Title: Cost of producing milk in selected areas of Florida
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Agricultural Economics Series No. 51-4


COST OF PRODUCING MILK


IN SELECTED AREAS


OF FLORIDA




by
A. H. Spurlock, D. L. Brooke and R. E. L. Greene


Department of Agricultural Economics


Table of Contents


Areas Included in Study ................... ........... ... 1
Method of Calculating Cost ................................ 2
Size of Dairies Studied ................................. 4
Annual Cost and Returns in Producing Milk . . . ..... .... 5
Variation in Cost of Producing Milk by Size of Farm . . . .... 10
Rate of Turnover of Cows in Milking Herd . . . ... . 14
Seasonal Distribution of Milk Production . . . ... ... ... 14
Distribution of Operator's Capital ......... . .......... 15
Variation in Operator's Capital by Size of Farm . . . . ... 17
Farm Returns ................... ...................... 19
Summary............................................. 19


University of Florida Agricultural Experiment Stations
Willard M. Fifield, Director


Gainesville, Florida


January 1951









COST OF PRODUCING MILK IN SELECTED AREAS OF FLORIDA


by

A. H. Spurlock, D. L. Brooke and R. E. L. Greene
Florida Agricultural Experiment Stations


The Dairy Industry, like most other segments of Florida Agriculture, has shown a rapid
growth during the last 30 years. Since 1920 the number of producing cows in the state has in-
creased 108 percent and on January 1, 1950, was estimated at 152,000 1/ (Fig. 1). During this
same period there was an even greater increase in the number of heifers 1-2 years old and
heifer calves being raised. Over the five-year period 1920-24, there was an average of one
heifer calf 1-2 years old and one heifer calf under 1 year old on farms January 1 for each 3.9
cows kept for milk. For the period 1945-49, the ratio had increased and there was one heifer
1-2 years old for each 3.5 cows being milked, and one heifer calf under 1 year old for each 2.2
cows being milked. The introduction of artificial breeding has encouraged dairymen to raise a
larger percentage of their replacements.

Cash receipts from the sale of dairy products (mostly fluid milk) increased from $8,865,000
in 1925 to $34,643,000 in 1949, or 4.2 times 1 (Fig. 2). Cash receipts increased faster than
the number of dairy cows for two reasons: (1) higher production per cow, and (2) higher price
for milk. Average production per cow in 1949 was 4100 pounds. This was 40 percent greater
than 20 years earlier and 20 percent greater than in 1940. Although receipts from dairy products
have shown a large increase, the proportion they make up of the total cash farm income in the
state has remained about the same. Throughout the period 1925 to 1949, sales of dairy products
made up about 8 percent of the cash receipts from the sale of all farm products, except for the
war years when they were only 6 percent, Table 1.

Table 1.- Number of Dairy Cattle Two Years Old and Over on Farms January 1 and Cash Re-
ceipts From Dairy Products and All Farm Products for Calendar Years, Florida Aver-
age for 5-year Periods, 1925-29 to 1945-49.

: Dairy Cattle : Cash Receipts From Sale of : Percent Dairy
Period : Two Years : Dairy : All Farm : Products Are of
: and Over : Products : Products : All Farm Products
1000 head 1000 dollars 1000 dollars Percent

1925-29 90 9,443 117,701 8.0
1930-34 99 7,655 94,063 8.1
1935-39 111 9,537 118,759 8.0
1940-44 121 14,280 228,866 6.2
1945-49 143 28,478 377,775 7.5


Areas Included In Study

Milk is produced for sale on more than 1200 farms in the state; however, most of the pro-
duction is from a much smaller number of highly specialized dairies located near the larger cen-
ters of population. A survey was made by the Florida Agricultural Experiment Station of the

1/ U.S.D.A., Bureau of Agricultural Economics.









cost of producing milk in six areas. Records were obtained from 24 producers in the Miami Area,
17 producers in the Palm Beach Area, 20 producers in the Jacksonville Area, 11 producers in


Number
(1,000 Head)


1920


1925 1930 1935 1940 1945


1950


Figure 1. Number of Dairy Cattle on Farms January 1,


Florida, 1920 1950.


the St. Petersburg Area, 21 producers in the Tampa Area, 19 producers in the Orlando Area, or a
total of 112 producers in the six areas. All records in each area except Miami covered the 1949
calendar year. In the Miami Area, an effort was made to obtain data for a 12-month period ending
August 31, 1950. Several of the records however, covered a slightly different period and some
covered less than a 12-month period. One record ended June 30, three ended July 31, and five
on September 15 or September 30, 1950. These differences in fiscal year do not affect the aver-
age cost for all dairies to any significant extent. Costs were higher in September 30 than on
June 30 but this is offset by those dairies with records ending in June or July.

Method of Calculating Cost

All of the producers from whom records were obtained were specializing in dairying and
were producing milk for wholesale delivery to plants for processing and distribution. Most of
the dairies were individual proprietorships. A few were partnerships or corporations. Information
was obtained by personal visits to the farm. Data on income and expenses were taken from farm
records or copies of 1949 income tax returns. Records of the gallons of milk sold were obtained
directly from the plant to which the cooperating farmer delivered his milk if this information was
not available in the farmer's records.

On each farm, receipts from the dairy enterprise were the only source of farm income. On
a few farms a small amount of feed was grown but on the majority all feed was purchased ex-
cept that obtained from pasture which varied widely between dairies as to quality and amount.










Practically all labor was hired except that supplied by the operator. Most operators of small
dairies worked in the barn but on many of the large dairies all of the operator's time was re-
quired for the management of the dairy business.

In most cases, cows for replacement were purchased. Raising of replacements was an im-
portant source of new stock in the Orlando and Palm Beach Areas, and seemed to be increasing
in importance in some of the other areas.

In calculating the cost of producing milk, all farm expenses were charged directly to the
dairy enterprise. Since only a few replacements were being raised, no attempt was made to
separate the cost of raising young stock from that of the milking herd. The cost of producing
milk was calculated on the basis of the number of gallons of milk sold rather than the number


Cows Two
Years and Over
(1,000 Head)


350 -





300 -





250 -





200 -





150 -





100 -





50 -
r1925
1925


Receipts from
Dairy Products
(1,000 Dollars)


35,000





30,000





S25,000





20,000





-- 15,000





10,000





5,000


1930 1935 1940 1945 1950


Figure 2. Number of Dairy Cattle Two Years and Over on Farms January 1, and Cash Receipts from
Dairy Products for Calendar Year, Florida, 1925 1950










of gallons of milk produced. The proportion of the milk used on the farm was small because very
few replacements were raised.

