• TABLE OF CONTENTS
HIDE
 Copyright
 Title Page
 Acknowledgement
 Table of Contents
 List of Tables
 Introduction
 Procedure
 Description of Tallahassee area...
 All farm receipts and expenses
 Measures of income and profits,...
 Input and output efficiencies
 Dairy herd characteristics and...
 Management practices and biographical...
 Summary






Group Title: Agricultural economics mimeo report - Department of Agricultural Economics, University of Florida - EC 65-2
Title: A Summary of 1962 costs and returns and an economic description of wholesale dairy farms in the Tallahassee, Florida milk marketing area
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Permanent Link: http://ufdc.ufl.edu/UF00071966/00001
 Material Information
Title: A Summary of 1962 costs and returns and an economic description of wholesale dairy farms in the Tallahassee, Florida milk marketing area
Physical Description: 65 p. : ; .. cm.
Language: English
Creator: Smith, B.J
Publisher: s.n.
Place of Publication: Gainesville
Publication Date: 1964
 Subjects
Genre: non-fiction   ( marcgt )
 Notes
Statement of Responsibility: by B.J. Smith.
Funding: Agricultural economics mimeo report Department of agricultural economics. Florida agricultural experiment stations. University of Florida ; 65-2
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Bibliographic ID: UF00071966
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
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Resource Identifier: oclc - 67371457
clc - 000474779

Table of Contents
    Copyright
        Copyright
    Title Page
        Title Page 1
        Page i
    Acknowledgement
        Page ii
    Table of Contents
        Page iii
        Page iv
    List of Tables
        Page v
        Page vi
    Introduction
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
    Procedure
        Page 6
        Selection of sample
            Page 6
        Conduct of survey
            Page 6
            Page 7
            Page 8
        General computational procedures
            Page 9
            Page 10
            Page 11
            Page 12
            Page 13
    Description of Tallahassee area dairy farms
        Page 14
        General measures of size
            Page 14
            Page 15
        Milk production
            Page 16
            Page 17
        Livestock
            Page 18
            Dairy
                Page 18
            Non-dairy
                Page 18
                Page 19
        Management and labor
            Page 20
            Page 21
        Land and its utilization
            Page 22
            Page 23
            Page 24
        Capital investment and depreciation
            Page 25
            Page 26
            Page 27
    All farm receipts and expenses
        Page 28
        General
            Page 28
            Page 29
            Page 30
            Page 31
            Page 32
        Farm receipts
            Page 33
            Cash receipts
                Page 33
                Page 34
            Non-cash receipts
                Page 35
        Farm expenses
            Page 36
            Cash expenses
                Page 36
                Page 37
                Page 38
                Page 39
            Depreciation
                Page 40
            Interest on investment at five and one-half per cent
                Page 41
            Value of unpaid labor
                Page 42
            Value of operator's labor and management
                Page 42
            Some general comments on farm expenses
                Page 43
                Page 44
    Measures of income and profits, the over-all financial position of dairymen, funds for family living, and net cost of producing milk
        Page 45
        Page 46
        Measures of income and profits
            Page 45
            Family farm income
                Page 45
            Farm income
                Page 45
            Family labor income
                Page 45
            Operator's labor income
                Page 47
            Net farm income
                Page 47
            Net profit or loss
                Page 47
            Return above equity maintenance
                Page 47
        Over-all financial position of area dairymen
            Page 48
        Funds for family living
            Page 49
        Net cost of producing milk
            Page 50
            Page 51
    Input and output efficiencies
        Page 52
        Page 53
        Page 54
    Dairy herd characteristics and facilities
        Page 55
        Herd characteristics
            Page 55
            Page 56
        Facilities
            Page 57
    Management practices and biographical data
        Page 58
        Management practices
            Page 58
            Page 59
            Page 60
        Biographical data
            Page 61
    Summary
        Page 62
        Page 63
        Page 64
        Page 65
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida




September, 7964
f-6 4 J-A2


Agricultural Economics Mimeo Report EC 65-2


COSTS


RETURNS


A Summary of 1962 Costs and Returns and an
Economic Description of Wholesale Dairy Farms
in the Tallahassee, Florida Milk Marketing Area


Blair J. Smith
Assistant Agricultural Economist


Department of Agricultural Economics
Florida Agricultural Experiment Stations
University of Florida, Gainesville, Florida


9~,
,
























































Requests for additional copies of this report should be forwarded to:

The Department of Agricultural Economics
Unit B, McCarty Hall
University of Florida
Gainesville, Flor da


SUGGESTED CITATION

Smith, B. J. A Summary of 1962 Costs and Returns and an Economic Description
of Wholesale Dairy Forms in the Tallahassee, Florida Milk Marketing Area
Agricultural Economics Mimeo Report EC 65-2, September, 1964
Florida Agricultural Experiment Stations, University of Fiorid4
Gainesville, Florida







ACKNOWLEDGEMENTS

The general tax-paying public aside, this report properly belongs to

the Tallahassee Area dairymen whose cooperation in supplying the highly

detailed data necessary to the study went well beyond the limits one had

any reasonable right to expect. Obtaining and verifying this information

involved as many as four or five visits with the dairyman, and took the

equivalent of as much as a whole day, or more, of his scarce and valuable

time. Without their kind assistance the study obviously could never have

taken place.

The Florida Milk Commission was of valuable help to the project in

its provision of the data on November shipments used as the basis for

selecting the sample of farms to be studied.

County agricultural extension personnel were most accommodating in

their response to requests for assistance in locating producers and in

making contacts with dairymen to solicit their cooperation and to estab-

lish their confidence in the study and in the people who were to obtain

the information from them.

There are a number of people in the Department of Agricultural

Economics who deserve recognition for their contribution to this study.

The field enumerators, the members of the staff who reviewed the manu-

script, and several others who aided in a number of other ways should

all receive due credit. Special notes of gratitude are extended to

Dr. R. E. L. Greene for his ever ready and ever capable assistance

throughout the conduct of the entire project, and to Mrs. Betty Jo Cook,

who so patiently and capably labored through the seemingly endless series

of calculations and who converted an almost illegible hand-written first

draft into the finished type-written copy of the report now before you.

ii





TABLE OF CONTENTS

Page

ACKNOWLEDGEMENTS ii


TABLE OF CONTENTS iii


LIST OF TABLES v


INTRODUCTION 1


PROCEDURE 6

Selection of Sample 6

Conduct of Survey 6

General Computational Procedures 9


DESCRIPTION OF TALLAHASSEE AREA DAIRY FARMS 14

General Measures of Size 14

Milk Production 16

Livestock 18

Dairy 18
Non-Dairy 18

Management and Labor 20

Land and Its Utilization 22

Capital Investment and Depreciation 25


ALL FARM RECEIPTS AND EXPENSES 28

General 28

Farm Receipts 33

Cash receipts 33
Non-cash receipts 35







Farm Expenses


Cash expenses 36
Depreciation 40
Interest on investment at five and one-half per cent 41
Value of unpaid labor 42
Value of operator's labor and management 42
Some general comments on farm expenses 43


MEASURES OF INCOME AND PROFITS, THE OVER-ALL FINANCIAL POSITION OF
DAIRYMEN, FUNDS FOR FAMILY LIVING, AND NET COST OF PRODUCING MILK 45

Measures of Income and Profits 45

Family farm income 45
Farm income 45
Family labor income 45
Operator's labor income 47
Net farm income 47
Net profit or loss 47
Return above equity maintenance 47

Over-All Financial Position of Area Dairymen 48

Funds for Family Living 49

Net Cost of Producing Milk 50


INPUT AND OUTPUT EFFICIENCIES 52


DAIRY HERD CHARACTERISTICS AND FACILITIES 55

Herd Characteristics 55

Facilities 57


MANAGEMENT PRACTICES AND BIOGRAPHICAL DATA 58

Management Practices 58

Biographical Data 61


SUMMARY 62





LIST OF TABLES


Table Page

1. Base-Holders, Production Units, Fat-Uncorrected November Milk
Shipments, and Sample Numbers, by Size of Farm, Tallahassee
Milk Marketing Area, 1962 7

2. Dairy Specialization Factors, Tallahassee Area Dairy Farms, 1962 11

3. Some Measures of Farm Size by Size Groups Based on Fat-Uncorrected
November Shipments, Tallahassee Area Dairy Farms, 1962 15

4. Annual Production and Disposition of Milk (Corrected to Four Per
Cent Butterfat), in Gallons per Farm, by Size of Farm, Tallahassee
Area Dairy Farms, 1962 17

5. Average Farm Numbers and Average Values in Dollars per Head of
Dairy Livestock, by Size of Farm, Tallahassee Area Dairy Farms,
1962 19

6. Labor and Management Hours, Values, and Man Equivalents per Farm,
by Size of Farm, Tallahassee Area Dairy Farms, 1962 21

7. Acreages per Farm by Major Uses, by Size of Farm, Tallahassee Area
Dairy Farms, 1962 23

8. Number of Sample Farms with Land in Listed Uses, by Size of Farm,
Tallahassee Area Dairy Farms, 1962 24

9. Capital Investment and Depreciation in Dollars per Farm, by Size
of Farm, Tallahassee Area Dairy Farms, 1962 26

10. All Farm Receipts and Expenses in Dollars per Farm, by Size of
Farm, Tallahassee Area Dairy Farms, 1962 29

11. All Farm Receipts and Expenses in Cents per Gallon of 4% F.C.M.
Sold at Wholesale, by Size of Farm, Tallahassee Area Dairy Farms,
1962 30

12. All Farm Receipts and Expenses in Dollars per Cow Based on 13-
month Inventory, by Size of Farm, Tallahassee Area Dairy Farms,
1962 31

13. Per Cent That Listed Items of Receipts and Expenses are of Total
Receipts and Expenses, Respectively, by Size of Farm, Tallahassee
Area Dairy Farms, 1962 32

14. Income, Profits, Net Worth, Funds for Family Living, and Net Costs
of Milk Sold at Wholesale, in Dollars per Farm, by Size of Farm,
Tallahassee Area Dairy Farms, 1962 46

15. Comparison of Efficiency in the Use and Production of Selected
Items, by Size of Farm, Tallahassee Area Dairy Farms, 1962 53







16. Herd Turnover Rates, Source of Replacements, Breed Percentages
and Facilities, by Size of Farm, Tallahassee Area Dairy Farms,
1962 56

17. Management Practices and Biographical Data, by Size of Farm,
Tallahassee Area Dairy Farmt, 1962 60







INTRODUCTION

A study of the management and economics of West Florida dairy farms

was initiated by the Department of Agricultural Economics of the Univer-

sity of Florida early in 1963.

The two major objectives of the study were to develop an economic de-

scription of dairying as it is carried out in those areas, and to get re-

liable information on area dairy production costs and returns. The data

and findings were based on the situation which prevailed in the area in

the calendar year 1962 and on the operational experiences of the dairymen

during that same year.

West Florida included both the Pensacola and Tallahassee Milk Mar-

keting areas as defined by the Florida Milk Commission (see Figure 1).

Each area was studied independently of the other and the findings are

reported in separate publications.

The report for the Pensacola Area was released for distribution in

August, 1964. 1/

This publication reports the results of the study which pertain to

the Tallahassee Area. It is similar in format, as was the Pensacola report,

to those done in other Florida areas by R. E. L. Greene, et al., but

is somewhat broader in scope as it also presents information on such things

as the dairyman's over-all financial position, management practices followed,

and biographical data pertaining to the farm operator. It differs most

substantially from the Greene reports with respect to the quantities of milk

shipments which serve as the basis for dividing farms into small, medium,


1/
B. J. Smith, A Sumrary of 1962 Costs and Returns and an Economic
Description of Wholesale Dairy Farms in the Pensacola, Florida Milk
Marketing Area: Department of Agricultural Economics Mimeograph
Series EC 65-1, July, 1964, Florida Agricultural Experiment Stations,
University of Florida, Gainesville, Florida.








Figure 1: Geographical Delineation of Florida's Milk Marketing Areas as Defined
On December 31, 1962.






i Jacksonville



Pensacola ensaco

Tallahassee ::::::Tallahas
O:: Orlando
















Northeast Florida ,


Central Florida


SNTampa Bay

Other Milk Marketing Areas: Miami
A s Southeastern Florida Federal Order n


SUnregulated
[T7 Unregulated







and large size groups. It differs from the Pensacola report in the same

respect, but to a lesser extent. Thus the reader is cautioned against

making direct, unqualified comparisons of, for example, small farms in the

Tallahassee area to small farms in the Tampa Bay area as the definition of

small is not the same in both instances.

The Tallahassee Milk Marketing Area is composed of all of Florida

west of the Suwanee River with the exception of Hamilton County and the

four counties which make up the Pensacola Area as shown in Figure 1. The

counties making up the Tallahassee market had a combined population of

318,209 in 1960. Just two cities had populations over 10,000 at that

time. These were Panama City with 33,275 people and Tallahassee with

48,174.

Regular Tallahassee Area producers shipped an estimated 7,777,901

gallons of milk in 1962. This was 93.4 per cent of all the milk received

in that area and about five per cent of all milk sold to plants and deal-

ers in all of Florida that year. This production took place on the 112

dairy farms in the area. These 112 farms represented 16 per cent of


2/ (a) R. E. L. Greene, et al., Summary of Costs and Returns for Whole-
sale Dairy Farms, Northeast Florida, 1958: Department of Agricultural
Economics Mimeograph Series 60-5, October 1959, Florida Agricultural
Experiment Stations, University of Florida, Gainesville, Florida.

(b) R. E. L. Greene, et al., Summary of costs and Returns for Whole-
sale Dairy Farms, Central Florida, 1958: Department of Agricultural
Economics Mimeograph Series 60-2, October 1959, Florida Agricultural
Experiment Stations, University of Florida, Gainesville, Florida.

(c) R. E. L. Greene, et al., Summary of Costs and Returns for Whole-
sale Dairy Farms, Tampa Bay Milk Marketing Area, 1959: Department of
Agricultural Economics Mimeograph Series 61-5, November, 1960, Florida
Agricultural Experiment Stations, University of Florida, Gainesville,
Florida.





4

the total of approximately 705 commercial milk production units over the

whole state at the time of the study. One hundred two of the farms were

engaged only in production. The other ten were producer-distributors,

one of which was processing milk received from one other area producer,

and one of which was processing milk received from two other area producers,

in addition to their own. The ten producer-distributors were excluded

from the study because of the difficulty normally experienced in separating

production and processing costs.

The great bulk of all milk shipped by regular area producers was

received by the three major distributors in the area. The balance of the

milk was produced or received by the ten producer-distributors who oper-

ated there in 1962. There were three additional firms distributing milk

within the area which was processed outside the area, thus making a total

of 16 firms distributing milk in that market at the time of the study.

There were a few producers in the Tallahassee area who regularly ship-

ped to other Florida areas or to receivers outside the state. Insofar

as these could be identified, they were included in this study. Producers

who regularly shipped to the Tallahassee market from the Pensacola Area

were included in the Pensacola study. The intent was to include all

the producers whose farms were actually located in the area without

regard to the location of their receiver.

