Title: Summary of costs and returns for twenty wholesale dairies, Jacksonville area, Florida
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Title: Summary of costs and returns for twenty wholesale dairies, Jacksonville area, Florida
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Creator: Greene, R. E. L.
Publisher: Department of Agricultural Economics, Florida Agricultural Experiment Stations
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Agricultural Economics Series No* 50-50


SUIMMARY OF COSTS AND RETURNS

FOR


TWENTY


WHOLESALE DAIRIES,


JACKSONVILLE AREA, FLORIDA

Average for Calendar Year 1949










by
R. E. L. Greene
Agricultural Economist















Department of Agricultural Economics
Florida Agricultural Experiment Stations
Gainesville, Florida


/c~Yv~?l~-r


November, 1950










SUMMARY OF THE COST OF PRODUCING MILK ON
WHOLESALE DAIRY FARMS IN THE JACKSONVILLE AREA

Average for the Calendar Year 1949


A survey was made on 20 dairy farms in the Jacksonville Area of the average
cost of producing milk during the 1949 calendar year. Information was obtained
by personal visits to the farms. Data on income and expenses were taken from
farm records or copies of 1949 income tax returns. Records of the amount of milk
sold were obtained directly from the plants to which the cooperating farmers
delivered their milk. The survey was made by members of the Department of Agri-
cultural Economics of the Florida Agricultural Experiment Station in cooperation
with the county agent in Duval County.


Method of Calculating Cost


Each of the farms surveyed was specializing in dairying. All milk was whole-
saled to plants for processing and distribution. Receipts from the dairy enter-
prise was the only source of farm income. On a few farms a small amount of feed
was grown but in the majority of cases all feed was purchased except that obtained
from pasture. Most of the replacements were purchased, also. Tho amount and quality
of pasture varied with a few farms having little or no pasture.

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 per gallon of producing milk was calculated on the basis
of the number of gallons of milk sold.


Size of Farms Studied


The farms included in this survey ranged from, 46 to 473 cows based on an
average of the number on hand at the beginning and end of the year. The average
number of gallons of milk sold per day varied from a low of 87 gallons to a high
of 783 gallons for the year. The dairies were divided into three size groups,
small, medium and large, according to the number of gallons of milk sold per day.
Small farms included those selling less than 200 gallons per day; medium farms,
200 to 399 gallons; and large farms, 400 gallons and over. Eight of the farms
surveyed fell in the small group, 7 in the medium, and 5 in the large. Table 1
shows an array of the farms for selected items based on the average number of
gallons of milk sold per day.











Table l.--Gallons of Milk Sold Per Day, Average Number of Cons and
Gallons of Milk Sold Per Cow Por Year and Per Day 20
Dairy Farms Jacksonville Area, 1949.


S:Gallons sold per cow
Farm No. : Gallons of milk : Average number : Per : Per
: sold per day : of cows / : year day
Gallons Number Gallons Gallons

Small Farms

1 87 45.5 699 1.9
2 109 64.5 618 1.7
3 115 62.5 672 1.8
4 116 95.0 447 1.2
5 163 104.0 571 1.6
6 174 113.5 566 1.5
7 175 64.5 991 2.7
8 184 94.0 713 2.0
Average 140 80.4 637 1.7

Medium Farms

9 215 126.0 624 1.7
10 222 112.5 721 2.0
11 247 117.0 771 2.1
12 253 149.0 621 1.7
13 272 175.5 566 1.5
14 313 184.0 620 1.7
15 337 185.5 663 1.8
Average 266 149.9 647 1.8

Large Farms

16 467 256.0 666 1.8
17 480 257.5 680 1.9
18 493 226.0 797 2.2
19 726 265.0 726 2.0
20 783 473.0 604 1.6
Average 590 295.5 729 2.0

Average
All Farms 297 158.5 683 1.9


I Based on the average of the numbers on hand at the beginning
and end of the year.










Yearly Costs and Returns in Producing Milk


The cost of producing milk depends on many factors. Cost will vary depend-
ing on the amount and price of the cost items used and amount of production
obtained. The average costs and returns for the farm surveyed on a per farm,
per cow and a per gallon of milk sold basis is shown in Table 2. Table 3 shows
the average costs and returns per gallon for small, medium and large farms. The
data in each of these tables are weighted averages for all farms included in
each group.

A brief explanation and discussion of certain items included in income and
expenses is given in the paragraphs below.

Milk sales represents the amount received for all milk sold. Average milk
sales amounted to $395 per cow. The average price was 57.9 cents per gallon.

