo
as % of milk receipts
Breeding
Veterinary &: medicine
Milk marketing
Cattle lease
Other livestock expense
Per Cow
$
709
734
$
921
$
31
71
Per Cow
3.77
0,13
$
$
$
3.91
$
$
$
4.90
$
- -% $
$
0,16
0.38
0.38
0,02
0.52
$
26%
34%
72
3
99
Per Cwt.
$
~
$
My Fatm
Per Cwt.
- ­%
$
18
Capital and Labor Efficiency Analysis
Capital efficiency factors measure how intensively the capital is being
used in the farm business. Measures of labor efficiency are key indicators
of management's success in generating products per unit of labor input.
CAPITAL EFFICIENCY 42 Western Plain Region Dairy Farms, 1989 Per
W2rk~r
It~m Farm capital
Real estate
Machinery & equipment
Capital turnover, years
My Farm:
Farm capital
Real estate
Machinery & equipment
Capital turnover, years
$201,618
$
35,427
Per
Per Tillable
Per Tillable
~2W
acr~
acr~ Own~d
1,942
$
5,591
2,153
982
$
3,812
1,468
341
1.67
$_-­
$_--­
$_-­
LABOR FORCE INVENTORY AND ANALYSIS 42 Western Plain Region Dairy Farms, 1989 Labor Force
Months
Age
12
7
44
43
34
Operator number 1
Operator number 2
Operator number 3
Family paid
Family unpaid
Hired
Total
2
2
2
38
63 My Farm: Total
Operator's
Labor Costs
12 ­
+
12 ­
+ 12 ­
Labor
Efficiency
Cows, average number
Milk sold, pounds
Tillable acres
Work units
+
Total
Total
Value of operator(s)
labor ($l,050/mo.) $ 21,875
Family unpd.($750/mo.)
1,393
Hired
75,771
Total Labor
$ 99,039
Machinery Cost
$ 75,348
Total Labor & Mach.
$174,387
13
5.26 Worker Equivalent
1.73 Operator/Manager Equiv.
___ Worker Equivalent
Operator/Manager Equiv.
115
7
400
$ 523
$ 398
$ 920
Total
My Farm
Per Worker
36
678,015
104
386
Average
Per
Per
Cow
Til. Acre
$
$ 27,725
12,650
3,798
13
13
Average
Per Worker
190
3,563,617
546
2,027
Value of
Labor & Mgmt.
Years of
of Educ.
$40.09
2.55
138,88
$181.52
$138.10
$319.63
Total
My Farm
Per
Per
Cow
Til. Acre
$
$_-­
$_-­
$
$
$
$_-­
$_­
$_­
$_-­
$_-­
$_-­
19 COMPARATIVE ANALYSIS OF THE FARM BUSINESS
Pro~ress
of the Farm Business
Comparing your business with average data from regional DFBS coopera­
tors that participated in both of the last two years is one part of a
business checkup, It is equally important for you to determine the progress
your business has made over the past two or three years and to set targets or
goals for the future.
PROGRESS OF THE FARM BUSINESS
Same 32 Western Plain Region Dairy Farms, 1988 and 1989
Average of 32 Farms*
1988
1989
Selected Factors
Size of Business
200
Average number of cows
182
Average number of heifers
154
165
Milk sold, 1bs.
3,414,786 3,828,979
Worker equivalent
4.92
5.42
Total tillable acres
504
490
Rates of Production
Milk sold per cow, 1bs.
Hay DM per acre, tons
Corn silage per acre, tons
Labor Efficiency
Cows per worker
Milk sold/worker, lbs.
Cost Control
Grain & cone. purchased
as % of milk sales
Dairy feed & crop expo
per cwt. milk
Labor & mach. costs/cow
18,769
3.3
15
19,145
3.0
12
37
693,431
37
706,888
27%
My Farm
1989
1988
Goal
26%
$
$
4.39
873
$
$
4.69
921
$
$
$
$
$
$
$
$
5,698
956
1.8
$
$
5,735
967
1.7
$
$
$
$
$
$
$130,834
$158,465
$
$
$
$
$
$
$ 53,713
$
Ca~ital
Efficiency** Farm capital per cow Mach. & equip. per cow Capital turnover, years Prof1tabil1ty Net farm inc. w/o apprec. $ 98,729
Net farm inc. w/apprec. $120,401
Labor & mgt. income per oper./manager
$ 38,425
Rate of return on eq.
capital w/apprec.
11.7%
Rate of return on all
capital w/apprec.
9.0%
Financial Summ~ry
Farm net worth, end year
$724,978
Debt to asset ratio
0.33
Farm debt per cow
1,902
$
*Farms participating both years.
14.7%
%
%
13.0%
%
%
$824,010
0.31
1,760
$
$
$
$
$
**Average for the year.
$
20 Farm Business Charts
The Farm Business Chart is a tool which can be used in analyzing a
business by drawing a line through the figure in each column which represents
the current level of management performance. The figure at the top of each
column is the average of the top 10 percent of the 406 farms for that factor.
The other figures in each column are the average for the second 10 percent,
third 10 percent, etc. Each column of the chart is independent of the others.
The farms which are in the top 10 percent for one factor would not necessarily
be the same farms which make up the top 10 percent for any other factor.
The cost control factors are ranked
is not necessarily the most profitable.
position is somewhere near the middle or
of costs, and must be taken into account
from low to high, but the lowest cost
In some cases, the "best" management
average. Many things affect the level
when analyzing the factors.
References to DFBS output page numbers for participating dairy farmers are
provided in the table headings.
FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS
406 New York Dairy Farms, 1988
Size of ~usiDess
Worker
No.
Pounds
Equiv­
of
Milk
alent
Cows
Sold
(DFBS
pg. 10)
(10)
(10)
7.6
302
5,478,274
4.5
150
2,555,561
3.6
118
1,965,272
3.2
99
1,667,766
2.9
84
1,377,121
-
Rate~
Pounds
Milk Sold
Per Cow
(9)
20,561
18,872
18,058
17,409
16,886
_____________________________
2.6
2.3
2.1
1.9
1.3
Grain
Bought
Per Cow
(9)
$286 401
463
522
572
72
62
55
47
36
1,156,002
1,000,552
857,485
716,763
542,182
% Feed is
of Milk
Receipts
(9)
14%
20
23
26
27
M_~
______
16,298
15,785
15,024
14,142
11,650
Qf Produ~tion
Tons
Tons Corn
Hay Crop Silage
DMLAcre Per Acre
~
(8)
4.2
3.5
3.1
2.9
2.6
__
•
__
•
(8)
21
18
16
15
15
________
2.4
2.2
2.0
1.7
1.2
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Worker
Per Worker
(10)
832,165
666,980
603,280
561,713
514,877
29
27
25
22
17
467,076
432,494
397,092
347,768
266,376
__________________________
14
13
12
11
8
Cost Control
Machinery
Labor lie
Costs
Machinery
Per Cow
Costs fer Cow
(10)
(10)
$219
$ 500
282
618
324
682
358
726
387
763
(10)
50
40
36
33
31
Feed lie Crop
Expenses
Per Cow
(9) $ 449
564
623
678
735
Feed lie Crop
Expenses Per
Cwt. Milk
(9 )
$3.00 3.64 3.93 4.22 4.49 .------------------------------------------------------------------------------­
615
655
700
767
886
29
31
32
35
39
415
442
480
539
664
805
854
919
1,000
1,142
785
824
874
939
1,086
4.71
4.94
5.19
5.54
6.47
21
The next section of the Farm Business Chart provides for comparative
analysis of the value and costs of dairy production.
