Group Title: Agricultural economics mimeo report
Title: Summary of costs and returns for wholesale dairy farms, northeast Florida, 1958
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Permanent Link: http://ufdc.ufl.edu/UF00094236/00001
 Material Information
Title: Summary of costs and returns for wholesale dairy farms, northeast Florida, 1958
Physical Description: 33 leaves : map ; 28 cm.
Language: English
Creator: Greene, R. E. L. ( Robert Edward Lee ), 1910-
Warrington, John
Brooke, Donald Lloyd, 1915-
Florida Milk Commission
Donor: unknown ( endowment )
Publisher: Department of Agricultural Economics, Florida Agricultural Experiment Stations
Place of Publication: Gainesville, Fla.
Publication Date: October, 1959
Copyright Date: 1959
 Subjects
Subject: Dairy farms -- Economic aspects -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: by R.E.L. Greene, John Warrington and D.L. Brooke.
General Note: Caption title.
General Note: "October 1959."
General Note: "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."--P. 1.
General Note: Agricultural economics - mimeo report - University of Florida ; 60-5
 Record Information
Bibliographic ID: UF00094236
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 362858770

Full Text






October 1959 Agricultural Economics
j Mimeo.Report--60-5



SUMMARY OF COSTS AND RETURNS

FOR

WHOLESALE DAIRY FARMS

NORTHEAST FLORIDA, 1958

by


R. E. L. Gre@ea, John Warrington and D. L. Brooke



TABLE OF CONTENTS

Method of Selecting Dairies to be Studied..............*... -...-;.. .. 1
Method of Calculating Cost ..........3.............................. 3
Size of Farms Studied..................... .. ................. 4
Acres Operated and Use of Land................................... 6
Distribution of Operator's Capital............ ..... .............. 6
Annual Costs and Returns in Producing Milk.......................... 9
Variations in the Costs of Producing Milk by Size of Farm.......... 15
Man Equivalents of Labor and Labor Efficiency........................ 16
Rate of Turnover of Cows in the Milking Herd........................ 21
Average Inventory Value, Purchase Price and Sales Price per Head..... 22
Seasonal Distribution of Milk Production............................. 22
Distribution of Total Production by Classes of Milk................. 22
Comparison of Selected Factors for Dairies in Northeast and Central
Florida ........................................................... 25
Comparison of Selected Factors for Dairies in 1949 and 1958.......... 28
Summary..................................... ......... ....... ......... 32







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














SUMMARY OF COSTS AND RETURNS FOR
WHOLESALE DAIRY FkRMS IN NORTHEAST FLORIDA
AVERAGE FOR THE CALENDAR YEAR, 1958


This report presents the results of a study of dairy farms in
Northeast Florida to obtain data on costs and returns from producing
milk during the 1958 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 Northeast Florida giving the base
gallons per day for the 1959 base setting period. These records listed
96 producers with daily bases that ranged from 32 to 1777 gallons
(Table 1). About a third of the producers had a daily base of less than
225 gallons per day with about 12 percent of the total base production;
another third a base of 225 to 449 gallons per day and 29 percent of
the total base production, and 31 percent a base of 450 gallons or more
per day and 59 percent of the daily base production.


Table l.--Variation in Number of Producers by Base Gallons per Day,
Northeast Florida, 1959 Base Period.

: : : Percent of total for:
Base gallons : Number of :Average base: Number of : Base gallons
per day : producers : gallons : producers ; per day
Small:
Less than 150 16 96 16.7 4.1
150-224 16 189 16.7 8.1
Medium:
225-314 16 268 16.7 11.5
315-449 18 365 18.7 17.7

Large:
450-599 12 513 12.5 16.6
600-899 12 731 12.5 23.6
900 or more 6 1139 6.2 18.4
Total or average 96 387 100.0 100.0











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 five farms.
Bases on two farms were combined because they were operating as one
unit, leaving a total of 90 farms (Table 2). Using the data on base
gallons per day, a sample of farms to be surveyed was randomly selected
to represent producers in various size groups. Usable records were
obtained from 31 farms. The location of these farms are shown in
Fig. 1. Table 2 shows the number of records obtained in each size
group and the proportion the farms surveyed were of all farms. Since
a disproportionate sample was taken, the various groups were weighted
according to the weights indicated in summarizing the data.


Table 2.--Number of Wholesale Producers, Number and Percent
for which Data were Obtained and Group Weights by
Gallons per Day, Wholesale Dairy Farms, Northeast


of Producers
1959 Base
Florida.


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


Small:
Less than 150 15 4 26.7 3.75
150-224 15 4 26.7 3.75

Medium:
225-314 14 4 28.6 3.50
315-449 16 6 37.5 2.67

Large:
450-599 13 4 30.8 3.25
600-899 12 6 50.0 2.00
900 or more 5 3 60.0 1.67
Total or average 90 31 .34.4 -



In summarizing and presenting the data, the dairies 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 base of 450 gallons
or more per day.













































Fig. 1.--Location of Dairy Farms Studied, Northeast 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 expenacs
were taken from certified accountants' records or copies of the 1958
income tax returns. Data on gallons and value of milk sold and percent
butterfat were copied from statements received by farmers for each pay
period. If the statements were not available, the information was
obtained directly from the plants to which the cooperating farmers
delivered their milk.