Size of Dairies Studied

The dairies included in this survey ranged in size from 12 to 803 cows in the six areas.
They were smallest in the Orlando Area and largest in the Miami Area, Table 2. The average
number of cows per dairy, based on the number on hand at the beginning and end of the year,
was 378 in Miami, 212 in Palm Beach, 159 in Jacksonville, 139 in St. Petersburg, 131 in Tampa,
and 79 in Orlando. Average production per cow was highest in the Jacksonville Area and low-
est in the Palm Beach Area.

Table 2. Average Number of Cows, Gallons of Milk Sold per Farm per Day and per Year, and
Gallons of Milk Sold per Cow per Day and per Year, 112 Rholesale Dairies by Areas
and Size of Farms, Florida, Calendar Year 1949, Except for Miami, Year Ending
August 31, 1950.


:Number : Average : Amount of Milk Sold : Amount Sold per Cow
AREA AND SIZE of : Number
OF DAIRY : Dairies : of Cows : Per Day : Per Year :Per Day : Per Year
Number Number Gallons Gallons Gallons Gallons
MIAMI:
Small 6 142 212 77,412 1.49 543
Medium 7 253 436 159,122 !.7 630
Large 11 587 958 349,740 1.63 596
Total or Average 24 378 619 226,061 1.64 598

PALM BEACH:
Small 6 106 146 53,268 1.38 502
Medium 5 181 302 110,049 1.67 608
Large 6 343 528 192,858 1.54 562
Total or Average 17 212 327 119,235 1.54 562

JACKSONVILLE:
Small 8 80 140 51,244 1.74 637
Medium 7 150 266 96,986 1.77 647
Large 5 296 590 215,328 2.00 729
Total or Average 20 159 297 108,275 1.87 683

ST. PETERSBURG:
Small 6 77 134 48,967 1.74 636
Large 5 214 379 138,389 1.77 647
Total or Average 11 139 246 89,614 177 65Z

TAMPA:
Small 5 63 96 35,072 1.53 557
Medium 11 124 212 77,235 1.71 623
Large 5 213 370 135,000 1.74 634
Total or Average 21 131 222 80,950 T."-6 1TB

ORLANDO:
Small 12 39 59 21,561 1.51 553
Large 7 147 271 98,819 1.84 672
Total or Average 19 79 137 50,025 1.73 633

The dairies in each area except Orlando and St. Petersburg were divided into three size
groups, small, medium and large, according to the number of gallons of milk sold. In the Orlando
and St. Petersburg Areas only two size classifications, small and large, were made, Table 2.
Since there was considerable difference in size of dairies in the various areas, the size classi-









fications were made by areas; thus a farm classified as small in one area may vary considerably
in size from a farm classified as small in another area. In the Miami Area small farms averaged
142 cows and large farms 587 cows; in the Tampa Area, small farms averaged 63 cows and
large farms 213 cows. A much larger percentage of the farms in the Miami Area fell in the large
group than in the other areas.

Annual Costs and Returns in Producing Milk

There are certain seasonal factors that affect the cost of producing milk. Daily milk pro-
duction is usually lowest from August to December and highest in the spring when more cows
are fresh. Pastures also are seasonal in the amount of feed produced. Thus an effort was made
to obtain costs on a 12-month basis to eliminate the effect of seasonal factors.

The annual cost of producing milk depends upon many factors, such as the amount and price
of various items used in production, and the volume of production obtained. In Tables 3 and 4
are shown the average production costs for the dairies in each area. The data in Table 3 give
the cost per gallon of milk sold, while those in Table 4 show average cost per cow and a per-
centage distribution of cost.

Costs and returns are based on weighted averages, that is, the total costs of all dairies in
a group were divided by the aggregate milk sales in gallons to obtain the cost per gallon. This
method gives emphasis to large volume and tends to show the cost of producing milk in an area
near the cost of the large dairies.

All dairies did not have exactly the same classification of items of expense. There may be
some inconsistencies, therefore, as no complete check could' be made to be sure that each item
of expense was classified uniformly. What one dairy charged to dairy supplies, for example,
another dairy may have charged to repairs. Some of the larger items were reclassified and the
resulting averages are believed to be reasonably uniform. Regardless of the classification of
individual items, however, total expenses remain the same.

A brief explanation and discussion of certain items included in income and expenses is
given below:

Milk sales represented the amount received for all milk sold. This amounted to 60 cents
per gallon in the Miami Area and 55.5 cents in the St. Petersburg Area.

Other income included the sale of bags, manure sales, soil conservation payments, mis-
cellaneous income from the dairy enterprise and appreciation in the dairy herd, if any. In these
records no credit was given for milk used by the operator andhired labor or fed to calves on the
farm. No credit was given for manure that was not sold. Miscellaneous income averaged from
0.5 to 0.9 cents per gallon of milk sold, or $3 to $7 per cow in the various areas.

Feed purchased represented the cash cost for all kinds of feed bought during the year.
Since most dairies maintained a fairly constant feed supply, the amount of feed purchased was
not adjusted for the amount on hand at the beginning and end of the year. Some dairies were
raising a part of their replacements. Cost of feed purchased included that for raising young
stock as well as for milk production. However, any feed, labor, or other expenses incurred in
raising replacements lessened the depreciation cost per cow.

Feed was the largest item in the cost of producing milk. Average feed cost amounted to
$217 per cow in the Jacksonville Area but only $161 per cow in the Miami Area. Feed cost per
gallon of milk sold ranged from 27.0 cents in the Miami Area to 32.5 cents in the Orlando Area.
In each area, feed made up about half or slightly more than half of the total cost of producing
milk.










Table 3. Summary of Costs and Returns per Gallon of Milk Sold, 112 Wholesale Dairies by
Areas in Florida; Calendar Year 1949, except for Miami, Year Ending August 31, 1950.