The profitability section shows the variation in farm income by decile and
enables a dairy farmer to determine where he or she ranks by using several
measures of farm profitability. Remember that each column is independently
established and the farms making up the top decile in the first column will not
necessarily be on the top of any other column. The dairy farmer who ranks at or
near the top of most of these columns is in a very enviable position.
FARM BUSINESS CHART FOR FARM MANAGEMENT COOPERATORS 406 New York Dairy Farms, 1988 Dairy
Receipts
Per Cow
(9)
$2,974
2,723
2,594
2,496
2,4l3
2,339
2,251
2,149
1,984
1,663
Dairy
Receipts
PeI Qwt,
(9)
$16.53
15.33
14.89
14.62
14.37
Oper. Cost
Milk
P!l;lr CQw
(9)
$ 878
1,170
1,309
1,409
1,506
14.17
l3.98
13.72
13.30
12.65
Oper. Cost
Milk
P!l;lI Cwt,
(9)
$ 5.97
7.50
8.18
8.72
9.19
1,588
1,671
1,775
1,923
2,122
Total Cost
Production
PeI Cow
(9)
$1,697
1,980
2,092
2,206
2,303
Total Cost
Production
Per Cwt.
(9)
$11.22
12.42
13.03
l3.45
13.85
2,383
2,489
2,613
2,749
3,085
14.45
14.93
15.68
16.59
19.26
9.62
10.06
10.51
11.11
12.96
Profitability
Fa!:m Income
With
Without
A:tl:tlrecia,tion
A:tl:tlrecia,tion
(3)
(3)
$191,562
$152,016
91,674
64,178
71,488
47,392
59,330
39,075
48,938
32,619
tl~t
40,055
32,386
24,193
16,077
-5
25,596
20,332
13,859
6,208
-11,890
Return to Operator's Labor,
Labor &
Management Income
Management. ~ ~guit~ Ca:tlita,l
With
Without
Per
Per
Farm
A:tl:tlrec;i.ation
A:tl:tlreciation
0:tlerator
(3)
(3)
(3)
(3)
$190,109
$150,408
$100,436
$82,939
89,579
62,028
36,434
27,820
69,860
45,854
25,726
19,437
57,028
37,325
19,032
14,022
47,001
30,8l3
13,156
10,174
38,398
30,714
21,562
13,720
-1,766
24,169
17,339
11,857
3,924
-13,815
7,890
2,740
-4,487
-11,265
-33,523
6,156
2,308
-3,781
-9,151
-34,040
Farm Business Charts for farms with freesta11 barns and 120 cows or less
and more than 120 cows, and farms with conventional barns with 60 cows or less
and more than 60 cows are discussed in the section on pages 23-28.
22 Financial Analysis Chart
The farm financial analysis chart is designed just like the Farm Business
Chart and may be used to measure the financial health of the farm business.
Most of the financial measures used in the chart are defined on pages 7, 10, 12,
and 18 of this publication. References to DFBS output page numbers for
participating dairy farmers are provided in the table headings.
FINANCIAL ANALYSIS CHART 406 New York Dairy Farms, 1988 Debt Payments
Made Per Cow
(DFBS pg. 7)
$
Liquidity (repayment)
Debt Payments
Cash Flow
as Percent
Coverage
of Milk Receipts
Ratio
(7)
61
203
293
373
435
494
563
639
742
1,161
Percent
Equity
(DFBS
pg. 5)
98%
90
82
75
69
65
58
52
43
28
SummSirize Your
3%
9
14
18
20
23
27
31
36
59
SQ1vency
Debt[Asset Ratio
Current &
Long
Interm~diate
I~rm
(7)
Available for
Debt Service
Per Cow
(11)
5.65
1. 84
1.42
1.21
1.09
0.96
0.83
0.68
0.52
-0.29
$845
660
572
510
462
415
361
300
222
-23
Debt
Per Cow
(5)
$
112
660
1,196
1,585
1,941
2,264
2,630
2,995
3,465
4,687
Profitability
Capital
Rate of
Turnover
Return on
(years}
Equity CSip.
Efficien~y ~
Total
Farm Cap.
P~r Cow
(5)
(5)
(10)
(10)
0.01
0.04
0.10
0.17
0.23
0.29
0.36
0.41
0.50
0.73
0.00
0.01
0.12
0.24
0.33
0.45
0.54
0.63
0.77
1.20
$4,110
4,849
5,231
5,620
5,989
6,334
6,806
7,358
8,214
10,357
1. 51
1.81
1. 98
2.13
2.29
2.43
2.56
2.73
3.05
3.91
(3)
25%
13
10
8
6
4
2
0
-4
-16
Busine~s Perfo~manc~
The Farm Business and Financial Analysis Charts can be used to help
identify strengths and weaknesses of your farm business. Identify three major
strengths and three areas of your farm business that need improvement.
Strengths:
Need Improvement:
23
Comparisons by Type of Barn and Herd Size
When analyzing a dairy farm business by comparing it to a group of farms,
it is important that the group of farms used has as many of the same physical
characteristics as possible as the farm being analyzed. To assist in this
endeavor, dairy farms in the 1988 State Summaryl have been divided into those
with freestall and those with conventional housing. Within each group is a
further classification by size of the dairy herd.
The table on page 24 shows the average values for the resulting four
groups of dairy farms. Within each housing type, the larger herd size has the
highest crop yields and pounds of milk sold per cow. The total cost of
producing milk was lower on the larger farms and labor efficiency greater.
Profitability was also greater on the larger farms within each housing type.
Farm business charts have been computed for each of the four housing and
herd size categories. References to DFBS output page numbers for participating
dairy farmers are provided in the table headings. From these charts on pages
25-28 the range in size of business, rates of production, labor efficiency,
value and cost of producing milk, and profitability can be observed. The range
in every category of business performance is tremendous.
By comparing the farm's performance on the most appropriate business
chart, a farm manager will be better able to evaluate his or her business
performance. Farm managers should remember, however, that their competition is
not limited to the other farms in their own barn type and herd size category.
They should observe how their management performance compares with farms in
other categories as well.
Herd Size Comparisons
A detailed comparison of profitability, financial situation, and business
analysis factors across herd sizes is contained on pages 29-36. As herd size
increases, the average profitability also increases (pages 29-30). Net farm
income without appreciation was $233,809 per farm for the 300 or more herd size
group and $12,875 per farm for those with less than 40 cows. This relationship
holds for all measures of profitability including rate of return on equity
capital.
As herd size increases, percent equity generally decreases (pages 31-34).
However, farm net worth increases substantially as herd size increases. The
average net worth for all size farms increased during 1988.
Crop yields generally increased as herd size increased, but fertilizer and
lime expenses and machinery cost per tillable acre also increased (pages 35-36).
Milk sold per cow generally increased as herd size increased, ranging from
15,833 pounds on the farms with 40 to 54 cows to 19,113 pounds on farms with 300
or more cows. Farm capital per worker increased as herd size increased, while
farm capital per cow decreased as herd size increased. Cows per worker
increased dramatically as herd size increased, ranging from 20 at the lowest
herd size category up to 45 at the largest size category.