All but two of the farms surveyed were specializing in dairying with
receipts from the dairy enterprise being the only source of income. On
farms with enterprises other than dairying, 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 relates only to the
dairy part of the farm business.













In calculating 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 producing 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.l/ Costs
and returns per gallon of milkwere calculated on the basis of the
number of gallons of 4 percent F. C. M. milk sold. No credit -.as
allowed for milk used on the farm or in the home. The number of cows
in the herd was based on the average number for the beginning and end
of the year. Average production per cow was obtained by dividing the
total production of 4 percent F. C. M. milk by the average number of
cows as shown by the beginning and ending inventory.


Size of Farms Studied

The farms included in this study had daily bases that ranged from
84 gallons to 1777 gallons (Table 3). Bases were less than 225 gallons
per day on 8 farms, 225 to 449 gallons on 10 farms, and 450 gallons or
more per day on 13 farms. On the basis of average volume sold per day
in 1958, the farms varied from a low of 70 to a high of 1414 gallons.
The average daily sales for small, medium and large farms was 152, 340,
and 807 gallons, respectively. Table 3 shows an array of the farms
for selected items based on the daily base gallons as set during the
1959 base period.


l/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 averege
butterfat test 4.3 and 4.5 percent, respectively, the production per
cow in terms of 4 percent F. C. M. milk would be 836 gallons on Farm A
and 860 gallons on Farm B.











Table 3.--Base Gallons per Day, Gallons of Milk Sold per Day, Average B. F.
Test, Average Wumber of Cows and Gallons of Milk Sold per Cow per
Year and per Day, Wholesale Dairy Farms, jportheast Florida, 1958.

: :Gallons of : :Average :Gallons of 4% F.C.M.
Farm : Base gallons :milk sold : B. F. :number : milk sold per cow
No. : per day,1959 : per day : test : of : Per : Per
: base period 1958 :(pct.) : cows year ; day


3
4
1
2
8,
7
5
6
Average


10
9
11
12
15
13
17
16
10
14
Average


Small Farms
4.39
4.36
4.00
4.41
4.44
4.13
4.23
4.19
4.26

Medium Farms
4.52
4.37
4.38
4.61
4.48
4.24
4.25
4.25
4.37
4.30
4.37


47.5
55.0
35.5
81.0
90.0
105.0
100.5
175.0
86.2


127.0
172.0
167.0
144.0
207.0
139.5
200.5
170.0
323.0
195.0
181.1


84
103
104
119
162
180
205
213
146


244
265
274
303
317
322
328
354
360
444
318


493
537
546
577
627
629
658
669
706
826
995
1027-
1777
722


70
114
85
122
158
176
229
262
152


260
278
274
251
416
261
331
483
490
397
340


359
463
782
932
865
789
558
947
818
1005
1414
975
1199
807


566
796
870
584
682
624
861
562
668


805
622
633
693
785
708
720
1076
585
776
724


534
1015
772
771
831
796
630
862
771
710
676
793
569
736


433 4.39 230.7


Large Farms
4.35 259.0
4.68 183.5
4.80 414.5
4.26 455.5
4.71 420.5
4.79 404.5
4.08 327.0
4.48 430.0
4.46 414.0
4.19 531.5
4.11 776.5
4.23 464.0
4.38 812.5
4.42 425.0


20/
21-
191
22.
24-
26,
23-
25.
27.,
28 v
29
31k
30 v
Average

Average
all farms


1.55
2.18
2.38
1.60
1.87
1.71
2.36
1.54
1.83


2.20
1.70
1.73
1.90
2.15
1.94
1.97
2.95
1.60
2.13
1.98


1.46
2.78
2.12
2.11
2.28
2.18
1.73
2.36
2.11
1.94
1.85
2.17
1.56
2.02


395


725 1.99














Acres Operated and Use of Land

Farmers for which records were obtained operated on the average
439 acres of land, of which 104 acres, or 24 percent, were rented and
335 acres were owned (Table 4). Acres operated averaged 228 on small
farms, 347 on medium farms and 742 acres on large farms.

A little more than half of total acres operated was in permanent
pasture. On all farms improved permanent pasture averaged 213 acres
per farm and other permanent pasture, 30 acres. Fifty-three acres
were in temporary pasture. On all farms, an average i 27 acres of
forage crops were harvested as hay, 40 acres as silage and 9 acres,
cut green. On all farms, of the 372 acres in forage crops and open
pasture, 104 acres were double-cropped. Thus, there were 268 acres
of land devoted to these uses.