AREA
ITEM :Miami : Palm : Jack- : St. : Tampa :Orlando
: Beach : sonville :Petersburg :
Number of dairies 24 17 20 11 21 19
Average number of cows per dairy 378 212 159 139 131 79
Milk sold per farm per day (gallons) 619 327 297 246 222 137
Milk sold per cow per year (gallons) 598 562 683 645 618 633
Milk sold per cow per day (gallons) 1.64 1.54 1.87 1.77 1.69 1.73


INCOME:
Milk sales
Other income (bags, manure, etc.)
Total income
PRODUCTION COSTS:
Feed purchased
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Dairy supplies
Power, lights, fuel
Repairs buildings and equipment
Truck and automobile expense
Taxes, licenses, insurance
Veterinary and medicines
Seed, fertilizer, lime
Legal and professional expense
Telephone and office expense
Rent
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Buildings,-excliding operator's
dwelling
Dairy equipment
Trucks and automobiles
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total gross costs
RETURNS:
Net returns
Returns to operator for labor and
supervision
Returns on average investment


Cents per gallon
60.0 59.6 57.9 55.5
0.8 0.7 0.9 0.5
60.8 60.3 58.8 56.0


27.0 31.6 31.8


9.5
-1/
2.4
11.9
0.7
0.7
2.0
1.0
0.9
0.4
0.9
0.2
0.3
0.4
1.0


9.6
0.2
3.1
12.9
0.8
0.9
1.0
1.0
1.0
0.2
0.8
0.1
J1/
0.3
0.7


47.4 51.3 49.3


27.9

7.6
1.2
4.4
13.2
0.7
0.8
1.0
1.3
0.7
0.3
0.1
0.1
0.1
0.9
0.7

47.8


56.3
0.5
56.8


56.8
0.8
57.6


29.0 32.5

7.9 7.8
0.7 0.8
4.1 5.9
12.7 14.5
0.9 1.0
0.8 1.2
1.6 1.0
1.4 1.6
0.9 0.6
0.2 0.7
0.1 0.8
0.3 0.1
0.1
0.4 0.6
0.5 0.6

48.9 55.2


4.1 0.6 3.4 3.2 2.9 0.2


3.2 3.0 2.4
56.5 56.1 56.7


3.2 3.3
56.4 59.9


-2.3

3.6
1.0


1/ Less than .05 cents.










Table 4. Summary of Costs and Returns per Cow and Percent of Total Gross Cost, 112 WIhole-
sale Dairy Farms by Areas in Florida; Calendar Year 1949, except for Miami, Year
Ending August 31, 1950.




AREA
ITEM : Miami :Palm : Jack- : St. :Tampa :Orlando
: Beach : sonville : Petersburg :
Number of dairies 24 17 20 11 21 19
Average number of cows per dairy 378 212 159 139 131 79
Milk sold per farm per day (gallons) 619 327 297 246 222 137
Milk sold per cow per year (gallons) 598 562 683 645 618 633
Milk sold per cow per day (gallons) 1.64 1.54 1.87 1.77 1.69 1.73


INCOME:
Milk sales
Other income (bags, manure, etc.)
Total income
PRODUCTION COSTS:
Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expenses
Total expenses before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on average investment
@ 5 percent
Total gross costs



Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expenses
Total expenses before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total
Interest on average investment
@ 5 percent
Total gross cost


RETURNS:
Net returns
Returns to operator for labor and
supervision
Returns on average investment


356
5
361

161

57
J1j
14
71
49


Dollars per Cow
395 358 348
7 3 3
402 361 351


178 217 180 179


281 289

24 4
11 6
35 10


51
1
22
74
46

337

23
11
34


17 16
316 387


308 302


16 20 21
352 349 379


Percent of Total Gross Costs
47.9 56.3 56.1 51.1


16.9
2/
4.4
21.3
14.6


13.2
.2
5.7
19.1
11.9


83.8 91.4 87.1


7.3
3.2
10.5


1.3 6.0
1.9 2.8
3.2 8.8


5.7 5.4 4.1
100.0 100.0 100.0


13.9 14.0 13.0
2.3 1.1 1.3
8.0 7.2 10.0
24.2 22.3 24.3
12.2 12.9 13.7

87.5 86.5 92.1


5.2
2.6
7.8


4.5 5.7 5.5
100.0 100.0 100.0


Dollars per Cow
26 24 15 9

40 42 37 37
45 41 31 25


2 -14


27 24
22 7


1/ Less than 1 dollar.


2/ Less than 0.1 percent.









Hired labor represented the cash payments for dairy help. In addition, the dairy employees
were usually furnished a house in which to live, milk from the dairy, and sometimes lights and
water. The costs of these privileges are included in other items of expense such as power and
lights, repairs to buildings, taxes, insurance and depreciation on buildings.

The cost of hired labor varied from 7.5 cents per gallon of milk sold in the Jacksonville
Area to 9.6 cents in the Palm Beach Area. Cost of hired labor amounted to about $49 per cow
for the year. It was 13.0 percent of the cost of producing milk in the Orlando Area and 17.1
percent in the Palm Beach Area.

Unpaid family labor, when used, was charged at prevailing wage rates according to the
amount of time spent at dairy work by unpaid members of the operator's family. Unpaid family
labor was highest in the St. Petersburg and OrlandoAreas.

Operator's labor was the value of the time spent by the operator in the dairy barn and in
the management of the business. Operators of small farms worked either full or part time in the
dairy barn but on the large farms many operators spent all of their time managing the business.
Each operator was asked to estimate the value of his services and this amount was entered as
labor cost. Value of operator's labor was usually estimated at about the rate received by the
highest paid workers in the barn plus an additional amount for management. Although the value
of operator's labor was higher on large than on small farms, the cost per gallon of milk sold was
usually less. In the Miami Area the value of operator's labor amounted to 2.4 cents per gallon
of milk sold while in the Orlando Area it was 5.9 cents per gallon.

Total labor expense included the cash cost of labor and the charge for unpaid family labor
and operator's labor. Total labor cost was the second largest item in the cost of producing milk.
It varied from 11.0 cents per gallon of milk sold in the Jacksonville Area to 14.5 cents in the
Orlando Area. On a per cow basis, total labor cost was $71 in the Miami Area and $92 in the
Orlando Area. Total labor in all areas averaged 22.4 percent of total cost of producing milk.
Feed and labor costs combined were 75.2 percent of all costs.

Dairy supplies included such items as soap, washing soda, disinfectants, sprays, boots
and small replacement items. These items amounted to about one cent or less per gallon of milk
sold.

Power, lights, fuel included cost of electricity used in operating milking machines, refri-
geration units, lights, for the dairy barn and helpers' houses, when paid by the operator, and
fuel for the boiler. This cost also amounted to about one cent per gallon of milk sold.

Repairs buildings, equipment represented the amount spent for repair of dairy buildings
and dairy and farm equipment during the year. It varied from one to two cents per gallon and
was highest in the Miami Area.