ISmith, Stuart F., Wayne A. Knoblauch, and Linda D. Putnam, Dairy Farm Management Business Summary. New York, 1988, Department of Agricultural Economics, Cornell University, A.E. Res. 89-12, August 1989. 24 SELECTED BUSINESS FACTORS BY TYPE OF BARN AND HERD SIZE 406 New York Dairy Farms, 1988 Farms with:
Item
gonv~ntiona1
:i~0
Cows
Number of farms
CroRRin& Pro&ram Ana1~si§
Total Tillable acres
Tillable acres rented*
Hay crop acres*
Corn silage acres*
Hay crop, tons DM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage DM per cow, tons
Tillable acres/cow
Fert. & lime exp./ti1. acre
Total machinery costs
Machinery cost/tillable acre
Fr~esta:11
:i12Q Cows
65
>120 f,;;ows
259
85
133
59
2.5
14.7
40.9
7.5
3.1
$29.68
$37,311
$144
560
209
237
181
2.9
14.3
45.3
7.2
2.6
$34.57
$82,010
$146
1,428,224
16,485
$9.25
$13.97
$12.88
$587
$3.56
27%
$4.47
84
69
1,381,093
16,496
$9.36
$14.14
$13.03
$608
$3.68
27%
$4.67
217
171
3,797,957
17,468
$9.64
$12.88
$13 .15
$660
$3.78
28%
$4.70
>QO f,;;ows
117
139
149
45
96
28
2.2
12.8
39.4
7.3
3.2
$21. 87
$18,754
$126
292
98
168
55
2.5
14.0
48.7
7.8
3.4
$24.92
$35,266
$121
Dair~ Analysis
Number of cows
46
Number of heifers
35
Milk sold, lbs.
745,373
Milk sold/cow, 1bs.
16,150
Operating cost of prod. milk/cwt.
$9.49
Total cost of prod. milk/cwt.
$15.35
Price/cwt. milk sold
$12.90
Purchased dairy feed/cow
$620
Purchased dairy feed/cwt. milk
$3.84
Purc. grain & conc. as % milk rec.
28%
Purc. feed & crop exp./cwt. milk
$4.59
87
72
85
Capital Efficiency
Farm capital/worker
Farm capital/cow
Farm capital/til. acre owned
Real estate/cow
Machinery investment/cow
Capital turnover, years
$165,397
$6,874
$3,050
$3,637
$1,242
2.58
$190,032
$6,367
$2,829
$3,056
$1,186
2.38
$191,181
$6,391
$3,075
$2,944
$1,264
2.33
$220,397
$5,688
$3,523
$2,574
$915
1.97
Labor Efficiency
Yorker equivalent
Operator/manager equivalent
Milk sold/worker, lbs.
Cows/worker
York units/worker
Labor cost/cow
Labor cost/tillable acre
1. 92
1.17
388,601
24
252
$427
$132
2.90
1.44
492,003
30
325
$390
$115
2.80
1.40
493,473
30
5.61
1.43
676,903
39
395
$431
$167
$32,593
$8,213
$1,935
70%
$31,035
$8,928
$2,265
65%
Profitability & Balance Sheet
Net farm income (w/o apprec.)
Labor & mgmt. income/operator
Farm debt/cow
Percent equity
322
$388
$126
Ana1~sis
$15,113
$2,387
$2,424
65%
*Average of all farms, not only those reporting data.
$86,118
$31,202
$2,018
65%
25
FARM BUSINESS CHART FOR SMALL CONVENTIONAL STALL DAIRY FARM
117 Conventional Stall Dairy Farms with 60 or Less Cows, New York, 1988
Siz~
Worker
Equiv­
alent
(DFBS pg. 10)
3.0
2.4
2.2
2.1
2.0
of ~usiness
No.
Pounds
of
Milk
Cows
Sold
Rates of ;froduction
Tons Corn
Pounds
Tons
Milk Sold Hay Crop Silage
Per !:;ow
DMLAcre ;f~r Acre
(10)
(10)
(9)
(8)
58
56
54
51
49
1,069,621
952,284
883,230
828,725
760,558
20,399
18,512
17,716
17,216
16,604
3.8
3.1
2.8
2.6
2.4
Labot: Efficiency
Cows
Pounds
Milk Sold
Per
Per liorker
Worker
(10)
(8)
40
33
29
27
25
20
18
17
15
14
(10) 672,046
562,928
469,994
433,894
414,271
----~.-------------------------------.---.~----------- --------------.--._-------
2.0
1.7
1.5
1.3
1.0
46
43
40
37
29
716,896
676,549
628,044
566,471
427,103
Grain
Bought
Per Cow
(9)
% Feed is
of Milk
$318
418
466
518
554
23%
28
31
33
35
Rec~iyts
(9)
16,054
15,273
14,721
13,809
11,901
2.3
2.0
1.9
1.7
1.2
Cost Control
Machinery
Labor &
Costs
Machinery
;fer Cow
CO!2ts Per Cow
(10)
(10)
$197
250
315
364
392
$
24
23
21
19
15
13
12
10
10
7
554
692
755
804
841
385,463
353,856
330,435
292,749
226,460
Feed & Crop
Expenses
Per Cow
(9)
Feed & Crop
Expenses Per
Cwt, Milk
(9)
455
550
600
644
713
$3.02
3.57
3.93
4.22
4.47
$
---------------------.-.-------------~---------------- ----.-----.------.--------
593
641
710
781
896
Va1u~
Milk
Receipts
Per Cow
(9)
36
38
40
44
50
426
451
488
538
647
anQ CO!2t of Production
Oper. Cost
Total Cost
Milk
Production
~er !:;wt.
;f~r Cwt,
(9)
(9)
899
941
1,013
1,069
1,192
759
812
872
952
1,092
4.68
4.90
5.18
5.58
6.70
Profitability
Net Farm Incom~
With
Without
Labor & Mgmt. Income
Per Farm
Aynrec ,
Per Qner ,
Ann rec ,
(3)
(3)
(3)
(3)
$2,631
$12.22
$66,048
$40,605
$26,515
$ 6.23
$25,175
2,411
7.69
13.25
45,717
31,042
18,240
15,171
2,289
8.23
14.00
38,199
24,592
12,447
10,259
2,200
8.68
14.57
31,413
20,824
8,024
6,890
2,122
9.22
15.09
27,367
16,987
5,314
4,522
_.. ----------------------------------------------------------------------------­
2,064
9.64
15.62
22,397
13 ,416
2,240
2,113
1,975
10.09
16.24
19,247
9,008
-1,921
-1,703
1,886
10.53
16.70
16,846
6,522
-5,605
-5,125
1,756
11.26
17.41
10,388
2,017
-9,948
-8,298
1,545
13.48
21.06
-9,679
-24,960
-402
-21,802
26
FARM BUSINESS CHART FOR lARGE CONVENTIONAL STALL DAIRY FARMS
139 Conventional Stall Dairy Farms with More Than 60 Cows, New York, 1988
Size of Business
Worker
No.