Other income includes the sale of bags, manure sales, soil conservation
payments, miscellaneous 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 and hired labor or fed to calves on the farm. No credit was given
for manure that was not sold. Miscellaneous income averaged 0.9 cents per gallon
of milk sold.

Feed purchased represents the cash cost for all kinds of feed bought during
the year. Most dairies maintain a fairly constant feed supply, so feed purchased
was not adjusted for the amount on hand at the beginning and the end of the year.
Some dairies were raising a part of their replacements. Cost of feed purchased
included that for raising heifers as well as for milk production. Average feed
cost amounted to $217 per cow and 31.8 cents per gallon of milk sold. Cost on
individual farms ranged from 26 to 34 cents per gallon of milk sold. Feed made
up 56 percent of the total cost of producing milk. The average feed cost per
gallon was highest on the larger farms.

Labor hired represents the cash payments to dairy help. Allowances for
privileges, such as a house to live in, or milk furnished are in addition to
the cash cost. The cost of privilege are included in other items of expenses
such as taxes, repair and depreciation on buildings. Cost of hired labor amounted
to 7.5 cents per gallon of milk sold and average 51 per cow for the year.

Unpaid family labor where used was charged at prevailing wage rates according
to the amount of time spent in dairy work by unpaid members of the operator's
family. A charge for unpaid family labor was reported on only three of the 20
farms studied.

Operator's labor, Most operators worked either full or part time in the dairy
barn and, in addition, performed the function of management for the dairy business.
Each operator was asked to estimate the value of his services and this was entered
as a labor cost. Value of operator's labor was usually estimated at about the rate
received by the highest paid worker in the barn plus an additional amount for









Table 2.--Summary of Costs and Returns for 20 wholesale Dairy Farms, Jacksonville
Area, Florida, Average for Calendar Year, 1949,

: : :Avorage per gallon of
: Average : Average : milk sold
Item : per : per : : Percent of
Sfarm : cow : Amount : total
Average number of cows 159
Milk sold per farm (gallons) 108,275
Milk sold per cow per year (gallons) 683
Milk sold per cow per day (gallons) 1.87 /
Dollars Dollars Cents, Percent


Income:
Milk sales 62,678 395 57.9 98.4
Other income (bags, manure, etc.) 1,019 7 0.9 1.6
Total income 63,697 -T O 1800.0
Production Costs:
Feed purchased 34,435 217 31.8 56.1
Labor:
Hired labor 8,104 51 7,5 13.2
Unpaid family labor 199 1 0.2 0.3
Operator's labor and supervision 3,540 22 3.3 5.8
Total labor expense Tl,843 74 i11. 19.3
Dairy supplies 1,081 7 1.0 1.8
Power, lights, fuel 1,074 7 1.0 1.9
Repairs buildings and equipment 1,088 7 1.0 1.8
Truck and automobile expenses 1,358 9 1.3 2.2
Taxes, licenses, insurance 766 5 0.7 1.2
Veterinary and medicines 236 1 0.2 0.4
Seed, fertilizer, lime 698 4 0.6 1.1
Legal and professional expense 22 1/ 2/ 2/
Telephone and office expense 77 T 0.1 071
Rent 264 2 0.2 0.4
Miscellaneous cash expenses 423 3 0.4 0.7
Total expenses before depreciation
and interest 53,365 337 49.3 87.0
Depreciation:
Net depreciation on herd 3,684 23 3.4 6.0
Buildings, excl. operator's dwelling 506 3 0.5 0.8
Dairy equipment 327 2 0.3 0.5
Trucks and automobiles 635 4 0.6 1.0
Tractors and miscellaneous equipment 278 2 0.2 0.5
Total depreciation T7 o "4T 50 8.8
Interest on average investment
@ 5 percent 2,565 16 2.4 4.2
Total gross costs -631, 87 5.7 100.0

Net returns 2,337 15 2.1
Returns to operator for labor
and supervision 5,877 37 5.4
Returns on average investment 4,902 31 4,5
Percent return on investment 9.6


1/Less than one dollar j Less than one-tenth


2/ Less than one-tenth


1/ Less than one dollar







-5-


Table 3.--Summary of Costs and Returns per Gallon of Milk Sold by Size of Farm
for 20 Dairy Farms, Jacksonville Area, Florida, Average for the
Calendar Year, 1949.