Truck and auto expense included cash costs of gasoline, oil, grease and repairs. Interest
and depreciation are in other items of expense. Licenses and insurance were included with
taxed when these items could be separated. When automobiles were used personally, as well as
in the business, only the estimated use for the farm was charged. Truck and automobile expense
amounted to 1.0 cents per gallon of milk sold in the Miami Area and 1.6 cents per gallon in the
Orlando Area.

Taxes, licenses, insurance included the cost of taxes on real estate, livestock and equip-
ment, truck and auto licenses, and insurance on buildings, equipment and vehicles.

Veterinary and medicines was the cash cost of drugs and veterinary services.









Seed, fertilizer, lime represented the amount paid for materials applied to pastures during
the fiscal year. It did not include labor or machine work if done by the regular farm workers as
the costs of these are in other classifications.

Legal and professional expense was the amount spent for attorneys' or accountants' fees
and other legal expense.

Telephone, office expense included the cost of telephone charged to the dairy, and cost
of office supplies such as ledgers and postage.

Rent Some of the farm operators included in this survey cash-rented all or a part of their
dairy farms and facilities; others rented some pasture. This item included the amount of cash
paid as rent.

Miscellaneous cash expenses included a number of small items, the most important of which
were Dairy Council Fees, Milk Producer Association Dues, and the amount paid for artificial
breeding. These items amounted to 0.4 cents per gallon of milk sold for farms in the Jacksonville
Area and 1.0 cents per gallon in the Miami Area.

Depreciation was charged to cover normal use of capital items used in the dairy business.
The amount of depreciation was calculated as follows:

Depreciation on the dairy herd was calculated where possible on the net change in value
of the herd, including bulls and young stock being raised, from the beginning to the ending in-
ventory. Actual calculation was: (value of beginning inventory plus purchases) minus (value
of ending inventory plus sales) equals net change in value for the year. This method gives a
depreciation expense based on the actual turnover and loss experienced in the year under con-
sideration. It considers cattle deaths during the year since they are in the beginning inventory
and not in the ending inventory. It also adjusts depreciation for increase in value of young
stock raised during the year which partly offsets the cost of feed, labor and other items for
raising them. On some of the herds in the Miami Area information was not complete enough for
calculating net change in the inventory so these herds were depreciated at 15 percent of their
cost.

Depreciation per cow varied widely in the areas studied. It amounted to $24 per cow in the
Miami Area but only $4 per cow in the Palm Beach Area and $1 per cow in the Orlando Area.
The low rate in the latter two areas was due largely to the greater amount of raising of young
stock. Low depreciation in these areas was partly offset by higher other costs. It will be noted
especially in the Orlando Area, that feed cost was somewhat higher than in other areas.

Depreciation on buildings and equipment was calculated on the basis of the cost of the
items. The rate used was as follows: dairy buildings, barns and tenant houses, 5 percent; dairy
equipment (such as compressors, milking machines and coolers) and miscellaneous equipment
(such as manure spreaders and disk harrows), 10 percent; and automobiles, trucks and tractors,
20 percent. Automobiles used personally, as well as in the dairy business, were depreciated
only for the estimated proportion used for the farm.

Total depreciation varied from 1.4 cents in the Orlando Area to 5.9 cents per gallon of milk
sold in the Miami Area or from $9 to $35 per cow. Depreciation averaged 8 to 10 percent of the
total cost of producing milk in each area except Palm Beach and Orlando.

Interest on investment A successful farm business should pay all cash costs, pay the
owner or operator a return for his labor and supervision, cover an allowance for wear and tear
of capital items used in the business, and earn a reasonable rate of return on the investment in








the business.


The amount of interest paid by a dairyman on indebtedness to purchase land, buildings,
equipment or cows does not cover the total interest cost since this represents only a part of the
capital required to operate the business. In calculating interest cost, the amount of interest
actually paid was omitted and instead, an interest charge, of 5 percent on the average capital
invested, was made. No interest was charged on working capital or cash required to operate the
business. The interest charge amounted to about 3 cents per gallon of milk sold.

Total production cost is the sum of all direct and indirect items of expense as explained
above. The total cost of production per gallon of milk sold varied from 54.7 cents in the St.
Petersburg Area to 59.9 cents in the Orlando Area. It is interesting to note that the total cost
in the Miami, Palm Beach, Jacksonville and Tampa Areas varied only 0.6 cents per gallon.

The average cost of keeping a cow for a year on these farms was $316 in the Palm Beach
Area and $387 in the Jacksonville Area.

Net returns is the difference between receipts and total production cost or expense. Re-
turns above all costs amounted to $26 per cow in the Miami Area but lacked $14 per cow equal-
ling costs in the Orlando Area. Returns per cow and per gallon were highest in the Miami and
Palm Beach Areas. Dairies in these two areas were largest and the average price received for
milk highest.

Return to the operator for labor and supervision is the total amount available to the operator
for his labor, supervision and conduct of the enterprise after covering all expenses including
a charge of 5 percent for the use of capital required in the farm business. This figure was ob-
tained by adding the value of the operator's labor to the net return. Average returns on all farms
amounted to $24 per cow in the Orlando Area and $41 per cow in the Palm Beach Area. The
amount per gallon of milk sold was 3.6 cents in the Orlando Area and 7.3 cents in the Palm
Beach Area.

Return on investment represents the return on the capital invested in the business after
paying all expenses including an allowance to the operator for his labor, supervision and man-
agement. This amount is not a return in addition to the return to the operator for his labor and
supervision but a different way of expressing returns. For his efforts in the enterprise and for
his capital invested the operator received: (1) a return for operator's labor and supervision,
estimated as an expense under labor; (2) interest on capital at 5 percent, if he owns all of the
capital used; and (3) net returns or net profit for his risk.

Return on investment was computed by adding an interest charge of 5 percent to the net
returns. In this study, only the capital of the operator was included in calculating cost. When a
farm was rented the amount paid as rent was included as a cost and it was assumed that this
amount covered costs of capital invested by the landlord. Returns on investment varied from
1.0 cents per gallon of milk sold in the Orlando Area to 7.5 cents in the Miami Area.

Variations in the Cost of Producing Milk by Size of Farm

The dairies in each area were divided into size groups based on the amount of milk sold.
The average cost of producing milk was calculated for each size group. These data are shown
in Table 5. In each area, small farms had higher production costs than large farms. There was
no consistent relation between size and individual items of cost in the different areas. As a
rule production per cow did not vary greatly between size groups but it tended to be slightly
higher on large farms. In some areas the average price received for milk was highest on the
large farms but in other areas it was highest on the small farms.