Total acres operated per cow averaged 1.90 on all farms. Acres
operated per cow decreased with size of farm, being 2.64 on small
farms, 1.92 on medium size farms and 1.74 on large farms. In terms
of acres in various land uses, there was no consistent pattern between
size of farms. On large farms, an average of .14 acre of hay was
harvested per cow; on small farms there was an average of .41 acre
of silage and .80 acre of temporary pasture per cow. The amount of
double cropping was greater on small farms than on medium or large
farms. Acres per cow in harvested crops and pasture was highest on
small farms but was about the same on medium and large farms. All
forage crops harvested per cow averaged only .33 acre on all 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
the operators considered it to be worth for agricultural purposes. In
many instances they had refused offers for their property much higher
than the values they gave for the study. The operators estimated that
their capital investment amounted to $172,720 for all farms, or an
average investment of $749 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 investment figure.











Table 4.--Total Acres Operated and Use of Land, Wholesale Dairy Farms,
Northeast Florida, 1958.

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

Average Acres per Farm
Acres Operated:
Owned 228 256 520 335
Rented 91 222 104
Total 228 347 742 439

Use of Land:
Cropland and open pasture
Forage crops harvested as:
Hay 7 15 59 27
Silage 35 10 75 40
Cut green 17 11 9
Temporary pasture 69 27 63 53
Permanent pasture:
Improved _111 162 367 213
Other 3 29 57 30
Total 225 260 632 372
Less acres doubled-cropped 64 72 177 104
Total crops and open pasture 161 188 455 2o0
Woodland pastured 17 155 151 108
Other land 50 4 136 63
Total operated 228 347 742 439

Average Acres per Cow
Acres Operated:
Owned 2.64 1.42 1.22 1.45
Rented .50 .52 .45
Total 2.64 1.92 1.74 1.90
Use of Land:
Cropland and open pasture
Forage crops harvested as:
Hay .08 .08 .14 .12
Silage .41 .06 .18 .17
Cut green .09 .03 .04
Temporary pasture .80 .15 .15 .23
Permanent pasture:
Improved 1.29 .89 .86 .92
Other .03 .16 .13 .13
Total 2.61 1.43 1.49 1.61
Less acres doubled-cropped .74 .39 .42 .45
Total crops and open pasture 1.87 1.04 1.07 1.1T
Woodland pastured .19 .86 .35 .47
Other land .58 .02 .32 .27
Total operated 2.64 1.92 1.74 1.90







-8-


Table 5.--Distribution of Operator's Capital, Wholes4e Dairy Farms,
Northeast Florida, 1958.1/

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

Average Amount per Farm

Land and improvements $32,603 $ 62,176 $123,750 $ 72,043
Dairy buildings 6,785 7,426 22,274 12,162
Other buildings __2,350 5,125 11,273 6,2A9
Total real estate 41,738 74,727 157,297 91,154

Livestock 24,094 53,811 120,653 66,186
Dairy equipment 2,798 4,454 13,737 5,911
Trucks and automobiles 913 3,247 3,826 3,747
Other machinery and equipment 3,446 3,072 7,378 4,632
Feed and supplies 912 855 1,204 990
Total 73,901 140,166 304,095 172,,'20

Average Amount per Cow
Land and improvements $378 $344 $292 $316
Dairy buildings 79 41 52 53
Other buildings 27 28 26 27
Total real estate 484 413 3/0 296
Livestock 280 297 284 287
Dairy equipment 32 24 32 26
Trucks and automobiles 11 18 9 16
Other machinery and equipment 40 17 17 20
Feed and supplies 10 5 3 4
Total 857 774 715 749
Percent of Total Investment
Land and improvements 44.1 44.3 40.7 42.2
Dairy buildings 9.2 5.4 7.3 7.0
Other buildings 3.2 3.6 3.7 3.6
Total real estate 56.5 53.3 51.7 52.8
Livestock. 32.6 38.4 39.7 38,3
Dairy equipment 3.8 3.2 4.5 3,4
Trucks and automobiles 1.2 2.3 1.3 ..2
Other machinery and equipment 4.7 2.2 2.4 2.7
Feed and supplies __1.2 0.6 0.4 0.6
Total 100.0 100.0 100.0 100.0


I/
The value of capital furnished by the landlord (rented capital) is in
addition to the amount shown in this summary.








- 9 -


The average operator's investment on small farms was $73,901 and
$304,095 on large farms. On a per cow basis, small farms had an investment
of $857 and large farms, $715. This reflected economics of scale as the size
of farm increased.

In terms of capital owned, operators of small farms valued their land
and buildings at $183 per acre, medium size farms, $292 per acre and large
farms, $302 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 year, the
average B. F. test and the amount of 4 percent F. C. M. milk. Table 7 shcws
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.
Tests and Amount of 4 Percent F.C.M. Milk Sold per Farm per Year,
per Cow per Year and per Cow per Day, Northeast Florida, 1958.
Item : Your : Size of farm : All
Item
: farm : Sal1l ; Mediuma : Large : farms

Average number of cows 86.2 181.1 425.0 230.7

Milk sold per farm per year--
gallons 55,434 124,096 294,436 157,989

Average B. F. test percent 4.26 4.37 4.42 4.39

Amount of 4 percent F.C.M. milk
Sold per farm per year--gallons 57,581 131,056 312,916 167,184
Sold per cow per year:
Gallons 668 724 736 725
Pounds 5,745 6,226 6,330 6,235
Sold per cow per day:
Gallons 1.83 1.98 2.02 1.99
Pounds 15.74 17.03 17.37 17.11






-10-
Table 7.--Summary of Costs and Returns, Wholesale Dairy Farms, Northeast
Florida, 1958.