: :Gallons of milk sold per day
Item : Your : Less than : 200 to : 400
: farm : 200 : 399 :and over
Number of farms 8 7 5
Average number of cows 80 150 296
Total milk sold per farm (gallons) 51,244 96,986 215,328
Milk sold per farm per day (gallons) 140 266 590
Milk sold per cow per year (gallons) 637 647 729
Milk sold per cow per day (gallons) 1.74 1.77 2.00


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, light, fuel
Repairs building 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 cash expenses
Total expenses before depreciation
and interest
Depreciation:
Net depreciation on herd
Buildings excl. operator's dwelling
Dairy equipment
Trucks and automobiles
Tractors and miscellaneous equipment
Total depreciation
Interest on average investment
@ 5 percent
Total gross costs

Net returns
Returns to operator for labor
and supervision
Returns on average capital

Percent returns on average investment


57.6
1.7


31.2

8.8
0.4
5.3
14.5
0.6
1.3
0.8
1.8
0.9
0.2
1.0
0.1
0.1
1,
o0.

52.9

2.1
0.9
0.3
0.9
0.6
4.8


3.1
60.8

--1.5

3.8
1.6
2.5


Cents per gallon

57.8
0.9


29.9

7.6
0.3
3.5
11.4
1.0
1.4
1.1
1.3
0.8
0.2
1.1
1/
O.T
/ 0.1
0.4

48.8

3.4
0.5
0.4
0.6
0.2
5.1

2.7
56.6

2.1

5.6

4.8
8.8


1/ Less than one-tenth


58.0
0.7


33.2

6.9

2.4
9.3
1.1
0.7
1.0
1.0
0.6
0.2
0.2
1/
0.1
0,4
0.4

48.2

3.9
0.3
0.2
0.5
0.1
5.0

1.9
55.1

3.6

6.0
5.5
14.8


-- -
"" ~1.


I
--

--cl
-.--

-
._ ___
----


-LI--~
--
~I--.


111-










management. The average value of operator's labor for all farms was $3540 for the
year. This amounted to $22 per cow and 3.3 cents per gallon of milk sold. The
charge for operator's labor was 5.3 cents per gallon on small farms but only 2.4
cents on large farms.

Total labor expense includes the cash cost of labor and the charge for unpaid
labor and operator's labor. Total labor cost amounted to 11 cents per gallon of
milk sold or 19.3 percent of the total cost of producing milk. The average labor
cost was 14.5 cents per gallon on small farms but only 9.3 cents on large farms.
Labor cost on individual farms varied from 9 to 17 cents per gallon of milk sold.
On all farms, the cost of labor and feed amounted to three-fourths of the total
cost of producing milk.

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

Power, lights, fuel. This item was mainly for electricity in operating milk-
ing machines, refrigeration 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. This item represents the amount spent for
repair of dairy buildings and dairy and farm equipment during the year.

Truck and auto expenses included cash costs of gasoline, oil, grease and
repairs. Interest and depreciation are in other items of expenses. Licenses and
insurance were included with taxes when these items could be separated. lThen
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 1.2 cents
per gallon of milk sold. These expenses average 1.8 cents per gallon on the small
farms but only 1.0 cents on the large farms.

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

Veterinary and medicines was the cash cost of these items of expense.

Seed, fertilizer, lime. This item represents the amount paid for materials
applied to pas-ures during 1949. It does not include labor or machine work if
done by the regular farm workers as the cost of these are in other classifications.

Legal and professional expense. This item includes attorneys or accountants
fees and other legal expense. Only 6 farms reported this item of expense.

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










Rent. Three of the farm operators included in this survey cash rented their
dairy farm and its facilities. Others rented some pasture. This item includes
the amount of cash paid as rent.

Miscellaneous cash expense includes a number of small items. The most im-
portant of which are Dairy Council fees, Duval Milk Producers Association dues,
and the amount paid for artificial breeding. These items amounted to 0.4 cents
per gallon of milk sold for all farms in each size group.

Depreciation was charged to cover the normal wear and tear of capital items
used in the dairy business. Depreciation on the dairy herd was calculated as the
net change in the value of the herd, including bulls and young stock being raised,
from the beginning to the ending inventory. Actual calculation was as follows:
valuee of beginning inventory plus purchases) minus (value of ending inventory plus
sales) equals net change in inventory for the year. Cattle deaths during the year
were automatically accounted for since they were in the beginning inventory but
not in the ending inventory. This method also capitalizes the increase in value
of heifers raised as replacements during the year and partly offsets the cost of
feed, labor and other items for raising them, by their increase in value.