The information upon which this report is based was obtained by per-

sonal interview with the primary manager (or managers) of each farm in-

cluded in the study. A formal questionnaire was used by the enumerator,

and the information the farmer gave was substantiated, insofar as possible,

by his own records (including his 1962 income tax return and milk settle-

ment sheets) and such other records, if any and as needed, that were kept

by the farmer's bookkeeper or accountant. As preliminary summaries and





5

analyses of individual records were carried out, and as certain discrepancies

and deviations from the apparent or expected norm were observed, farms were

revisited to verify or modify, as appropriate, those items which seemed

most doubtful.

This report is prepared in such a way that the farmers who cooperated

in the study can use it to compare their own farm operation to other farms

of similar size. Space is provided on most tables to record the information

from individual farms which corresponds to the data presented in that par-

ticular table for the stall, medium, large, and all farm groups. It is

recommended that cooperating dairymen take advantage of this opportunity

to evaluate their operation and to seek assistance in interpretation, if

desired, through their County Agricultural Extension Agent.








PROCEDURE

Selection of Sample

The Florida Milk Commission supplied a list of milk shipments by

base-holding producers for the month of November, 1962. After deleting

the ten producer-distributors from that list, and after multiple bases

in a single production unit were combined, there remained 102 producers

from which the sample was initially drawn. These 102 producers were first

arrayed in order of size with respect to November shipments, then divided

into three groups. The first of these groups included all producers

shipping less than 100 gallons per day and numbered 44. There were 41

producers in the middle group with shipments between 100 and 200 gallons

per day, and 17 in the large group shipping over 200 gallons per day.

After the producers were thus divided into size groups, they were arranged

in order of size according to the county in which they were located. A

random start was made and every third farm selected for inclusion in the

original sample for the small and medium size groups. The farm immediately

following each original was selected as an alternate to that particular

original. This method of selection insured good distribution by size and by

geographical location within the area. Due to the small number involved,

and the importance of the group with respect to total production, it was

decided to attempt to include in the study all the farms classified as large.

More complete information on farm and sample sizes, numbers, and percentages

are presented in Table 1, below.

Conduct of the Survey

The originals were all first contacted and their cooperation solicited.

If they did not qualify, or did not choose to cooperate, the cooperation

of their respective alternates was next sought. Then, if for any reason








PROCEDURE

Selection of Sample

The Florida Milk Commission supplied a list of milk shipments by

base-holding producers for the month of November, 1962. After deleting

the ten producer-distributors from that list, and after multiple bases

in a single production unit were combined, there remained 102 producers

from which the sample was initially drawn. These 102 producers were first

arrayed in order of size with respect to November shipments, then divided

into three groups. The first of these groups included all producers

shipping less than 100 gallons per day and numbered 44. There were 41

producers in the middle group with shipments between 100 and 200 gallons

per day, and 17 in the large group shipping over 200 gallons per day.

After the producers were thus divided into size groups, they were arranged

in order of size according to the county in which they were located. A

random start was made and every third farm selected for inclusion in the

original sample for the small and medium size groups. The farm immediately

following each original was selected as an alternate to that particular

original. This method of selection insured good distribution by size and by

geographical location within the area. Due to the small number involved,

and the importance of the group with respect to total production, it was

decided to attempt to include in the study all the farms classified as large.

More complete information on farm and sample sizes, numbers, and percentages

are presented in Table 1, below.

Conduct of the Survey

The originals were all first contacted and their cooperation solicited.

If they did not qualify, or did not choose to cooperate, the cooperation

of their respective alternates was next sought. Then, if for any reason








PROCEDURE

Selection of Sample

The Florida Milk Commission supplied a list of milk shipments by

base-holding producers for the month of November, 1962. After deleting

the ten producer-distributors from that list, and after multiple bases

in a single production unit were combined, there remained 102 producers

from which the sample was initially drawn. These 102 producers were first

arrayed in order of size with respect to November shipments, then divided

into three groups. The first of these groups included all producers

shipping less than 100 gallons per day and numbered 44. There were 41

producers in the middle group with shipments between 100 and 200 gallons

per day, and 17 in the large group shipping over 200 gallons per day.

After the producers were thus divided into size groups, they were arranged

in order of size according to the county in which they were located. A

random start was made and every third farm selected for inclusion in the

original sample for the small and medium size groups. The farm immediately

following each original was selected as an alternate to that particular

original. This method of selection insured good distribution by size and by

geographical location within the area. Due to the small number involved,

and the importance of the group with respect to total production, it was

decided to attempt to include in the study all the farms classified as large.

More complete information on farm and sample sizes, numbers, and percentages

are presented in Table 1, below.

Conduct of the Survey

The originals were all first contacted and their cooperation solicited.

If they did not qualify, or did not choose to cooperate, the cooperation

of their respective alternates was next sought. Then, if for any reason















TABLE 1. Base-Holders, Production Units, Fat-Uncorrected November Milk
Shipments and Sample Numbers, by Size of Farm, Tallahassee Milk Marketing
Area, 1962


I Area
Size of Farm a/ Total or
Item Small Medium I Large Average


Number of Production Units

Average Daily November Shipments
per Production Unit (gals.)

Total November Shipments (gals.)

Farms in Size Groups as Per Cent of
Total Number of Production Units


by Size Groups as Per Cent
November Shipments for All


Farms in the Original
Sample


Number of Completed Survey
Questionnaires


Number of Survey Questionnaires Used
in this Report


Questionnaires Used as Per
Farms in Respective Size


44


64.6

85,290


43.1



20.8


11


11


18.2


___________ I


41


138.9

L70,850


40.2



41.7


10


10


9


22.0


17 102


301.5 134.0

L53,780 409,920


16.7



37.5


17


8


7



41.2


100.0



100.0


38


29


24



23.5


Size of farm is based on the daily average number
shipped in November, 1962, as noted in the text.


of gallons of milk


Shipments
of Total
Farms

Number of


Number of
Cent of
Groups


i








a questionnaire was not completed with the alternate, a replacement was

randomly chosen from among the producers who were not initially selected

for the study.

Farms were initially disqualified in the field if:

(1) the producer's fiscal year deviated from the calendar

year 1962 by more than three months

(2) the producer processed any milk for any other producer

or more than 10% of his own milk

(3) the producer sold more than 10% of his own milk to his own

retail outlets

(4) the producer was a tenant on anything but a fixed cash

rental or fixed crop or livestock share basis.

After some experience was gained in the field, it was decided farms

should also be disqualified in those cases where:

(1) principal management had changed hands at any time in 1962

(2) multiple production units operated with autonomy in some

areas, but were interdependent in other areas

(3) if gross receipts from sales of milk were less than 50%

of gross receipts from all farm enterprises as reported on

their 1962 Federal Income Tax Return.

A formal questionnaire was followed and the producer's answers record-

ed on the questionnaire itself at a personal interview with the principal

manager or managers of the farm. All information recorded at this inter-

view was taken from records, from the farmer's memory of his records, or

from the farmer's own best estimates of those things which he did not

normally record. The principal records were the Federal Income Tax Return,

Producer Milk Settlement sheets, and such other records as farm account








books, ledgers, check stubs, etc., that the farmer or his bookkeeper

might have.

The schedules were checked for completeness in the field at the first

opportunity, and farms immediately revisited if there were errors of

commission or of obvious commission. They were given another more detailed

check for the same purpose at Gainesville at the earliest opportunity, and

farms were again revisited as appropriate. As soon as the field work was

completed, the records were summarized individually and by size groups.

This provided a basis for comparison of individual records within a group

to the average for that same group for all the items of costs and returns

recorded in the interviews. These cost and return items were compared

both as to their total magnitude and on per cow, per acre, or per gallon

of milk bases, as appropriate. As discrepancies or deviations of sub-

stantial degree from the apparent or expected averages were discovered,

and where these could not be rationalized on the basis of other pecular-

ities about a particular farm, farms were once again revisited. At this

final stage of the information gathering and verification process, 10 of

the 24 farms used in this study were revisited.

General Computational Procedures

Dairymen in West Florida are less specialized in the production of

milk than those in other areas of the state. Not only did they produce

a higher percentage of their own feed for their dairy enterprises, they

were also relatively heavily involved in the production of crops for cash

sales and, though to a somewhat lesser extent, in other livestock enterprises.

Farms whose gross receipts from milk were less than 50% of all gross

receipts were initially excluded from the study. Once the survey was

completed, and more complete data for each of the cooperating farms were








at hand, a dairy specialization factor was computed. / All farms for

which this factor turned out to be less than .70 were arbitrarily deleted

from the original set of completed survey schedules and were excluded from

all calculations for this report. Table 2 shows these factors for each

farm, the weighted averages for each size group, and the over-all weighted

factor for the entire Tallahassee area. Though the over-all specialization

factor for sample farms in the Tallahassee Area is slightly less than the

one for the Pensacola Area, it is believed that when all dairy farms in

the two areas are considered, Pensacola would be the less specialized of

the two.

The elimination of farms with dairy specialization under 70% did

much to remove the effects of non-dairy enterprises on the estimate of the

apparent cost of producing milk. The farms which remained showed an

over-all area average specialization of 92%. To correct, farm by farm,

for the approximate eight per cent non-specialization which remained, total

farm expenses were reduced by all farm receipts except those from the

wholesale sale of milk. The resulting balance of expenses were charged to

the production of milk which was sold at wholesale. The assumption implied

here was that the costs of producing non-wholesale milk items were just

equal to the receipts from the same, and that the receipts accurately mea-

sured the returns to those items.

2/
This factor was computed as follows:
The sum of: (1) gross receipts from wholesale sales of milk
(2) receipts from retail milk sales
(3) value of milk used in operator's home
(4) receipts from sales of veal dairy calves
(5) value of dairy animals butchered for home use
(6) net dairy herd appreciation

Divided by the sum of:
(1) (1) through (6) above
(2) net non-dairy livestock appreciation
(3) values of non-dairy livestock butchered
(4) receipts from sales of crops
(5) net feed inventory increases








TABLE 2. Dairy Specialization Factors, Tallahassee


11

Area Dairy Farms, 1962.


Small Farms Medium Farms Large Farms
Item Farm No. Factor Farm No. Factor Farm No. Factor

1 .94 1 .90 1 .98

2 .70 2 .98 2 .76

Individual 3 .90 3 .97 3 .89
Farm Factors
4 .86 4 .96 4 .92

5 1.00 5 1.00 5 1.00

6 .75 6 .81 6 .90

7 .87 7 .99 7 .95

8 .96 8 .99

9 .99

Size Groups
Average Factors .87 .96 .92


Overall Area Factor --- .919 Your Farm Factor


Beyond these adjustments for non-dairy specialization and for non-

wholesale milk receipts, no attempt was made to separate costs or returns

for the farm production of goods or services which were used as direct

inputs to the dairy enterprise. The most common of these are the farm

production of feeds and the growing of herd replacements.

The estimate of the cost of producing milk was based on total milk

shipments corrected to a four per cent butterfat basis. /1 The butterfat

3/
Milk is customarily corrected to a common butterfat percentage where
quantity of milk is an important factor in the element under study.
It is, simply, an attempt to make unlike things more alike, and is
calculated as follows:
(0.4 x pounds or gallons of milk)
plus
(15 x pounds or gallons of butterfat)






12

test reported by the receiver was used in the calculations. Unless speci-

fied otherwise, all further references to milk will be to that which has

been so corrected.

The estimate of mature cow numbers was based on a 13-month inventory

obtained for each dairy. This consisted of the farmer's best estimate of

the number of mature cows (in milk and dry) on hand at the beginning of

each month, and the number on hand the last day of the last month of

the year. These 13 on-hand counts were added and the total divided by

13 to yield the estimate of the average number of cows on that farm for

the year 1962. This method gives a count which in effect weights cow

numbers by length of time in the herd and is more precise than a simple

average of the cows at the beginning and the end of the year. The 13-

month average is therefore used throughout this report except as noted

to the contrary.

The summarization of individual farm records was a straight forward

procedure and involved, for the most part, only simple totals, averages,

or percentages. Though care had to be taken that averages of averages or

averages of percentages were not used, estimates for size groups were for

the most part developed simply by summing the items under consideration for

all farms within a given size group and then dividing these sums by the

appropriate number of sample farms. It was when size groups were combined

to make up area averages that the best procedures were not immediately

clear. The primary source of the problem resided in the fact that there

were unequal numbers of farms in each size group in the first instance,

and that the proportions of farms sampled from each group was different

in the second. One had to be able to legitimately assume, of course,

that the farms that were sampled were representative of the group from







13

which they came. Otherwise the study would be of doubtful statistical

validity.

The weights and weighting procedures used depended on the particular

estimate that was to be made. They were carefully selected and employed

throughout this study to ensure that size groups and area totals, aver-

ages, and percentages were both meaningful and contained a minimum of

distortion.









DESCRIPTION OF TALLAHASSEE AREA DAIRY FARMS

General Measures of Size

There is no one all-inclusive, over-all best way of measuring the

size of anything that exists in more than one dimension, and dairy farms,

of course, exist in many dimensions. Daily fat-uncorrected November

shipments were originally used as the basis for division into size groups

for purposes of drawing the sample of farms to be studied, and it is on

that basis that farms continue to be classified with respect to size

throughout this report. Total shipments for the year, as well as total

production for the year, are better measures of size with respect to milk

output than November shipments alone. Since these figures were not avail-

able before the study began, farms could not be classified on those bases

for purposes of sampling, and to maintain the statistical validity of the

study, it was necessary to continue on a November shipment basis.

Other measures of size which are of interest are cow numbers, acreages,

men, capital, and gross cash farm receipts. These are listed in Table 3

by size groups based on fat-uncorrected November shipments. Further

detail regarding the descriptive aspects of these measures of size is

presented in succeeding parts of this section.









DESCRIPTION OF TALLAHASSEE AREA DAIRY FARMS

General Measures of Size

There is no one all-inclusive, over-all best way of measuring the

size of anything that exists in more than one dimension, and dairy farms,

of course, exist in many dimensions. Daily fat-uncorrected November

shipments were originally used as the basis for division into size groups

for purposes of drawing the sample of farms to be studied, and it is on

that basis that farms continue to be classified with respect to size

throughout this report. Total shipments for the year, as well as total

production for the year, are better measures of size with respect to milk

output than November shipments alone. Since these figures were not avail-

able before the study began, farms could not be classified on those bases

for purposes of sampling, and to maintain the statistical validity of the

study, it was necessary to continue on a November shipment basis.

Other measures of size which are of interest are cow numbers, acreages,

men, capital, and gross cash farm receipts. These are listed in Table 3

by size groups based on fat-uncorrected November shipments. Further

detail regarding the descriptive aspects of these measures of size is

presented in succeeding parts of this section.