Pounds
Equiv­
of
Milk
alent
Cows
Sold
(DFBS
Pg. 10)
(10)
(10)
4.7
3.7
3.3
3.1
2.9
141
112
98
93
83
2,455,689
1,887,601
1,724,659
1,531,719
1,396,207
Rates of Production
Tons
Tons Corn
Pounds
Milk Sold Hay Crop Silage
Per Cow
DMtAcre Per Acre
(9)
(8)
19,800
18,638
18,106
17,463
16,959
4.1
3.5
3.1
2.8
2.6
(8)
21
17
16
15
15
____________________________________________________ w
2.6
2.5
2.4
2.1
1.8
78
73
67
64
61
1,286,389
1,172,462
1,086,160
992,080
822,664
Grain
Bought
Per Cow
(9)
% Feed is
of Milk
RilceiRts
(9)
$272
371
433
502
565
24%
28
30
32
33
16,331
15,846
15,340
14,294
11,490-
2.4
2.2
2.0
1.7
1.2
Efficien~y
Pounds
Milk Sold
Per Worker
(10)
(10)
47
38
35
33
31
755,830
651,861
591,353
541,449
510,816
__________________________ •
29
28
26
23
19
14
13
12
11
8
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$221
285
327
358
391
Labor
Cows
Per
Worker
476,869
445,549
410,818
373,760
293,815
Feed & Crop
Expenses
Per Cow
(9)
Feed & Crop
Expenses Per
Cwt. Milk
(9)
$429
541
607
658
701
$3.01
3.57
3.82
4.02
4.27
$526
647
698
750
787
------------------------------.----------------------- -~-------.---------.------
605
648
700
757
883
35
37
39
41
48
418
441
475
519
660
Value and Cost of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
Per Cwt,
Per Cwt.
(9)
(9)
(9)
$2,590
2,425
2,339
2,256
2,174
$ 6.33
7.33
7.95
8.42
8.91
$11.06
12.27
12.97
13.28
13.58
838
879
939
1,035
1,173
751
801
847
915
1,068
4.53
4.77
5.03
5.36
6.14
Profitability
Net Farm Income
With
Without
Labor & Mgmt. Income
Per Farm
Per ORer.
ARRrec.
ARRrec.
(3)
(3)
(3)
(3)
$113,623
79,373
67,707
59,750
51,694
$69,808
54,563
46,491
41,639
35,314
$45,158
33,225
26,185
20,956
16,765
$40,726
23,975
19,075
15,497
11,634
-----~------------------.----------------------------- --------------------------
2,120
2,024
1,940
1,820
1,480
9.27
9.76
10.27
10.94
12.89
14.05
14.55
15.13
16.09
18.79
46,333
40,463
34,299
24,116
2,703
31,497
26,457
21,668
11,595
-10,487
11,988
6,807
-1,047
-9,842
-30,954
8,446
4,985
-585
-7,205
-21,750
27
FARM BUSINESS CHART FOR SMALL FREESTALL DAIRY FARMS
65 Freesta11 Barn Dairy Farms with 120 or Less Cows, New York, 1988
Size of Business
'Worker
No.
Pounds
Equiv­
of
Milk
alent
Cows
Sold
(DFBS
pg. 10) (10)
(10)
Labor Efficiency
Cows
Pounds
Per
Milk Sold
Per 'Worker
'Worker
Rates of Production
Tons
Tons Corn
Pounds
Milk Sold Hay Crop Silage
DM/Acre Per Acre
Per Cow
(8)
(9)
(10)
(8)
(10)
4.2
3.5
3.3
3.1
3.0
115
108
105
100
92
2,135,755
1,909,121
1,771,060
1,688,234
1,505,063
20,957
19,580
18,347
17,512
16,867
3.9
3.4
3.1
2.9
2.8
21
20
18
16
15
46
39
36
34
31
738,383
637,748
582,787
559,711
525,414
2.8
2.6
2.3
2.1
1.6
84
78
70
59
42
1,365,945
1,191,775
1,061,328
872,566
610,624
16,271
15,778
14,891
13,601
11,393
2.5
2.3
2.0
1.6
1.1
15
14
12
11
29
28
27
25
18
474,472
455,536
429,339
376,468
277 ,940
Grain
Bought
Per Cow
(9)
$258
416
454
511
583
Feed is
of Milk
Receipts
%
(9)
23%
28
31
35
37
8
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
Costs Per Cow
(10)
(10)
$234
302
346
369
396
$
530
662
719
767
807
Feed & Crop
Expenses
Per Cow
(9)
$
Feed & Crop
Expenses Per
Cwt. Milk
(9)
480
587
629
685
761
$2.91
3.65
3.98
4.47
4.78
800
839
896
995
1,152
5.00
5.28
5.51
5.89
6.95
--------------------- .. ---------------------------------_._-------------.---- .. ­
635
672
712
781
883
38
40
41
44
53
439
510
561
603
767
852
900
1,036
1,153
1,344
Value and Co§t of Production
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per CQw
Per Cwt,
Per Cwt,
(9)
(9)
(9)
$2,677
2,502
2,361
2,269
2,175
$ 5.99
7.65
8.34
8.71
9.29
$11.76
12.36
13.01
13.42
14.01
______________________________
2,106
2,060
1,965
1,792
1,567
9.77
10.07
10.61
11.56
13.45
k
___
14.68
15.56
16.33
17.14
18.97
Profitability
Net ;Earm Income
'With
'Without
Labor §! Hgmt. Incom!i
Apprec,
Apprec.
Per Farm
Per Oper,
(3)
(3)
(3)
(3)
$122,057
86,612
72 ,241
60,248
51,410
•
$80,538
59,942
46,332
40,507
36,770
$50,935
36,940
27,220
22,245
16,212
$41,222
28,176
20,081
14,792
11,783
______________________________________
43,786
33,786
22,275
11,783
226
28,683
21,707
15,781
9,142
-13 ,498
12,431
7,906
-1,726
-10,710
-24,719
------
9,286
5,326
-1,838
-7,666
-22,741
28
FARM BUSINESS CHART FOR LARGE FREESTALL DAIRY FARMS
85 Freesta11 Barn Dairy Farms with More Than 120 Cows, New York, 1988
Size of Bl&siness
Worker
No.