Net depreciation on the herd amounted to ;.23 per cow or 3.4 cents per gallon
of milk sold. It was 6 percent of the total cost of producing milk. Depreciation
was greater on large farms than on small farms partly because they were raising
a smaller percentage of their replacements. The rate of turnover of cows in the
herd was also greater on the large farms.

Depreciation on buildings and equipment was calculated on the basis of the
cost of the items. The rates used were as follows: dairy buildings, barns and
tenant houses, 5 percent; dairy equipment (such as compressors, milking machines
and coolers), 10 percent; miscellaneous farm 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 charged only
for the estimated proportion used for the farm.

Total depreciation amounted to 5 cents per gallon of milk sold or 8.8 percent
of the total cost of producing milk.

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, and earn a reasonable rate of return on the
investment in the business. Some dairymen were paying interest on loans to purchase
equipment, cows, or real estate. However, interest was paid on only part of the
total capital required to operate the dairy business. The amount of interest paid
was excluded from the farm expenses and an interest charge of 5 percent was made
on the average farm capital for the year.

Total production cost is the sum of all direct and indirect items of expenses
as explained above. The average cost of keeping a cow for a year on these farms
was 0387. The total cost of producing milk in 1949 was 56.7 cents per gallon of
milk sold. Average costs per gallon on farms in the small group was 60.8 cents







-8-


compared to 55.1 cents for farms in the large groups. Cost per gallon ranged from
50.5 cents on the farm with the lowest cost to 66.6 cents on the farm with the
highest cost.

Net returns is the difference between total receipts and total expenses.
The returns above all costs were 2.1 cents per gallon of milk sold.

Returns to the operatbr for labor and supervision represents the total return
to the operator from 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 obtained by adding the value of
the operator's labor to the net return. Average returns on all farms amounted to
$37 per cow or 5.4 cents per gallon of milk sold. The returns for operators of
small farms was 3.8 cents per gallon in comparison with 6.1 cents on large farms.

Returns on investment represent the return to the capital invested in the
business after paying all expenses including an allowance to the operator for
his labor, supervision and management. Percent return on investment is expressing
the return on investment as a percentage of the average capital. It was computed
by dividing net returns plus interest on investment (calculated at 5 percent), by
the average capital invested. 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 on capital
invested by the landlord.


Distribution of Operator's Capital


The operators included in this study estimated that their capital investment
amounted to $51,292 per farm, or an average investment of )323 per cow (Table 4).
Fifty-five percent of the total investment was in livestock and 34 percent in
land and buildings. The average operator's investment on small farms was $31,825
and $80,158 on large farms. Two of the five operators in the large group rented
the farm they operated. This made the average investment in land and buildings
low in this group in comparison with other groups as the value of capital furnished
by the landlord is not included.


Rate of Turn-over of Cows in the Milking Herd


One-third of the cows in the herds covered in this study was replaced during
1949 (Table 5). At this rate the average cow would remain in the herd 3 years.
The rate of replacement was 40 percent on the large farm and 27 percent on the
medium and small farms. Ninety-two percent of the additions were purchased and
8 percent were raised on the farm. Only one farm in the large group raised re-
placements that entered the herd in 1949. Several of the operators were beginning
to raise heifers but they were not old enough to freshen in 1949.










Table 4.--Distribution of Operator's Capital, 20
Area, 1949. 1


Dairy Farms, Jacksonville


: : Size of farm
Item : Your : : : : All
: farm : Small : Medium 2/ Large 3/: farms


Average amount per farm


Livestock
Dairy equipment
Trucks and automobiles
Other machinery and equipment
Buildings
Land
Total


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


Average amount per cow


Livestock
Dairy equipment
Truck and automobiles
Other machinery and equipment
Buildings
Land
Total


S 173
13
23
18
82
86
395


Percent of total investment in


Livestock
Dairy equipment
Trucks and automobiles
Other machinery and equipment
Buildings
Land
Total


44
3
6
4
21
22
----TOO


I/ The value of capital furnished by landlords is in addition
shown in this summary.
2/ One farmer in this group rented his farm.
3/ Two farmers in this group rented their farms and one other
of pasture land.


to the amount


rented 300 acres


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


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



S182
13
11
5
31
29
271


$28,141
2,269
2,225
1,301
7,780
9,576
851, 292


0 178
14
14
8
49
60
3525


$ 174
17
12
7
54
89
353


50
5
3
2
15
25
100


67
5
4
2
12
10
1T0


55
4
4
3
15
19
f10-0







-10-


Table 5.--Average Number of Cows on Hand at Beginning and End of the Year,
Number Added to the Herd, Number Taken Out of the Herd and Rate


of Turn-over by Size of
Florida, 1949.