TABLE 3. Some Measures of Farm Size Groups Based on Fat-Uncorrected
November Shipments, Tallahassee Area Dairy Farms, 1962



Item Size of Farm All Your
Small Medium Large Farms Farm

Average 55.5 70.4 140.4 75.6
Number of
Cows Range 42 28 72 28
to to to to xxxxx
75 116 234 234


Average 237 264 681 322
Number of
Acres
Operated Range 138 143 240 138
to to to to xxxxx
365 560 1,396 1,396


Average 2.1 2.8 6.5 3.1

Number of
Man
Equivalents Range 1.3 2.2 2.0 1.3
to to to to xxxxx
3.3 4.0 8.6 8.6


Average 54,377 72,139 176,222 81,824

Total Farm
Capital Range 39,201 40,324 101,610 39,201
(Dollars) to to to to xxxx
72,052 143,240 326,094 326,094


Average 19,652 26,019 64,958 29,762

Cash Farm
Receipts Range 12,946 12,783 37,037 12,783
(Dollars) to to to to xxxxx
27,798 42,492 115,465 115,465








Milk Production

Average annual butter-fat percentages and individual farm totals

for 4% fat corrected milk (4% F.C.M.) shipped in 1962 estimated from

November shipments alone, 4% F.C.M. actually shipped during the year

based on settlement sheets, other 4% FC.M. produced in 1962, and total

4% F.C.M. produced during the year are shown in Table 4 below. Other

milk produced is broken down into milk retailed at the farm, milk used in

the operator's household, milk used by hired workers and their families,

milk fed to calves, and milk in all other uses, principally that which

was dumped or given away.

The estimate of annual shipments based on November data was only

90% of annual shipments based on settlement sheets for the whole year.

This means, of course, that November was a seasonally low production

month, and that farms were larger, from the standpoint of total milk

shipments, than the November data alone indicated. It can be shown,

too, from the data of Table 4, that the estimate of annual shipments

based on November data was only 87% of total production for the year.

Thus the deviations between total production and the estimate of ship-

ments based on the November data are explained more by seasonality in

production than by the quantities of milk used for purposes other than

wholesale sales.










TABLE 4. Annual Production and Disposition of Milk (Corrected to Four
Per Cent Butterfat), in Gallons per Farm, by Size of Farm, Tallahassee
Area Dairy Farms, 1962.



Im Size of Farm All Your
Small Medium Large Farms Farm


Average Butterfat Test (%)

Milk Estimated Shipped (Based
Only on November Shipments)

Milk Actually Shipped (Based
on all Settlement Sheets)


Retailed at the
Farm

Used in Operator's
Household

Used by Hired
Workers

Fed to Calves


All Else


4.01


4.17


28,139147,537


32,145 50,470


1,233


358


212

389


41


2,233

34,379


78


363


131

573


85


1,231

51,700


4.21


111,051


126,951




112


481


503

1,626


56


2,777
129,728


4.14


49,755


55,312




582


381


228

669


61


1,921

57,233


_____ I I


Other
Milk
Produced


Total Other

Total Milk Produced, 1962









Livestock

Dairy

The average numbers and values for cows, heifers of all ages, and

bulls of all ages are shown in Table 5 below. In a later section of this

report will be shown herd turnover rates, source of replacements, breed

percentages, as well as facilities for housing and milking the dairy

herd.

Non-Dairy

Livestock other than dairy is of limited importance on Tallahassee

Area dairy farms. Sales of non-dairy livestock, increase in inventory values,

and the value of non-dairy animals consumed in the home accounted for just

about two per cent of all farm receipts on the farms studied. Approximately

75 per cent of these non-dairy livestock receipts were from beef, the re-

mainder from swine of various kinds. A substantial portion of the receipts

from beef were associated with animals which were dairy-beef crosses.

The farms that were eliminated because of a low degree of special-

ization in dairy were receiving the bulk of their other farm income from

cash crop enterprises in about the same proportion to income from non-

dairy livestock enterprises as was found on sample farms. This was at

the ratio of about two and one-half to one, or five per cent of all

receipts for crops to two per cent for non-dairy livestock.









Livestock

Dairy

The average numbers and values for cows, heifers of all ages, and

bulls of all ages are shown in Table 5 below. In a later section of this

report will be shown herd turnover rates, source of replacements, breed

percentages, as well as facilities for housing and milking the dairy

herd.

Non-Dairy

Livestock other than dairy is of limited importance on Tallahassee

Area dairy farms. Sales of non-dairy livestock, increase in inventory values,

and the value of non-dairy animals consumed in the home accounted for just

about two per cent of all farm receipts on the farms studied. Approximately

75 per cent of these non-dairy livestock receipts were from beef, the re-

mainder from swine of various kinds. A substantial portion of the receipts

from beef were associated with animals which were dairy-beef crosses.

The farms that were eliminated because of a low degree of special-

ization in dairy were receiving the bulk of their other farm income from

cash crop enterprises in about the same proportion to income from non-

dairy livestock enterprises as was found on sample farms. This was at

the ratio of about two and one-half to one, or five per cent of all

receipts for crops to two per cent for non-dairy livestock.









Livestock

Dairy

The average numbers and values for cows, heifers of all ages, and

bulls of all ages are shown in Table 5 below. In a later section of this

report will be shown herd turnover rates, source of replacements, breed

percentages, as well as facilities for housing and milking the dairy

herd.

Non-Dairy

Livestock other than dairy is of limited importance on Tallahassee

Area dairy farms. Sales of non-dairy livestock, increase in inventory values,

and the value of non-dairy animals consumed in the home accounted for just

about two per cent of all farm receipts on the farms studied. Approximately

75 per cent of these non-dairy livestock receipts were from beef, the re-

mainder from swine of various kinds. A substantial portion of the receipts

from beef were associated with animals which were dairy-beef crosses.

The farms that were eliminated because of a low degree of special-

ization in dairy were receiving the bulk of their other farm income from

cash crop enterprises in about the same proportion to income from non-

dairy livestock enterprises as was found on sample farms. This was at

the ratio of about two and one-half to one, or five per cent of all

receipts for crops to two per cent for non-dairy livestock.









TABLE 5. Average Farm Numbers and Average Values in Dollars per Head
of Dairy Livestock by Size of Farm, Tallahassee Area Dairy Farms, 1962.



Size of Farm__
Item Small Medium Large All Farms Your Farm
Ave. Ave Ave. I Ave. T Ave.
No. Val. No. Val. No. Val. No. Val. No. !Val.


Cows
Beginning Inven.
Additions
Purchased
Transferred in
Subtractions
Sales
Died
Butchered
Ending Inven.
Ave. of Begin-
end Inven.

13-Month Average
Inventory


57.5

1.6
10.0


112.3
1.0
.1
155.8

56.7


155.5


Heifers (All Ages)
Beginning Inven. 23.1
Additions
Purchased
Transferred in 111.0
Subtractions
Sales .1
Died .4
Butchered .3
Transferred out 10.0
Ending Inven. 23.4
Ave. of Begin-
end Inven. 23.2


Bulls (All Ages)
Beginning Inven
Additions
Purchased
Transferred in
Subtractions
Sales
Died
Butchered
Ending Inven.
Ave. of Begin-
end Inventory


223

192


1221


96


1.4 201

.3 151
I -

.4 188
.1 -

1.1 208

1.3 205


72.3

5.4
11.0

15.4
1.1
.4
71.8

72.1


70.4


26.0

1.3
18.4

.8
.9

11.0
33.1

29.6


1.6

.6


.2


1.9

1.8


114

151


20
- 1


112

113


211

153


231


221

216


146.1

14.0
S19.4

40.9
2.9
.1
135.7

140.9


140.4


63.0

.7
36.3

7.1
2.3

19.4
71.1

67.1


1.3

.6
.1

.3

.1
1.6

1.5


278 78.2

214 5.2
- 12.0

186 18.3
1.4
.3
275 75.5

277 76.9


- 75.6


141 30.9

35 .6
18.2

170 1.5
.9
.1
S 12.0
135 35.3

138 133.1


333 1.5

91A -


370


359

346


.3
.1
.0
1.5

1.5


241


206


266

254





118

129


136



115

116


225

167
-

230


241

233


-I-

I-j














I-


- I


.1 ______ 1..--


I-


-1








Management and Labor

Each principal operator was asked as to the total number of hours,

days, months, or weeks that each individual person employed on the farm

in 1962 worked. He was also asked as to the number of hours each person

worked per day, week, or month, if appropriate, and as to the hourly,

daily, weekly, monthly, or annual wages paid or the worth of the individ-

ual's service if not paid, for all labor and management performed on

his farm in 1962 other than that associated with custom work or hired

under special contract. He was also asked to estimate the total number

of man hours spent in performing the regular daily routine chores of

feeding, milking, and caring for his entire dairy herd. Table 6 pre-

sents data gathered in this connection in some detail. No individual

manager or laborer was listed at over 14 hours of work per day, and a

standard work day of nine hours at six dollars per day was used for day

labor rates where some of the information for this item was missing.

Man equivalents were arbitrarily developed on the basis of the average

number of hours worked by each man who appeared to be employed on the

farm on a full-time basis. Total wages paid was computed through ex-

tending the rates of pay per pay period by number of pay periods worked

for all hired labor. This total wage figure was compared to the state-

ment of wages paid on the Federal Income Tax return, and, the time worked

and wages paid adjusted in proportion to the differences, if any,

found between the two wage bills. No allowance was made for the value of

perquisites granted hir-d labor, and so to the extent the value of

these perquisites varied between farms, farm to farm labor costs are

not strictly comparable.








TABLE 6. Labor and Management Hours, Values, and Man Equivalents Per
Farm, by Size of Farm, Tallahassee Area Dairy Farms, 1962.


Size of Farm All Your
Item Small Medium Large Farms Farm


All Labor
Total hours
Total dollar value
Value per hour
Man equivalents

Operator's Labor and
Total hours
Total dollar value
Value per hour
Man equivalents


Management


Hired Labor
Total hours
Total dollar value
Value per hour
Full-time man equivalents
Part-time man equivalents

Unpaid Family Labor
Total hours
Total dollar value
Man equivalents

Shares to Dairy a/
Total hours
Total dollar value
Man equivalents

Annual Dairy Chore Hours


6,662
7,926
1.19
2.13


3,121
4,671:
1.50
.92


1,967
1,921
.98
.38
.33


1,574
1,334
.50


5,796
6,896
1.85

3,308


9,943
9,284
.93
2.78


3,896
5,364
1.38
.95


3,447
1,937
.56
1.00
.13


2,600
1,983
.70


9,545
8,913
2.67

5,625


19,523 10,124
19,902 10,468
1.02 1.03
6.47 3.11


4,136 3,602
7,393 5,403
1.79 1.50
1.10 .96


13,088 4,415
10,128 3,295
.77 .75
4.00 1.23
.74 .32


2,298 2,107
2,381 1,769
.63 .60


17,961 9,314
18,311 9,631
5.95 2.86

9,151 5,213


I-




I -


I-
I -
I-


I I


Computed by multiplying the average total labor
items by the dairy specialization factors first
General Computational Procedures section above.


figures for appropriate
referred to under the








Labor and management shares to dairy in terms of man equivalents,

value, and hours were developed from total farm figures through the

application of the Dairy Specialization Factors first referred to under

the General Computational Procedures section above. This adjustment was

made so that individual farms could be later compared, with respect to

the efficiency of their labor in just the dairy enterprise, on a more

uniform basis.

Land and Its Utilization

A complete statement of acreages owned, rented, and operated, and

their utilization by crops was obtained from each farm in the survey.

Sample totals and averages were expanded to area totals and averages

using weights as appropriate.

Value per owned acre was the farmer's own best estimate of the

value of his land for agricultural purposes. The estimate was, for the

most part, based on the price he felt he could afford to pay for land

of similar quality and realize a return from it in agricultural pro-

duction at least equal to the costs of carrying that land.

Acres owned and rented refer to actual physical acreages only.

Table 7 shows that 13.8% of all land operated on all farms was double or

triple cropped. It shows, too, that 21.9% of all high-order use land

was double or triple cropped.

Acreages classified as low-order or non-use acreages are, for the

most part, of no consequence from the standpoint of productive output.

Farms studied would have been at least as well off without them insofar

as the 1962 production of milk was concerned.










TABLE 7. Acreages per Farm by Major Uses, by Size
Area Dairy Farms, 1962.


of Farm, Tallahassee


Item I Size of Farm All Your
ISmall I Medium Large Farms Farm


Value per owned acre (dollars)
Total acres operated
Acres owned
Acres rented
Total operated
Per cent rented
Low-Order or Non-Use Acreages
Unusable
Idle (though usable)
Woodland pastured
Unimproved open pasture
Total low-order
High-Order Use Acreages
Forage crops
Permanent improved pasture
Temporary pasture
Hay
Silage
Green chop
Total forages
Grain crops
Corn
Oats
Wheat
Total grains
Other High-Order Uses
Total high-order (includes
multiple crops and uses)
Acres double-cropped !/
Acres triple-cropped S/
Acres double-use crops a/
Actual, physical high-order
acreages
Per cent of total land operated
double or triple cropped
Per cent of actual, physical
high-order use land double or
triple-cropped


133.0

193.0
43.9
236.6
18.6


34.1
9.6
27.4

71.1


86.8
34.0
12.6
17.6
3.4
154.3

22.8
9.4
.8
32.9
3.2

190.4
8.8

16.1

165.5

3.7


5.3


136.4

244.2
19.8
264.0
7.5

60.4
20.5
21.4
.7
103.1


73.2
77.7
7.2
28.9
25.4
212.4

18.8


18.8
.6

231.9
41.4
12.2
17.2

161.1

20.3


33.3


143.7

263.1
58.7
321.7
18.2

61.3
21.3
31.5
4.0
118.1


163.4

490.1
190.7
680.9
28.0

134.1
53.3
66.6
22.1
276.1


155.3
219.1
54.1
94.1
13.9
536.6

63.9


64.9
15.7

617.3
114.9

97.7

404.7

16.9


28.4


2/Double-cropped acreages were those from which two different crops were
harvested -- for example, oats followed by millet on the same land.
Triple-cropped acreages were those from which three different crops
were harvested -- for example, oats followed by corn and then millet
on the same land. If the same crop on the same land were successively
harvested in two different ways, for example, bahia grass that was
pastured and then cut for hay, it was listed as a double-use crop.


92.8
82.4
17.3
34.9
14.0
241.4

28.0
4.1
.3
32.6
4.2

278.2
39.6
4.9
30.1

203.6

13.8


21.9







24

Table 8 shows the number of sample farms who had some land in the

various uses listed. This is a tabulation of possible interest, and since

it is largely self-explanatory, no further comment seems warranted.