Item


Income:
Milk sales
Bags and manure
Calves sold
Appreciation
Other
Total income


Production Costs:
Feed purchased
Fertilizer, lime, seed, etc.
Total
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
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 expense 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
Returns on average investment
Percent return on investment
1/Less than 50 cents.


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


$91,786 $398 98.8
541 2 .6
441 2 .5
-


145 1
92,913 -403


42,936
2,628
45,564

13,344
473
7 779
21,596
234
652
1,560
1,726
460
1,753
1,138
195
974
684
394
77
416
2,122
451


186
12
198

58
2
33
93
1
3
6
8
2
8
5
1
4
3
2
1/
1
9
3_


79,996 347


970
1,441
1,067
1,203
1,325
6,006

8,637
94,639
1,127
93,512


4
6
5
5
6
26

37
410
5
405


-1,726 -7


6,053
6,911
4.0


Cents


.1
100.0

45.4
2.8
48.2

14.1
.5
8.2
22.8
.3
.7
1.7
1.8
.5
1.9
1.2
.2
1.0
.7
.4
.1
.4
2.2
.5

84.6

1.0
1.5
1.1
1.3
1.4
6.3

9.1
100.0


- -1.03


3.62
4.13


54.90
.32
.26

.09
55.57

25.68
1.57
27.25

7.98
.28
4.65
12.91
.14
.39
.93
1.03
.28
1.05
.68
.12
.58
.41
.24
.05
.25
1.27
.27

47.85

.58
.86
.64
.72
.79
3.59

5.16
56.60
.67
55.93


Cents


--


$6.38
.04
.03

.01
6.46

2.99
.18
3.17

.93
.03
.54
1.50
.02
.04
.10
.12
.03
.12
.03
.01
.07
.05
.03
.01
.03
.15
.03

5.56

.07
.10
.09
C
.-9
.42

.60
6.58
.08
6.50

-.12

.42
.48







-11-


The data on costs and returns are based on averages weighted to
represent the distr.'ution of dairy farms in Northea-t Florida by size
of farm and for all farms. In each case, per unit costs and returns
are shown in terms of 4 percent F. C. M. milk. 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. Reclassi-
fications 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 ard expenses
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 $398 per cow. The average
price was 54.90 cents per gallon.

Other income.--Included in other income is the sale of veal calves,
bags, manure, appreciation in the dairy herd, if any, and certain
miscellaneous income such as soil conservation payments, gas tax refund,
etc. Miscellaneous income amounted to $5 per cow or .67 cent per g.llon.
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.

Feed.--This item included the cost for all kinds of purchased feeds
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 feed cost including cost of fertilizer, lime and seed
amounted to $198 per cow, or 27.25 cents per gallon of milk sold. Feed
costs on individual farms ranged from 19.60 to 39.04 cents per gallon
of milk sold. Feed made up 48 percent of the gross cost of producing
milk.

Fertilizer, lime, seed, etc.--This item covered the amount paid fo:
materials applied to pastures and for producing forage crops in 1953.
The amount does not include labor or machine work if done by regular
farm workers as the cost of these are included in other classifications.
The cost of fertilizer, lime and seed averaged $12 per cow, or 1.57
cents per gallon of milk 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








-12-


addition to the cash costs. The cost of privileges is included in other
items of expenses such .: taxes, repairs and depreciation. on buildings.
Cost of hired labor amounted t: $58 per cow, or 7.98 cents per gallon
of milk sold.

Unpaid family labor where used was charged at prevailing wage rates accord-
ing to the amount of time spent at dairy work by unpaid members of the oper-
ator's family. Unpaid family labor was reported on 13 of the 31 farms sur-
veyed. However, the amount of unpaid family labor averaged only $2 per cow,
or .28 cent per gallon of milk sold,

Operator's labor was the value of the time spent by the operator in work-
ing 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 enter-
prise. 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. On the
31 farms surveyed, there were 34 operators. Two farms were operated by hired
managers and there was no charge for operator's labor. 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 $7,779 per fa;m,
or 4.65 cents per gallon of milk sold.

Total cost of all labor amounted to $93 per cow, or 12.91 cents per
gallon of milk sold. Labor costs were the second largest item of expense
and amounted to 22.8 percent of the gross costs. The cost of labor and
feed, including the cost of fertilizer, lime and seed, amounted to 71 percent
of the gross cost of producing milk.

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 $234 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 .93 cent 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 hauls his own milk, the
cost of hauling is included as a part of gas and oil, repairs and depreciation.
Three of the farmers in the large group hauled all of their own milk. Five
farmers hauled their own milk a part of the year and hired it hauled the rest
of the year.









-13-


Dues.--This amount included deductions for the Florida Milk Commission,
Dairy Council, dues to local producer organizations and other farm
organizations.

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 about one cent per gallon of milk sold.