Pounds
Equivof
Milk
Sold
a1~nt
~ows
(DFBS pg. 10) (10)
(10)
12.1
7.7
6.5
6.0
5.4
532
309
253
224
194
10,258,979
5,748,053
4,450,040
3,683,829
3,237,071
Rates of P);;oduction
Tons Corn
Pounds
Tons
Milk Sold Hay Crop Silage
Per Cow
DMLAcre Per Acre
(9)
21,283
19,739
18,818
17,827
17,274
(8)
4.8
4.1
3.8
3.4
3.1
Lab 0);;
Cows
Per
Worker
(8)
(10)
19
18
17
16
15
60
47
44
41
39
Effi!,;;1en!,;;~
Pounds
Milk Sold
Per Worker
(10) 1,027,141
839,146
742,700
685,010
648,889
---------------------------~--------------------------------------------------~-
4.8
4.2
3.9
3.6
2.9
173
153
136
127
121
2,920,311
2,550,953
2,313,893
2,088,296
1,660,164
Grain
Bought
Per Cow
(9)
% Feed is
of Milk
Recei12ts
(9)
$316
454
527
587
623
24%
30
32
34
36
16,940
16,266
15,745
14,707
12,411
Cost Control
Machinery
Labor &
Costs
Machinery
Per Cow
~osts Per Cow
(10)
(10)
$263
295
320
349
382
---------------------------~--
653
675
702
776
897
37
39
41
42
47
14
13
12
11
10
2.9
2.6
2.4
2.1
1.5
$
543
642
726
756
784
37
34
33
31
27
613,465
579,478
555,146
510,554
423,675
Feed & Crop
Expenses
Per Cow
(9)
Feed & Crop
Expenses Per
Cwt. Milk
(9)
487
644
737
775
811
$3.17
3.97
4.32
4.53
4.71
839
869
912
949
1,057
4.91
5.13
5.30
5.60
6.31
$
.. ------- .. ---------.--- -------------------------­
407
423
453
507
617
Value and Cost of P);;oduction
Milk
Oper. Cost
Total Cost
Receipts
Milk
Production
Per Cow
P~r Cwt,
p~);; Cwt,
(9)
(9)
(9)
831
900
947
989
1,093
Profitabilit~
Net FaDJl In!';;Qme
With
Without
Alm rec ,
Alu~re" ,
(3)
(3)
Labor ~ Mgmt. Income
Per OQer ,
Per FaDJl
(3)
(3)
$2,767
2,585
2,466
2,365
2,293
$ 5.23
7.66
8.92
9.39
9.85
$10.40
11.77
12.33
12.87
13.20
$367,659
223,987
158,470
123,985
105,605
$308,013
166,492
114,554
87,002
71,945
$225,699
115,331
69,277
50,003
39,841
$195,726
74,508
48,997
37,563
24,763
2,232
2,145
2,045
1,949
1,650
10.29
10.51
10.77
11.11
12.23
13.63
13 .88
14.36
14.85
16.60
90,906
74,583
63,368
41,941
12,620
62,101
44,749
33,199
20,940
-12,543
27,489
15,425
-177
-15,048
-50,857
18,851
12,052
133
-12,035
-43,219
29
FARM BUSINESS SUMMARY BY HERD SIZE
406 New York Dairy Farms, 1988
Item
Farm Size:
Number of farms
Less than
40 Cows
29
40 to
54 Cows
55 to
69 Cows
70 to
84 Cows
85 to
99 Cows
67
81
53
36
ACCRUAL EXfgNSgS
Hired labor
Dairy grain & concentrate
Dairy roughage
Nondairy feed
Machine hire/rent/lease
Machine repairs/parts
Auto expense (farm share)
Fuel, oil & grease
Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Cattle lease/rent
Other livestock expense
Fertilizer & lime
Seeds & plants
Spray & other crop expense
Landjbui1ding/fence repair
Taxes & rent
Telephone & electricity
Interest paid
Misc. (including insurance)
Total Operating Expenses
Expansion livestock
Machinery depreciation
Building depreciation
Total Accrual Expenses
$ 2,392
18,877
2,095
348
915
3,293
469
1,554
1,926
1,104
1,269
3,505
10
2,963
1,698
732
718
1,398
2,979
2,877
6,223
2,5Z6
$59,921
672
4,924
2,415
$67,932
$
4,607
27,003
1,749
144
1,517
4,837
415
2,208
1,023
1,568
1,675
4,900
52
4,874
3,465
1,340
1,021
1,478
5,209
3,635
9,444
3,135
$ 85,299
337
6,528
3,573
$ 95,737
$
9,317
34,299
916
263
1,421
7,323
687
3,423
1,516
2,064
2,645
5,727
0
5,534
5,162
1,961
1,713
2,359
6,374
4,572
10,280
4,550
$112,106
176
9,639
4,964
$126,885
$ 14,404
43,702
1,524
685
1,436
8,357
665
4,240
1,318
2,436
3,397
7,365
352
6,974
6,944
2,953
2,178
2,200
7,877
5,304
12,466
5,601
$142,378
537
11,715
5,960
$160,590
$ 19,414
56,902
580
63
1,229
13,107
781
5,632
1,523
3,102
4,035
7,354
14
9,024
8,272
3,680
3,045
3,661
8,324
5,994
15,535
6,31:2
$177,586
1,253
15,214
6,460
$200,513
ACCRUAL RECgIPTS
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Misc. receipts
Total Accrual Receipts
$69,058
6,296
1,809
479
1,936
1,230
$80,807
$ 96,366
7,934
2,074
131
977
3,258
$110,742
$126,139
10,340
2,580
115
2,558
4,9Z6
$146,708
$162,315
15,094
2,899
369
4,576
5,572
$190,826
$206,315
18,421
3,494
318
4,331
6,316
$239,195
$12,875
$20,258
$2,331
1.10
$2,119
$15,005
$28,129
$3,228
1.16
$2,782
$19,823
$33,894
$3,284
1. 36
$2,415
$30,236
$45,986
$11,721
1.41
$8,313
$38,682
$61,521
$17,960
1.31
$13,710
PROFITABILIIX ANALYSIS
Net farm income (w/o apprec.)
Net farm income (w/apprec.)
Labor & mgmt. income
Number of operators
Labor & mgmt. inc./oper.
Rates of return on:
Equity capital w/o apprec.
Equity capital w/apprec.
All capital w/o apprec.
All capital w/apprec.
-4.3%
0.0%
-0.4%
2.5%
-4.0%
2.8%
0.5%
4.7%
-2.6%
2.2%
0.6%
3.9%
0.5%
5.2%
2.9%
6.1%
2.9%
9.1%
4.7%
8.9%
30
FARM BUSINESS SUMMARY BY HERD SIZE
406 New York Dairy Farms, 1988
Item
Farm Size:
Number of farms
100 to
149 Cows
150 to
199 Cows
81
25
ACCRUAL EXPENSES
Hired labor
Dairy grain & concentrate
Dairy roughage
Nondairy feed
Machine hire/rent/lease
Machine repairs/parts
Auto expense (farm share)
Fuel, oil & grease
Replacement livestock
Breeding
Veterinary & medicine
Milk marketing
Cattle lease/rent
Other livestock expense
Fertilizer & lime
Seeds & plants
Spray & other crop expense
Landjbui1ding/fence repair
Taxes & rent
Telephone & electricity
Interest paid
Misc. (including insurance)
Total Operating Expenses
Expansion livestock
Machinery depreciation
Building depreciation
Total Accrual Expenses
$ 25,129
68,636
1,652
301
3,137
14,690
606
7,046
1,505
3,404
4,970
11,218
112
10,996
10,849
4,544
4,179
3,965
12,154
7,515
20,245
7,728
$224,581
1,445
16,826
8,646
$251,498
$ 52,976
107,553
1,725
ACCRUAL RECEIPTS
Milk sales
Dairy cattle
Dairy calves
Other livestock
Crops
Mise, receipts
Total Accrual Receipts
$256,607
19,533
4,526
556
6,714
10,966
$298,902
$376,291
33,320
6,676
472
9,520
18,255
$444,533
$47,404
$71,193
$20,551
1.48
$13 ,886
$52,624
$100,639
$16,348
1.56
$10,480
PROFITABILITY ANALYSIS
Net farm income (w/o apprec,)
Net farm income (w/apprec.)
Labor & mgmt. income
Number of operators
Labor & mgmt, inc./oper.
Rate of return on:
Equity capital w/o apprec,
Equity capital w/apprec,
All capital w/o apprec,
All capital w/apprec.
2.8%
7,6%
4.6%
7.9%
o
2,027
24,337
548
11,674
180
5,874
8,862
16,822
864
14,902
15,467
6,168
5,727
7,811
17,290
10,434
30,488
11,427
$353,156
2,175
23,211
13 ,367
$391,909
2.5%
9.4%
4.6%
9.2%
200 to
299 Cows
300 or
More Cows
21
13
$ 79,337 $
153,329
3,503
374
3,590
32,025
1,040
14,884
12,690
6,885
12,037
17,375
o
21,193
24,072
9,696
9,390
10,295
16,508
13,990
38,183
15,598
$505,994
3,046
33,872
19 ,946
$562,858
200,247
323,183
11,127
2,971
6,976
44,595
949
22,566
2,072
13,345
29,107
28,057
1,700
44,593
30,893
12,581
16,835
18,413
36,340
22,305
82,861
27,380
$ 979,096
42,433
51,018
_---'-4.....