TABLE 8. Number of Sample Farms With
Farm, Tallahassee


Land in Listed Uses, by Size of
Area Dairy Farms, 1962


Size of Farm All
Item Small Medium barge Farms


Number of Farms in Sample

Number of Sample Farms:

With woodland pasture

With unimproved open pasture

With permanent improved pasture

With temporary pasture

That made some hay

That made some silage

That made some green chop

That harvested some corn for
grain

That harvested some oats for
grain

That harvested some wheat for
grain

That harvested some soybeans fo
grain

That harvested some tobacco


9



4

1

8

7

2

6

3


5


0


0


0

2


7



3

2


r









Capital Investment and Depreciation

The asset values listed in Table 9 are owned assets only, thus

they do not include the values of rented land. Values for buildings,

fences, machinery, and equipment are the depreciated book values, if

such assets were on a depreciation schedule, otherwise they are the

farmer's best estimate of their current market value. Land was valued

as explained under the Land and Its Utilization section above, and

livestock on the basis of the farmer's best estimate of its current

market value.

Milk base is not listed as an asset anywhere in this report.

When it is sold it is frequently sold along with a number of cows, and

the problem of separating the value of the base from the value of the

cows presents itself. The difficulty of base valuation is further com-

pounded by the uncertainty surrounding its legal basis, and the rather

marked fluctuation in its market price over time as the institutions and

organizations which give it substance vacillate between views as to what

status base can and should have.

Depreciation on buildings, fences, machinery, and equipment was

taken, as available, from the depreciation schedules used in the

preparation of the Federal Income Tax return. Buildings and fences

not listed on the schedule were depreciated at four per cent of their

current value and machinery and equipment at eleven per cent of its cur-

rent value. These rates are approximately two-thirds of the over-all

rates of depreciation taken on scheduled buildings, fences, machinery,

and equipment. About one-half of the assets not listed were newly

purchased in 1962, and the other half of the items were not listed for

a variety of other reasons. Using the two-thirds rates for such unlisted

assets seemed a reasonable compromise.










TABLE 9. Capital Investment and Depreciation in Dollars per Farm,
by Size of Farm, Tallahassee Area Dairy Farms, 1962.



Item Size of Farm All Your
____Small Medium Large Farms Farm

Capital Investment:
Land (rented land not included) 27,453 33,322 80,068 38,581
Buildings and fences 4,086 8,686 24,783 9,385
Machinery and equipment 6,908 8,701 21,833 10,116
Dairy livestock 14,603 20,581 47,499 22,489
Non-dairy livestock 1,326 847 2,038 1,252
Total investment 54,377 72,139 176,222 81,824

Depreciation:
Buildings and fences 317 627 2,251 764
Machinery and equipment 1,366 1,667 5,277 2,139
Dairy livestock/ -445 -1,687 -3,346 -1,428
Non-dairy livestock/ -513 -456 -1,161 -598
Total depreciation 727 151 3,020 877

Dairy Specialization Factor .87 .96 .92 .92

Dairy Share of Capital
Investment:b/
Land 23,884 31,989 73,663 35,495
Buildings and fences 3,555 8,338 22,800 8,634
Machinery and equipment 6,010 8,354 20,086 9,307
Dairy livestock 14,603 20,581 47,499 22,489
Total 48,012 69,262 164,048 75,925

Dairy Share of Depreciation-
Buildings and fences 276 602 2,071 703
Machinery and equipment 1,189 1,600 4,854 1,968
Dairy livestock -445 -1,687 -3,346 -1,428
Total 1,020 515 3,579 1,243

Over-all Rates of Depreciation:
Buildings and fences 7.8% 7.2% 9.1% 8.1%
Machinery and equipment 19.8% 19.2% 24.2% 21.1%

a/ Dairy and non-dairy livestock depreciation is negative because there
was, on the average, an over-all increase in all livestock values in
1962 as computed for purposes of this report. The basis for these
computations is given in the accompanying text.
b/ Computed by multiplying the average total investment and depreciation
figures for appropriate items by the dairy specialization factors
first referred to in the General Computational Procedures section
above and listed again in this table for convenience of reference.







27

Depreciation on livestock was computed as follows:

(Value of beginning inventory + cost of purchases)

less

(Value of ending inventory + receipts from sales.)

If the herd decreased in value based on these computational procedures,

the sign of the answer was positive, If it increased in value (that is,

if the herd appreciated in value) the sign was negative.









ALL FARM RECEIPTS AND EXPENSES

General

The data in Tables 10, 11, and 12 show all farm receipts and ex-

penses on the basis of per farm, per gallon of 4% F.C.M., and per cow,

respectively. The classification of receipts and expenses used is

thought to be the most meaningful within the limits within which the

study was conducted. Precise comparisons among individual farms of

specific receipts or expenses items is not always possible since farmers

themselves do not classify such factors in a completely standardized

way. Where there was good reason to believe that a particular item

was improperly listed, however, it was assigned to the most likely

classification. Though there are likely to be some substantial errors

in classification in the case of individual farms, it is felt the

estimates for size groups and the estimates for all farms are uniform

enough for reliable comparisons of the individual items of receipts

and expenses. Of course the classification of individual items has

no effect on total receipts or expenses, so the accuracy of the over-

all analysis is unaffected by whatever errors in classification might

exist.

It must be clearly noted and understood that this section of this

report deals with all farm receipts and expenses, and that no attempt

is made to separate the milk-producing operation from other farm enter-

prises. It is, theq a total farm analysis, and it is not until the

following section that an attempt to separate out the costs and re-

turns to the production of milk for wholesale shipment is made.

Table 13 shows the percentage that each receipt and expense item

is of total receipts and expenses, respectively. This table shows most

clearly the relative importance of each item listed.









ALL FARM RECEIPTS AND EXPENSES

General

The data in Tables 10, 11, and 12 show all farm receipts and ex-

penses on the basis of per farm, per gallon of 4% F.C.M., and per cow,

respectively. The classification of receipts and expenses used is

thought to be the most meaningful within the limits within which the

study was conducted. Precise comparisons among individual farms of

specific receipts or expenses items is not always possible since farmers

themselves do not classify such factors in a completely standardized

way. Where there was good reason to believe that a particular item

was improperly listed, however, it was assigned to the most likely

classification. Though there are likely to be some substantial errors

in classification in the case of individual farms, it is felt the

estimates for size groups and the estimates for all farms are uniform

enough for reliable comparisons of the individual items of receipts

and expenses. Of course the classification of individual items has

no effect on total receipts or expenses, so the accuracy of the over-

all analysis is unaffected by whatever errors in classification might

exist.

It must be clearly noted and understood that this section of this

report deals with all farm receipts and expenses, and that no attempt

is made to separate the milk-producing operation from other farm enter-

prises. It is, theq a total farm analysis, and it is not until the

following section that an attempt to separate out the costs and re-

turns to the production of milk for wholesale shipment is made.

Table 13 shows the percentage that each receipt and expense item

is of total receipts and expenses, respectively. This table shows most

clearly the relative importance of each item listed.








TABLE 10. All Farm Receipts and Expenses in Dollars per Farm, by Size
of Farm, Tallahassee Area Dairy Farms, 1962.



Item Size of Farm All Your
It __Small Medium Large Farms Farm
Cash Receipts:
Wholesale Milk sales 16,402 24,315 59,992 26,848
Retail sales of milk 764 53 73 363
Value of milk used in home 189 179 227 191
Dairy calves sold 333 406 747 431
Dairy animals used in home 52 67 60 59
Non-dairy animals used in home 45 19
Crop sales 1,653 540 3,303 1,481
Other and misc. receipts 214 459 556 370
Total Cash Receipts 19,652 26,019 64,958 29,762
Non-Cash Receipts:
Dairy livestock appreciation 445 1,687 3,346 1,428
Non-dairy livestock apprec. 513 456 1,161 598
Total Non-Cash Receipts 958 2,143 4,507 2,026
TOTAL FARM RECEIPTS: 20,610 28,162 69,465 31,788

Cash Expenses:
Labor hired 1,921 1,937 10,128 3,295
Repairs and maintenance 620 996 3,161 1,195
Feed purchased 6,555 8,585 14,683 8,726
Seeds and plants 240 580 1,383 567
Fertilizer and lime 1,415 1,962 8,041 2,739
Machine hire and custom work 356 516 379 424
Supplies 407 558 1,642 674
Testing, regis., breeding 109 212 927 287
Veterinary and medicine 108 261 455 227 _
Gasoline, fuel, and oil 497 780 2,381 925
Florida Milk Commission Taxes 42 71 159 73
Other taxes and licenses 234 272 767 338
Insurance 239 327 835 374
Utilities 315 565 1,138 553
Rents paid 53 59 659 156
Milk hauling, handling, trans. 1,304 1,583 3,575 1,795
Other trucking or freight 119 159 424 186
Legal, accounting, auditing 2 49 132 43
Farm organization dues 103 366 601 292
Other and miscellaneous 33 86 169 77
Total Cash Receipts 14,672 19,924 51,638 22,946
Depreciation:
Dairy herd depreciation -
Non-dairy livestock deprec. -
Buildings and fences 317 627 2,251 764
Machinery and equipment 1,366 1,667 5,277 2,139
Total Depreciation 1,683 2,294 7,528 2,903
Int. on investment @ 5 1/2% 2,991 3,968 9,692 4,501
Unpaid labor (other than oper.) 1,334 1,983 2,381 1,769
Operator's labor and management 4,671 5,364 7,393 5,403
TOTAL FARM EXPENSES: 25,351 33,533 78,632 37,522







TABLE 11. All Farm Receipts and Expenses in Cents Per Gallon of 4%
F. C. M. Sold at Wholesale, by Size of Farm, Tallahassee
Area Dairy Farms, 1962.

Size of Farm All Your
Item Small Medium Large Farms Farm
Gal. 4% F.C.M. Sold Wholesale 32,145 50,470 126,951 55,312

Cash Receipts:
Wholesale milk sales 51.03 48.18 47.26 48.54
Retail sales of milk 2.38 .11 .06 .66
Value of milk used in home .59 .36 .18 .35
Dairy calves sold 1.04 .80 .59 .78
Dairy animals used in home .16 .13 .05 .11
Non-dairy animals used in home .14 .03
Crop sales 5.14 1.07 2.60 2.68
Other and misc. receipts .67 .91 .44 .67
Total Cash Receipts 61.14 51.55 51.17 53.81
Non-Cash Receipts:
Dairy livestock appreciation 1.38 3.34 2.64 2.58
Non-dairy livestock apprec. 1.60 .90 .92 1.08
Total Non-Cash Receipts 2.98 4.25 3.55 3.66
TOTAL FARM RECEIPTS: 64.12 55.80 54.72 57.47

Cash Expenses:
Labor hired 5.98 3.84 7.98 5.96
Repairs and maintenance 1.93 1.97 2.49 2.16
Feed purchased 20.39 17.01 11.57 15.78
Seeds and plants .75 1.15 1.09 1.03
Fertilizer and lime 4.40 3.89 6.33 4.95
Machine hire and custom work 1.11 1.02 .30 .77
Supplies 1.27 1.11 1.29 1.22
Testing, regis., breeding .34 .42 .73 .52
Veterinary and medicine .34 .52 .36 .41
Gasoline, fuel, and oil 1.55 1.55 1.88 1.67
Florida Milk Commission Taxes .13 .14 .13 .13
Other taxes and licenses .73 .54 .60 .61
Insurance .74 .65 .66 .68
Utilities .98 1.12 .90 1.00
Rents paid .17 .12 .52 .28
Milk hauling, handling, trans. 4.06 3.14 2.82 3.25
Other freight and trucking .37 .32 .33 .34
Legal, accounting, and audit. .01 .10 .10 .08
Farm organization dues .32 .73 .47 .53
Other and miscellaneous .10 .17 .13 .14
Total Cash Expenses 45.64 39.48 40.68 41.49
Depreciation:
Dairy herd depreciation -
Non-dairy livestock deprec. -
Buildings and fences .99 1.24 1.77 1.38
Machinery and equipment 4.25 3.30 4.16 3.87
Total Depreciation 5.24 4.55 5.93 5.25
Int. on investment @ 5 1/2% 9.31 7.86 7.63 8.14
Unpaid labor (other than oper.) 4.15 3.93 1.88 3.20
Operator's labor and management 14.53 10.63 5.82 9.77
TOTAL FARM EXPENSES: 78.87 66.44 61.94 67.84








TABLE 12. All Farm Receipts and Expenses in Dollars Per Cow Based
on 13-Month Inventory, by Size of Farm, Tallahassee Area
Dairy Farms, 1962

Size of Farm All Your
Item Small Medium Large Farms Farm

Cow No. Based on 13-Mo. Inven. 55.5 70.4 140.4 75.6
Cash Receipts:
Wholesale milk sales 295.43 345.63 427.45 355.04
Retail sales of milk 13.76 .75 .52 4.80
Value of milk used in home 3.40 2.54 1.62 2.53
Dairy calves sold 6.00 5.77 5.32 5.70
Dairy animals used in home .94 .95 .43 .78
Non-dairy animals used in home .81 .25
Crop sales 29.77 7.68 23.53 19.59
Other and misc. receipts 3.86 6.53 3.96 4.89
Total Cash Receipts 353.96 369.85 462.83 393.57
Non-Cash Receipts:
Dairy livestock appreciation 8.02 23.98 23.84 18.88
Non-Dairy livestock apprec. 9.24 6.48 8.27 7.91
Total Non-Cash Receipts 17,26 30.46 32.11 26.79
TOTAL FARM RECEIPTS: 371.22 400.31 494.94 420.37
Cash Expenses:
Labor hired 34.60 27.53 72.16 43.57
Repairs and maintenance 11.17 14.16 22.52 15.80
Feed purchased 118.07 122.03 104.62 115.39
Seeds and plants 4.32 8.25 9.85 7.50
Fertilizer and lime 25.49 27.89 57.29 36.22
Machine hire and custom work 6.41 7.34 2.70 5.61
Supplies 7.33 7.93 11.70 8.91
Testing, regis., breeding 1.96 3.01 6.61 3.80
Veterinary and medicine 1.95 3.71 3.24 3.00
Gasoline, fuel, and oil 8.95 11.09 16.97 12.23
Florida Milk Commission Taxes .76 1.01 1.13 .97
Other taxes and licenses 4.22 3.87 5.47 4.47
Insurance 4.31 4.65 5.95 4.95
Utilities 5.67 8.03 8.11 7.31
Rents paid .96 .84 4.70 2.06
Milk, hauling, handling, trans. 23.49 22.50 25.47 23.74
Other trucking or freight 2.14 2.26 3.02 2.46
Legal, accounting, auditing .04 .70 .94 .57
Farm organization dues 1.86 5.20 4.28 3.86
Other and miscellaneous .59 1.22 1.20 1.02
Total Cash Expenses 264.27 283.21 367.92 303.44
Depreciation:
Dairy herd depreciation -
Non-dairy livestock deprec. -
Buildings and fences 5.71 8.91 16.04 10.10
Machinery and equipment 24.60 23.70 37.60 28.29
Total Depreciation 30.31 32.61 53.64 38.39
Int. on investment @ 5 1/2% 53.87 56.40 69.06 59.52
Unpaid labor (other than oper.) 24.03 28.19 16.97 23.39
Operator's labor and management 84.13 76.25 52.68 71.45
TOTAL FARM EXPENSES: 456.61 476.66 560.26 496.19





32

TABLE 13. Per Cent that Listed Items of Receipts and Expenses are of
Total Receipts and Expenses, Respectively, by Size of Farm,
Tallahassee Area Dairy Farms, 1962.