Table 5. Comparison of Costs and Returns by Size Groups, 112 Wholesale Dairy Farms in
Selected Areas in Florida; Average for the Calendar Year 1949, Except for Miami,
Year Ending August 31, 1950.


ITEM : Miami Area : Palm Beach Area
: Small : Medium : Large :Small : Medium : Large
Number of dairies 6 7 11 6 5 6
Number of cows per dairy 142 253 587 106 181 343
Milk sold per farm per day (gallons) 232 450 958 146 302 528
Milk sold per cow per year (gallons) 543 630 596 503 608 562
Milk sold per cow per day (gallons) 1.49 1.73 1.63 1.38 1.67 1.54


INCOME:
Milk sales
Other income (bags, manure, etc.)
Total income


PRODUCTION COSTS:
Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on average investment
@ 5 percent
Total gross costs



Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on investment @ 5 percent
Total gross costs


RETURNS:
Net returns
Returns to operator for labor and
supervision
Returns on average investment


Cents per Gallon
58.5 60.9 60.0 61.0
1.1 1.0 0.6 0.7
59.6 61.9 60.6 61.7


28.9

7.8
0.3
6.1
14.2
9.4

52.5


Cents per Gallon
28.0 26.6 36.7

9.8 9.7 8.4
0.5
4.2 1.5 5.8
14.0 11.2 14.7
8.2 8.1 7.4

50.2 45.9 58.8


2.6 2.8 4.7
1.8 2.3 1.7
4.4 5.1 6.4


3.0
59.9


60.6
0.8
61.4


58.8
0.7
59.5


31.6 30.2


9.7
0.6
3.4
13.7
7.1


9.8

2.2
12.0
6.5


52.4 48.7


0.3 0.7 0.8
1.3 1.0 1.2
1.6 1.7 2.0


5.4 2.6 3.0
60.7 S-49 63.4


Percent of Total Gross Cost
46.0 48.4 57.9 55.5


13.1
0.6
10.2
23.9
15.5

87.6

4.2
3.1
7.3
5.1
100.0



-0.3


16.2 17.7 13.3
0.8
6.8 2.7 9.1
23.0 20.4 23.2
13.7 14.8 11.7

82.7 83.6 92.8


4.7
3.7
8.4
8.9
100.0


8.6
3.1
11.7
4.7
100.0


0.5
2.0
2.5
4.7
100.0


Cents per Gallon
1.2 5.7 -1.7


5.8 5.4 7.2 4.1
2.7 6.6 8.3 1.3


17.0
1.1
6.0
24.1
12.5


3.0
53.7



56.2

18.3

4.1
22.4
12.1


92.1 90.7


1.2
1.8

4.9
100.0


1.5
2.2
YT
5.6
100.0


4.5 5.8

7.9 8.0
7.3 8.8










Table 5. (Cont'd) Comparison of Costs and Returns by Size Groups, 112 Wholesale Dairy Farms
in Selected Areas in Florida; Average for the Calendar Year 1949, Except
for Miami, Year Ending August 31, 1950.


ITEM : Jacksonville Area : St. Petersburg Area
:Small : Medium : Large : Small : Medium : Large

Number of dairies 8 7 5 6 1/ 5
Number of cows per dairy 80 150 296 77 214
Milk sold per farm per day (gallons) 140 266 590 134 379
Milk sold per cow per year (gallons) 637 647 729 636 647
Milk sold per cow per day (gallons) 1.74 1.77 2.00 1.74 1.77


INCOME:
Milk sales
Other income (bags, manure, etc.)
Total income

PRODUCTION COSTS:
Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on average investment
@ 5 percent
Total gross costs


Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on investment @ 5 percent
Total gross costs

RETURNS:
Net returns
Returns to operator for labor and
supervision
Returns on average investment


Cents per Gallon
57.6 57.8 58.0 57.1
1.7 0.9 0.7 0.5
59.3 58.7 58.7 57.6

Cents per Gallon
31.2 29.9 33.2 29.4


8.8
0.4
5.3
14.5
7.2

52.9


7.6
0.3
3.5
11.4
7.5


6.9 7.7
2.0
2.4 5.8
9.3 15.5
5.7 8.8


48.8 48.2 53.7


2.1 3.4 3.9 5.6
2.7 1.7 1.1 1.9
4.8 5.1 5.0 7.5

3.1 2.7 1.9 3.4
60.8 56.6 55.1 64.6

Percent of Total Gross Cost
51.3 52.8 60.3 45.5


14.5
0.7
8.7
23.9
11.8

87.0

3.5
4.4
7.9
5.1
100.0


-1.5


13.4
0.5
6.2
20.1
13.3


12.5 11.9
3.1
4.4 9.0
16.9 24.0
10.3 13.6


86.2 87.5 83.1


6.0
3.0
9.0
4.8
100.0


7.1
2.0
9.1
3.4
100.0


8.7
2.9
11.6
5.3
100.0


Cents per Gallon
2.1 3.6 -7.0


3.8 5.6 6.0
1.6 4.8 5.5


1/ Dairies in the St. Petersburg Area were divided only into small and large sizes.


54.8
0.6
55.4


27.3

7.6
0.9
3.7
12.2
5.8


45.3


2.1
50.5


54.1

15.0
1.8
7.3
24.1
11.5

89.7

4.3
1.8
6.1
4.2
100.0











Table 5. (Cont'd) Comparison of Costs and Returns by Size Groups, 112 Wholesale Dairy Farms
in Selected Areas in Florida; Average for the Calendar Year 1949, Except
for Miami, Year Ending August 31, 1950.





ITEM : Tampa Area : Orlando Area
:Small : Medium : Large : Small : Medium :Large

Number of dairies 5 11 5 12 1/ 7
Number of cows per dairy 63 124 213 39 147
Milk sold per farm per day (gallons) 96 212 370 59 271
Milk sold per cow per year (gallons) 557 623 634 553 672
Milk sold per cow per day (gallons) 1.53 1.71 1.74 1.51 1.84


INCOME:
Milk sales
Other income (bags, manure, etc.)
Total income

PRODUCTION COSTS:
Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on average investment
@ 5 percent
Total gross costs


Feed
Labor:
Hired labor
Unpaid family labor
Operator's labor and supervision
Total labor expense
Miscellaneous expense
Total expense before depreciation
and interest
Depreciation:
Net depreciation on herd
Other
Total depreciation
Interest on investment @ 5 percent
Total gross costs

RETURNS:
Net returns
Returns to operator for labor and
supervision
Returns on average investment


