Title: Summary of costs and returns for wholesale dairy farms, Tampa Bay milk marketing area, Florida, 1959
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Title: Summary of costs and returns for wholesale dairy farms, Tampa Bay milk marketing area, Florida, 1959
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Creator: Greene, R. E. L.
Publisher: Department of Agricultural Economics, Florida Agricultural Experiment Stations
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Full Text



.
- V .


/2./


November 1960


Agricultural Economics Mimeo Report No. 61-5


SUMMARY OF COSTS AND RETURNS

FOR

WHOLESALE DAIRY FARMS


TAMPA BAY MILK MARKETING AREA FLORIDA, 1959

by


R. E. L. Greene, R. H. Walker and D. L. Brooke


TABLE OF CONTENTS


Method of Selecting Dairies to Be Studied .
Method of Calculating Cost. . .....
Size of Farms Studied . . .
Acres Operated and Use of Land. . . .
Distribution of Operator's Capital. . .
Annual Costs and Returns in Producing Milk. .
Variations in The Costs of Producing Milk by Size
Man Equivalents of Labor and Labor Efficiency .
Rate of Turnover of Cows in The Milking Herd. .
Average Inventory Value, Purchase Price and Sales
Head . . . . ..
Seasonal Distribution of Milk Production. .


* .
* .
* .
* .
* .
* *
of Farm .
* .
* .
Price per
* .
* .


Distribution of Total Production of Milk by Classes .
Comparison of Selected Factors for Dairies in Three Areas of
Florida. . . . . . .
Comparison of Selected Factors for Dairies in 1949 and 1959 .
Summary . . . .


Department of Agricultural Economics and
Florida Milk Commission, Cooperating
Florida Agricultural Experiment Stations
Gainesville, Florida


4


J6
3
5
5
5
10
16
21
21

25
27
27

29
35
40













SUMMARY OF COSTS AND RETURNS FOR WHOLESALE DAIRY FARMS IN
THE TAMPA BAY AREA OF FLORIDA, AVERAGES FOR THE
CALENDAR YEAR, 1959

This report presents the results of a study of dairy farms in the
Tampa Bay Area of Florida to obtain data on costs and returns from pro-
ducing milk during the 1959 calendar year. This survey was made by members
of the Department of Agricultural Economics of the Florida Agricultural
Experiment Station in cooperation with the Florida Milk Commission.


Method of Selecting Dairies to Be Studied

To aid in selecting a sample for this study, the Milk Commission
supplied data for each producer in the area giving the base gallons per day
for the 1959 base setting period. There was a total of 224 producers in
the Tampa Bay Area with daily bases that ranged from 84 to 1920 gallons
(Table 1). Forty-two percent of the producers had a daily base of less
than 225 gallons per day with about 16 percent of the total base production.
Thirty-one percent of the producers had a base of 225 to 449 gallons per day
and 28 percent of the total base production. Only 27 percent of the
producers had a base of 450 gallons or more per day but this group had 56
percent of the total daily base production.


Table l.--Variation in The Number of Producers by Base Gallons per Day,
Dairy Farms, Tampa Bay Area Florida, 1959 Base Period.

S: : Percent of total for
Base gallons : Number of :Average base: Number of : Base gallons
per day : producers : gallons : producers : per day

Small:
Less than 125 44 80 19.6 4.4
125-224 51 174 22.8 11.2

Medium:
225-324 34 275 15.2 11.7
325-449 35 381 15.6 16.7

Large:
450-599 24 508 10.7 15.3
600-899 22 736 9.8 20.3
900 or more 14 1161 6.3 20.4

Total or average 224 356 100.0 100.0











In making the survey, it was decided to eliminate producer-distributors
unless the dairy farm was completely separate from the distribution part of
the business. This eliminated 10 farms leaving a total of 214 farms for
sampling purposes. Using the data on 1959 base gallons per day, a sample
of farms to be surveyed was randomly selected to represent producers in
various size groups. Table 2 shows the number of records obtained in each
size group and the proportion the farms surveyed were of all farms. Usable
records were obtained for 50 farms. The location of these farms is shown
in Fig. 1. Since a disproportionate sample was taken, the various groups
were weighted as indicated in summarizing the data.

In summarizing and presenting the data, the farms were grouped into
three size groups--small, medium and large. Small dairies were those with
a daily base of less than 225 gallons, medium size dairies, 225 to 449
gallons and large dairies, those with a daily base of 450 gallons or more
per day.


Table 2.--Number of Wholesale Producers, Number and Percent of Producers
for which Data were Obtained and Group Weights by 1959 Base
Gallons per Day, Wholesale Dairy Farms, Tampa Bay Area Florida.

: : Number of : Percent of :Group weight
Base gallons : Total number : producers : total farms : for
per day : of producers : surveyed : surveyed : summary

Small:
Less than 125 44 7 15.9 6.29
125-224 47 9 19.1 5.24

Medium:
225-324 31 6 19.4 5.15
325-449 35 7 20.0 5.00

Large:
450-599 23 6 26.1 3.83
600-899 22 8 36.4 2.75
900 or more 12 7 58.3 1.72

Total or average 214 50 23.4 -















Hernando
/-- -


( Pasco

{ 'Hillsborough '



5i i H ar. I
I I


~anatee Hard


I--


Polk


'I

lee ; \
Si.
t L


S' Highlands
De Soto
7Sarasota -I

\-^----T-- --

\. \ Charlotte Glades '
-r- ------ .- --


./ Hendry
SLee -- ,

--j


Fig. l.--Location of Dairy Farms Studied, Tampa Bay Area Florida.






Method of Calculating Cost

Information for each farm included in the study was obtained in a
personal interview with the farm operator. Data on income and expenses
were taken from accountants' records or copies of the 1959 income tax re-
turns. Data on gallons and value of milk sold and percent butterfat were
copied from statements received by farmers for each pay period. If
statements were not available, the information was obtained directly from
the plants to which the cooperating farmers delivered their milk.


I


I "











All farms surveyed except one were specializing in dairying with
receipts from the dairy enterprise being the only source of income. On
this farm, necessary information was obtained to separate all data relating
to the dairy enterprise from the rest of the farm business. The data in
this summary relate only to the dairy part of the farm business.

In calculating the cost of producing milk, all expenses were charged
directly to the dairy enterprise. No attempt was made to separate the cost
of replacements being raised from that of the milking herd. However, the
increase in value of young stock was considered as a credit to the dairy
enterprise and thus tended to reduce the amount of net depreciation for all
livestock. Expenses for labor, seed, fertilizer and other costs for pro-
ducing harvested feeds or pastures were charged directly to the dairy
enterprise. This method tended to charge these items to the dairy
enterprise at their costs of production.

The production of milk on each farm was adjusted to a 4 percent fat
corrected (F.C.M.) basis to correct production on individual farms for
variations in percent butterfat of milk produced.. Costs and returns per
gallon of milk were calculated on the basis of the number of gallons of 4
percent F. C. M. milk sold. No credit was allowed for milk used on the
farm or in the home.

In obtaining information relating to the number of cows in the dairy
herd, data were obtained on the number of cows in the herd at the beginning
and end of the year and also the number of cows added to and removed from
the herd each month. This made it possible to calculate the number of cows
in the herd the first of each month. Two averages were calculated for the
number of cows in the herd. One average was based on an average of the
number at the beginning and end of the year. A second average was a "13
month inventory" based on an average of cows on hand the first of each
month and at the end of the year. Except where indicated all average per
cow figures shown in the report are based on the 13 month inventory
average.


1/Four percent fat corrected milk is calculated as follows: (.4 x
pounds of milk) plus (15 x pounds of butterfat). If on Farm A and B, the
average production per cow was 800 gallons per year and the average butter-
fat test 4.3 and 3.9 percent, respectively, the production per cow in terms
of 4 percent F. C. M. milk would be 836 gallons on Farm A and 788 gallons
on Farm B.











Size of Farms Studied
The farms included in this study had daily bases that ranged from 50
to 1290 gallons (Table 3). Bases were less than 225 gallons per day on 16
farms, 225 to 449 gallons on 13 farms and 450 gallons or more per day on 21
farms. On the basis of average volume sold per day in 1959, the farms
varied from a low of 63 gallons to a high of 1098 gallons. The average
daily sales for small, medium and large farms were 159, 347 and 724 gallons,
respectively. Table 3 shows an array of the farms surveyed for selected
items according to the daily base gallons as set during the 1959 base
period.


Acres Operated and Use of Land

Farms from which records were obtained operated an average of 296
acres, of which 65 acres, or 22 percent, were rented and 231 acres were
owned (Table 4). Acres operated averaged 136 on small farms, 348 on medium
size farms and 490 acres on large farms.

Most of the open land on these dairy farms was in permanent pasture.
On all farms improved permanent pasture averaged 158 acres per farm. Only
5 acres were in temporary pasture. A small acreage of forage crops was
harvested. On all farms, an average of 24 acres of forage crops was
harvested as hay, 7 acres as silage and 8 acres cut and fed green.
Thirty-three of the 202 acres reported in forage crops and open pastures
were double- cropped leaving a total of 169 acres devoted to these uses.