Farm, 20 Dairy Farms, Jacksonville Area,


: Your : Size of farm : All
Number of head : farm : Small : Medium : Large :farms

On hand beginning of the year 79.0 145,0 307.4 159.2
Additions:
Purchased 21.5 46.4 132.4 58.0
Replacements raised 3.0 5.1 9.2 5.3
Total 24.5 141.6
Subtractions:
Sold 17.8 34.3 111.2 46.9
Died, stolen, etc. 3,8 7.4 13.8 7.6
Total -T7 14250 T.'.

On hand end of year 81.9 154.8 324.0 168.0

Percent turn-over 26.9 27.0 39.6 33.3

Average years in herd 3.7 3.7 2.5 3.0




Fourteen percent of the cows that were taken out of the herd left because
they died or were stolen. Several operators reported cows being stolen during
the year. The loss from deaths and stolen was only about 60 percent as much on
large farms as on small farms probably because they were replacing a larger
percentage of their herd each year. The number of cows in the herds increased
between the beginning and end of the year for farms in all size groups. The
average increase amounted to about 5 percent but the greatest increase was on
farms in the medium size group.


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. The highest period of .production was in April and May on medium
and large farms but in February and March on small farms. Production showed a
steady decrease from May reaching a low in September on large farms, October
on medium farms and November on small farms. As an average for all farms the
highest daily deliveries occurred in May and the lowest in October. Daily
deliveries 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 6 shows the average daily deliveries for each month on small,






-11-


medium, lrgo c all -41t a. Figure 1 shows the percent that the daily
deliveries each month were above or below the average daily deliveries for the
year.

Table 6.--Seasonal Distribution of Milk Production, by Size of Farm, 20 Vjholesale
Dairy Farms, Jacksonville Area, Florida, 1949.


:Your : Size of farm : All
: farm : Small : medium : Large : farms

Average number of gallons sold per day

January 132 264 601 296
February 149 272 617 309
Harch 155 274 626 311

April 146 282 630 314
May 146 283 630 315
June 147 279 600 306

July 145 269 585 298
August 142 261 555 286
September __ 136 246 548 277

October 131 239 556 275
November 129 248 558 278
December 137 271 575 293

Average 140 266 590 297




Comparison of Costs in the Jacksonville Area
with Other Areas in the State


Summaries of the cost of producing milk for the 1949 calendar year have been
made for Tampa, St. Petersburg, Lakeland, Orlando, and Palm Beach Areas. 1/ A
comparison of the costs in each of these areas with Jacksonville is shown in
Table 7 The cost in the Jacksonville, Palm Beach and Tampa Areas was about the
same being 56.7, 56.1 and 56.4 cents per gallon of milk sold, respectively. Cost
in the St. Petersburg Area was 54.7 cents and in the Orlando Area 59.9 cents per
gallon. Feed cost was the highest in the Orlando Area and lowest in the Tampa
Area. Labor cost was also the highest in the Orlando Area but lowest in the
Jacksonville Area. The proportion that feed and labor made up of the total cost
varied from a low of 73.9 percent in the Tampa Area to a high of 79.3 percent in
the Palm Beach Area. Net depreciation on the herd amounted to 6.0 percent of the
total cost in the Jacksonville Area but only three-tenths of 1 percent in the


1/ See Agricultural Economics Series No. 50-5, 50-5a, and 50-5b by A. H.
SSpurlock and Donald L. Brooke.







-12-


Orlando Area. Depreciation was low in the Orlando Area because farmers were
raising a number of their replacements. Increase in value of young stock
offset some of the depreciation in the milking herd. Part of the high feed
cost in the Orlando Area was due to the raising of replacements.










Percent Variation
from Average

,All farms
5 .....-----"' i .t
0
5 -T -
**::-_ '---..-^-~--r-


5 ----...-. .- Large farms
O -! <. .
-5 .. .. .-




5 M .i medium farms


-5 -


10 ,
5 -. -- Small farms

0
-5 --
-10 ._... ..J
Jan* Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec*



Figure 1. Percent Variation in Daily Milk Deliveries per Ionth, from the
Average Daily Deliveries for the Year, Small, Medium and Large
Dairy Farms, Jacksonville Area, 1949.