55.5
0.3
55.8


Cents per Gallon
56.5 56.2 55.8 57.3
0.6 0.5 1.0 0.7
57.1 56.7 56.8 58.0


27.5 29.4


7.1
1.9
8.2
T732
9.2


8.4
0.5
4.2
13.1
7.5


53.9 50.0


Cents per Gallon
28.9 33.0


7.2
0.6
2.9
10.7
6.5


6.9
2.3
10.6
19.8
7.5


46.1 60.3


2.6 1.2 5.1 0.2
1.6 1.3 1.6 1.4
4.2 2.5 6.7 1.2

3.7 2.6 3.9 3.8
61.8 55.1 56.7 65.3


44.5 53.4


11.5
3.1
13.2
27.8
14.9

87.2

4.2
2.6
6.8
6.0
100.0


15.2
0.9
7.6
23.7
13.6

90.7

2.2
2.4
4.6
4.7
100.0


32.2


8.1
0.2
4.1
12.4
8.6

53.2


3.2
57.9


Percent of Total Gross Cost
51.0 50.6


12.7
1.1
5.1
18.9
11.4


10.6
3.5
16.2
30.3
11.5


81.3 92.4


9.0
2.8
11.8
6.9
100.0


0.3
2.1
1.8
5.8
100.0


14.0
0.3
7.1
21.4
14.9

91.9

0.7
1.9
2.6
5.5
100.0


Cents per gallon
2.0 0.0 -8.5

6.2 2.9 2.1
4.6 3.9 -4.7


1/ Dairies in the Orlando Area were divided only into small and large sizes.


4









The most consistent relation between size and items of cost was in total labor, miscel-
laneous operating expenses, and herd depreciation. In each area total labor cost per gallon of
milk sold was less on large than on small farms. The least difference was in the Palm Beach
Area where it was 2.7 cents per gallon; the greatest difference was in the Orlando Area where
it was 7.4 cents. Miscellaneous operating expenses were less on large farms in all areas ex-
cept Orlando. Cost of operating trucks, repairs to buildings and equipment and other items do
not increase in proportion to the amount of milk produced.

In each area except St. Petersburg, herd depreciation was only about half as much on small
farms as on large farms. The greatest difference was in Tampa where herd depreciation was
4.2 cents per gallon on small farms and 9.0 cents per gallon on large farms. At least two fac-
tors account for the difference in depreciation in the size groups: (1) The small farms raised
a larger proportion of their replacements, and (2) Cows remained in the herd longer on small
farms. Most of the larger farms tried to keep the seasonal variation in production as small as
possible by buying and selling cows. This, as well as other factors, accounts for the more rapid
rate of herd turnover on the larger farms.

In each area, operators of small farms did not receive enough for their milk to cover all
costs, including a charge for operator's labor and a return for the capital invested. In the Orlan-
do Area, operators of small farms made a net loss of 8.5 cents per gallon. In each area except
Tampa costs on large farms were less than returns. In the Tampa Area, costs and returns were
equal on large farms. In each area, except St. Petersburg and Tampa, the return to the operator
per gallon of milk sold for his labor and supervision was about twice as much on large as on
small farms.

Rate of Turnover of Cows in the Milking Herd

Almost one-third of the cows in the herds in this study were replaced during the year, Table
6. At this rate the average cow would remain in the herd a little over three years. As mentioned
above, the rate of turnover was usually higher on large farms than on small farms. The rate of
turnover on large farms in the Jacksonville and Tampa Areas was almost 40 percent while on
the small farms it was only about half this amount, Table 7.

About one-third of the replacements were raised in the Orlando Area and 20 percent in the
Palm Beach Area. Only a relatively few replacements were raised in the other areas. In each
area there was increasing interest in raising replacements. Several of the operators were be-
ginning to raise heifers but they were not old enough to freshen during the year.

About one-fourth of the cows taken out of the herds in the Palm Beach and Orlando Areas
left because they died or were stolen. This figure was less than 15 percent in each of the other
areas. The percent loss from deaths and stolen was usually much less on large than on small
farms. This was probably because they were replacing a larger percentage of their herds each
year.

In all areas except St. Petersburg and Tampa, the number of cows on hand at the end of the
year was more than the number on hand at the beginning of the year. The average increase
amounted to 13 percent in the Miami Area; 4 percent in the Palm Beach Area; 5 percent in the
Jacksonville Area; and 8 percent in the Orlando Area. The St. Petersburg Area showed no
change and the Tampa Area a 4 percent decrease.

Seasonal Distribution of Milk Production

One problem of dairies producing milk mainly for fluid consumption is that of maintaining
a fairly even production throughout the year. These dairies were no exception. Records were










Table 6. Average Number of Cows on Hand, Beginning and End of the Year, Number Added
and Number Taken Out of the Herd and Rate of Turnover, 112 Wholesale Dairy Farms
by Areas, Florida. Calendar Year 1949, Except for Miami, Year Ending August 31,
1950.
AREA
Number of Head :Miami : Palm :Jack- : St. : Tampa :Orlando
:Beach :sonville : Petersburg :
On hand beginning of the year 309 208.3 159.2 139.5 133.5 76.3
Additions:
Purchased 41.1 58.0 52.6 34.0 12.8
Replacements raised _10.0 5.3 0.6 0.4 6.0
Total 126 51.1 63.3 53.2 34.4 18.8

Subtractions:
Sold 32.8 46.9 46.6 35.1 10.1
Died, stolen, etc. 10.6 7.6 6.6 4.9 2.9
Total 85 43.4 54.5 53.2 40.0 13.0

On hand end of year 350 216.0 168.0 139.5 127.9 82.1
Rate of turnover (percent) 26 20.5 33.3 38.1 30.6 16.4

Average life in herd (years) 3.8 4.9 3.0 2.6 3.3 6.1

1/ Includes only 13 dairies. No breakdown in data by method of addition or subtraction.


Table 7. Rate of Turnover and Average Number of Years in the Herd by Size of Farms, 112
Wholesale Dairies by Areas in Florida. Calendar Year 1949, Except for Miami, Year
Ending August 31, 1950.
Percent Turnover : Average fears in Herd
AREAS : Small : Medium : Large : Small A Medium : Large

Miami-
Palm Beach 18.9 20.3 21.0 5.3 4.9 4.8
Jacksonville 26.9 27.0 39.6 3.7 3.7 2.5
St. Petersburg 36.7 2/ 38.7 2.7 2/ 2.6
Tampa 19.0 28.0 37.3 4.4 3.6 2.7
Orlando 14.8 2/ 17.0 6.8 2/ 5.9


1/ No breakdown by size of farm.