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

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 building, livestock, equipment
and liability 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 $9 per cow, or 1.27 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 live-
stock and miscellaneous items that were grouped as such in the records
of the farmers.

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

Depreciation on 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








-14-


+ amount received from all sales) equals net change in value for the
year. This method -- /-es a depreciation expense bas ecn the actual
turnover and loss cxperier_.ed in the year under consideration. It
considers cattle deaths during the year as they are in the beginning
but not in the ending inventory. It also adjusts depreciation for the
increase in value of young stock raised during the year which 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
ad.'sted for the value of veal calves sold since the amount of this
ittm was listed as a part of other income.

Net depreciation on all livestock amounted to 44 per cow, or only
.58 cent per gallon of milk sold. On the average, about 15 percent of
all replacements were raised on the farm which tended to reduce the
amount of the net depreciation. However, the raising of replacements
results in higher costs 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, 7.8 percent; dairy equipment, 18.0 percent; autos and trucks,
32.0 percent and tractors and miscellaneous equipment, 28.6 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 $6,006 per farm, $26 per cow, or 6.3
percent of the gross cost of producing milk. On the basis of a per
gallon of milk sold, depreciation averaged .86 cent for buildings and
fences, .64 cent for dairy equipment, .72 cent for autos and trucks and
.79 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
supervision, cover and 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.








-15-


The interest charged averaged $37 per cow, or 5.16 cents per gallon
of milk sold. On te'se farms the amount of interest actually paid in
1958 amounted to $1521 per farm, or .91 cent per gallon of milk sold.

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 $410, or 56.60 cents per gallon of milk sold.

Net cost of milk sold.--The net cost of milk sold was obtained by
sl.btracting the value of minor products such as bags and manure, veal
calves, etc., from the gross cost of producing milk. The value of minor
products averaged $5 per cow, or .67 cent per gallon of milk sold. Thus,
the net cost per gallon of milk sold was 55.93 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 $7 to cover costs. This was a loss of 1.03 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 the capital required in the farm business.
This figure was obtained by adding the value of operator's labor to the
net returns. Average returns for operator's labor and supervision for
all farms amounted to $26 per cow, or 3.62 cents per gallon of milk sold.

Returns on average investment.--This amount represents the return
on the capital invested in the business after paying all expenses
including an allowance to the operator for his labor, supervision and
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. Returns 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 $30 per cow, or 4.13 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









-16-


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 and 10.

Medium size farms had the highest average price per gallon of milk sold;
56.05 cents compared to 54.28 cents for the large farms. Medium farms also
had the largest gross income per gallon partly because this group had a
net appreciation on all livestock of .88 cent per gallon.

The net cost per gallon of milk sold was 62.37 cents on the small farms
and 54.03 cents on the large farms, or a difference of 8.34 cents. lhe
main items that varied in cost were labor, depreciation and interest. Lcbor
costs per gallon of milk sold on small farms were 3.27 cents higher than on
large fans, depreciation, 2.02 cents and interest 1.56 cents. On small
farms, the average value of operator's labor and management was $4,737 per
farm compared to $11,178 on large farms, or only 42 percent as much. The
larger interest charge on small farms as compared to large farms was due
mainly to the higher investment per cow. Small farms had an average investment
of $857 per cow and large farms, $715.


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 2.52 man
equivalents of labor on small farms, 5.47 on medium size farms and 9.53 man
equivalents on large farms (Table 11).

There was not much difference in the accomplishment per man on small
and medium size farms, but there was a significant increase in labor
efficiency on large farms. There was an average of 34.9 cows per man on
small farms, 33.1 on medium size farms and 42.7 on large farms. Gallons of
4 percent F.C.M. milk sold per man averaged 22,850 on small farms, 23,959 on
medium size farms and 32,835 on large farms. On large farms, the amount of
milk sold per man was 37 percent more than the amount on medium size farms.
Part of the increase was due to the fact that many jobs require about the same
amount of labor regardless of the size of the enterprise. Labor on large
farms also spent a smaller proportion of their time in forage production and
more direct time in milk production.

Wages paid per week for hired labor averaged $52.67 on small farms,
$48.92 on medium size farms and $60.34 on large farms. In addition, most
of the people working in the dairy were furnished:.a house and milk. The
weekly wage was higher on large farms because some were operated by hired
managers.

Operators of small farms valued their labor at $93.79 per week, medium
size farms, $131.00 and large farms, $136.88.







Table 8.--Average Total Income and
Farm, Uholesale Dairy Farms,


-17-
Production Costs per Farm by Size of
Northeast Florida, 1958.