Total acres operated averaged 1.78 per cow on all farms. This amount
was 1.59 acres on small farms, 2.20 on medium size farms and 1.61 acres on
large farms. The acres of harvested crops and open pasture per cow did not
vary a great deal by size of farm. Land devoted to improved pasture
averaged .89 acre per cow on small and medium and 1.02 acres on large
farms. Forage crops harvested per cow were greater on medium size farms
than on other farms. However, only .38 acre of forage crops was harvested
per cow on these farms.


Distribution of Operator's Capital

Estimates were obtained from operators interviewed as to the current
value of their various capital assets. Real estate was valued at what each
operator considered it to be worth for agricultural purposes, In many
instances they had refused offers for their properties much higher than the
values placed on them in the study. Average capital investment amounted to
$145,409 for all farms, or an average investment of $849 per cow (Table 5).
Fifty-three percent of the total investment was in land and buildings and
38 percent in livestock. The value of rented capital was not included in
the average investment figure.












Table 3.--Base Gallons per Day, Gallons of Milk Sold per Day, Average B. F.
Test, Average Number of Cows and Gallons of 4 Percent F. C. M.
Milk Sold per Cow per Year and per Day, Wholesale Dairy Farms,
Tampa Bay Area Florida, 1959.

: : Gallons of: :Average : Gallons of 4 percent
Farm :Base gallons: milk sold : B. F. :number :F.C.M. milk sold per cow
No. :per day,1959: per day, : test : of : Per : Per
:base period : 1959 :(pct.) : cows-I : year : day


Small Farms


3
6
5
4
2
7
1
14
15
11
8
13
10
12
9
16
Average


50
55
65
90
92
117
123
130
142
146
153
180
189
198
201
212
130


63
76
106
79
85
268
131
209
198
245
156
173
189
206
253
170
159"


3.84
4.10
3.93
4.17
3.89
4.15
4.39
3.97
4.27
3.97
3.99
4.16
3.58
4.40
3.89
3.96
4.05


34.0
65.3
57.5
53.2
34.2
152.5
90.4
155.2
86.1
129.3
60.8
100.8
73.9
103.7
130.5
59.5
85.5


660
433
669
555
889
656
560
489
871
689
932
642
874
772
697
1038
686


1.81
1.19
1.83
1.52
2.44
1.80
1.53
1.34
2.39
1.89
2.55
1.76
2.39
2.12
1.91
2.84
1.88


Medium Farms


19
18
20
22
21
17
28
25
24
29
26
23
27
Average


253
264
287
302
304
321
332
338
356
360
410
428
446
337


285
284
420
278
305
424
321
412
175
320
364
380
527
347


4.41
4.04
3.81
4.10
3.96
3.77
3.86
3.89
4.23
3.91
4.-00
3.99
4.04
3.99


120.9
146.2
158.9
113.2
150.9
175.5
177.2
215.1
108.2
159.5
179.2
146.7
207.0
157.9


913
713
938
910
733
852
650
707
612
736
742
971
944
801


2.50
1.95
2.57
2.49
2.01
2.33
1.78
1.94
1.68
2.02
2.03
2.66
2.59
2.19












Table 3.--Continued.


: : Gallons of: :Average : Gallons of 4 percent
Farm :Base gallons: milk sold : B. F. :number :F.C.M. milk sold per cow
No. :per day,1959: per day, : test : of : Per : Per
:base period : 1959 :(pct.) : cows1 : year day


31
35
32
34
30
33
40
38
36
42
37
39
41
43
45
49
47
46
50
48
44
Average


471
474
510
523
526
542
642
658
72.?
734
757
820
858
884
913
922
967
1045
1079
1093
1290
719


477
665
596
524
542
511
723
695
766
697
694
710
839
877
796
1071
917
955
1092
1098
1079
724


Average
all farms 351


Large Farms

3.81 232.5
3.93 267.5
3.70 230.0
3.98 226.5
3.79 242.5
4.28 246.6
4.07 285.2
3.76 325.2
3.82 336,8
3.99 290.2
4.04 26C(,
4.13 27S.5
3.76 375.6
3.81 283.6
4.08 297.2
4.07 536.0
3,99 412.2
3,91 378.2
3.88 331.6
3.86 496.3
4.01 502.8
3.93 303.8


3.97 166.0


a 13 month inventory.


738
898
904
843
791
789
935
755
807
876
977
948
786
1096
990
744
811
909
1181
790
784
861


802


2.02
2.46
2.48
2.31
2.17
2.16
2.56
2.07
2.21
2.40
2.68
2.60
2.15
3.00
2.71
2.04
2.22
2.49
3.24
2.16
2.15
2.36


2.20


I/Based on












Table 4.--Total Acres Operated and Use of Land, Wholesale Dairy Farms,
Tampa Bay Area Florida, 1959.


Item : Your : Size of farm : All
: farm : Small : Medium :Large : farms
Average Acres per Farm


Acres Oerated:
Owned
Rented
Total
Use of Land:
Cropland and open pasture
Forage crops harvested as:
Hay
Silage
Cut green
Temporary pasture
Permanent pasture:
Improved
Other
Total
Less acres double -cropped
Total crops and open pasture
Woodland pastured
Other land
Total operated


96
40
136



10
~I--
6
13

76

105
14
91
38
7
136


Average Acres per Cow


Acres Operated:
Owned
Rented
Total
Use of Land:
Cropland and open pasture
Forage crops harvested as:
Hay
Silage
Cut green
Temporary pasture
Permanent pasture:
Improved
Other
Total
Less acres double- cropped
Total crops and open pasture
Woodland pastured
Other land
Total operated


1.12
.47
1.59



.12

.07
.15

.89
- L23
1.23
.17
1.06
.45
.08
1.59


214
134
348



40
19
-


141

200
59
141
188
19
348


466
24
490



25
5
19


309

358
37
321
109
60
490


231
65
296



24
7
8
5

158

202
33
169
103
24
296


1,36
.84
2.20



.26
.12



.89

1.27
.38
.89
1.19
.12
2.20


1.53
.08
1.61



.08
.02
.06


1.02

1.18
.12
1.06
.36
.19
1.61


1.39
.39
1.78



.15
.04
.05
.03

.95

1.22
.20
1.02
.62
.14
1.78








-9-


Table 5.--Distribution of Operator's Capital, Wholesale Dairy Farms,
Tampa Bay Area Florida, 1959.


: Size of farm
Item : Your : : All
: farm : Small : Medium : Large : farms
Average Amount per Farm


Land and improvements
Dairy buildings
Other buildings
Total raal estate
Livestock
Dairy equipment
Trucks and automobiles
Other machinery and equil
Feed and supplies
Total


Land ard improvements
Dairy buildings
Other buildings
Total real estate
Livestock
Dairy equipment
Tricks and automobiles
Other machinery and equil
Feed and supplies
Total


_-- $31,407 $ 47,169
____ 6,863 7,802
1,946 3,694
40,216 58,665
____ 25,824 50,339
__ 3,357 6,149
1,192 2,339
____ 2,216 2,477
151 -
72,956 119,969


Average Amount per Cowl
$3C5
S 80
22
467
300
39
14
)ment 25
2
847


Percent of Total


Land and improvements
Dairy buildings
Other buildings
Total real estate
Livestock
Dairy equipment
Trucks and automobiles
Other machinery and equipment
Feed and supplies
Total


$287
48
22
357
307
37
14
15

730


Investment


43.0
9.4
2,7
55.1
____ 35.4
4.6
1.6
3.1
2
100.0


39.3
6.5
3.1
48.9
42.0
5.1
1.9
2.1

100.0


I/Based on average number of cows on hand at beginning
year.


and end of the


$131,686
16,834
10,787
159,307
109,213
9,964
4,953
6,458
640
290,535


$418
54
34
506
347
32
16
20
2
923


$ 62,978
9,808
4,840
77,626
55,596
5,978
2,547
3,427
235
145,409


$368
57.
28
453
325
35
15
20
1
849


45.3
5.8
3.7
54.8
37.6
3.4
1.7
2.3
.2
100.0


43.3
6.8
3.3
53.4
38.2
4.1
1.8
2.3
.2
100.0








-10-


Operator's investment averaged $72,956 on small farms and $290,535
on large farms. Average investment per cow was $847 on small farms and
$923 on large farms. The average investment per cow was only $730 on
medium size farms which was the lowest of either size group.

In terms of capital owned, operators of small farms valued their land
and buildings at $419 per acre, medium size farms, $274 per acre and large
farms, $342 per acre. The average value for all farms was $336 per acre.