2/ Farms divided into only two groups.


obtained of milk sales by months for farms in the Jacksonville Area. These Data show the
seasonal distribution of milk production for this area. The highest period of production was in
April and May on medium and large farms but in February and March on small farms. As an
average for all farms the highest daily deliveries occurred in May and the lowest in October.
Dailydeliveries in May were 14.5 percent more than they were in October. On a percentage basis,
large farms showed the least seasonal variation-and small farms the greatest. Table 8 shows the
average daily deliveries for eachmonthon small, medium, large and all farms. Figure 3 shows the
percent that the daily deliveries each month were above or below the average daily deliveries for
the year.
Distribution of Operator's Capital

Dairy farms in milk sheds around large centers of population in Florida are highly special-
ized and are large in size. A considerable amount of capital is usually invested in land, build-
ings, equipment and livestock. The average investment in farms included in this study varied
from S33,450 in the Orlando Area to $146,111 in the Miami Area, Table 9. This amount does










Table 8. Seasonal Distribution of Milk Production, by Size of Farm, 20 Wholesale Dairy Farms,
Jacksonville Area, Florida, 1949.


Size of Farm
:Small : Medium


Average Number of


: All
:Large : Farms


Gallons Sold per Day


Figure 3. Percent Variation in Daily Milk Deliveries per Month, from the Average Daily Deliveries for the
Year, Small, Medium and Large Dairy Farms, Jacksonville Area, 1949.


January
February
March


April
May
June


July
August
September

October
November
December


Average










not include the value of the capital supplied by the landlord. However, only a very few farms
were rented.

Total investment varied from $424 per cow in the Orlando Area to $322 per cow in the St.
Petersburg Area. Cows in the Palm Beach Area were valued at the lowest amount per head
and those in the Tampa Area the greatest. The investment in dairy equipment on a per cow
basis was about twice as much in the Miami Area as in the other areas. Most of the dairies in
this area maintained a stand-by electrical unit to supply electricity in the event of hurricanes.
On the average about $15 per cow was invested in automobiles and trucks. Investments in
buildings varied from $38 per cow in the Orlando Area to $65 per cow in the Tampa Area.

Variations in Operator's Capital by Size of Farm

Table 10 shows the variation in operator's capital by size of farm. In the Miami, Jack-
sonville and St. Petersburg Areas, the average investment per cow was much less on large
farms than on small. In the other areas the investment per cow varied very little for different
size farms. There was no consistent relation between size and the investment per cow in the
various areas.


Table 9. Average Investment on 112 Wholesale Dairy Farms in Selected Areas in Florida.
Calendar Year 1949, Except for Miami, Year Ending August 31, 1950.



AREA
ITEM : Miami : Palm : Jack- : St. : Tampa : Orlando
:Beach :sonville : Petersburg :
Number of farms 24 17 20 11 21 19
Average Amount per Farm
Livestock $67,987 $32,198 $28,141 $24,203 $29,165 $15,007
Dairy equipment 11,146 2,686 2,269 2,273 1,868 1,313
Trucks and automobiles 5,688 1,921 2,225 1,833 2,080 999
Other machinery and equipment 688 574 1,301 285 437 347
Buildings 23,415 11,207 7,780 6,133 8,439 3,008
Land 37,187 23,116 9,576 10,011 10,244 12,776
Total $146,111 $71,702 $51,292 $44,738 $52,233 $33,450

Average Amount per Cow
Livestock $180 $152 $178 $174 $223 $190
Dairy equipment 30 12 14 17 14 17
Trucks and automobiles 15 9 14 13 16 13
Other machinery and equipment 2 3 8 2 3 4
Buildings 62 53 49 44 65 38
Land ?8 109 60 72 78 162
Total $387 $338 $323 $322 $399 $424

Percent of Total Investment
Livestock 47 45 55 54 56 45
Dairy equipment 8 4 4 5 3 4
Trucks and automobiles 4 3 4 4 4 3
Other machinery and equipment -/ 1 3 1 1 1
Buildings 16 15 15 14 16 9
Land 25 32 19 22 20 38
Total 100 100 100 100 100 100

_/ Less than 0.5 percent.










Table 10. Distribution of Operator's Capital by Size of Farm, 112 Wholesale Dairy Farms in
Selected Areas of Florida. Calendar Year 1949, Except for Miami, Year Ending
August 31,1950.

:Average Amount per Farm : Average Amount per Cow
AREA AND ITEM : Small : Medium : Large : Small : Medium : Large


MIAMI AREA
Livestock
Dairy equipment
Trucks and autos
Other machinery and equipment
Buildings
Land
Total
Number of cows per dairy
PALM BEACH AREA
Livestock
Dairy equipment
Trucks and autos
Other machinery & equipment
Buildings
Land
Total
Number of cows per dairy
TACKSONVILLE AREA
Livestock
Dairy equipment
Trucks and autos
Other machinery & equipment
Buildings
Land
Total
Number of cows per dairy
ST. PETERSBURG AREA
Livestock
Dairy equipment
Trucks and autos
Other machinery & equipment
Buildings
Land
Total
Number of cows per dairy
TAMPA AREA
Livestock
Dairy equipment
Trucks and autos
Other machinery & equipment
Buildings
Land
Total
Number of cows per dairy
ORLANDO AREA
Livestock
Dairy equipment
Trucks and autos
Other machinery & equipment
Buildings
Land
Total
Number of cows per dairy


$23,988 $62,354
3,119 7,274
1,965 2,975
607 1,310
7,257 27,712
9,892 67,633
$46,828 $169,258
142 253


$18,514
1,559
1,060
45
5,660
8,213
$35,051
106

$13,988
1,083
1,883
1,385
6,596
6,900
$31,835
80

$15,758
2,113
1,773
222
5,233
8,063
$33,162
77

$13,644
850
1,223
__1/
4,294
6.031
$26,042
63

$ 7,222
704
536
217
1,778
5.718
$16,175
39


$27,603
1,328
1,739
494
10,141
20,690
$61,995
181

$26,138
2,574
1,835
989
8,051
13,324
$52,911
150


$95,572
17,987
9,445
337
29,494
32,700
$185,535
587

$49,712
4,945
2,933
1,170
17,640
40,040
$116,440
343

$53,592
3,742
3,319
1,602
9,295
8,608
$80,158
296


2/ $34,338
2,464
1,905
361
7,212
12,350
$58,630
214


$27,220
1,911
2,420
292
4,000
4.713
$40,556
124


$48,967
2,789
2,192
1,192
22,350
26.625
$104,115
213

$28,353
2,358
1,792
571
5,117
24,875
$63,066
147


$169
22
14
4
51
70
$330


$175
15
10
1
53
77
$331


$173
13
23
18
82
86
$395


$205
27
23
3
68
105
$431


$217
13
19
1/
68
96
8413


$185
18
14
5
46
147
$415


$246
29
12
5
110
267
$669


$153
7
10
3
56
114
$343


$174
17
12
7
54
89
$353


$163
31
16
11
50
56
$316


$145
14
9
3
51
117
$339


$182
13
11
5
31
29
$271


2/ $160
11
9
2
34
58
$274


$220
15
20
2
32
38
$327


$230
13
10
6
105
125
$489


2/ $193
16
12
4
35
169
$429


2/ Area divided only into small and large sizes.