Size of Farm All Your
Item Small Medium Large Farms Farm

Cash Receipts:
Wholesale milk sales 79.58 86.34 86.36 84.46
Retail sales of milk 3.71 .19 .11 1.14
Value of milk used in home .92 .64 .33 .60
Dairy calves sold 1.62 1.44 1.08 1.36
Dairy animals used in home .25 .24 .09 .19
Non-dairy animals used in home .22 .06
Crop sales 8.02 1.92 4.75 4.66
Other and misc. receipts 1.04 1.63 .80 1.16
Total Cash Receipts 95.35 92.39 93.51 93.63
Non-Cash Receipts:
Dairy livestock appreciation 2.16 5.99 4.82 4.49
Non-dairy livestock apprec. 2.49 1.62 1.67 1.88
Total Non-Cash Receipts 4.65 7.61 6.49 6.37
TOTAL FARM RECEIPTS: 100.00 100.00 100.00 100.00

Cash Expenses:
Labor hired 7.58 5.78 12.88 8.78
Repairs and maintenance 2.45 2.97 4.02 3.18
Feed purchased 25.86 25.60 18.67 23.26
Seeds and plants .95 1.73 1.76 1.51 j
Fertilizer and lime 5.58 5.85 10.23 7.30
Machine hire and custom work 1.40 1.54 .48 1.13
Supplies 1.61 1.66 2.09 1.80
Testing, regis., breeding .43 .63 1.18 .76
Veterinary and medicine .43 .79 .58 .60
Gasoline, fuel, and oil 1.96 2.33 3.03 2.47 _
Florida Milk Commission Taxes .17 .21 .20 .19
Other taxes and licenses .92 .81 .98 .90
Insurance .94 .98 1.06 1.00 _
Utilities 1.24 1.68 1.45 1.47 _
Rents paid .21 .18 .84 .42
Milk hauling, handling, trans. 5.14 4.72 4.55 4.78
Other trucking or freight .47 .47 .54 .50
Legal, accounting, auditing .01 .15 .17 .11
Farm organization dues .41 1.09 .76 .78
Other and miscellaneous .13 .26 .21 .21__
Total Cash Expenses 57.88 59.42 65.67 61.15
Depreciation:
Dairy herd depreciation -
Non-dairy livestock deprec. -
Buildings and fences 1.25 1.87 2.86 2.04
Machinery and equipment 5.39 4.97 6.71 5.70
Total Depreciation 6.64 6.84 9.57 7.74_
Int. on investment @ 5 1/2% 11.80 11.83 12.33 12.00
Unpaid labor (other than oper.) 5.26 5.91 3.03 4.71
Operator's labor and management 18.43 16.00 9.40 14.40
TOTAL FARM EXPENSES: 100.00 100.00 100.00 100.00








Farm Receipts

All receipts have been classified as either cash or non-cash.

Though clear-cut distinctions are not always maintained nor possible,

the calling of, for example, the value of animals butchered for use

in the home a cash receipt is justified on the basis that it could have

been easily converted to cash if the farmer had so chosen. If he had,

he would have needed to turn around and purchase meat or other foods

to replace that which would have been added to his diet had he not

sold the animal but butchered it for his own use in the first place.

Cash receipts

Wholesale milk sales

The figure reported here was the gross value of milk shipped to

handlers before any deductions were made. Deductions for hauling,

handling, and transfer charges, Florida Milk Commission taxes, and

the like, were not subtracted from milk receipts here, but were listed

as expenses under the expenses section. These data came from the

copies of producer settlement sheets which were returned to the pro-

ducer himself each pay period during the year. The milk was corrected

to a four per cent basis in the manner described earlier in this

report. As Table 11 indicates, the average blend price received over

the entire Tallahassee Area was 48.54 cents per gallon of four per

cent F.C.M.

Retail sales of milk

This was the value of all milk sold at the farm to final consumers,

and was computed by multiplying gallons sold by price per gallon charged

by the farmer. From Table 10 it can be seen that retail sales on that

basis averaged $363 per farm for the area.








Farm Receipts

All receipts have been classified as either cash or non-cash.

Though clear-cut distinctions are not always maintained nor possible,

the calling of, for example, the value of animals butchered for use

in the home a cash receipt is justified on the basis that it could have

been easily converted to cash if the farmer had so chosen. If he had,

he would have needed to turn around and purchase meat or other foods

to replace that which would have been added to his diet had he not

sold the animal but butchered it for his own use in the first place.

Cash receipts

Wholesale milk sales

The figure reported here was the gross value of milk shipped to

handlers before any deductions were made. Deductions for hauling,

handling, and transfer charges, Florida Milk Commission taxes, and

the like, were not subtracted from milk receipts here, but were listed

as expenses under the expenses section. These data came from the

copies of producer settlement sheets which were returned to the pro-

ducer himself each pay period during the year. The milk was corrected

to a four per cent basis in the manner described earlier in this

report. As Table 11 indicates, the average blend price received over

the entire Tallahassee Area was 48.54 cents per gallon of four per

cent F.C.M.

Retail sales of milk

This was the value of all milk sold at the farm to final consumers,

and was computed by multiplying gallons sold by price per gallon charged

by the farmer. From Table 10 it can be seen that retail sales on that

basis averaged $363 per farm for the area.








Value of milk used in the operator's home

Value of milk used for this purpose was based on the fat uncorrected

blend price received by the farmer for milk sold at wholesale and his best

estimate of farm produced milk consumed in his own home. This aver-

aged $191 per farm.

Dairy calves sold

Included here are only the proceeds from calves sold for veal at very

early ages which were never intended to be kept for other purposes such

as herd replacements or feeding out to higher weights for later sales

as beef. The receipts from these latter animals are accounted for in

the computation of changes in inventory values of livestock.

Value of dairy animals used in the operator's home

Dairy animals butchered were valued on the following basis:

mature cows at $150 each

mature bulls at $200 each

heifers at the average value for all heifers

calves at the average price received for other calves sold.

Value of non-dairy animals used in the operator's home

Valuations of these animals were made by the farmer himself based

on his best estimate of the market value of the particular animals

butchered.

Crop sales

Crops were valued, generally, at their gross sales prices before

deductions for hauling. Most farmers hauled their crops to market them-

selves and the costs of hauling are included in other farm expenses in

the form of labor, gasoline, truck repairs, etc. If hauling was done

commercially, those hauling charges were listed as expenses against the






35

farm business. Crop sales averaged $1,481 per farm and were 4.66 per cent

of all farm receipts.

Other and miscellaneous receipts

Included here are such things as: patronage dividends, rebates,

and refunds; agricultural programs payments; custom work; and rents

received for farm property. The sum of these was small, and averaged

only $370 per farm which is but 1.16 per cent of all farm receipts.

Non-cash receipts

Dairy livestock appreciation

Though for the area as a whole and for each of these size groups

there were increases in the over-all value of the dairy herds, there

were decreases in value for a few individual farms. Thus it was

necessary to make provisions for recording both appreciation in herd

value under the receipts section and depreciation in herd value under

the expenses section.

The figure reported for appreciation is the total for the entire

herd wherein cows, bulls, and heifers are all included. Veal calves

sold and dairy animals butchered for home use were reported separately

and so did not enter into the computations. Cattle deaths during the

year are accounted for as their value appears in the beginning inven-

tory (or in purchases) but not in the ending inventory. Thus appreciation

is reduced, or depreciation increased, by their approximate value at

the time of their loss. The decrease in value of mature cows and the

increase in value of growing youngstock are accounted for by the

computational procedures employed. The increase in value of youngstock

is reflected in increased feed, labor, and other costs which are a part

of the total costs reported in the expenses section.






36

Appreciation on dairy livestock averaged $1,428 per farm which is

4.49 per cent of all farm receipts. Thus it is an item of importance

on Tallahassee Area dairy farms ranking behind only wholesale milk

and crop sales.

Non-dairy livestock appreciation

The procedures, employed for the computation of the appreciation of

non-dairy livestock were identical to those described as used for dairy

livestock just above and the comments under that section are generally

applicable as well.

As mentioned earlier in this report, non-dairy livestock is

of only small importance on Tallahassee Area dairy farms. Appreciation

on non-dairy livestock is as high as it is because livestock other than

dairy is kept primarily for the increase in animal value that can be

achieved through feeding as contrasted to dairy cattle wherein the

production of meat is principally a by-product operation.

Farm Expenses

The items of expense which it seemed appropriate to elaborate

upon are discussed in the same manner that receipts items wore dis-

cussed above. The ones which did not warrant additional ccmnr:nt are

merely omitted. The others are considered in turn in the same order

that they are listed on Table 10.

Cash expenses

Labor hired

Total wages paid (including legally required payroll deductions)

to all full-time, part-time, and occasional hired labor were included

here. The value of goods and services otherwise provided hired workers,

such as housing, utilities, milk, transportation, and the like, are not






36

Appreciation on dairy livestock averaged $1,428 per farm which is

4.49 per cent of all farm receipts. Thus it is an item of importance

on Tallahassee Area dairy farms ranking behind only wholesale milk

and crop sales.

Non-dairy livestock appreciation

The procedures, employed for the computation of the appreciation of

non-dairy livestock were identical to those described as used for dairy

livestock just above and the comments under that section are generally

applicable as well.

As mentioned earlier in this report, non-dairy livestock is

of only small importance on Tallahassee Area dairy farms. Appreciation

on non-dairy livestock is as high as it is because livestock other than

dairy is kept primarily for the increase in animal value that can be

achieved through feeding as contrasted to dairy cattle wherein the

production of meat is principally a by-product operation.

Farm Expenses

The items of expense which it seemed appropriate to elaborate

upon are discussed in the same manner that receipts items wore dis-

cussed above. The ones which did not warrant additional ccmnr:nt are

merely omitted. The others are considered in turn in the same order

that they are listed on Table 10.

Cash expenses

Labor hired

Total wages paid (including legally required payroll deductions)

to all full-time, part-time, and occasional hired labor were included

here. The value of goods and services otherwise provided hired workers,

such as housing, utilities, milk, transportation, and the like, are not









separately reported because the cost of providing these is already in-

cluded in such other expense items as depreciation, electricity bills,

feed, and gasoline. Though this method of reporting complicates the

problem of comparing total labor costs between individual farms, it

has no bearing on the calculation of the over-all profitability of

farms.

Hired labor, as computed, accounted for 8.78 per cent of all farm

expenses and averaged $3,295 per farm.

Repairs and maintenance

Figures for this item are probably less comparable between farms

than those for any other item. There is, in the first place, a good

bit of variation as to the extent that repairs are carried out on the

farm and the extent to which they are hired done by people off the farm.

Thus the labor involved in the former instance is not ordinarily in-

cluded under repairs and maintenance whereas in the second instance

it is. There is in the second place, likely to be a good bit of non-

uniformity as to the classification of expenses into those properly

belonging under repairs and maintenance, those belonging under supplies,

and those which should actually be handled as a depreciable asset.

The total repairs amd maintenance bill, though relatively small,

is nevertheless a significant item of expense as it is given. The

classification of expenses here will affect the calculation of over-

all profits to the extent, but only to the extent, that the value and

kind of any depreciable assets which might be included under the

repairs and maintenance category differed in 1962 from that of other

recent years.









Feed purchased

Purchased feeds were by far the most important single item of

cash expense on dairy farms in the Tallahassee Area. These accounted

for 23.26 per cent of all farm expenses in 1962 and averaged $8,726

per farm. The total purchased feed bill was adjusted for changes in

all feed inventories (including stored home-grown feeds) for purposes

of this report.

There is, of course, wide variation over the area as to the per-

centages of all feed nutrients that are supplied to livestock from

home-grown sources. No attempt to compute a total feed bill is made

in this report; neither was an allocation of feed to the different kinds

of livestock (where more than one kind is present on a particular farm)

tried. It seems likely, too, that there was some crossover in class-

ification between feeds, seeds and plants, fertilizer and lime, and

supplies, insofar as any particular farmer's report is concerned. The

extent to which this was done is not known, of course, but it would not

seem to be of any serious consequence, on the whole, even when individual

farms are compared.

Fertilizer and lime

Fertilizer and lime costs are quite a significant part of over-all

farm expenses, about equal to hired labor costs which rank second only

to purchased feed costs insofar as cash expenses are concerned. They

averaged $2,739 per farm, accounting for 7.30 per cent of all farm

expenses.









Supplies

This is the sum of all farm supplies purchased, both for use in

the dairy and in crop work, except for possible mis-classified items

as mentioned above. It would probably include some replacement items

as well as the usual soaps, disinfectants, and insect sprays.

Testing, registration, and breeding fees

The amount reported here included artificial breeding fees, stud

service, DHIA testing fees, and fees associated with the registration

of purebred cattle.

Other taxes and licenses

All farm property taxes (including those on real estate, livestock,

and equipment) and the cost of licenses for vehicles used in the farm

business are included here.

Insurance

Premiums on insurance against hazards to buildings, livestock, and

machinery and the costs of liability insurance associated with the farm

business make up the total of costs reported here.

Utilities

The sum of the farm shares of the phone and electric bills.

Milk hauling, handling, and transfer charges

All farms reported hauling charges, a few reported handling and

transfer charges. Handling and transfer fees are charged to the

farmer when some of his milk is diverted or transferred to plants

other than those of his primary receiver.








Other trucking or freight

Costs of transporting crops, feed, cattle, machinery, etc., where

this is not done by the farmer himself, and where the shipping, receiv-

ing, or transporting agency lists such charges separately are included

under this heading.

Legal, accounting, auditing

Bookkeepers', accountants', and attorneys' fees, as well as other

legal expenses of doing business are included in this category.

Other and miscellaneous

The amounts that the farmer himself reported as other and mis-

cellaneous costs on his own tax return, the amounts he reported as

storage and warehousing costs, the farm share of automobile and truck

expenses if reported separately, subscription payments for farm papers

and magazines, and other costs reported by the farmer but not included

under any of the categories already enumerated above were all included

under the heading of Other and miscellaneous costs for purposes of this

report. The sum of these is very small and of no particular consequence

in relation to total costs.

Depreciation

Dairy herd and non-dairy livestock

The basis for computing depreciation on the livestock has already

been described in detail. Although all farms taken together and farms

taken by size groups show no depreciation, there are instances wherein

individual farms experienced a decline in livestock values as computed

in this study. Thus space was provided to show this depreciation in

this section.








Buildings and fences

The basis for the figures reported here is fully described in the

Capital Investment and Depreciation section above. The amount of depre-

ciation taken on buildings and fences is rather small in terms of total

farm expenses, amounting to on $764 per farm or 2.04 per cent of all

farm expenses.

Machinery and equipment

The basis for these computations is likewise explained in the

Capital Investment and Depreciation section above. As can be seen from

Table 10, depreciation on machinery and equipment averaged $2,139 per

farm which, as Table 13 shows, was 5.70 per cent of all farm expenses.