7.. . ."7:.. .:;9=3
$1,120,340
$530,450 $1,148,224
50,614
122,913
10,489
20,435
2,292
2,655
11,087
26,097
27.459
33,826
$632,391 $1,354,149
$69,533
$98,371
$25,100
1.42
$17,676
3.9%
7.2%
5.4%
7.6%
$233,809
$280,953
$162,342
1.47
$110,437
13.4%
16.8%
11. 3%
13.3%
31
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
406 New York Dairy Farms, 1988
Item
40 to 54 Cows
Jan. 1
Dec. 31
55 to 69 Cows
Jan. 1
Dec. 31
3,074
6,196
15
13,321
45,140
46,651
912
1,131
139,670
$256,110
$
$
$
16,895
56,489
54,871
1,403
2,194
163,123
$305,692
17,800
60,707
57,184
1,289
2,311
169,451
$320,550
3,845
10,443
74
26,495
79,513
77,112
2,559
3,363
213,256
$416,659
$
2,830
1,171
20,095
2,943
3,068
7,619
4.436
$ 42,162
$
2,898
2,772
29,421
2,892
1,618
8,468
2.587
$ 50,657
$
3,147
3,806
34,017
3,659
2,885
9,336
2,757
$ 59,608
$
8,002
3,668
34,463
3,040
3,577
7,775
1. 870
$ 62,394
$
$298,272
$356,349
$380,158
$479,053
$505,044
1,502
388
933
0
23,857
54,881
$ 81,562
____~8~0~5
$
$
$
$
$
23,556
53,469
$ 80,602
1,247
38,415
78,049
$123,480
2,009
38,787
74,337
$121,099
2.308
46,980
80,272
$132,859
2,738
47,843
79.627
$133,556
6.958
$ 82,367
$ 81,849
$125,489
$123,407
$135,597
$140,514
$161,275
$175,508
$182,212
$199,451
$283,801
$303,794
$196,859
$216,423
$230,860
$256,751
$343,456
$364,530
Farms with: Less than 40 Cows
Jan. 1
Dec. 31
ASSETS
Farm cash/chkg./sav. $ 4,457
Accounts receivable
5,424
Prepaid expenses
0
Feed & supplies
11,232
Livestock*
42,673
Machinery & equipment* 43,066
FLB & PCA stock
935
Other stock & cert.
1,333
Land & bui1dings*
133.717
Total Farm Assets
$242,837
Pers. cash/chkg./sav.$ 1,701
Cash value of life ins. 1,045
Nonfarm real estate
17,714
Auto (personal share)
1,386
Stocks & bonds
2,509
Household furnishings
7,095
All other
4,939
Tot. Nonfarm Assets**$ 36,389
Total Farm & Nonfarm
Assets
$279,226
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced gov't, rec.
Intermediate***
Long term*
Total Farm Liab.
Tot, Nonfarm Liab.**
Total Farm & Nonfarm
Liabili ties
Farm Net Worth
(Equity Capital)
Farm & Nonfarm
Net Worth
$
$
1,478
451
1,648
o
2,714
8,003
$
o
o
4,338
1,462
1,216
o
FINANCIAL MEASURES
Less than 40 Cows
Percent equity
69%
Debt/asset ratio-long term
0.38
Debt/asset ratio-inter. & current
0.23
Change in net worth with apprec.
$14,232
Total farm debt per cow
$2,303
Debt payments made per cow
$430
Debt payments as % of milk sales
21%
Amount avail. for debt service
$14,628
Cash flow coverage ratio for 1988
1.08
2,675
9,132
4,799
1,912
1,265
o
3,275
851
1,481
o
40 to 54 Cows
62%
0.44
0.31
$17,238
$2,577
$445
21%
$23,140
1.15
4,036
11,770
52
28,566
83,341
79,800
2,629
3,660
223.496
$437,350
9,051
3,967
37,286
3,456
3,682
7,790
2,462
$ 67,694
3,769
1,026
1,291
o
55 to 69 Cows
69%
0.36
0.25
$19,993
$2,154
$432
21%
$28,374
1.20
*Inc1udes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1988.
***Includes FLB/PCA stock and discounted lease payments for cattle and
machinery.
32
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
406 New York Dairy Farms, 1988
Farms with:
Item
ASSETS
Farm cash/chkg./savings
Accounts receivable
Prepaid expenses
Feed & supp lies
Livestock*
Machinery & equipment*
FLB & PCA stock
Other stock & cert.
Land & bui1dings*
Total Farm Assets
Pers. cash/chkg./savings
Cash value of life ins.
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Total Nonfarm Assets**
Total Farm & Nonfarm
Assets LIABILITIES
Accounts payable
Operating debt
Short term
Advanced gov't. rec.
Intermediate***
Long term*
Total Farm Liab.
Total Nonfarm Liab.**
Total Farm & Nonfarm
Liabilities
Farm Net Worth
(Equity Capital)
Farm & Nonfarm Net Worth
70 to 84 Cows
Jan. 1
Dec, 31
$
4,510
14,084
°
34,010
97,948
92,466
3,019
4,751
232,751
$483,539
85 to 99 Cows
Jan. 1
Dec. 31
3,641
16,866
6,787
19,378
5,046
15,293
4
37,259
104,483
95,936
3,159
5,093
239,667
$505,940
$
41,775
115,682
108,882
3,693
2,489
240,295
$533,323
46,435
124,050
112,275
3,717
3,235
255,043
$570,919
$
°
$
°
$
7,611
4,076
6,368
3,311
2,287
8,600
2,392
$ 34,644
$
7,892
6,006
6,368
4,115
3,771
8,776
2,370
$ 39,297
$ 12,975
3,144
30,100
2,716
6,916
6,280
4,590
$ 66,722
$ 11,777
3,960
48,300
2,404
7,214
6,400
7,585
$ 87,641
$518,183
$545,237
$600,045
$658,560
5,742
1,422
1,712
176
54,621
92,638
$156,310
1,080
$
4,956
2,410
2,109
$ 5,422
2,663
3,093
$
56,760
89,206
$155,441
1.058
75,449
101,029
$187,656
1,128
75,857
98,083
$184,926
3,084
$157,390
$156,499
$188,784
$188,010
$327,229
$360,793
$350,500
$388,738
$345,667
$411,261
$385,993
$470,550
$
FINANCIAL MEASURES Percent equity Debt/asset ratio-long term Debt/asset ratio-inter. & current
Change in net worth with apprec.
Total farm debt per cow Debt payments made per cow Debt payments as % of milk sales Amount avail. for debt service
Cash flow coverage ratio for 1988
°
70 to 84 Cows
69%
0.37
0.25
$23,271
$1,968
$470
22%
$32,687
1.15
°
5,940
4,065
981
°
85 to 99 Cows
68%
0.38
0,27
$40,327
$1,926
$579
27%
$43,561
1.05
*Inc1udes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1988.
***Inc1udes FLB/PCA stock and discounted lease payments for cattle and
machinery.