1/ Less than $0.50.









Farm Returns


Table 11 shows the average farm returns in each of the areas studied. Returns were highest
in the Miami Area and lowest in the Orlando Area. Returns ran in relation to size of dairies.
Dairies in the Miami Area were the largest and those in the Orlando Area were smallest.

Average earnings were fairly satisfactory on these farms during the period covered by this
study. The average labor income or the returns to the operator for his labor and supervision was
$15,118 in the Miami Area; $8,702 in the Palm Beach Area; $5,877 in the Jacksonville Area;
$5,095 in the St. Petersburg Area; $3,633 in the Tampa Area; and $1,822 in the Orlando Area.



Table 11. Summary of Costs and Returns per Farm, 112 Wholesale Dairy Farms in Selected
Areas in Florida. Calendar Year 1949, Except for Miami, Year Ending August 31,
1950.


: Miami : Palm : Jack-
:Beach : sonville


AREA
:St. :Tampa
: Petersburg:


Total income $136,420 $71,979 $63,697 $50,191 $45,982 $28,838
Total expense 114,036 59,692 55,255 42,859 39,737 25,343
Farm income 22,384 12,287 8,442 7,332 6,245 3,495
Interest on average capital
@5 percent 7,266 3,585 2,565 2,237 2,612 1,673
Returns to operator for labor
and supervision 15,118 8,702 5,877 5,095 3,633 1,822

Farm income 22,384 12,287 8,442 7,332 6,245 3,495
Value of operator's labor 5,480 3,694 3,540 3,902 3,320 2,966
Return on average investment $16,904 $ 8,593 $ 4,902 $ 3,430 $ 2,925 $ 529
Percent return on investment 11.6 12.0 9.6 7.7 5.6 1.6


SUMMARY

The cost of producing milk was studied in six areas of Florida. Records were obtained for
24 producers in the Miami Area; 17 producers in the Palm Beach Area; 20 producers in the
Jacksonville Area; 11 producers in the St. Petersburg Area; 21 producers in the Tampa Area;
and 19 producers in the Orlando Area. All records in each area covered the calendar year
1949, except Miami, which covered approximately the 12-month period ending August 31,
1950.

All of the producers from whom records were obtained were specializing in dairying and
were producing milk for wholesale delivery to plants for processing and distribution. The dairies
ranged in size from 12 to 803 cows. The average number of cows per dairy in the various areas,
based on the number on hand at the beginning and end of the year, was 378 in Miami; 212 in
Palm Beach; 159 in Jacksonville; 139 in St. Petersburg; 131 in Tampa; and 79 in Orlando. The
average amount of milk sold per day was 619 gallons in Miami; 327 gallons in Palm Beach;
297 gallons in Jacksonville; 246 gallons in St. Petersburg; 222 gallons in Tampa; and 137
gallons in Orlando.


ITEM


: Orlando









The average price received per gallon for all milk sold varied from 60 cents in the Miami
Area to- 55.5 cents in the St. Petersburg Area. Returns from the sale of manure, bags, etc.
averaged from 0.5 to 0.9 cents per gallon of milk sold.

The average cost of production per gallon of milk sold varied from 54.7 cents in the St.
Petersburg Area to 59.9 cents in the Orlando Area. The average cost of production in the Miami,
Palm Beach, Jacksonville and Tampa Areas varied only 0.6 cents per gallon. Feed was the
largest item in the cost of producing milk and ranged from 27.0 cents to 32.5 cents per gallon.
Labor was the second largest item of cost and ranged from 11.0 cents per gallon in the Jackson-
ville Area to 14.5 cents in the Orlando Area. Feed and labor costs combined accounted for 75.2
percent of the total cost in all areas.

Income exceeded cost by 4.3 cents per gallon in the Miami Area, 4.2 cents in the Palm
Beach Area, 2.1 cents in the Jacksonville Area, 1.3 cents in the St. Petersburg Area, and 0.4
cents in the Tampa Area. It failed to equal cost by 2.3 cents in the Orlando Area. In each area
costs on small farms were more than returns. In each area, except St. Petersburg and Tampa,
the return to the operator for his labor and supervision per gallon of milk sold was about twice
as much on large as on small farms.

Almost one-third of the cows in the herds were replaced during the year. The rate of turn-
over was usually higher on large than on small farms. About one-third of the replacement in
the Orlando Area were raised and 20 percent in the Palm Beach Area. Only a relatively few re-
placements were raised in other areas. Cows in herds in the Miami Area increased 13 percent
during the year; Palm Beach Area, 4 percent; Jacksonville Area, 5 percent; and Orlando Area,
8 percent. Herds in the St. Petersburg Area showed no change in size and decreased 4 percent
in the Tampa Area.

Peak production on farms in the Jacksonville Area occurred in April and May and the least
production in October. Daily deliveries in May were 14.5 percent more than they were in October.
The seasonal variation in milk production was greater on small than on large farms.

The average capital investment of the operator varied from $33,450 in the Orlando Area to
$146,111 in the Miami Area. Total investment per cow was $424 in the Orlando Area and $332
in the St. Petersburg Area. About 50 percent of the total investment was in livestock and 25
percent in land. In the Miami, Jacksonville and St. Petersburg Areas, the average investment
per cow was much less on large than on small farms. In the other areas the investment per cow
varied very little for different size farms.

Total farm returns were highest in the Miami Area and lowest in the Orlando Area. Average
farm labor income was $15,118 in the Miami Area, $8,702 in the Palm Beach Area, $5,877 in the
Jacksonville Area, $5,095 in the St. Petersburg Area, $3,633 in the Tampa Area, and $1,822 in
the Orlando Area.





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