Interest on investment at five and one-half per cent

The valuation of assets was done as described under the Capital

Investment and Depreciation and the Land and Its Utilization sections

above. A five and one-half per cent rate of return was used for pur-

poses of exposition as it is representative of interest costs charged

by the principal agricultural loan agencies in the area. For example,

the Farmer's Home Administration was charging five per cent on both cap-

ital and operating loans, the Production Credit Association six per

cent on both capital and operating loans, and the Federal Land Bank

five and one-half per cent on capital loans. Of course one may assume

whatever return to capital he feels is relevant, and the computed

costs would change accordingly. In a later section of this report

it will be shown what the effect of altering rates of return would

have on the computed cost of producing a gallon of milk.

The five and one-half per cent rate was applied to the total

capital investment in the farm with the exception of working capital,






42

or the day to day cash needed to carry on the farm business and whatever

minimum stocks of feeds and supplies must be kept on hand. The interest

thus charged is composed of interest payments made on borrowed capital

as well as interest payments to owned capital. The former of course

must be paid currently, and is in the nature of a cash cost. The lat-

ter, though it does not represent an out-of-pocket cost, is a cost

of doing business in the sense that that same capital could earn a

similar return in other uses. A later section of this report shows

the net worth position of the dairyman in the study and distinguishes

between interest on owned and borrowed capital.

Value of unpaid labor

A brief, general discussion of quantities and values of labor and

management was given in the section titled Management and Labor above.

No standard quantity-value-kind of labor schedule was developed for

purposes of this study. Unpaid labor (other than operator) consisted

almost exclusively of members of the immediate family, and was valued

by the farmer on the basis of his own knowledge of hired labor costs in

light of the quality and quantity of work performed. The value of un-

paid labor was thus set at a level roughly commensurate with what it

would have cost to have had the same work hired done.

Unpaid labor accounted for 4.71 per cent of all farm expenses

and averaged $1,769 per farm. The value of this labor increased with

size of farm in terms of dollars and cents, but diminished in terms

of costs per gallon of milk.

Value of operator's labor and management

There was a total of 23.7 operators on the 24 farms included in

this study. Where a clear-cut partnership existed, each principal






42

or the day to day cash needed to carry on the farm business and whatever

minimum stocks of feeds and supplies must be kept on hand. The interest

thus charged is composed of interest payments made on borrowed capital

as well as interest payments to owned capital. The former of course

must be paid currently, and is in the nature of a cash cost. The lat-

ter, though it does not represent an out-of-pocket cost, is a cost

of doing business in the sense that that same capital could earn a

similar return in other uses. A later section of this report shows

the net worth position of the dairyman in the study and distinguishes

between interest on owned and borrowed capital.

Value of unpaid labor

A brief, general discussion of quantities and values of labor and

management was given in the section titled Management and Labor above.

No standard quantity-value-kind of labor schedule was developed for

purposes of this study. Unpaid labor (other than operator) consisted

almost exclusively of members of the immediate family, and was valued

by the farmer on the basis of his own knowledge of hired labor costs in

light of the quality and quantity of work performed. The value of un-

paid labor was thus set at a level roughly commensurate with what it

would have cost to have had the same work hired done.

Unpaid labor accounted for 4.71 per cent of all farm expenses

and averaged $1,769 per farm. The value of this labor increased with

size of farm in terms of dollars and cents, but diminished in terms

of costs per gallon of milk.

Value of operator's labor and management

There was a total of 23.7 operators on the 24 farms included in

this study. Where a clear-cut partnership existed, each principal









partner was listed as an operator. Two of the 24 farms had such two-

man partnerships. Four farms had principal operators who spent only

fractional parts of their total time on the farm business because

they were engaged in other jobs or for reasons of health voluntarily

limited their activities.

Operator's labor and management were generally valued by the operator

involved on the lower of the following four bases: (1) what it would

cost to hire done what the operator did, (2) what the operator would

want to be paid to do for someone else what he did for himself, (3) what

the operator could earn in his next best employment off the farm,

or (4) what the operator felt his contribution to the farm business

was actually worth in terms of costs and returns to other factors. The

valuation of the operator's labor and management was one of the most

difficult estimates that had to be made. Though there is considerable

variation from farm to farm, it is felt that the all farms average is

a reasonably good and useful measure for purposes of this study. It

is, in any event, easy to show the effect on milk production costs of

any change in value of operator's labor and management one may wish to

consider.

Table 10 shows an average value for this item of $5,403 per farm

and Table 13 that it constitutes a little over 14 per cent of

total farm costs.

Some general comments on farm expenses

Farm expenses were broken down into cash and other costs which were

generally referred to as non-cash. There is some ambiguity with respect

to certain items placed in those classifications, particularly in the

case of interest on investment, already noted, which might properly

have been considered a cash cost to the extent of interest charges







44

on farm indebtedness. Then too, if there were purchases of cattle in

excess of the value of sales the amount of the excess could have been

considered a cash expense whether there was an increase in the over-all

value of livestock or not. If livestock sales had exceeded purchases,

on the other hand, the difference would have been classified as a cash

receipt.

It is interesting to note how the percentage of expenses which have

been classified as cash increases as the size of farm (with respect to

milk shipments) increases. Table 13 shows these as approximately 58,

59, 66, and 61 for small, medium, large, and all farms, respectively.

This ascending order reflects the effect of the spreading of fixed

costs, which are mostly non-cash items, over greater quantities of

production per farm.

Purchased feed, at 23.26 per cent of all farm expenses, was the

highest single cash expense on Tallahassee Area dairy farms. When one

adds hired labor, value of unpaid labor, and value of operator's labor

and management, however, total labor becomes the largest single item

of expense and accounts for 27.89 per cent of all farm expenses. Feed

and labor thus make up a total of 51.15 per cent of all farm costs. The

next highest item of expense is interest on investment at 12 per cent

of all farm expenses.






45

MEASURES OF INCOME AND PROFITS, THE OVER-ALL FINANCIAL POSITION OF DAIRY-
MEN, FUNDS FOR FAMILY LIVING, AND NET COST OF PRODUCING MILK

The information presented in Table 14 of this report serves as the

basis for the discussion in this section. Its purpose is to make the

data on costs and returns previously presented more meaningful in terms

of their relationship to the economic welfare of the dairy farm families,

and to permit comparison of farms on that basis. Other data related to

the dairyman's over-all financial and current income position is present-

ed which permits us to look at the dairy farm family as a consumption as

well as a production unit.

Measures of Income and Profits

Family farm income

Family farm income is computed by subtracting cash expenses and

depreciation from all farm receipts. It is, then,the total return for

the operator's labor and management, for other family labor, and the

capital employed in the farm business. This is, as can be seen from

Table 14, a positive quantity for all three size groups of farms.

Farm income

This figure is obtained by subtracting the value of unpaid family

labor from Family farm income. It is the total return for the operator's

labor and management and the capital employed in the farm business.

Family labor income

This is the total return to the operator and his family for their

labor and management and is calculatedby subtracting cash expenses,

depreciation, and interest on investment from total farm receipts.






46
TABLE 14, Income, Profits, Net Worth, Funds for Family living, and Net
Costs of Milk Sold at Wholesale, in Dollars per Earm, by
Size of Farm, Tallahassee Area Dairy Farms, 1962.



Size of Farm All Your
Item / Small Medium Large Farms Farm

Family farm income 4,255 5,944 10,299 5,939
Farm income 2,921 3,961 7,918 4,170
Family labor income 1,264 1,976 607 1,438
Operator's labor income -70 -7 -1,774 -331
Net farm income -1,750 -1,403 525 -1,233
Net farm profit or loss -4,741 -5,371 -9,167 -5,734

Return above equity maintenance 3,466 4,951 7,954 4,808

Total farm assets 54,377 72,139 176,222 81,824
Total farm liabilities 14,343 18,052 42,630 20,646
Total farm net worth 40,034 54,087 133,592 61,178

Ratio of assets to liabilities 3.8::1 4.0::1 4.1::1 4.0::1

Interest on debts at 5 1/2% 789 993 2,345 1,131
Total 1962 payments on debts 4,381 4,383 11,651 5,594

Maximum possible farm cash avail-
able for family living 4,191 5,102 10,975 5,685
Farm cash actually available for
family living 599 1,712 1,669 1,222
Family cash income from non-farm
sources 630 1,708 876 1,104
Total cash available for family
living 1,229 3,420 2,545 2,326

Total farm expenses 25,354 33,534 78,630 37,521
Total farm receipts 20,608 28,161 69,464 31,787
Farm receipts except milk shipts. 4,206 3,846 9,472 4,939
Receipts from milk shipped 16,402 24,315 59,992 26,848
Net cost of milk shipped 21,148. 29,688 69,158 32,582

Gallons of milk shipped (4% B. F.32,145 50,470 126,951 55,312
Net cost per gallon of milk
shipped .65789 .58823 .54476 .58905

Change in per gallon cost for
each 1% change in interest .01692 .01428 .01387 .01478
Change in costs needed for a one-
cent change in cost/gal. 321 505 1,270 553

ach item listed is explained in the accompanying text as necessary.
Each item listed is explained in the accompanying text as necessary.






45

MEASURES OF INCOME AND PROFITS, THE OVER-ALL FINANCIAL POSITION OF DAIRY-
MEN, FUNDS FOR FAMILY LIVING, AND NET COST OF PRODUCING MILK

The information presented in Table 14 of this report serves as the

basis for the discussion in this section. Its purpose is to make the

data on costs and returns previously presented more meaningful in terms

of their relationship to the economic welfare of the dairy farm families,

and to permit comparison of farms on that basis. Other data related to

the dairyman's over-all financial and current income position is present-

ed which permits us to look at the dairy farm family as a consumption as

well as a production unit.

Measures of Income and Profits

Family farm income

Family farm income is computed by subtracting cash expenses and

depreciation from all farm receipts. It is, then,the total return for

the operator's labor and management, for other family labor, and the

capital employed in the farm business. This is, as can be seen from

Table 14, a positive quantity for all three size groups of farms.

Farm income

This figure is obtained by subtracting the value of unpaid family

labor from Family farm income. It is the total return for the operator's

labor and management and the capital employed in the farm business.

Family labor income

This is the total return to the operator and his family for their

labor and management and is calculatedby subtracting cash expenses,

depreciation, and interest on investment from total farm receipts.






45

MEASURES OF INCOME AND PROFITS, THE OVER-ALL FINANCIAL POSITION OF DAIRY-
MEN, FUNDS FOR FAMILY LIVING, AND NET COST OF PRODUCING MILK

The information presented in Table 14 of this report serves as the

basis for the discussion in this section. Its purpose is to make the

data on costs and returns previously presented more meaningful in terms

of their relationship to the economic welfare of the dairy farm families,

and to permit comparison of farms on that basis. Other data related to

the dairyman's over-all financial and current income position is present-

ed which permits us to look at the dairy farm family as a consumption as

well as a production unit.

Measures of Income and Profits

Family farm income

Family farm income is computed by subtracting cash expenses and

depreciation from all farm receipts. It is, then,the total return for

the operator's labor and management, for other family labor, and the

capital employed in the farm business. This is, as can be seen from

Table 14, a positive quantity for all three size groups of farms.

Farm income

This figure is obtained by subtracting the value of unpaid family

labor from Family farm income. It is the total return for the operator's

labor and management and the capital employed in the farm business.

Family labor income

This is the total return to the operator and his family for their

labor and management and is calculatedby subtracting cash expenses,

depreciation, and interest on investment from total farm receipts.






45

MEASURES OF INCOME AND PROFITS, THE OVER-ALL FINANCIAL POSITION OF DAIRY-
MEN, FUNDS FOR FAMILY LIVING, AND NET COST OF PRODUCING MILK

The information presented in Table 14 of this report serves as the

basis for the discussion in this section. Its purpose is to make the

data on costs and returns previously presented more meaningful in terms

of their relationship to the economic welfare of the dairy farm families,

and to permit comparison of farms on that basis. Other data related to

the dairyman's over-all financial and current income position is present-

ed which permits us to look at the dairy farm family as a consumption as

well as a production unit.

Measures of Income and Profits

Family farm income

Family farm income is computed by subtracting cash expenses and

depreciation from all farm receipts. It is, then,the total return for

the operator's labor and management, for other family labor, and the

capital employed in the farm business. This is, as can be seen from

Table 14, a positive quantity for all three size groups of farms.

Farm income

This figure is obtained by subtracting the value of unpaid family

labor from Family farm income. It is the total return for the operator's

labor and management and the capital employed in the farm business.

Family labor income

This is the total return to the operator and his family for their

labor and management and is calculatedby subtracting cash expenses,

depreciation, and interest on investment from total farm receipts.






45

MEASURES OF INCOME AND PROFITS, THE OVER-ALL FINANCIAL POSITION OF DAIRY-
MEN, FUNDS FOR FAMILY LIVING, AND NET COST OF PRODUCING MILK

The information presented in Table 14 of this report serves as the

basis for the discussion in this section. Its purpose is to make the

data on costs and returns previously presented more meaningful in terms

of their relationship to the economic welfare of the dairy farm families,

and to permit comparison of farms on that basis. Other data related to

the dairyman's over-all financial and current income position is present-

ed which permits us to look at the dairy farm family as a consumption as

well as a production unit.

Measures of Income and Profits

Family farm income

Family farm income is computed by subtracting cash expenses and

depreciation from all farm receipts. It is, then,the total return for

the operator's labor and management, for other family labor, and the

capital employed in the farm business. This is, as can be seen from

Table 14, a positive quantity for all three size groups of farms.

Farm income

This figure is obtained by subtracting the value of unpaid family

labor from Family farm income. It is the total return for the operator's

labor and management and the capital employed in the farm business.

Family labor income

This is the total return to the operator and his family for their

labor and management and is calculatedby subtracting cash expenses,

depreciation, and interest on investment from total farm receipts.








Operator's labor income

When the value of unpaid family labor is subtracted from Family

labor income the quantity remaining is the income to the operator for

his labor and management. This is the balance of receipts after all

cash expenses, depreciation, unpaid family labor, and interest on in-

vestment at five and one-half per cent are allowed. Table 14 indicates

this to be negative for all size groups of farms.

Net farm income

Also commonly called return to capital, net farm income is the

portion of receipts remaining after cash expenses, depreciation, value

of unpaid family labor, and value of operator's labor and management

are subtracted. This is negative for all theee size groups, and so if

one wished to compute the rate of return on investment, this would

necessarily be negative, too.

Net farm profit or loss

This is, simply, all farm receipts minus all farm expenses.

Table 14 shows this to be negative for farms in each of the three size

groups, indicating they experienced losses in 1962 according to the data

and assumptions of this study.

Return above equity maintenance

The basis for this figure was all farm receipts less cash expenses,

depreciation, and interest (at five and one-half per cent) on farm in-

debtedness. This is the amount that the farm families had available to

live on and to build up their assets in the farm business in 1962.

Table 14 shows this to be positive for each of three size groups

with an average for all farms of $4,808.