33
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
406 New York Dairy Farms, 1988
Farms with:
Item
ASSETS
Farm cash/chkg./savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock*
Machinery & equipment*
FLB & PCA stock
Other stock & cert.
Land & bui1dings*
Total Farm Assets
Pers. cash/chkg./savings
Cash value of life ins.
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Total Nonfarm Assets**
Total Farm & Nonfarm
Assets
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced gov't. rec.
Intermediate***
Long term*
Total Farm Liab.
Total Nonfarm Liab.**
Total Farm & Nonfarm
Liabilities
Farm Net Worth
(Equity Capital)
Farm & Nonfarm Net Worth
].00 to 1!!:9 Cows
Jan. 1
Dec. 31
150 to 199 Cows
Jan. 1
Dec. 31
9,184
34,103
57
79,415
223,016
179,605
13,047
16,900
468,814
$1,024,141
15,950
37,876
0
86,404
233,323
182,784
12,959
16,437
493,711
$1,079,444
$ 10,907
22,149
0
55,111
149,876
136,228
6,146
5,952
32Z,973
$714,342
$ 15,024
25,052
62
60,700
159,687
141,737
5,896
6,261
5,805
5,260
91,000
2,101
2,549
6,500
2,871
$116,086
$
5,810
5,825
110,969
2,189
3,483
7,138
2,711
$138,124
$
$830,428
$887,950
$1,093,975
$1,176,271
4,179
2,860
3,442
69
99,192
135,158
$244,900
1,147
$
$
$
$241,239
945
$
$246,047
$242,184
$
353,810
$
354,251
$469,442
$584,381
$508,587
$645,766
$
$
671,508
740,165
$
$
725,768
822,020
$
$
FINANCIAL MEASURES
Percent equity
Debt/asset ratio-long term
Debt/asset ratio-inter. & current
Change in net worth with apprec.
Total farm debt per cow
Debt payments made per cow
Debt payments as % of milk sales
Amount avail. for debt service
Cash flow coverage ratio for 1988
33~,407
$749,826
4,376
2,775
2,818
0
99,795
$
$
9,549
5,399
3,088
$
$
o
131,47~
100 to ].49 Cows
68%
0.39
0.26
$39,145
$2,010
$471
22%
$55,340
1.09
2,693
10,159
42,571
1,971
836
9,750
1,854
69,834
$
137,202
197,395
352,633
1.177
2,738
12,195
51,143
4,979
945
9,964
14,863
96,827
10,589
9,025
7,270
o
$
129,905
196.886
353,676
575
150 to ].99 Cows
67%
0.40
0.27
$54,260
$2,033
$501
24%
$70,113
1.06
*Inc1udes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1988.
***Inc1udes FLB/PCA stock and discounted lease payments for cattle and
machinery.
34
FARM FAMILY FINANCIAL SITUATION BY HERD SIZE
406 New York Dairy Farms, 1988
ASSETS
Farm cash/chkg./savings
Accounts receivable
Prepaid expenses
Feed & supplies
Livestock*
Machinery & equipment*
FLB & PCA stock
Other stock & cert.
Land & bui1dings*
Total Farm Assets
Pers. cash/chkg./savings
Cash value of life ins.
Nonfarm real estate
Auto (personal share)
Stocks & bonds
Household furnishings
All other
Total Nonfarm Assets**
Total Farm & Nonfarm
Assets
LIABILITIES
Accounts payable
Operating debt
Short term
Advanced gov't. rec.
Intermediate***
Long term*
Total Farm Liab.
Total Nonfarm Liab.**
Total Farm & Nonfarm
Liabilities
Farm Net Worth
(Equity Capital)
Farm & Nonfarm Net Worth
Mor~ than 300 Cows
Dec. 31
Jan. 1
200 to 299 Cows
Jan. 1
Dec. 31
Farms with:
Item
6,047
46,641
381
120,265
310,431
218,866
15,602
22,927
616,437
$1,357,597
$
11,091
7,318
24,818
4,159
28,617
10,455
18,481
104,939
$
6,852
42,654
0
110,563
294,678
196,810
13,911
22,919
606,656
$1,295,043
$
10,227
7,164
25,273
3,773
25,527
10,000
16,588
98,552
$
$
$
$
$
17,077
102,600
5,032
288,123
564,900
338,523
21,595
68,053
1,132,831
$2,538,735
11,551
80,033
3,601
261,579
496,895
314,866
15,888
66,023
1,032,410
$2,282,846
$
1,616
1,451
25,600
2,935
16,473
8,600
13,919
70,595
$
$
$
8,145
1,505
34,000
3,900
17,730
9,200
5,930
80,411
$1,393,595
$1,462,536
$2,353,441
$2,619,146
$
$
$
$
9,504
10,964
12,095
13,705
10,809
19,329
o
$
210,412
209.592
452,568
12 , 723
o
$
9,653
57,635
15,232
o
o
211,558
207,354
462,755
10.245
11,539
89,818
24,590
$
392,319
469.520
944,359
463,532
461.387
$1,050,866
o
o
$
465,291
$
473,000
$
944,359
$1,050,866
$
$
842,475
928,304
$
$
894,843
989,536
$1,338,487
$1,409,082
$1,487,869
$1,568,280
FINANCIAL MEASURES
Percent equity
Debt/asset ratio-long term
Debt/asset ratio-inter. & current
Change in net worth with apprec.
Total farm debt per cow
Debt payments made per cow
Debt payments as % of milk sales
Amount avail. for debt service
Cash flow coverage ratio for 1988
200 to 299 Cows
66%
0.34
0.34
$52,367
$1,851
$537
23%
$120,532
1. 22
More than 300 Cows
59%
0.41
0.42
$149,382
$2,198
$496
20%
$303,053
1. 56
*Inc1udes discounted lease payments.
**Average of farms reporting nonfarm assets and liabilities for 1988.
***Inc1udes FLB/PCA stock and discounted lease payments for cattle and
machinery.
- - - .....
~
------...
..•..- - - -.....•
35
SELECTED BUSINESS FACTORS BY HERD SIZE
406 New York Dairy Farms, 1988
Farms with:
Item
Number of farms
Cropping Program Analysis
Total Tillable acres
Tillable acres rented*
Hay crop acres*
Corn silage acres*
Hay crop, tons OM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage OM per cow, tons
Tillable acres/cow
Fert. & lime exp./ti1. acre
Total machinery costs
Machinery cost/tillable acre
40 to
54 Cows
55 to
69 Cows
70 to
84 Cows
85 to
99 Cows
29
67
81
53
36
107
31
78
15
2.0
12.6
3.0
6.7
3.2
$15.84
$13,368
$125
156
49
98
28
2.2
13.4
33.4
7.4
3.3
$22.18
$18,263
$117
219
67
131
37
2.4
12.7
58.1
7.7
3.6
$23.56
$26,363
$120
252
76
139
48
2.5
13.9
42.8
7.5
3.3
$27.58
$31,093
$123
296
108
168
63
2.6
13.8
41.5
7.9
3.2
$27.97
$41,459
$140
47
36
742,474
15,833
$9.60
$15.30
$12.98
$613
$3.87
61
93
77
66
51
77
979,950 1,252,616 1,608,344
16,006
16,165
17,356
$9.36
$9.13
$9.08
$15.16
$14.17
$13.31
$12.87
$12.96
$12.83
$620
$575
$584
$3.59
$3.61
$3.57
Less than
40 Cows
Dairy Analysis
33
Number of cows
22
Number of heifers
Milk sold, 1bs.