Annual Costs and Returns in Producing Milk

The annual cost of producing milk depends on many factors. Cost will
vary depending on the amount and price of various items used in production
and the volume of production obtained. Table 6 shows the average size of
herds on farms of various sizes, the total amount of milk sold per farm per
year in 1959, the average B. F. test and the amount of 4 percent F. C. M.
milk sold. Table 7 shows the amount of income and the production costs for
all farms surveyed on a per farm, per cow and per unit of 4 percent F. C. M.
milk sold basis.
Table 6.--Average Number of Cows, Milk Sold per Farm per Year, Average B. F.
Test,and Amount of 4 Percent F.C.M. Milk Sold per Farm per Year,
per Cow per Year and per Cow per Day, Tampa Bay Area Florida,
1959.

Im :Your : Size of farm : All
Item
:farm : Small : Medium : Large : farms
Average number of cows:
"13 month inventory" 85.5 157.9 303.8 166.0
Average number at beginning
and end of the year 86.3 164.2 314.8 171.2
Milk sold per farm per year--
gallons ___ 58,211 126,763 264,274 134,239
Average B. F. test--percent 4.05 3.99 3.93 3.97
Amount of 4 percent F.C.M. milk:
Sold per farm per year--Gallons 58,665 126,529 261,605 133,649
Sold per cow per year:
Based on average of 13 month
inventory:
Gallons 686 801 861 805
Pounds 5900 6889 7405 6923
Based on average of number
at beginning and end of the
year:
Gallons 680 770 831 781
Pounds 5848 6622 7147 6717







-11-
Table 7.--Summary of Costs and Returns, All Farms, Wholesale Dairy Farms,
Tampa Bay Area Florida, 1959.

:Total amount:Percent:Average per unit of
Item : Per :Per : of :4% F.C.M. milk sold
: farm :cow : total :Per gallon:Per cwt.
Cents


Income:
Milk sales
Bags and manure
Calves sold
Other
Total income
Production Costs:
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Feed purchased
Fertilizer, lime, seed, etc.
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expenses
Taxes and licenses
Insurance
Legal and auditing
Machine hire
Rent of farm or pasturage
Repairs--buildings and equipment
Miscellaneous cash expenses
Total expenses before
depreciation and interest
Depreciation:
Net depreciation on livestock
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Cost
Less value of minor products
Net cost of milk sold
Returns:
Net returns
Returns to operator:
For labor and supervision
For average capital owned
Percent return on investment


$78,476
268
516
215
79,475


$473
2
3
1
479


10,685 65
590 3
5,002 30
16,277 98
38,492 232
1,602 10
255 2
527 3
1,923 12
1,658 10
370 2
1,210 7
1,406 8
64 1/
1,005 6
600 4
214 1
108 1
403 2
2,237 14
946 6

69,297 418


577
1,381
1,183
787
923
4,851

7,270
81,418
999
80,419


3
8
7
5
6
29

44
491
-6
485


98.8
.3
.6
.3
100.0


13.1
.7
6.2
20.0
47.3
1.9
.3
.7
2.4
2.0
.4
1.5
1.7
.1
1.2
.7
.3
.1
.5
2.8
1.2

85.1

.7
1.7
1.5
1.0
1.1
6.0

8.9
100.0


-1,943 -12


3,059
5,327
3.66


58.72
.20
.39
.16
59.47


8.00
.44
3.74
12.18
28.80
1.20
.19
.39
1.44
1.24
.28
.90
1,05
.05
.75
.45
.16
.09
.30
1.67
.71

51.85

.43
1.03
.89
.59
.69
3.63

5.44
60.92
.75
60.17

-1.45

2.29
3.99


$6.83
.02
.04
.02
6.91


.93
.05
.44
1.42
3.35
.14
.02
.05
.17
.14
.03
.10
.12
.01
.09
.05
.02
.01
.04
.19
.08

6.03

.05
.12
.10
.07
.08
.42

.63
7.08
.08
7.00

-.17

.27
.46


1/Less than 50 cents.








-12-


The data on costs and returns are based on averages weighted to
represent the distribution of dairy farms in the Tampa Bay Area by size of
farm and for all farms. In each case, per unit costs and returns are shown
in terms of amount of 4 percent F. C. M. milk sold. All dairies did not
have exactly the same classification of items of expenses. What one dairy
charged to dairy supplies, for example, another dairy may have charged to
other classifications of expenses. No complete check could be made to be
sure that each item of expense was classified uniformly. Reclassifications
were made when differences were apparent and the resulting averages are
believed to be reasonably uniform. Regardless of the classification of
individual items, however, total income and expenses would remain the same.

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

Milk sales.--This item represented the amount received for all milk
sold. Average milk sales amounted to $473 per cow. The average price was
58.72 cents per gallon of 4 percent F. C. M. milk.

Other income.--Included in other income is the sale of veal calves,
bags, manure, appreciation in the dairy herd and certain miscellaneous
income such as soil conservation payments, gas tax refund, etc. Miscel-
laneous income amounted to $6 per cow, or ,75 cent per gallon of milk sold.
In these records, no credit was given for milk used by the operator and
hired labor or fed calves on the farm. No credit was given for manure that
was not sold.

Labor.--Labor cost was divided into hired labor, unpaid family labor
and operator's labor. The cost for hired labor represents the amount of
cash payments to dairy help. Allowances for privileges, such as a house to
live in, electricity, or milk furnished are in addition to the cash costs.
The cost of privileges is included in other items of expenses such as taxes,
repairs and depreciation on buildings. Cost of hired labor amounted to $65
per cow, or 8.00 cents per gallon of milk sold.

Unpaid family labor where 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 reported on 15 of the 50
farms surveyed. The amount of unpaid family labor averaged $3 per cow, or
.44 cent per gallon of milk sold.

Operator's labor was the value of the time spent by the operator in
working with the dairy enterprise and in the management of the business.
Operators of small farms usually spent most of their time working with the
dairy enterprise. On large farms, many operators devoted the majority of
their time to managing the business. In a few cases, a father and son or
two brothers worked together in operating a farm, and both were listed as
operators. There were the equivalent of 52 operators on the 50 farms
surveyed. Two farms were operated by a hired manager and there was no
charge for operator's labor. Some operators estimated they spent only a







-13-


part of their time in operating the business. Each operator was asked to
estimate the value of his services and that amount 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 management. The value of operator's labor averaged $5,002 per farm,
or 3.74 cents per gallon of milk sold.

Total cost of all labor amounted to $98 per cow, or 12.18 cents per
gallon of milk sold. Labor costs were the second largest item of expenses
and amounted to 20 percent of the gross costs. The cost of labor and feeds
purchased amounted to 67 percent of the gross cost of producing milk.

Feed.--This item included the cost for all kinds of purchased feed fed
during the year. The cost of feed purchased was adjusted for any changes
in inventory between the beginning and end of the year. A decrease in
inventory was added to the cost of feed purchased. An increase in inventory
was subtracted from the cost. Cost of feed included that fed all other
livestock in addition to the producing herd. Average cost of feed
purchased amounted to $232 per cow, or 28.80 cents per gallon of milk sold.
Feed costs on individual farms ranged from 20.28 to 36.69 cents per gallon
of milk sold. Feed made up 47 percent of the gross cost of producing milk.

Fertilizer, lime, seed, etc.--This item covered the amount paid for
materials applied to pastures and for producing forage crops in 1959. The
amount does not include labor or machine work for applying the material if
done by regular farm workers as the cost of these are included in other
classifications. The cost of fertilizer, lime and seed averaged $10 per
cow, or 1.20 cents per gallon of milk sold.

Breeding fees.--This was the amount paid for artificial breeding.
Many operators did not use this service or artificially bred only a part of
their cows. Breeding fees averaged $255 per farm.

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

Dairy supplies.--This item included such supplies as soap, washing
soda, disinfectants, sprays and small replacement items. Dairy supplies
amounted to 1.44 cents per gallon of milk sold.

Transporting milk.--Many of the farmers hired their milk hauled. This
item was the amount paid for milk hauling. If a farmer hauled his own milk,
the cost of hauling is included as a part of gas and oil, repairs and
depreciation. The cost of hauling milk averaged 1.24 cents per gallon of
milk sold, not including cost for farmers who hauled their own milk.

Dues.--This amount included deductions for the Florida Milk Commission,
dues to local producer organizations and to other farm organizations.
Payments for DHIA testing was put in miscellaneous expenses.








-14-


Gas, oil, fuel.--These were expenditures for gas and oil to operate
tractors, trucks and other farm equipment and fuel oil for firing boilers.
These expenditures amounted to 0.9 cent per gallon of milk sold.

Electricity.--This was the cost of electricity used in operating
milking machines, refrigeration units, lights for dairy buildings and
houses of hired help when paid by the operator. Electricity cost 1.05 cents
per gallon of milk sold.

Telephone, office expenses.--This item included cost of telephone
charged to the dairy and cost of office supplies such as ledgers and
postage.

Taxes and licenses.--Included in this amount was the cost of taxes on
real estate, livestock and equipment and the costs of truck, automobile
and other licenses.

Insurance.--This was the amount paid for buildings, livestock,
liability and other insurance premiums.