-13-


Table 7.--Comparison of Costs and Returns on Wholesale Dairy Farms in the
Jacksonville Area with Farms in Other Dairy Areas of Florida,
Average for the Calendar Year 1949.
/ z i- 7" '
: Jack- : Palm : : SSt.
Item )CatL:;sonville:Beach : Tampa :Petersburg:Orlando
: Area : Area : Area : Area : Area
Number of dairies 20 17 21 11 19
Number of cows per dairy 159 212 131 139 79
Milk sold per farm (gallons) 108,275 119,235 80,950 89,614 50,025X
Milk sold per cow per year (gallons) 683 562 618 645 633
Hilk sold per cow per day (gallons) 1.87 1.54 1.69 1.77 1.73

Income Cents per gallon


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


57.9
0,9
58.8


59.6
0.7
60.73


56.3
0.5
56.U


55.5
0.5
56.0


56.8
0.8
57.6


Production Costs Cents per.gallon


Feed 1f 31,8
Total labor 11.0
Miscellaneous operating expenses 6.5
Total expense before depreciation
and interest 49.3
Depreciation:
Net depreciation on herd 3.4
Other 1.6
Total -O'
Interest on investment 5 percent 2.4
Total gross cost 56.7


31.6
12.9
6.8


29.0
12.7
7.2


27.9
13.2
6.7


51.3 48.9 47.8


0.6
1.2
-Trg
3.0
U56T.


2.9
1.4

3.2
56.4


3.2
1.2
-4T7
2.5
54.7


Percent of total gross cost


Feed f 56.1
Total labor c 19.3
Miscellaneous operating expenses 11.6
Total expenses before depreciation
and interest 87.0
Depreciation:
Net depreciation on herd 6.0
Other 2.8
Total 8.8
Interest on investment @ 5 percent 4.2
Total gross cost 100.0

Re


56.3
23.0
12.1


51.4
22.5
12.8


51.0
24.1
12.3


91.4 86.7 87.4

1.1 5.1 5.8
2.1 2.5 2.2
3.2 7.6 8.0
5.4 5.7 4.6
t100.0 1 00.0 100.0

turns Cents per gallon


Net returns
Returns to operator for labor
and supervision

Returns on average investment
Percent return on investment


5.4

4.5


1.3

5.7

3.8


-2.3

3.6

1.0


9.6 12.0 5.6 7.7 1.6


32.5
14.5
8.2

55.2

0.2
1.2

3.3
59.9


54.3
24.2
13.7

92.2

0.3
2.0
2.3
5.5
100.0


- *-1)


9.6 12,0


5.6 7.7 1.6







-14-


Summary


A study was made of the cost of producing milk on 20 farms in Jacksonville
Area for the calendar year, 1949. All of these farms wholesaled their milk to
plants for processing and distribution. The farms varied in size from 46 to 473
cows based on an average of the number on hand at the beginning and end of the
year. The average amount of milk sold per day varied from a low of 87 gallons to
a high of 783 gallons. Eight of the farms survey sold less than 200 gallons, 7
farms, 200 to 399 gallons, and 5 farms 400 gallons or more per day.

The average price received per gallon of milk was 57.9 cents. Returns from
the sale of manure, bags, etc., amount to 0.9 cents per gallon, so the total
income was 58.8 cents. The average cost of producing milk was 56.7 cents per
gallon of milk sold. Feed cost averaged 31*8 and labor 11.0 cents per gallon of
milk sold. These two items of cost accounted for 75.4 percent of the total cost
of producing milk. Income exceeded cost on these farms by 2.1 cents per gallon.
Returns to the operator for his labor and supervision amounted to 5.4 cents per
gallon and returns to operator's capital 4.5 cents per gallon. Cost of production
per gallon of milk sold was 60.8 cents on small farms, 56.6 cents on medium farms
and 55.1 cents on large farms.

The average capital investment of the operator was $51,292 per farm. This
amounted to $323 per cow of which 55 percent was in livestock. One-third of the
herd was replaced in 1949. All but 8 percent of the replacements were purchased.
Fourteen percent of the cows leaving the herd, left because of death or stolen.

Peak production on these farms occurred in April and flay 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.

Studies of the cost of producing milk for 1949 have been made in the Jackson-
ville, Palm Beach, Tampa, St. Petersburg and Orlando Areas. Cost in the Jankscn-
ville, Palm Beach and Tampa Areas were about the same. The St. Petarsbur.g .rea
with an average cost of 54.7 cents per gallon of milk sold was lowest. Cost ~yas
highest in the Orlando Area where it was 59.9 cents per gallon.












RELG:bk 11/3/50
Ag.Ec., Exp.Sta. 250




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