Operator's labor income

When the value of unpaid family labor is subtracted from Family

labor income the quantity remaining is the income to the operator for

his labor and management. This is the balance of receipts after all

cash expenses, depreciation, unpaid family labor, and interest on in-

vestment at five and one-half per cent are allowed. Table 14 indicates

this to be negative for all size groups of farms.

Net farm income

Also commonly called return to capital, net farm income is the

portion of receipts remaining after cash expenses, depreciation, value

of unpaid family labor, and value of operator's labor and management

are subtracted. This is negative for all theee size groups, and so if

one wished to compute the rate of return on investment, this would

necessarily be negative, too.

Net farm profit or loss

This is, simply, all farm receipts minus all farm expenses.

Table 14 shows this to be negative for farms in each of the three size

groups, indicating they experienced losses in 1962 according to the data

and assumptions of this study.

Return above equity maintenance

The basis for this figure was all farm receipts less cash expenses,

depreciation, and interest (at five and one-half per cent) on farm in-

debtedness. This is the amount that the farm families had available to

live on and to build up their assets in the farm business in 1962.

Table 14 shows this to be positive for each of three size groups

with an average for all farms of $4,808.








Operator's labor income

When the value of unpaid family labor is subtracted from Family

labor income the quantity remaining is the income to the operator for

his labor and management. This is the balance of receipts after all

cash expenses, depreciation, unpaid family labor, and interest on in-

vestment at five and one-half per cent are allowed. Table 14 indicates

this to be negative for all size groups of farms.

Net farm income

Also commonly called return to capital, net farm income is the

portion of receipts remaining after cash expenses, depreciation, value

of unpaid family labor, and value of operator's labor and management

are subtracted. This is negative for all theee size groups, and so if

one wished to compute the rate of return on investment, this would

necessarily be negative, too.

Net farm profit or loss

This is, simply, all farm receipts minus all farm expenses.

Table 14 shows this to be negative for farms in each of the three size

groups, indicating they experienced losses in 1962 according to the data

and assumptions of this study.

Return above equity maintenance

The basis for this figure was all farm receipts less cash expenses,

depreciation, and interest (at five and one-half per cent) on farm in-

debtedness. This is the amount that the farm families had available to

live on and to build up their assets in the farm business in 1962.

Table 14 shows this to be positive for each of three size groups

with an average for all farms of $4,808.








Operator's labor income

When the value of unpaid family labor is subtracted from Family

labor income the quantity remaining is the income to the operator for

his labor and management. This is the balance of receipts after all

cash expenses, depreciation, unpaid family labor, and interest on in-

vestment at five and one-half per cent are allowed. Table 14 indicates

this to be negative for all size groups of farms.

Net farm income

Also commonly called return to capital, net farm income is the

portion of receipts remaining after cash expenses, depreciation, value

of unpaid family labor, and value of operator's labor and management

are subtracted. This is negative for all theee size groups, and so if

one wished to compute the rate of return on investment, this would

necessarily be negative, too.

Net farm profit or loss

This is, simply, all farm receipts minus all farm expenses.

Table 14 shows this to be negative for farms in each of the three size

groups, indicating they experienced losses in 1962 according to the data

and assumptions of this study.

Return above equity maintenance

The basis for this figure was all farm receipts less cash expenses,

depreciation, and interest (at five and one-half per cent) on farm in-

debtedness. This is the amount that the farm families had available to

live on and to build up their assets in the farm business in 1962.

Table 14 shows this to be positive for each of three size groups

with an average for all farms of $4,808.







Over-All Financial Position of Area Dairymen

Total farm assets, already presented and discussed in an earlier

section, are listed again in Table 14 for convenience of reference.

Total farm liabilities, or money owed by the farmer, averaged $20,646

for all farms. Farm indebtedness increased as farm size increased in

the Tallahassee Area. Total farm net worth is simply the difference be-

tween assets and liabilities, and is the farmer's equity in his farm.

The ratio .of total farm assets to total liabilities was lowest for

the small size group and highest for the large size group though differences

in the ratios were small. On the bases of these ratios it can be con-

cluded that dairymen generally are in strong equity positions throughout

the Tallahassee Area. Furthermore, land was valued at its worth in

agricultural employment insofar as possible. Its market price would

in most instances be higher than that, and it is the higher value

that lenders are likely to use as the basis for loans. Thus credit may

actually be extended beyond what might otherwise appear to be a prudent

level based on the assumptions of this report.

There is, on most farms, a fairly persistent increase in the value

of land for non-agricultural uses. Thus, in addition to the returns

above equity cited above, the extent of the increase in land values

each year is a form of return, though it cannot be converted to income,

except through borrowing, until the land is sold. These increases in

land values are extremely difficult to appraise for individual farms

for any particular year, and there was no attempt to make this appraisal

in this study. They are not, in any event, in any direct way related

to the profitability of dairying, though they do have a bearing on the

over-all financial position of the dairyman.





49

Listed in Table 14 are interest costs on indebtedness at five and

one-half per cent. This was an assumed rate since the data collected

in the study were not in the detail necessary to make an actual com-

putation. Total 1962 payments on indebtedness averaged $5,594 per

farm. These payments include, of course, both payments on principal and

the interest charges that were actually made on all outstanding loans.

Debt payments and interest on indebtedness, though of concern here,

figure more importantly in the following section of this report.

Funds for Family living

Figures were developed and this section written for purposes of

determining and showing the availability of cash funds for family liv-

ing. Maximum possible farm cash available for family living was computed

by subtracting cash expenses and interest on indebtedness from total

cash receipts and amounted to an average of $5,685 for all farms. This

determination did not take account of the differences in cash exchanges

associated with the purchase and sales of capital assets. Farm cash

actually available for family living was the difference between all cash

receipts and the sum of all cash expenses and total payments on in-

debtedness (principal and interest). When family cash income from non-

farm sources is added to farm cash actually available for family living,

the result is total cash available for family living. This was positive

for all three size groups and averaged $2,326 per farm.

Cash from non-farm sources was almost exclusively from off-farm

work by the operator or by some other member of his immediate family,

usually his wife. There are, of course, other possible sources of cash

income not given here. These might be income from gifts or other assis-

tance by relatives living elsewhere, for example, but more likely, from





50

money borrowed during the year or from the postponement of payments for

items purchased which we have already called cash expenses.

Net Cost of Producing Milk

It has already been noted that Tallahassee Area dairy farms are gen-

erally less specialized in the production of milk than are dairy farms

in other areas of the state. Dairy specialization factors were computed

to reduce the effect of non-dairy enterprises on the apparent profit-

ability of producing milk. Cests were further adjusted to take account

of dairy receipts other than those which came from the wholesale sale

of milk for purposes of computing a "cost of producing milk". This

adjustment of expenses to account for the production of things other

than milk for wholesale sales was accomplished by subtracting the value

of all non-wholesale milk items from total farm expenses. The remaining

expenses were then considered to be chargeable to the production of the

milk which was sold at wholesale.

Total farm expenses, total farm receipts, and both the receipts

from milk shipped and the total farm receipts except those from milk

shipments are listed in Table 14. By subtracting farm receipts except

those from milk shipments from total farm expenses we get net cost of

milk shipped. By dividing net cost of milk shipped by gallons of milk

shipped the net cost per gallon of milk shipped was obtained. As Table

14 shows, this was 65.8, 58.8, 54.5, and 58.9 cents for small, medium,

large, and all farms, respectively, on a gallon-weighted basis.


5/
SA publication titled Tallahassee Milk Marketing Area Report, Calendar
Year 1961 by Allen, Williams, Sheffield and Watterson, Certified Pub-
lic Accountants, Tallahassee, Florida, for the Florida Milk Commission
showed costs adjusted to a five and one-half per cent return on invest-
ment, of 61.2, 58.4, 51.4, and 53.6 cents for small, medium, large and
all farms, respectively. They defined farm size using base gallonages
of the same intervals as those of November shipments-used in this
report. The methods of procedure and the assumptions under which
their study was conducted w;re also similar, though not identical to
those used in this study.







It should be emphasized that these costs are the result of both

the factual data and the non-factual assumptions upon which they are

based. The factual data presented are believed to be reliable. The

non-factual assumptions made are thought to be reasonable. More precise

factual data, or a different set of non-factual assumptions, would alter

the computed cost of producing milk. The change in per gallon cost for

each one per cent change in return to investment and the changes in costs

needed to bring about a one-cent change in cost per gallon are given in

Table 14. With these one can assume any level of return on investment

or any level of costs for any particular item he likes, and develop his

own cost of production estimate. Some specific set of assumptions had to

be made to standardize farms for purposes of comparison, but no claim

that these are necessarily the "best" set is advanced in this report.







INPUT AND OUTPUT EFFICIENCIES

The computation and comparison of farms on the basis of efficiency

in the use of selected productive inputs and the production of selected

outputs is useful in that it may provide leads as to strong and weak

points in the farm business. Areas in which the manager is doing a

comparatively good job, and those to which he might consider directing

more of his attention may be highlighted for him through such comparison.

Table 15 presents a number of such efficiency ratios and serves as the

basis for the discussion in this section.

The upper group of figures in the body of Table 15 give total

quantities per farm, by size of farm, for the six items listed across

the top of the table. Man equivalents, receipts, and capital have

been adjusted as noted in the table footnote. It was assumed here, for

sake of simplicity, and to make farm to farm comparisons more meaning-

ful, that each of those three items so adjusted were chargeable or attri-

butable to the dairy enterprise in the same proportion as the farm was

specialized in dairy in the basis of the dairy specialization factors

already discussed: for example, small farms had a dairy specialization

factor of .87, and so 87 per cent of all capital on small dairy

farms was assumed to be chargeable to the dairy enterprise. This amount-

ed to $47,308 and is so listed in Table 15.

The other groups of figures are the ratios of the items in any

particular row of the first column to the item which appears at the

head of any other column of interest in that same row. For example,

in the Cows, All Farms row under the Dairy Man Equivalents column, we

find the figure 26.4. This should be interpreted as there being, on all

area farms, an average of 26.4 cows for each dairy man equivalent.








TABLE 15. Comparison of Efficiency in the Use and Production of Selected
Items, by Size of Farm, Tallahassee Area Dairy Farms, 1962.


Cows High Total 4% Dairy
Based on Order Milk Man Dairy Dairy
13-month Use Produced Equiva- Receipts- Capital-
Inventory Acres lents a/
(no.) (no.) (gallons) (no.) (dollars) (dollars)

QUANTITIES:
Small farms 55.5 190 34,379 1.85 17,931 47,308
Medium farms 70.4 232 51,700 2.67 27,036 69,253
Large farms 140.4 617 129,728 5.95 63,908 162,124
All farms 75.6 278 57,223 2.86 29,245 75,278
Your farm

RATIOS:

Cows
Small farms xxxxx 0.29 xxxxxxx 30. xxxxxx xxxxxxx
Medium farms xxxxx 0.30 xxxxxxx 26.4 xxxxxx xxxxxxx
Large farms xxxxx 0.23 xxxxxxx 23.6 xxxxxx xxxxxxx
All farms xxxxx 0.27 xxxxxxx 26.4 xxxxxx xxxxxxx
Your farm xxxxx xxxxxxx xxxxxx xxxxxxx

Milk
Small farms 619 xxxxx xxxxxxx 18,583 xxxxxx xxxxxxx
Medium farms 734 xxxxx xxxxxxx 19,363 xxxxxx xxxxxxx
Large farms 924 xxxxx xxxxxxx 21,803 xxxxxx xxxxxxx
All farms 757 xxxxx xxxxxxx 20,008 xxxxxx xxxxxxx
Your farm xxxxx xxxxxxx xxxxxx xxxxxxx

Dairy Receipts
Small farms 323 xxxxx xxxxxxx 9,692 xxxxxx 0.38
Medium farms 384 xxxxx xxxxxxx 10,126 xxxxxx 0.39
Large farms 455 xxxxx xxxxxxx 10,741 xxxxxx 0.39
All farms 387 xxxxx xxxxxxx 10,226 xxxxxx 0.39
Your farm xxxxx xxxxxxx xxxxxx

Dairy Capital
Small farms 852 xxxxx 1.38 25,572 2.64 xxxIxxx
Medium farms 984 xxxxx 1.34 25,937 2.56 xxxxxxx
Large farms 1,155 xxxxx 1.25 27,248 2.54 xxxxxx:
All farms 996 xxxxx 1.32 26,321 2.57 xxxxxxx
Your farm xxxxx ____ xxxxxxx

SThe quantities usdd in the computations involving these items were
developed by multiplying the all farm totals for man equivalents,
farm receipts, and capital investment by the appropriate dairy
specialization factors first presented under the General Computational
Procedures section above.




54

Table 15 also shows, by way of further example, that Dairy Receipts for

all farms per one dollar of Dairy Capital is 39 cents. This says that

for each dollar invested in the dairy enterprise, there was a return of

39 cents in the form of dairy receipts. All other figures in the table

can be read in a similar way. Little xxx's appear at places in the table

where ratios would not be relevant or meaningful. Each farmer in the

study should find a comparison of his farm to the group averages both

interesting and useful.








DAIRY HERD CHARACTERISTICS AND FACILITIES

The information developed for this and the following section is pre-

sented primarily as a matter of possible interest from the standpoint of

description, though it may at some later date be useful for purposes of

analysis. The data to be presented in this section is summarized in

Table 16. Though this table is largely self-explanatory, a few comments

with respect to each of the two major parts of that table are in order.

Herd Characteristics

The basis for the computation of herd turnover rates is shown in a

footnote to Table 16. The average number of years that cows remained in

the herd (based solely on the 1962 experience) is gotten by dividing

the herd turnover rate into the number one. In other words, for all

farms .26 or 26% of all the mature cows were replaced in 1962, which is

to say that each mature cow remained in the herd an average of 3.9

years.

It is interesting to note that 70 per cent of all replacements were

from the farmer's own cows in 1962. In view of the relatively low

average production per cow on Tallahassee Area farms, and to the extent

this low production is due to the inherent ability of the cows now

found there, the up-grading of herd averages will indeed be a slow

process with such a high proportion of replacements currently coming

from present stock.

Holsteins are the predominant breed at 36.7% of all cows. Guernseys

at 29.0% and Jerseys at 28.1% are the other two major breeds in the area.

All other breeds at 6.1 per cent of the total make up the remainder.

Approximately 29 per cent of all cows on Tallahassee Area farms were pure-

bred, though not necessarily registered, according to area dairymen.








DAIRY HERD CHARACTERISTICS AND FACILITIES

The information developed for this and the following section is pre-

sented primarily as a matter of possible interest from the standpoint of

description, though it may at some later date be useful for purposes of

analysis. The data to be presented in this section is summarized in

Table 16. Though this table is largely self-explanatory, a few comments

with respect to each of the two major parts of that table are in order.

Herd Characteristics

The basis for the computation of herd turnover rates is shown in a

footnote to Table 16. The average number of years that cows remained in

the herd (based solely on the 1962 experience) is gotten by dividing

the herd turnover rate into the number one. In other words, for all

farms .26 or 26% of all the mature cows were replaced in 1962, which is

to say that each mature cow remained in the herd an average of 3.9

years.