Legal and auditing.--This was the amount spent for fees for accountants,
attorneys and other legal expenses.

Machine hire.--This was the amount spent for equipment hired on a
custom or cash basis.

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

Repairs--buildings and equipment.--This was the amount spent for the
repair of dairy buildings, dairy and farm equipment, and trucks and
tractors during the year. Repairs amounted to $14 per cow, or 1.67 cents
per gallon of milk sold.

Miscellaneous cash expenses.--This item included a number of small
items such as freight, travel in connection with the purchase of livestock,
and miscellaneous items that were grouped as such in the records of the
farmers.

Depreciation.--Depreciatio;1 was charged to cover normal use of capital
items used in the dairy business. The amount of depreciation was calculated
as follows:

Depreciation on livestock was calculated as the net change in the
value of the herd, including the milking herd, bulls and young stock being
raised, from the beginning to the ending inventory. The method used was:
(value of all livestock at the beginning of the year + cost of all
purchases) minus (value of all livestock at the end of the year + amount
received from all sales) equals net change in value for the year. This








-15-


method gives a depreciation expense based on the actual turnover and loss
experienced in the year under consideration. It considers cattle deaths
during the year as they are in the beginning inventory or purchases but not
in the ending inventory. It also adjusts depreciation for the increase in
value of young stock raised during the year. Increase in value of young
stock tends to balance costs included for raising them in feed, labor and
other costs. If there was a net increase in value for the year, it was
listed as an appreciation. In each case the net change in value as
calculated was adjusted for the value of veal calves sold since the amount
of this item was listed as a part of other income.

Net depreciation on all livestock amounted to $3 per cow, or only .43
cent per gallon of milk sold. On the average 25 percent of all re-
placements were raised on the farms. This tended to reduce the amount of
net depreciation. However, the raising of replacements resulted in a
higher cost for feed, labor and other items.

Depreciation on buildings and equipment was calculated on the basis of
the cost of the items. The rate of depreciation varied depending on the
operator's estimated usable life of the items. Based on the average
inventory values at the beginning and end of the year the amount charged
for depreciation in percent of average value was as follows: buildings
and fences, 9.4 percent; dairy equipment, 19.8 percent; auto and trucks,
30.9 percent and tractors and miscellaneous equipment, 26.9 percent.
Automobiles used personally, as well as in the dairy business, were
depreciated only for the estimated proportion used for the farm.

Total depreciation amounted to $4,851 per farm, $29 per cow, or 6.0
percent of the gross cost of producing milk. On the basis of a gallon of
milk sold, depreciation averaged 1.03 cents for buildings and fences, .89
cent for dairy equipment, .59 cent for auto and trucks and .69 cent for
tractors and miscellaneous equipment.

Interest on investment.--A successful farm business should pay all
cash costs, pay the owner or operator a return for his labor and super-
vision, 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 paid on borrowed capital does not cover 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 was made based on
5 percent of the average capital investment. No interest was charged on
working capital or cash required to operate the business. Interest was
calculated at 5 percent, as this is the approximate rate on long-term farm
mortgages.

The interest charged averaged $44 per cow, or 5.44 cents per gallon of
milk sold. On these farms the amount of interest actually paid in 1959
amounted to $1,873 per farm, or 1.4 cents per gallon of milk sold.








-16-


Gross costs.--This is the sum of direct and indirect items of expenses
as explained above. The gross cost of keeping a cow for a year was $491,
or 60.92 cents per gallon of milk sold.

Net cost of milk sold.--The net cost of milk sold was obtained by
subtracting the value of minor products such as bags and manure, veal
calves, appreciation, etc., from the gross cost of producing milk. The
value of minor products averaged $6 per cow, or .75 cent per gallon of
milk sold. Thus, the net cost per gallon of milk sold was 60.17 cents.

Net returns.--Net returns is the difference between total income and
gross costs. On these farms when all costs were considered as explained
above, the returns from the dairy enterprise on a per cow basis failed by
$12 to cover costs. Tis was a loss of 1.45 cents per gallon of milk sold.
This does not mean the dairy enterprise was not making money. It means the
operators did not receive a 5 percent return on their investment and a
payment equal to the value they placed on their labor and management in
addition to covering all other costs of operating the business.

Returns to the operator for labor and supervision.--This is the amount
available to the operator for his labor, supervision and conduct of the
dairy enterprise after covering all expenses including a charge of 5 percent
for the use of his capital required in the farm business. This figure was
obtained by adding the value of operator's labor to the net returns. Aver-
age returns for operator's labor and supervision for all farms amounted to
$18 per cow, or 2.29 cents per gallon of milk sold.

Returns on average investment.--This is the return for operator's
capital invested in the business after paying all expenses including an
allowance to the operator for his labor, supervision and management. The
amount is not a return in addition to the return to the operator for his
labor and supervision but is a different way of expressing returns. Re-
turns on investment was computed by adding the charge for interest 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. It was assumed that this amount covered cost of
capital invested by the landlord. Returns on investment averaged $32 per
cow, or 3.99 cents per gallon of milk sold.


Variations in The Costs of Producing Milk by Size of Farm

As indicated on page 2, the dairies were divided into size groups
based on the size of the daily base gallons as set during the 1959 base
period. The samples were selected and weighted to represent the farms in
each size group. The average cost of producing milk was calculated for
each size group. The data by size of farm are shown in Tables 8, 9, 10
and 11.







-17-
Table 8.--Average Total Income and Production Costs per Farm, by Size of
Farm, Wholesale Dairy Farms, Tampa Bay Area Florida, 1959.

: Your : Size of farm
Item : farm : Small : Medium : Large


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
Other
Total income
Production Costs:
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Feed purchased
Fertilizer, lime, seed, etc.
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expenses
Taxes and licenses
Insurance
Legal and auditing
Machine hire
Rent of farm or pasturage
Repairs--buildings and equipment
Miscellaneous cash expenses
Total expenses before
depreciation and interest
Depreciation:
Net depreciation on livestock
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Cost
Less value of minor products
Net cost of milk sold
Returns:
Net returns
Returns to operator:
For labor and supervision
For average capital owned
Percent return on investment


$33,389
185
245
1,181
157
35,157


$74,153
287
537


140 399
75,117 157,160


4,307 9,794
602 330
4,610 4,728
9,519 14,852
15,855 35,107
980 953
201 147
210 406
804 2,256
1,150 1,704
133 365
633 1,137
790 1,513
40 94
465 787
209 667
60 293
63 51
328 608
910 2,237
150 824

32,500 64,001


814
675
226
490
2,205

3,648
38,353
.1,768
36,585


-3,196


1,414
452
.63


1,360
1,164
1,135
737
696
5,092

5,999
75,092
964
74,128

25


4,753
6,024
5.02


$155,463
376
922


21,900
872
5,943
28,715
78,552
3,347
468
1,175
3,322
2,415
756
2,217
2,265
68
2,117
1,147
369
243
286
4,354
2,358

134,174

2,474
2,538
2,050
1,738
1,879
10,679

14,527
159,380
1,697
157,683

-2,220


3,723
12,307
4.24







-18-
Table 9.--Summary of Costs and Returns per Cow, Wholesale Dairy Farms,
Tampa Bay Area Florida, 1959.

: Your : Size of farm
Item : farm : Small : Medium : Large


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
Other
Total income
Production Costs:
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Feed purchased
Fertilizer, lime, seed, etc.
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expenses
Taxes and licenses
Insurance
Legal and auditing
Machine hire
Rent of farm or pasturage
Repairs--buildings and equipment
Miscellaneous cash expenses
Total expenses before
depreciation and interest
Depreciation:
Net depreciation on livestock
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average invea2ient
@ 5 percent
Total Gross Cost
Less value of minor products
Net cost of milk sold
Returns:
Net returns
Returns to operator:
For labor and supervision
For average capital owned


$390
2
3
14
2
411


50
7
54
111
186
11
2
2
10
13
2
7
9
1
5
2
1
1
4
11
2

380


9
8
3
6
26

43
449
21
428


$470
2
3

1
476


62
2
30
94
223
6

3
14
11
2
7
10
1
5
4
2
1/
4
14
5

406

9
7
7
5
4
32

38
476
6
470


$512
1
3

1
517


72
3
20
95
259
11
2
4
11
8
2
7
7
1/
7
4
1
1
1
14
8

442

8
8
7
6
6
35

48
525
6
519

-8

12
40


1/Less than 50 cents.







-19-
Table 10.--Summary of Costs and Returns per Gallon of 4 Percent F.C.M, Milk
Sold, by Size of Farm, Wholesale Dairy Farms, Tampa Bay Area
Florida, 1959.