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


Income:
Milk sales
Bags and manure
Calves sold
Appreciation
Other
Total income
Production Costs:
/'eed purchased
Fertilizer, lime, seed, etc.
Total
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expense
Taxes and licenses
Insurance
Legal and auditing
Machine hire
Rent of farm or pasturage
Repairs--buildings & 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
S@ 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
Returns on average investment
Percent return on investment


$32,061
54
214

224
32,553

14,169
1.473
15,642

3,488
555
4.737
8,780
113
277
442
952-
231
732
581
78
352
229
97
23
75
705
72


29,381

- 1,128
671
392
364
776
3,331

3,695
- 36,407
S492
35,915

-3,854

883
-159
-.2


$73,455
410
343
1,155
20
75,383

35 533
1, i
37,392

10,897
197
7123
18,517
255
521
1,020
1,976
406
1,452
825
141
991
464
214
46
174
1,641
351

66,386


1,080
663
1,319
1.020
4,082

7,008
77,476
1.928
75,548

-2,093

5,330
4,915
3.5


$169,842
1,159
765

192
171,958

79,104
4.553
83,657

25,648
666
11,178
37,492
335
1,158
3,216
2,250
744
3,075
2,007
366
1,580
1,350
671
161
1,000
4,023
928

144,223

2,937
2,572



11,758

15 .2C8
171,189
2,116
169,073

769

11,947
15,977
5.2


/79
.R/ 4/


- ~------~- ~---- ------


1



--


--






-18-
Table 9.--Rummary of Costs and Returns per Gallon of 4 Percent rCM Milk Sold
by Sise of Farm, Wholesale Dairy Farms, Northeast Florida, &)58.

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

Income:
Milk sales 55.68 56.05 54.28
Bags and manure .10 .31 .37
Calves sold .37 .26 .24
Appreciation .88 -
Other .39 .02 .06
Total income 56.54 57.52 54.95
Production Costs:
Feed purchased 24.61 27.11 25.28
Fertilizer, lime, seed, etc. 2.56 1.42 1_46
Total 27.17 28.53 26.74
Labor:
Hired labor 6.06 8.32 8.20
Unpaid family labor .96 .15 .21
Operator's labor & supervision 8.23 566 3.57
Total 15.25 14.13 11.93
Breeding fees .20 .19 .11
Veterinary and medicines .48 .40 .37
Dairy supplies .77 .78 1.03
Transporting milk 1.65 1.51 .72
Dues .39 .31 .23
Gas, oil, fuel 1.27 1.11 .98
Electricity 1.01 .63 .64
Telephone, office expense .14 .11 .12
Taxes and licenses .61 .76 .50
Insurance .40 .35 .43
Legal and auditing .17 .16 .28
Machine hire .04 .04 .05
Rent of farm or pasturage .-13 .13 .32
Repairs--buildings and equipment 1.22 1.25 1.29
Miscellaneous cash expenses .13 .26 .30
Total expenses before
depreciation and interest 51.03 50.65 46.09
Depreciation:
Net depreciation on livestock 1.96 -.94
Buildings and fences 1.16 .82 .82
Dairy equipment .68 .51 .68
Auto and trucks .63 1.01 .62
Tractors and misc. equipment 1.35 .78 .70
Total depreciation 5.78 3.12 3.76
Interest on average investment
@ 5 percent 6.42 5.34 4.86
Total Gross Cost 63.23 59.11 54.71
Less value of minor products .86 1.47 .67
Net cost of milk sold 62.37 57.64 54.04
Returns:
Net returns -6.69 -1.59 .24
Returns to operator for labor
and supervision 1.54 4.07 3.81
Returns on average investment -.27 3.75 5.10







-19-


Table 1.--Percent of Total Income and Percent of Total Costs for Various
Items by Size of Farm, Wholesale Dairy Farms, Northeast Florida, 1958.

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


Income:
Milk sales
Bags and manure
Calves sold
Appreciation
Other
Total income


Production Costs:
Feed purchased
Fertilizer, lime, seed, etc.
Total
Labor:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Breeding fees
Veterinary and medicinmo
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel
Electricity
Telephone, office expense
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


98.5
.2
.6

.7
100.0


38.9
4.1
43.0

9.6
1.5
13.0
24.1
.3
.8
1.2
2.6
.6
2.0
1.6
.2
1.0
.6
.3
.1
.2
1.9
.2

80.7


3.1
1.8
1.1
1.0
2.1
9.1

10.2
100.0


97.4
.5
.4
1.7
1/
100.0


45.9
2.4
48.3

14.1
.2
9.6
23.9
.3
.7
1.3
2.6
.6
1.9
1.0
.2
1.3
.6
.2
.1
.2
2.1
.4

85.7


1.4
.9
1.7
1.3
5.3

9.0
100.0


98.8
.7
.4

,1
100.0


46.2
2.7
48.9

15.0
.4
6.5
21.9
.2
.7
1.9
1.3
.3
1.8
1.2
.2
.9
.8
.5
.1
.6
2.4
.5

84.2

1.7
1.5
1.3
1.1
1.3
6.9

8.9
100.0


1/Less than .05 percent.


--









Table 11.--Base Gallons per Day, Man Equivalents of Labor, Cows per
Man and 4 Percent F.C.M. Milk Sold per Man.