It is interesting to note that 70 per cent of all replacements were

from the farmer's own cows in 1962. In view of the relatively low

average production per cow on Tallahassee Area farms, and to the extent

this low production is due to the inherent ability of the cows now

found there, the up-grading of herd averages will indeed be a slow

process with such a high proportion of replacements currently coming

from present stock.

Holsteins are the predominant breed at 36.7% of all cows. Guernseys

at 29.0% and Jerseys at 28.1% are the other two major breeds in the area.

All other breeds at 6.1 per cent of the total make up the remainder.

Approximately 29 per cent of all cows on Tallahassee Area farms were pure-

bred, though not necessarily registered, according to area dairymen.






56

TABLE 16.- Herd Turnover Rates, Source of Replacements, Breed Percentages
and Facilities, by Size of Farm, Tallahassee Area Dairy Farms,
1962.


Size of Farm All Your
Item Small Medium Large Farms Farm


HERD CHARACTERISTICS:
Production per cow (lbs. 4% F.C.M.)

Herd turnover rate a/

Average no. of years cows in herd

Per cent replacements raised

Per cent cows died

Cows died as per cent of all removals

Per cent all cows purebred

Per cent all cows grade

Per cent all cows Holstein

Per cent all cows Guernsey

Per cent all cows Jersey

Per cent all cows all other breeds /i

FACILITIES:

Per cent farms milking in stanch.
barns

Ave. no. of stanchions per barn

Per cent farms milking in parlors

Ave. no. of stalls per parlor

Ave. no. milking units per farm

Per cent farms using pipeline system

Per cent farms providing herd shelter


5,323

.24

4.2

86

1.8

7.5

13.3

86.7

40.0

19.3

28.1

12.6


62.5

11.6

37.5

4.0

3.1

37.5

25.0


6,312

.24

4.2

67

1.6

6.5

39.9

60.1

34.1

28.3

33.3

4.3




66.7

13.8

33.3

4.3

3.1

55.6

22.2


7T946 6,510


.31

3.2

58

2.0

6.6

30.6

69.4

37.0

40.0

21.4

1.5




71.4

22.0

28.6

6.0

3.9

85.7

42.9


.26

3.9

70

1.8

6.8

28.7

71.3

.36.7

29.0

28.1

6.1




65.7

14.2

34.3

4.5

3.2

52.8

26.9


xxxxx



xxxxx

xxxxx

xxxxx

xxxxx

xxXXX


a/- -
Herd turnover rate is computed by dividing the total number of cows re-
moved during the year by the 13-month average inventory of cows.
Per cent cows died is computed by dividing the number of cows died dur-
ing the year by the 13-month average inventory of cows.
c/ These other breeds were only 4% purebred and consisted of 23% recognizable
Ayrshires, 21% recognizable Brown Swiss, and 55% other breeds and crosses
not recognizable as any particular breed.







Facilities

Stanchion milking barns were considerably more in evidence (66 per

cent) than milking parlors (34 per cent) in the area in 1962. Generally

the smaller the farm the more likely it was to be milking in a parlor, but

the differences between size groups was not very great. Though the num-

ber of stanchions per barn as well as the number of stalls per parlor in-

creased rather significantly as farm size increased, the number of milk-

ing units per farm increased much more slowly.

About 27 per cent of the area farms studied provided some sort of

constructed shelter for their cows, most of them being just simple roof

shelters open on all four sides. Pipeline systems were found on 52.8 per

cent of the farms and their incidence increased significantly as size of

farm became larger.







MANAGEMENT PRACTICES AND BIOGRAPHICAL DATA

The writing of this section was undertaken for the same general

reason as for the section immediately preceding, that of description

for present purposes and for possible analysis at a later date. It,

as does the previous section, tells us more completely "how dairying is

carried out" in the Tallahassee Area. It should as a result provide bet-

ter insight into problems and problem settings than just a simple iter-

ation of costs and returns would permit.

Management Practices

Dairymen were asked as to whether they followed a number of

practices which were considered to be generally desirable from the

standpoint of good management. Their responses to certain selected

practices are given in Table 17. They were queried as to other prac-

tices not listed there, too, but their replies were either virtually

all positive or all negative, or generally inconclusive because of the

form in which questions regarding the practices were cast.

All the dairymen's replies are given on a whole farm basis in

Table 17. For example, the data show that 49 per cent of all farms

keep some sort of individual cow production records. This should

not be interpreted as meaning that individual production records are

kept for just 49 per cent of the cows in the area. In this particular

case, since a higher percentage of the larger farms kept records, and

since they had higher than average numbers of cows per farm, actually

more than 49 per cent of all the cows in the area were on some sort of

production record -keeping system. The kinds of production records kept

ranged all the way from those wherein the farmer merely weighed each cow's

milk once a month to full participation in a DHIA program.







MANAGEMENT PRACTICES AND BIOGRAPHICAL DATA

The writing of this section was undertaken for the same general

reason as for the section immediately preceding, that of description

for present purposes and for possible analysis at a later date. It,

as does the previous section, tells us more completely "how dairying is

carried out" in the Tallahassee Area. It should as a result provide bet-

ter insight into problems and problem settings than just a simple iter-

ation of costs and returns would permit.

Management Practices

Dairymen were asked as to whether they followed a number of

practices which were considered to be generally desirable from the

standpoint of good management. Their responses to certain selected

practices are given in Table 17. They were queried as to other prac-

tices not listed there, too, but their replies were either virtually

all positive or all negative, or generally inconclusive because of the

form in which questions regarding the practices were cast.

All the dairymen's replies are given on a whole farm basis in

Table 17. For example, the data show that 49 per cent of all farms

keep some sort of individual cow production records. This should

not be interpreted as meaning that individual production records are

kept for just 49 per cent of the cows in the area. In this particular

case, since a higher percentage of the larger farms kept records, and

since they had higher than average numbers of cows per farm, actually

more than 49 per cent of all the cows in the area were on some sort of

production record -keeping system. The kinds of production records kept

ranged all the way from those wherein the farmer merely weighed each cow's

milk once a month to full participation in a DHIA program.







Considerably higher percentages of farmers tested soil for lime

and/or fertilizer needs than kept cow production records. All large

farms in the survey had tests made regularly, and an average of 85 per

cent of all farms in the area followed a fairly regular program of soil

analysis.

Forty-one per cent of all farms fed concentrate feeds to cows on

an individual cow basis. A further attempt to evaluate their feeding

program was made by computing a weighted sum of factors by ranking

nine factors that might be considered as a basis for determining

quantities of concentrate feeds needed in the approximate order of

their importance. The least important was assigned a weight of one

and the most important a weight of nine. The complete list of factors

and their weights is as follows:

The composition of the concentrate feed itself 9

The quality and quantity of roughages available 8

The production of the cow 7

The condition of the cow 6

The size of the cow 5

The stage of lactation of the cow 4

The stage of pregnancy of the cow 3

The age of the cow 2

The weather 1

The dairyman was asked in this connection: "What determines the

quantity of concentrate feed that you do feed each cow" (whether he fed

them individually or not). The factors he gave were recorded and later

assigned to one of the nine categories and weighted accordingly.







TABLE 17. Management Practices and Biographical Data, by Size of Farm,
Tallahassee Area Dairy Farms, 1962.


Size of Farm All
Item Small Medium Large Farms

Management Practices:


Per cent of farms keeping any kind of
individual cow production records
Per cent of farms testing soil for lime
and/or fertilizer needs
Per cent farms feeding concentrate feeds to
cows on an individual cow basis
Sum of weights for factors considered in the
determination of amounts of concentrate fedW/

Per cent of farms:
(a) vaccinating calves for Bang's disease
(b) dehorning calves
(c) using artificial breeding

Biographical Data:

Average number of years present operator has
had management control of farm
Average number of years of other farm
experience of operator
Average number of years of non-farm work
experience including military service by
operator
Average number of years of formal schooling
by operator

'Average age of operator


6


75
75
25




8

12


6

10.9

44


71

100

86

13


100
71
71




7

21


4 5

9.9 11.0

49 50


49

85

41

10


80
71
45




9

16


5

10,5

47


The basis upon which these weights were developed
the text accompanying this table. A maximum score
under the system of weights used.


is explained in
e of 45 was possible


None of the nine factors were "suggested" as the dairyman did not have

any knowledge of the factors or their ranking at the time of the inter-

view. The weights for each farm were then added, and an average weight


for each size group developed.


These average sums of weights are given


in Table 17, and it could be reasonably concluded, insofar as the ques-

tions concerning feeding are valid and discerning, that Tallahassee Area

dairymen do not pay a good deal of attention to the quantities of con-


I








centrate feeds fed to their cows, either on an individual cow or on a

herd basis. Little regard is given at least in a formal way, to the

varying needs of the cows, though with a good many dairymen there is

something of an automatic adjustment which takes place as the cows are

frequently permitted to eat all they can while in the milking barn or

parlor.

Biographical Data

Little comment with regard to the data of this part of Table 17

seems warranted beyond an explanation of the basis for the computation

of the years of both other farm and non-farm experience on the

part of the operator. Full work experience credit of one kind or

another was given for the years of life of the dairyman between his age

at the time his formal schooling ceased and his age in 1962. It was

listed as management control of present farm, other farm experience, or

non-farm work experience as classified by the dairyman himself. If one

adds these categories of work experience, the years of formal school-

ing, and six years for preschool time, the sum is the age of the oper-

ator in 1962 except for differences dues to arithmetical rounding.








SUMMARY

An economic study of wholesale dairy farms in the Tallahassee Milk

Marketing Area was conducted in 1963 based on the situation of those

dairies and their operational experience in the calendar year 1962.

The two major objectives of the study were to develop an economic

description of dairying as it was carried out in the area, and to get

reliable data on the costs and returns experienced by dairymen for that

year.

There were approximately 112 dairy farms in the Tallahassee Area

and they supplied 93.4 per cent of all the milk received by handlers

there in 1962. Producers were grouped according to size based on Nov-

ember, 1962 shipments of milk into small, medium, and large groups. A

systematic, random sample of producers stratified by size and location

was drawn for inclusion in the study and data from 24 of the 112 farms

was ultimately used in the report. The information collected in the

survey was summarized and presented in the report using the same size

groupings that initially served as the basis for drawing the sample of

farms to be contacted.

Farms with gross receipts from wholesale sales of milk less than

50 per cent of all farm receipts were excluded from the study at the

outset. After the survey work was completed, farms with a dairy spec-

ialization factor (as defined in the report) of less than .70 were ex-

cluded from further consideration and were not permitted to enter into

the calculations upon which the final report is based.

Small farms shipped an average of 88, medium farms 138 and large

farms 348 gallons of four per cent fat-corrected milk daily. There were

56, 70, and 140 cows per farm on the small, medium, and large farm sizes,






63

respectively, in 1962. By size groups, in ascending order of size, there

were averages per farm of 237, 264, and 681 acres of land operated; man

equivalents of 2.1, 2.8, and 6.5; capital of $54,377, $72,139, and $176,222;

and $19,652, $26,019, and $64,958 of gross cash receipts.

All farm receipts and expenses were broken down into cash and non-

cash items, and presented on per farm, per gallon of four per cent fat-

corrected milk shipped, and per cow bases. Each item of receipts and

expenses was shown as a per cent of total receipts and total expenses,

respectively. Cash receipts for all farms were 93.6 per cent of total

receipts, and cash expenses 61.2 per cent of total expenses. Receipts

from wholesale sales of milk were 84.5 per cent of total receipts, and

sales of crops 4.7 per cent. Appreciation on dairy livestock, the only

other receipts item of any particular significance, amounted to 4.5 per

cent of total receipts. Purchased feed, at 23.3 per cent of all farm

expenses, was the largest single item of cash expense on area farms though

when hired labor at 8.8 per cent, value of unpaid labor at 4.7 per cent

and value of operator's labor at 14.4 per cent are added, total labor

expenses at 27.9 per cent becomes the largest over-all expense item.

Interest on investment at 12.0 per cent of total expenses, depreciation

at 7.7 per cent, and fertilizer and lime at 7.3 per cent were the other

categories of expense of major importance in 1962.

An analysis of costs and returns showed the income to the operator

for his labor and management, after all expenses including an interest

allowance of five and one-half per cent on investment were met, to be

-$331 per farm for the average of all farms in the area. Net farm profit

or total receipts minus total expenses, averaged -$5,734 for all farms in

the area based on the assumptions and findings of the study.







Levels of indebtedness were tabulated in the study, and these were

analyzed along with cost and return data to determine the over-all financial

position of Tallahassee area dairymen. There was an average of $1,222 of

farm cash available for family living, and when cash from known non-farm

sources was added, the farm families studied had an average total cash

available for family living of $2,326. A figure of particular interest

was the farmer's return above the amount needed to just maintain his equity

in his business. This came to an average of $4,808 for all farms in the

area, and goes a long way toward explaining how area dairymen can continue

to produce milk at computed costs so much higher than prices received.

The net cost of producing a gallon of four per cent fat-corrected

milk, based on the data and assumptions of this report, was 65.8, 58.8,

54.5, and 58.9 cents for small, medium, large, and all farms, respectively.

Farmers received blend prices for milk corrected to a four per cent fat

basis of 51.0, 48.2, 47.3, and 48.5 cents for small, medium, large, and

all farms, respectively. The differences between costs and blend prices

multiplied by the number of gallons of four per cent fat-corrected milk

shipped equals net farm profit, which, as reported above, averaged -$5,734

for all farms in the area.

Ratios were developed so that a comparison of farms on the basis of

efficiency in the use of selected productive inputs and the production of

selected outputs could be made. This sort of comparison can provide some

leads as to the strong and weak points in the farm business and should be

of particular interest to the dairymen who cooperated in the study.

Information obtained on dairy herd characteristics showed that cows

on all farms remained in the milkin6 herd an average of 3.9 years, that

70 per cent of herd replacements were raised from the dairyman's own herd,








and that 29 per cent of all cows were classified as purebred animals.

Cows were milked in stanchion barns on 66 per cent of all farms sur-

veyed, with the other 34 per cent being milked in parlors. There was an

average of 3.2 milking units per farm. Almost 27 per cent of the farms

surveyed supplied some type of constructed shelter for their herd.

The report was concluded with a section on management practices and

biographical data, presented for purposes of further description and for

possible later analysis. It was found that only 49 per cent of all farms

kept any sort of individual cow production records, but that 85 per cent

had their soil tested on a fairly regular basis. Dairymen generally did

not appear to pay a good deal of formal attention to the variation in feed

concentrate needs of cows.

Area operators averaged 47 years in age in 1962 and had had manage-

ment control of their present farm for an average of nine years. Their

formal schooling had ended midway between the tenth and eleventh grades,

as they averaged 10.5 years of attendance at educational institutions

from the elementary through the college levels.







BJS: bjc 9/30/24
Exp. Sta., Ag. Ec. 750




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