: Your : Size of farm
Item : farm : Small : Medium : Large
-- Cents- - -


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
Other
Total income
Production Costs:
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Feed purchased
Fertilizer, lime, seed, etc.
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expenses
Taxes and licenses
Insurance
Legal and auditing
Machine hire
Rent on farm or pasturage
Repairs--buildings and equipment
Miscellaneous cash expenses
Total expenses before
depreciation and interest
Depreciation:
Net depreciation on livestock
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Cost
Less value of minor products
Net cost of milk sold
Returns:
Net returns
Returns to operator:
For labor and supervision
For average capital owned


-5.45

2,41
.77


56.91
.32
.42
2.01
.27
59.93


7.34
1.03
7.86
16.23
27.03
1.67
.34
.36
1.37
1.96
.22
1.08
1.34
.07
.79
.36
.10
.11
.56
1.55
.26

55.40


1.39
1.15
.38
.84
3.76

6.22
65.38
3.02
62.36


58.60
.23
.42

.11
59.36


7.74
.26
3.74
11.74
27.75
.75
.11
.32
1.78
1.35
.29
.90
1.20
.07
.62
.53
.23
.04
.48
1.77
.65

50.58

1.07
.92
.90
.58
.55
4.02

4.74
59.34
.76
58.58

.02

3.76
4.76


59.43
.14
.35
-
.15
60.07


8.37
.33
2.27
10.97
30.03
1.28
.18
.45
1.27
.92
.29
.85
.87
.02
.81
.44
.14
.09
.11
1.67
.90

51.29

.95
.97
.78
.66
.72
4.08

5.55
60.92
.64
60.28

-.85

1.42
4.70







-20-


Table ll.--Percent of Total Income and Percent of Total Costs for Various
Items, by Size of Farm, Wholesale Dairy Farms, Tampa Bay Area
Florida, 1959.

: Your : Size of farm
Item : farm : Small : Medium : Large
- Percent- - -


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
Other
Total income
Production Costs:
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Feed purchased
Fertilizer, lime, seed, etc.
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expenses
Taxes and licenses
Insurance
Legal and auditing
Machine hire
Rent of farm or pasturage
Repairs--buildings and equipment
Miscellaneous cash expenses
Total expenses before
depreciation and interest
Depreciation:
Net depreciation on livestock
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Cost


95.0
,5
.7
3.4
.4
100.0


11.2
1.6
12.0
24.8
41.3
2.6
.5
.5
2.1
3.0
.3
1.7
2.0
.1
1.2
.5
.2
.2
.9
2.4
.4

84.7


2.1
1.8
.6
1.3
5.8


98.7
.4
.7
-
.2
100.0


13.1
.4
6.3
19.8
46.7
1.3
.2
.5
3.0
2.3
.5
1.5
2.0
.1
1.0
.9
.4
.1
.8
3.0
1.1

85.2

1.8
1.6
1.5
1.0
.9
6.8


9.5 8.0 9.1
100.0 100.0 100.0


98.9
.2
.6
-
.3
100.0


13.8
.5
3.7
18.0
49.3
2.1
.3
.7
2.1
1.5
.5
1.4
1.4
.1
1.3
.7
.2
.2
.2
2.7
1.5

84.2

1.5
1.6
1.3
1.1
1.2
6.7








-21-


Large size farms had the highest average price per gallon of milk sold:
59,43 cents compared to 56.91 for the small size farms. Large farms also
had the largest gross income per gallon.

The net cost per gallon of milk sold was 62.36 cents on small farms
and 60.28 cents on the large farms, or a difference of 2.09 cents. However,
medium size farms had an average net cost of 58.58 cents per gallon. This
was 3.78 cents less than cost on small farms and 1.69 less than the cost
on large farms. The main items that varied in cost were feed, labor and
depreciation. Purchased feed cost per gallon of milk sold on small farms
was 3.00 cents less than on large farms, labor 5.26 cents less and
depreciation, .32 cent per gallon more, respectively. On small farms, the
average value of operator's labor and management was $4,610 per farm
compared to $5,943 on large farms.


Man Equivalents of Labor and Labor Efficiency

The amount of labor used on each farm was calculated in terms of man
equivalents by dividing total weeks of labor employed, including labor of
operator and family, by 52 weeks. This expressed the labor in terms of the
average number of men for the year. There was an average of 2.79 man
equivalents of labor on small farms, 3.93 on medium size farms and 7.67 man
equivalents on large farms (Table 12).

There was a consistent increase in the accomplishment per man as the
size of farm increased. There was an average of 30.6 cows per man on small
farms, 40.2 on medium size farms and 39.6 on large farms. Gallons of 4
percent F. C. M. milk sold per man averaged 21,027 on small farms, 32,196
on medium size farms and 34,108 on large farms.

Wages paid per week for hired labor averaged $55 on small farms, $64
on medium size farms and $66 on large farms. In addition, most of the
people working in the dairy were furnished a house and milk.

Operators of small farms valued their labor at $86 per week, medium
size farms, $100 and large farms, $105.


Rate of Turnover of Cows in The Milking Herd

Twenty-six percent of the cows covered in this study were replaced in
1959 (Table 13). At this rate the average cow would remain in the herd
3.9 years. The rate of replacement was 17.9 percent on small farms, 30.2
percent on medium size farms and 26.6 percent on large farms.

Seventy-five percent of the additions to the herd were purchased and
25 percent raised. The percent of replacement raised was 30 on small farms,
19 on medium size farms and 26 percent on large farms. Twelve percent of
the cows taken out of the herd left because of deaths. The proportion of
cows removed because of death averaged 12 percent on small and medium size
farms and 11 on large farms. Percent death loss in all herds averaged 3.0
percent based on an average of the number of cows on hand at the beginning
and end of the year.








-22-


Table 12.--Base Gallons per Day, Man Equivalents of Labor, Cows per Man,
and Amount of 4 Percent F.C.M. Milk Sold per Man, Wholesale
Dairy Farms, Tampa Bay Area Florida, 1959.

: :Gallons of : :Amount of 4% F.C.M. milk
Farm :Base gallons:milk sold : Man : Cows : sold per man per year
No. :per day,1959: per day, :equivalents: per :
:base period : 1959 : of labor :manL/ : Gallons : Pounds

Small Farms
3 50 63 1.30 26.2 17,265 148,479
6 55 76 2.00 32.6 14,138 121,587
5 65 106 1.29 44.6 29,808 256,349
4 90 79 1.95 27.3 15,132 130,135
2 92 85 2.02 16.9 15,059 129,507
7 117 268 5.02 30.4 19,940 171,484
1 123 131 3.18 28.4 15,934 137,032
14 130 209 4.00 38.8 18,990 163,314
15 142 198 3.50 24.6 21,421 184,221
11 146 245 3.66 35.3 24,340 209,324
8 153 156 2.29 26.6 24,760 212,936
13 180 173 3.00 33.6 21,589 185,665
10 189 189 2.06 35.9 31,362 269,713
12 198 206 3.50 29.6 22,871 196,691
9 201 253 4.13 31.6 22,022 189,389
16 212 170 2.15 27.7 28,721 247,001
Average 130 159 2.79 30.6 21,027 180,832

Medium Farms
19 253 285 4.00 30.2 27,603 237,386
18 264 284 3.00 48.7 34,758 298,919
20 287 420 4.00 39.7 37,248 320,333
22 302 278 3.23 35.0 31,895 274,297
21 304 305 3.18 47.4 34,765 298,979
17 321 424 4.18 42.0 35,757 307,510
28 332 321 3.46 51.2 33,309 286,457
25 338 424 5.29 40.7 28,753 247,276
24 356 175 3.16 34.2 20,963 180,282
29 360 326 4.00 39.9 29,356 252,462
26 410 364 4.00 44.8 33,220 285,692
23 428 380 4.53 32.4 31,447 270,444
27 446 527 5.27 39.3 37,061 318,725
Average 337 347 3.93 40.2 32,196 276,886








-23-


Table 12.--Continued.


: :Gallons of: :
Farm :Base gallons:milk sold : Man : Cows
No. :per day,1959: per day, :equivalents: per
:base period : 1959 : of labor mania /


:Aon f4. ...ml


:Amount of 4% FC.M, milk
:sold per man per year

: Gallons : Pounds


31
35
32
34
30
33
40
38
36
42
37
39
41
43
45
49
47
46
50
48
44
Average

Average
All Farms


471
474
510
523
526
542
642
658
722
754
757
820
858
884
913
922
967
1045
1079
1093
1290
719


351


477
665
596
524
542
511
723
695
766
697
694
710
839
877
796
1071
917
955
1092
1098
1079
724


368


Large Farms
6.00
7.18
5.00
6.00
8.00
6.64
7.25
8.27
9.00
6.18
6.03
8.36
9.00
9.08
6.20
13.51
9.34
11.26
8.00
9.00
9.50
7.67


4.44


38.8
37.2
46.0
37.8
30.3
37.1
39.3
39,3
37,4
47.0
42.9
33.3
41.7

479
39.7
44.1
33.6
41-4
55.1
52.9
39.6


28,602
33,460
41,570
31,811
23,968
29,298
36,771
29,682
30,208
41,153
41,914
31,575
32,827
34,240
47,433
29,16
35,798
30,533
48,946
43,562
41,506
34,108


245,977
287,756
357,502
273,575
206,125
251,963
316,231
255,265
259,789
353,916
360,460
271,545
282,312
294,464
407,923
253,838
307,863
262,584
420,936
374,633
356,952
293,329


37.4 30,101 258,869


1/Based on a 13 month inventory.