:Basa gallons : Man : Cows :Four percent F.C.M. milk
Farm :per day,1959 :equiva- : per : sold per man
No. :oase pe-iod : lents : man .: Gallons : Pounds
Small Farms
Small Farms


1.84 1
2.18 ,
1.08
1.68
3.43
2.53
2.98 O
4.44 '
2.52


25.8
25.2
32.9
48.2
26.2
41.5
33.7
39.4
34.9


Medium Farms


3
4
1
2
8
7
5
6
Average


10
9
11
12
15
13
17
16
18
14
Average


20
21
19
22
24
26
23
25
27
28
29
31
30
Average


84
103
104
119
162
180
205
213
146


244
265
274
303
317
322
328
354
360
444
318


493
537
546
577
627
629
658
669
706
826
995
1027
1777
722


Large Farms

4.46, 58.1
6.84 26.8
10.84 39.2
10.27 44.3
8.65 48.6
11.00 36.8
4.40 74.3
12.78 33.8
9.79 42.3
10.69 49.7
16.00 48.5
12.00 38.7
11.50 '70.6
9.53 '- 42.7


395 5.84 38.6 28,627


4.47
3.95'
4.05
6.25
3.65
6.03
6.54
8.25
6.13
6.37
5.47


28.4
43.5
41.2
23.0
56.7
23.1
30.6
20.6
.52.8
30.6
33.1


14,618
20,071
28,594
28,163
17,884
25,919
29,048
22,143
22,850


22,879
27,085
26,109
15,962
44,538
16,392
22,075
22,176
30,811
23,742
23,959


30,970
27,243
29,501
34,209
40,402
29,271
46,794
29,006
32,604
35,288
32,787
30,657
40,220
32,835


125,715
172,611
245,908
242,202
153,802
222,903
249,813
190 430
196,510


196,759
232,931
224,537
137,273
383,027
140,971
189,845
190,714
264,975
204,181
206,047


266,342
234,290
253,709
294,197
347,457
251,731
402,428
249,452
280,394
303,477
281,968
263,650
345,892
282,381

246,192


Average all farms








-21-


Rate of T-,rnover of Cows in the Milking Herd

Twenty-eight percent of thu cows covered in this study were replaced
in 1958 (Table 11). At this rate the average cow would remain in the herd
3.6 years. The rate of replacement was 33.3 percent on small farms, 23.8 per-
cent on medium size farms and 28.6 percent on large farms.

Eighty-five percent of the additions to the herd were purchased and
15 perce:it raised. The percent of replacement raised was 21 on smaa' armsm,
29 on m.u:dium size farms and 10 percent on large farms. Ten percent of the
cows takenL out of the herd left because of deaths. The percent death loss
was 2.0 on small farms, 3.1 on medium size farms and 2.7 on large farms.

The average number of cows in the herd decreased between the beginning
and ending inventories on small farms, remained almost constant on medium
size farms, but increased 11 percent on large farms.


Table 12.--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 Ha.d at
the End of the Year and Rate of Turnover by Size of Farm, Wholesale
Dairy Farms, Northeast Florida, 1958.

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

On hand beginning of the year 87.9 180.9 407.3 225.3

Additions:
Purchased 20.0 31.0 141.6 64.2
Replacements raised 5.3 12.5 15.5 11.1
Total 25.3 43.5 157.1 75.3

Subtractions:
Sold 27.0 37.4 110.2 58.2
Died 1.7 5.7 11.5 6.3
Total 2d.7 43.1 121.7 64.5

On hand end of year 04.5 181.3 442.7 236.1

Percent turnover 33.3 23.8 23.6 28.0

Average years in herd 3.0 4.2 3.5 3.6








-22-


Average Inventory Value, Purchase Price
and Siles Price per Head

The average value placed on mature cows at the beginning and ending of
the year was $260 per hcad (Table 13). Herd bulls were valued at $247 per
head, heifers over one year, $158 and heifers under one year, $60. In most
cases, on large farms various groups of livestock were valued slightly higher
than on small farms. Replacements raised that entered the milk herd during
the year were valued at the time of freshening at $223 per head on small
farms, .;;246 on medium size farms and $183 on large farms.

The average price paid per head for cows and springers during 1958 was
$233 on slanll farms, $222 on medium size farms and $227 on large farms. The
average sales price of cows removed from the herd was $134 on small farms,
$154 on medium size farms and $137 on large farms.


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 14). The highest monthly
production on small farms was in August. Production on both medium and large
farms was highest in October, November and December. No doubt these producers
were building up their production in order to increase the size of their bases
during the base setting period.


Distribution of Total Production by Classes of Milk

A higher percentage of the total production of milk on small farms was
sold as Class I milk than was true for medium and large farms (Table 15).
The percentage for the three groups of farms was 80.9, 80.9 and 76.8,
respectively.

The proportion of sales in Class I milk varied by months throughout the
year (Table 16). On small .farms, the variation was from 77 percent in June
to 98 percent in October. Medium farms varied from a low of 72 percent in
June to a high of 88 percent in September and October. Large farms varied
from a low of 65 percent in June to a high of 86 percent in November.









-23-


Table 13.--Average Number and Average Value per Head for Various Classes
of Livts uck, Wholesale Dairy Farms, Northeast Florida, 1958.