544,550
Milk sold/cow, 1bs.
16,264
Operating cost of prod. mi1k/cwt. $8.97
Total cost of prod. mi1k/cwt.
$15.57
Price/cwt. milk sold
$12.68
Purchased dairy feed/cow
$626
Purchased dairy feed/cwt. milk
$3.85
Purchased grain & cone. as %
of milk receipts
27%
Purchased feed & crop
expense/cwt. milk
$4.43
27%
28%
27%
28%
$4.66
$4.50
$4.57
$4.51
$181,148
6,385
2,811
3,048
1,216
2.39
$189,902
5,958
2,937
2,673
1,193
2.11
2.73
1.41
458,644
28
303
$425
$131
2.91
1.31
553,188
32
352
$406
$127
Capital Efficiency
Farm capital/worker
Farm capital/cow
Farm capital/til. acre owned
Real estate/cow
Machinery investment/cow
Capital turnover, years
$150,202
7,451
3,240
4,082
1,340
2.83
$167,498
2,926
3,546
1,195
2.53
$176,466
6,975
2,809
3,567
1,281
2.66
Labor Efficiency
Worker equivalent
Operator/manager equivalent
Milk sold/worker, 1bs.
Cows/worker
Work units/worker
Labor cost/cow
Labor cost/tillable acre
1.66
1.10
327,861
20
205
$532
$166
1.87
1.16
397,172
25
263
$444
$133
2.42
1. 36
404,979
25
285
$449
$126
6,677
*Average of all farms, not only those reporting data.
36
SELECTED BUSINESS FACTORS BY HERD SIZE
406 New York Dairy Farms, 1988
Farms with:
Item
Number of farms
Cro~~ing Program An~l~sis
Total tillable acres
Tillable acres rented*
Hay crop acres*
Corn silage acres*
Hay crop, tons DM/acre
Corn silage, tons/acre
Oats, bushels/acre
Forage DM per cow, tons
Tillable acres/cow
Fert. & lime exp./til. acre
Total machinery costs
Machinery cost/tillable acre
100 to
149 Cows
150 to
199 Cows
200 to
299 Cows
300 or
More Cows
81
25
21
13
367
134
190
84
2.6
14.7
44.7
7.7
3.1
$29.56
$49,168
$134
500
216
241
140
2.8
13.6
58.3
7.6
2.9
$30.94
$70,776
$142
618
214
243
226
2.8
14.2
35.3
7.2
2.6
$38.94
$95,583
$155
919
295
309
382
3.4
15.1
54.6
6.5
2.0
$33.63
$141,975
$155
119
96
1,959,901
16,531
$9.37
$13.65
$13.09
$593
$3.59
172
148
2,864,891
16,656
$10.02
$13.73
$13.13
$635
$3.81
241
179
4,099,894
17,036
$9.93
$13.17
$12.94
$652
$3.83
453
343
8,665,733
19,113
$9.41
$11.87
$13.25
$737
$3.86
Dair~ An~lJ::s1s
Number of cows
Number of heifers
Milk sold, lbs.
Milk sold/cow, 1bs.
Operating cost of prod. mi1k/cwt.
Total cost of prod. milk/cwt.
Price/cwt. milk sold
Purchased dairy feed/cow
Purchased dairy feed/cwt. milk
Purchased grain & cone. as %
of milk receipts
Purchased feed & crop
expense/cwt. milk
27%
29%
29%
28%
$4.58
$4.77
$4.88
$4.55
CaRital Efflcienc~
Farm capital/worker
Farm capital/cow
Farm capital/til. acre owned
Real estate/cow
Machinery investment/cow
Capital turnover, years
$206,856
6,175
3,142
2,798
1,172
2.27
$214,798
6,115
3,703
2,798
1,053
2.14
$220,180
5,511
3,283
2,541
864
2.01
$236,828
5,317
3,870
2,388
721
1.72
Labor Effic1en~~
Worker equivalent
Operator/manager equivalent
Milk sold/worker, 1bs.
Cows/worker
Work units/worker
Labor cost/cow
Labor cost/tillable acre
3.54
1.48
553,786
33
351
$383
$124
4.90
1.56
585,070
35
371
$425
$146
6.02
1.42
680,615
40
405
$405
$158
10.18
1.47
851,294
45
438
$482
$238
*Average of all farms, not only those reporting data.
37
IDENTIFY AND SET GOALS
If businesses are to be successful, they must have direction. Written
goals help provide businesses with an identifiable direction over both the long
and the short term. Goal setting is as important on a dairy farm as it is in
other businesses. Written goals are a tool which farm operators can use to
ensure that the business continues to move in the proper direction.
1. Goals should be specific.
2. Goals should be realistic and achievable.
3. The achievement of the goal should be verifiable.
4. You should designate a time when each goal will be achieved.
Goal setting on a dairy farm does not have to be a complex process. In
many cases it provides a process for writing down and agreeing on goals that you
have already given some thought to. It is also important to remember that once
you write out your goals they are not cast in concrete. If a change takes place
which has a major impact on the farm business, the goals should be reworked to
accommodate that change. Refer to your goals as often as necessary to keep the
farm business progressing.
It is important to identify both long and short range goals when looking
at the future of your farm business.
A suggested format for writing out your goals is as follows:
a. Begin with a general philosophy statement which incorporates both
business and family goals.
b. Identify 4-6 long range goals.
c. Identify specific short range goals for a given time period (i.e., one
year).
Worksheet for Setting Goals
I. General Philosophy and Objectives
38
Worksheet for Setting Goals (continued)
II. Long Range Goals (require two or more years to achieve)
III.
What
Short Range Goals (possible to achieve in one or two years).
IHow
IWhen
NOTE: Once long and short range goals have been identified, it is helpful to
rank them in order of priority.
Prepared by T.R. Maloney, Extension Associate, Cornell University
Other Asricultural Economics Extension Publications
No. 89-35
FORAGE PRODUCTION; A Pro-Dairy Management
Focus Yorkshop for Farm Managers,
Facilitator's and Participants Manual
N. R. Leonard
R. A. Milligan
Y. D. Pardee
No. 89-37
New York Economic Handbook 1990, Agriculture
Situation and Outlook
Extension Staff
No. 89-38
Census of Agricultural Highlights, New York
State, 1987
B. Stanton
Y. Knoblauch
L. Putnam
No. 90-1
Micro DFBS, A Guide to Processing Dairy
Farm Business Summaries in County and
Regional Extension Offices for Micro DFBS
V 2.4
L. D. Putnam
Y. A. Knoblauch
S. F. Smith
No. 90-2
Poultry Farm Business Summary, New York,
1988
D. P. Snyder
S. Ackerman
K. Park
No. 90-3
The Economics of Concord and Niagara Grape
Production in the Great Lakes Region of
New York, 1989
G. B. White
J. S. Kamas
No. 90-4
Agricultural District Legislation in
New York as Amended Through 1989
K. V. Gardner
No. 90-5
Agricultural Lending Policy of New York
Commercial Banks
J. M. Thurgood
E. L. LaDue
No. 90-6
Proceedings of Managing Farm Personnel in
the 90's
Bernie Erven
Guy Hutt
Tom Maloney
No. 90-7
The U.S. Dairy Situation and Outlook for
1990
Andrew M. Novakovic
No. 90-8
Dairy Farm Business Summary, Northern New
York, 1989
Stuart F. Smith
Linda D. Putnam