-24-


Table 13.--Average Number of Cows on Hand at The Beginning of The Year,
Number Added to The Herd, Number Taken Out of The Herd, Number
on Hand at The End of The Year and Rate of Turnover, by Size of
Farm, Wholesale Dairy Farms, Tampa Bay Area Florida, 1959.

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

On hand beginning of the year 75.8 160.5 304.4 162.8

Additions:
Purchased 25.3 45.9 77.0 45.4
Replacements raised 11.1 11.0 27.4 15.4
Total 36.4 56.9 104.4 60.8

Subtractions:
Sold 13.6 43.4 74.3 38.9
Died 1.8 6.2 9.3 5.1
Total 15.4 49.6 83.6 44.0

On hand end of year 96.8 167.8 325.2 179.6
Percent turnover 17.9 30.2 26.6 25.7
Average years in herd 5.6 3.3 3.8 3.9



For each size of farm, the average number of cows in the herds
increased between the beginning inventory and the ending inventory
(Table 14). The greatest percentage increase was on small farms where it
averaged 28 percent. This was due partly to some operators buying other
herds to increase their size. The months when the number of cows in the
herd was least was usually June and July.








-25-


Table 14.--Average Number of Cows in Herd First of Each Month and
December 31, Wholesale Dairy Farms, Tampa Bay Area Florida,
1959.

: Your : Size of farm : All
Date : farm : Small : Medium : Large : farms

January 1 76 160 304 163
February 1 77 159 300 161
March 1 76 150 300 158

April 1 75 153 295 158
May 1 83 150 290 159
June 1 81 151 285 157

July 1 87 151 285 159
August 1 87 154 292 162
September 1 90 160 309 170

October 1 92 166 316 175
November 1 95 163 321 176
December 1 96 168 325 179
December 31 97 168 325 180

Average number 85 158 304 166


Average Inventory Value, Purchase Price
and Sales Price per Head


The average value placed onmature cows at the beginning and
of the year was $286 per head (Table 15). Herd bulls were valued
per head, heifers over one year, $156 and heifers under one year,
Replacements raised that entered the milking herd during the year
valued at the time of freshening at $201 per head on small farms,
medium farms and $251 on large farms.


ending
at $285
$83.
were
$204 on


The average price paid per head for cows and springers during 1959
was $286 on small farms, $235 on medium size farms and $285 on large farms.
The average sales price of cows removed from the herd was $142 on small
farms, $174 on medium size farms and $167 on large farms.








-26-


Table 15.--Average Number and Average Value per Head for Various Classes
of Livestock, Wholesale Dairy Farms, Tampa Bay Area Florida,
1959.

: Average number of head : Average value or
Item : : : : amount per head
:Your: Size of farm : All :Your: Size of farm : All
:farm:Small:Medium:Large:farms:farm:Small:Medium:Large:farms


Average for
beginning and
end of year:
Cows
Herd bulls
Bulls to be
raised
Heifers:
Over 1 year
Under 1 year


Replacements
raised


86.3 164.2 314.8 171.2
1.4 3.1 5.3 3.0


0.6 0.4 0.6 0.5

15.4 21.1 39.7 23.6
14.7 18.4 34.7 21.2


11.1 11.0 27.4 15.4


$252 $275 $308 $286
328 225 307 285

80 76 155 104


150 138
77 72


172 156
95 83


201 204 251 225


Purchases:
Cows and
springers
Herd bulls
Bulls to be
raised
Heifers:
Over 1 year
Under 1 year


25.3 45.9 77.0 45.4
0.4 0.8 1.7 0.8


1/
2.1


- 1/ 1/

3.4 0.9
2.8 1.7


286 235 285 270
236 204 199 207


94

309
41


55 80

184 187
68 53


Sales:
Cows
Herd bulls
Bulls to be
raised
Heifers:
Over 1 year
Under 1 year


13.6 43.4 74.3 38.9
0.6 1.5 1.7 1.2


0.1


- 0.1 0.1


0.1 0.1 2.0 0.6
0.1 0.2 0.4 0.2


142 174 167 166
234 207 237 224


- 43 51


156 151
66 54


I/Less than 0.05.








-27-


Seasonal Distribution of Milk Production


One problem of dairies producing milk mainly for fluid consumption
is that of maintaining production in line with Class I needs. These
dairies were no exception. Records were obtained of milk sales by months.
These data show the seasonal distribution of milk production (Table 16).
The highest monthly production on all farms was in December. The lowest
average production was in the month of August.


Table 16.--Seasonal Distribution of Milk Production, by Size of Farm,
Wholesale Dairy Farms, Tampa Bay Area Florida, 1959.

S: Size of farm
Month : Your : All
: farm : Small : Medium : Large : farms

Average Number of Gallons Sold per Day

January 143 370 775 382
February 156 384 807 400
March 150 384 816 399

April 164 355 799 392
May 162 341 750 374
June 155 320 692 349

July 137 297 621 316
August 130 302 589 305
September 147 332 595 323

October 189 356 681 372
November 190 363 764 397
December 189 365 806 408

Average 159 347 724 368


Distribution of Total Production of Milk by Classes


Producers in the Tampa Bay Area did a reasonably good job of holding
their production of milk in line with Class I sales (Table 17). The pro-
portion of total sales in Class I varied from 86 percent on small farms to
92 percent on large farms.








-28-


Table 17.--Amount, Percent of Milk in Various Classes and Average Price
Received per Gallon, by Size of Farm, Wholesale Dairy Farms,
Tampa Bay Area Florida, 1959.


Class : Your : Size of farm : All
:farm : Small : Medium : Large : farms

Gallons of Milk
Class I 50,199 114,401 241,781 121,028
Class II 6,299 11,641 20,490 11,726
Class III 1,713 721 1,833 1,440
Other 170 45
Total 58,211 126,763 264,274 134,239

Percent of Total
Class I 86.2 90.2 91.5 90.2
Class II 10.8 9.2 7.7 8.7
Class III 3.0 0.6 0.7 1.1
Other 0.1 1/
Total 100.0 100.0 100.0 100.0

Average Price per Gall)n (Cents)

Class I 60.76 60.95 60.92 60.90
Class II 37.81 36.13 36.96 36.90
Class III 28.83 27.21 26.93 27.93

All Milk 57.36 58.50 58.83 58.46


'/Less than .05.


The proportion of sales in Class I milk varied some by months
throughout the year (Table 18). On small farms, the variation was from
78 percent in April to 99 percent in September. Medium farms varied from
a low of 85 percent in April to 98 percent in September, Large farms
varied from 86 percent in April and May to 99 percent in September.

The average price received per gallon on a non-fat corrected basis
was 60.90 cents for Class I milk, 36.90 for Class II milk and 27.93 cents
for Class III milk.








-29-


Table 18.--Monthly Variation in Percent of Total Sales as Class I Milk,
by Size of Farm, Wholesale Dairy Farms, Tampa Bay Area Florida,
1959.

: Percent of total sales as Class I
Month : Your : Size of farm : All
: farm : Small : Medium : Large farms

January 85 92 92 91
February 83 92 92 90
March 85 87 90 88

April 78 85 86 84
May 79 87 86 85
June 81 90 89 88

July 86 92 94 92
August 94 97 97 96
September 99 98 99 99

October 92 92 98 95
November 84 84 90 87
December 87 89 90 89

Average 86 90 91 90


Comparison of Selected Factors for Dairies in
Three Areas of Florida


Studies were
covering the 1958
Northeast Florida


made for dairies in Northeast and Central
calendar year. Records were obtained for
and 34 farms in Central Florida*


Florida areas
31 farms in


Farms in each area were grouped into size groups the same as in this
report. The data in the three areas should be comparable except the study
in the Tampa Bay Area was for 1959. However, data on wage rates for
Florida show no change between 1958 and 1959 (Table 19). The price of
20 percent mixed dairy feed and hay was 0.5 to 1.9 percent lower in 1959
as compared to 1958. Citrus pulp was 18.6 percent lower in 1959 than it
was in 1958. The cost of motor supplies and farm machinery was up slightly.
It is felt that the level of cost was about the same for the two years.







-30-


Table 19.--Average Farm Wage Rates and Prices of Selected Feeds, Florida,
1958 and 1959.1/

: : :Change 1958 to 1959
Item : Unit ; 1958 : 1959 : Amount : Percent

Wage rate:
Without board or room Per day $ 6.10 $ 6.10 $ 0 0
Price paid for feed:
Mixed dairy feed-20 percent
protein cwt. 4.13 4.11 -.02 -0.5
Alfalfa hay ton 66.83 66.17 -.66 -1.0
All other hay ton 64.25 63.00 -1.25 -1.9
Dried citrus pulp cwt. 2.87 2.34 .53 -18.6


1/Wage rates from Farm Labor Report, USDA. Feed prices are from Farm
Price Reports issued by Florida Crop and Livestock Reporting Service. The
annual figure for each feed is a simple average of the price reported each
month. Price of citrus pulp is the price delivered to farms in truck lots
in the Miami area.


Tables 20 and 21 show a comparison of selected factors for the average
of all farms in each of the three areas. Data for the three size groups
in each area are presented in Tables 22 and 23.

The average size dairy in Northeast Florida was somewhat larger than
that in Central Florida or the Tampa Bay Area. The average base gallons
per day as set during the 1959 base period was 395 gallons in Northeast
Florida, 332 gallons in Central Florida and 351 in the Tampa Bay Area.
The average number of cows was 231, 157 and 171 in the three areas,
respectively.

The average daily deliveries in 1958 were 433 gallons on farms in
Northeast Florida and 305 gallons in Central Florida. Deliveries in the
Tampa Bay Area in 1959 averaged 368 gallons per day. Production of milk
per cow per year on a 4 percent F. C. M. basis averaged 725 gallons for
dairies in Northeast Florida, 739 gallons in Central Florida and 781 gallons
in the Tampa Bay Area. Ave-age percent B. F. was 4.39, 4.27 and 3.97 in
the three areas, respectively. Farmers in Central Florida and the
Tampa Bay Area more nearly held their production in line with Class I
needs than those in Northeast Florida. The percent of total sales of milk
as Class I was 93 percent in Central Florida, 90 percent in the Tampa Bay
Area and 79 percent in Northeast Florida.

Due partly to a larger size, the average value of operator's capital
was greatest on dairies in Northeast Florida. However, the investment per
cow was $749 in Northeast Florida compared to $857 in Central Florida and
$849 in the Tampa Bay Area. Average man equivalent of labor was 5.84 in
Northeast Florida, 4.49 in Central Florida and 4.44 in the Tampa Bay Area.
The gallons of 4 percent F. C. M. milk sold per man per year were 28,627 in
Northeast Florida, 25,783 in Central Florida and 30,101 gallons in the
Tampa Bay Area.







-31-


Table 20.--Comparison of Selected Factors for Wholesale Dairy Farms,
Northeast and Central Florida Areas, 1958 and Tampa Bay Area,
1959.

:Northeast : Central : Tampa Bay
Item : Area : Florida : Area
Number of farms surveyed 31 34 50
Base gallons per day, 1959 base period 395 332 351
Average number of cowsa/ 231 157 171
Gallons of milk sold:
Total per farm 157,989 111,239 134,239
Average per day 433 305 368

Percent of total sales of milk in
Class I 79 93 90

Average B. F. test--percent 4.39 4.27 3.97

Amount of 4 percent F.C.M. milk sold:
Per cow per year/:
Gallons 725 739 781
Pounds 6,235 6,355 6,717

Acres operated:
Owned 335 257 231
Rented 104 47 65
Total 439 304 296

Average acres operated per cow:
Owned 1.45 1.64 1.39
Rented .45 .30 .39
Total 1.90 1.94 1.78

Total value of operator's capital $172,720 $134,345 $145,409

Value of operator's capital per cow in:
Real estate $396 $469 $453
Livestock 287 311 325
Dairy equipment 26 33 35
Trucks and automobiles 16 16 15
Other 24 28 21
Total 749 857 849
Man equivalent of labor 5.84 4.49 4.44
Cows per man2/ 38.6 34.9 38.6
Gallons of 4 percent F.C.M. milk sold:
Per man per year 28,627 25,783 30,101
Per man per day 78 71 82

./Average of the number at the beginning and the end of the year.

2/Based on average number of cows as shown above.






-32-


Table 21.--Average Total Income and Production Costs per Gallon of 4
Percent P. C. M MMilk Sold, Wholesale Dairy Farms, Northeast and
Central Florida Areas,1958 and Tampa Bay Area, 1959.

: Northeast : Central :Tampa Bay
Item : Area : Florida : Area
Cents Cents Cents
Income:
Milk sales 54.90 59.00 58.72
Bags and manure .32 .25 .20
Calves sold .26 .33 .39
Net appreciation on livestock .97 -
Other .09 .13 .16
Total income 55.57 60.68 59.47
Production Costs:
Labor:
Hired labor 7.98 8.80 8.00
Unpaid family labor .28 1.14 .44
Operator's labor & supervision 4.65 4.58 3.74
Total 12.91 14.52 12.18
Feed purchased 25.68 27.50 28.80
Fertilizer, lime, seed, etc. 1.57 1.49 1.20
Breeding fees .14 .36 .19
Veterinary and medicines .39 .59 .39
Dairy supplies .93 1.15 1.44
Transporting milk 1.03 1.70 1.24
Dues .28 .16 .28
Gas, oil, fuel 1.05 .99 .90
Electricity .68 .94 1.05
Telephone, office expenses .12 .20 .05
Taxes and licenses .58 .63 .75
Insurance .41 .32 .45
Legal and auditing .24 .11 .16
Machine hire .05 .20 .09
Rent of farm or pasturage .25 .27 .30
Repairs--buildings and equipment 1.27 1.70 1.67
Miscellaneous cash expenses .27 .67 .71
Total expenses before
depreciation and interest 47.85 53.50 51.85
Depreciation:
Net depreciation on livestock .58 .43
Buildings and fences .86 .73 1.03
Dairy equipment .64 .64 .89
Auto and trucks .72 .68 .59
Tractors and misc. equipment .79 .83 .69
Total depreciation 3.59 2.88 3.63
Interest on average investment
@ 5 percent 5.16 5.80 5.44
Total Gross Cost 56.60 62.18 60.92
Les. value of minor products .67 1.68 .75
Net cost of milk sold 55.93 60.50 60.17
Return r
Net turnss -1.03 -1.50 -1.45
Returtr to operator:
For labor and supervision 3.62 3.08 2.29
For average capital owned 4.13 4.30 3.99








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-35-


The average price received for milk in 1958 on a 4 percent F. C. M.
basis was 54.90 cents in Northeast Florida and 59.00 cents in Central
Florida. The average price per gallon in the Tampa Bay Area in 1959 was
58.72 cents per gallon. The net cost per gallon of milk sold was 55.93
cents in Northeast Florida, 60.50 in Central Florida and 60.17 in the
Tampa Bay Area. The cost of purchased feed per gallon was highest in the
Tampa Bay Area. This area had the lowest labor cost per gallon with the
main difference being in the value placed on operator's labor. The amount
of cost for other items of expenses varied between areas but the difference
was not very great. When differences between prices received and cost of
producing milk in the three areas were considered, the amount of the net
return per gallon was about the same. Net returns averaged -1.03 cents per
gallon in Northeast Florida, -1.50 cents in Central Florida and -1.46 in
the Tampa Bay Area.


Comparison of Selected Factors for Dairies in 1949 and 1959

Dairy cost records were obtained from 21 farm operators in the Tampa
area and 11 in the St. Petersburg area in 1950. These records included
data on the average cost of producing milk during the 1949 calendar year.
This study was similar to the one reported here except a less systematic
job of sampling was done and all of the dairies were located in the Tampa
area. However, it is felt that a comparison of selected items for all farms
for the two surveys are significant. The production of milk in 1949 was not
corrected to a 4 percent F. C. M. basis. Therefore, for comparative
purposes in this section of the report, costs and returns per gallon of milk
sold in 1959 has been expressed in terms of the actual number of gallons of
milk sold rather than in terms of 4 percent F. C. M. milk,

Size of farm and production of milk.--The farms surveyed for 1949 had
an average of 134 cows per farm compared to 171 cows for the average farm
for the present survey (Table 24). The gallons of milk sold per cow per
year on an uncorrected fat basis was 626 in the 1949 survey and 781 in the
present survey, or an increase of 26 percent.







-36-


Table 24.--Comparison of Average Number of Cows, and
and per Cow, 1949 and 1959 Surveys of The
Tampa Bay Area Florida.


Milk Sold per Farm
Cost of Producing Milk,


Item 1949 : 1959


Average number of cows/ 134 171

Milk sold per farm--gallons 83,928 134,239

Milk sold per cow per year:
Gallons 626 781
Pounds 5,384 6,717

Milk sold per cow per day:
Gallons 1.72 2.14
Pounds 14.8 18.4


1/Average of number on


hand at beginning and end of year.


Distribution of operator's capital.--The operators included in the
1949 survey estimated that their capital investment amounted to $49,656
per farm (Table 25). This was a little more than one-third of the in-
vestment of $145,409 for the average farm in 1959. On a per cow basis, the
average investment in 1949 was $371 compared to $849 in 1959, or an
increase of 129 percent. The biggest change in investment was in real
estate which averaged only $133 per cow in 1949 but $453 in 1959. In 1949,
the value of livestock accounted for 55 percent of the total investment but
only 38 percent in 1959. In both surveys, the value of rented capital was
not included in the investment figures reported above.







-37-


Table 25.--iistribution of Operator's Capital, 1949 and 1959 Surveys of
The Cost of Producing Milk, Tampa Bay Area Florida.

: Average amount :Percent of total
: Per farm : Per cow : investment
Item : : : : : :
: 1949 : 1959 : 1949 : 1959 : 1949 : 1959
Land and improvements $10,164 $ 62,978 $ 76 $368 21 44
Buildings 7,646 14,648 57 85 15 10
Total real estate 17,810 77,626 133 453 36 54

Livestock 27,459 55,596 205 325 55 38
Dairy equipment 2,007 5,978 15 35 4 4
Trucks and automobiles 1,995 2,547 15 15 4 2
Other machinery and
equipment 385 3,427 3 20 1 2
Feed and supplies 235 1 1/
Total 49,656 145,409 371 849 100 100


1/Less than .5.


The net cost per gallon of milk sold in 1949 was 55.0 cents and 59.9
cents in 1959, or an increase of 4.9 cents per gallon (Table 26). The cost
of feed purchased in 1959 was 28.6 cents which was 0.2 cent more than the
cost in 1949. The cost per gallon for labor in 1959 including hired,
unpaid and operator's was 12.1 cents, which was 0.9 cent less than
the labor cost in 1949. The charge for depreciation in 1959 was 0.7 cent
less than the charge in 1949. The charge for interest was 2.6 cents more
reflecting the increase in investment per cow. The net return per gallon
of milk in 1949 was 0.9 cent and -1.4 cents in 1959. The return on average
capital per gallon of milk sold was 3.7 cents in 1949 and 4.0 cents in
1959.








-38-


Table 26.--Average Costs and Returns per Gallon of Milk Sold and Percent
Various Items were of Total Costs and Returns, 1949 and 1959
Surveys of The Cost of Producing Milk, Tampa Bay Area Florida.

:Average per gallon:Percent of total
Item : of milk sold :
: 1949 : 1959 : 1949 : 1959
Cents Cents


Income:
Milk sales
Other income
Total
Production Costs:
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Feed purchased
Fertilizer, lime, seed, etc.
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel, electricity
Truck and automobile expenses
Telephone, office expenses
Taxes, licenses, insurance
Legal and auditing
Machine hire
Rent of farm or pasturage
Repairs--buildings and equipment
Miscellaneous cash expenses
Total expenses before
depreciation and interest
Depreciation:
Net depreciation on livestock
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Cost
Less value of minor products
Net cost of milk sold
Returns:
Net returns
Returns to operator:
For labor and supervision
For average capital owned


55.9
.5
56.4


7.7
1.0
4.3
13.0
28.4
0.1

.3
.8


.8
1.3
.1
.8
.2
-
.7
1.3
.6

48.4

3.0
.4
.3
.5
.1
.73

2.8
55.5
.5
55.0


58.5
.7
59.2


8.0
.4
3.7
12.1
28.6
1.2
.2
.4
1.4
1.2
.3
1.9

.1
1.2
.2
.1
.3
1.7
.7

51.6

.4
1.0
.9
.6
.7
3.6

5.4
60.6
.7
59.9


99.1
.9
100.0


13.9
1.8
7.7
23,4
51.2
.2

.5
1.4


1.4
2.4
.2
1.4
.4

1.3
2.3
1.1

87.2

5.4
.7
.5
.9
.2
"777


98.8
1.2
100.0


13.1
.7
6.2
20.0
47.3
1.9
.3
.7
2.4
2.0
.4
3.2

.1
1.9
.3
.1
.5
2.8
1.2

85.1

.7
1.7
1.5
1.0
1.1
6.0


5.1 8.9
100.0 100.0


.9 -1.4


5.2
3.7


2.3
4.0








-39-


Rate of turnover of cows in milking herd.--Thirty-one percent of the
cows in the herds in 1949 were replaced during the year and 26 percent in
1959 (Table 27). Ninety-nine percent of the additions were purchased in
1949 but only 75 percent in 1959. Of the cows taken out of the herd, 12
percent in each year were removed because of deaths.


Table 27.--Average Number of Cows on Hand at Beginning and End of The
Number Added to The Herd, Number Taken Out of The Herd and
of Turnover, 1949 and 1959 Surveys of The Cost of Producing
Tampa Bay Area Florida.


Year,
Rate
Milk,


Item : 1949 : 1959


Number of head on hand at the
beginning of the year 133.5 162.8

Additions:
Purchased 34.0 45.4
Replacements raised 0.4 15.4
Total 34.4 60.8

Subtractions:
Sold 35.1 38.9
Died, etc. 4.9 5.1
Total 40.0 44.0

On hand at the end of the year 127.9 179.6

Percent turnover 30.6 25.7

Average years in the herd 3.3 3.9








- ,' --


Summary


A study was made of the cost of producing milk on wholesale dairy
farms in the Tampa Bay Area of Florida for the 1959 calendar year.
Operators of all farms surveyed wholesaled their milk to plants for
processing and distribution, or, if producer-distributors, operated their
farms completely separate from the processing and distribution part of the
business. Records were obtained for 50 farms that varied in size from 34
to 503 cows based on an average of a "13 month" inventory. The average
amount of milk sold per day varied from a low of 63 gallons to a high of
1098 gallons.

In summarizing the data, the farms were grouped into three size
groups--small, medium and large--on the basis of the daily base gallons of
milk for each farm as set during the 1959 base period. The records were
weighted to represent the distribution of dairy farms in each size group
and all farms in the Tampa Bay Area. The production of milk on each farm
was adjusted to a 4 percent F. C. M. basis. Costs and Returns per unit
were expressed in terms of amount of 4 percent F. C. M. milk sold in the
general summary of the 1959 data. In order to compare results in 1959 with
a similar study for 1949, costs and returns were expressed in terms of the
actual number of gallons of milk sold. Butterfat tests were not obtained
for the 1949 data.

Acres operated in 1959 averaged 296 per farm, of which 231 were owned
and 65 acres were rented. The average capital investment of the operator
was $145,409 per farm. This amounted to $849 per cow of which 53 percent
was in real estate. The value of all livestock made up 38 percent of the
total investment.

The average number of cows per farm for all farms was 166. The
average annual sales per cow were 805 gallons of 4 percent F. C. M. milk.
The average price received per gallon for milk sold was 58.72 cents. Re-
turns from the sale of bags and manure, veal calves and other minor products
amounted to .75 cent per gallon to give a gross return of 59.47 cents.

The net cost per gallon for milk sold was 60.17 cents* Purchased
feeds averaged 28.80 cents per gallon and labor costs, 12.18 cents. These
two items of expenses accounted for 67 percent of the gross cost of pro-
ducing milk. All depreciation amounted to 3.63 cents per gallon and
interest on capital, 5.44 cents.

The net cost per gallon for milk sold was 62.36 cents on small farms
and 60.27 cents on large farms, or a difference of 2.09 cents. However,
medium size farms had a net cost of 58.58 cents per gallon.

Twenty-six percent of the cows in the herds were replaced in 1959.
Seventy-five percent of the replacements were purchased. Twelve percent
of the cows taken out of the herds were due to deaths.









-41-


The average value placed on mature cows at the beginning and end of
the year was $286 per head. Replacements raised that entered the milking
herd during the year were valued at the time of freshening at $225 per
head. Cows and springers purchased during 1959 cost an average of $270
per head. Cows sold during the year brought an average of $166 per head.

The lowest production on these farms was during the summer months.
All farms showed a tendency to increase production towards the end of the
year. This probably reflected a desire to increase base production during
the base setting period. These farms had a problem of keeping production
in line with requirements for Class I milk. The percent of total sales as
Class I milk was 86 on small, 90 on medium farms and 92 percent on large
farms.


OTHER MIMEOGRAPHED PUBLICATIONS AVAILABLE IN THE DEPARTMENT OF AGRICULTURAL
ECONOMICS ON COSTS AND RETURlIS ON FLORIDA DAIRY FARMS

Experiment Station Reports

1. Summary of Costs and Returns for Wholesale Dairy Farms, Central Florida,
1958. Agr. Econ. Mimeograph Report 60-2, October, 1959.

2. Summary of Costs and Returns for Wholesale Dairy Farms, Northeast
Florida, 1958. Agr. Econ. Mimeograph Report 60-5, October, 1959.


Extension Service Reports

1. Manatee County Dairy Farm Business Summary for 1958.

2. Polk County Dairy Farm Business Summary for 1958.

3. Business Analysis 1959--Fifteen Dairy Farms, Manatee- Sarasota Counties,
Agr. Ext. Ser. Economic Series 60-5, September, 1960.

4. Business Analysis 1959--Nine Polk County Dairy Farms, Agr. Ext. Ser.
Economic Series 60-7, September, 1960.

5. Business Analysis 1959--Eighteen Dairy Farms, Lower East Coast,
Agr. Ext. Ser. Economic Series 60-9, October, 1960.




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