: Average number of head : Average value.or


Item


: : : : amount Der 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
H-rd bulls
Bulls to be
raised
Heifers:
Over 1 year
Under 1 year


Replacements
raised


86.2 181.1 425.0 230.7 $245
1.8 3.6 9.7 5.0 233


.8 .1 .7 .5


12.7
13.9


18.3 27.2
26.8 36.4


5.3 12.5 15.5


19.4
25.7


11.1


$262 $262 $250
344 213 247


112 142 70 96


133
55


157 170 158
60 61 60


223 246 183 213


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

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


20.0
.3


31.0 141.6
.8 3.3


64.2
1.5


.3 .1


1.9 .4
- 11.6


27.0
.9


37.4 110.2
1.0 2.8


- .8
- .5


58.2
1.6


- .1 .1

2.3 1.1
1.3 .4


233 222 227 227
188 227 143 161

- 100 100


- 94
- 50


134 154 137 140
142 193 147 156

- 40 40


- 248 193
63 63


100







-24-


Table 14.--Seasonal Distribution of Milk Production, By Size of Farm,
Wholesale Dairy Farms, Northeast Florida, 1958.

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

Average Number of Gallons Sold per Day

January 153 353 766 424
FeLruary 144 342 764 416
March 150 328 780 419

April 161 336 797 431
May 160 344 813 429
June 147 338 797 427

July 137 319 789 415
August 165 313 803 427
September 153 339 828 440

October 150 349 845 448
November __147 358 831 445
December 154 360 863 459

Average 152 340 807 433



Table 15.--Amount and Percent of Milk in Various Classes, Wholesale
Dairy Farms, Northeast Florida, 1958.

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

Gallons of Milk

Class I 49,278 100,372 226,016 125,222
Class II 4,202 9,699 20,870 11,591
Class III 849 11,394 34,434 15,559
Other 1,105 2,631 13,116 5,617
Total 55,434 124,096 2)4,436 157,989

Percent of Total

Class I 88.9 80.9 76.8 79.3
Class II 7.6 7.8 7.1 7.3
ClsSs III 1.5 9.2 11.7 9.9
Other 2.0 2.1 4.4 3.5
Total 100.0 100.0 100.0 100.0









-25-


Table 16.--Monthly variation in Percent of Total Sales as Class I Milk,
by Size of Farms, Volesalc Dairy Farms, Northeast Florida, 1958.

Percent of total sales as Class I
Month : Your Size of farm A

: farm Small Medium : Large : farms

January 89 82 82 83
Febr. r-.y 94 81 81 82
March 91 80 77 79
April 82 79 72 75
Mqy 87 81 72 76
June 77 72 65 68
July 81 76 68 72
August 83 78 71 74
September 94 88 80 83
October 98 88 83 86
November 95 85 86 86
December 95 79 82 83

Average 89 81 77 79



Comparison-of Selected Factors for Dairies
in Northeast and Central Florida

A study was made of dairies in Central as well as Northeast Florida.
Records were obtained for 34 dairy farms. They were grouped into size groups
the same as used in this report. Table 17 shows a comparison of selected
factors for the two areas for all farms and also by size of farm.

The average size dairy in Northeast Florida was somewhat larger than
that in Central Florida. The 1959 average daily base per farm for the two
areas was 395 and 332 gallons, respectively. The average daily deliveries
in 1958 were 433 and 305 gallons, respectively.

The average production of milk per cow per year in the two areas was
almost the same; 725 gallons in Northeast and 739 gallons in Central Florida.
Farmers in Central Florida did a better job of holding their production in
line with Class I needs than those in Northeast Florida. The percent 7f
total sales of milk as Class I was 93 in Central Florida and 79 in North-
east Florida.






-26-
Table 17.--Comparison of Selected Factors for Dairies in Northeast and Central Florida, by Size of Farm,
Wholesale Dairy Farms, 1958.

: Size of Farm All Farms
Item : Small Medium : Large:
Northeast :Central:Northeast: Central: Northeast: Central: Northeast: Central


Number of farms surveyed
Base gallons per day, 1959 base period
Average number of cows
Gallons of milk sold in 1958:
Total per farm
Average per day
Percent of total sales of milk as Class I
Average B.F. test-percent
Amount of 4 percent F.C.M. milk sold
per cow year:
Gallons
Pounds
Total acres operated:
Owned
Rented
Total
Average acres operated per cow:
Owned
Rented
Total
Total value of operator's capital
Value of operator's capital per cow:
Real estate
Livestock
Other
Total
Man equivalent of labor
Cows per man
G-llons of 4 percent F.C.M. milk
sold per man


10
318
181


55,434
152
89
4.26


668
5,745

228

228

2.64

2.64
$73,901

$484
280
93
857
2.52
34.9


46,139
126
91
4.27


729
6,269

137
24
161

2.08
.35
2.44
$63,574

$574
297
94
965
1.96
33.6


124,097
340
81
4.37


724
6,226

256
91
347

1.42
.50
1.92
$140,166

$413
297
64
774
5.47
33.1


13
722
425


18,338
324
91
4.40


698
6,003

269
25
294

1.50
.14
1.64
$138,760

$394
303
75
772
5.30
33.9


294,436
807
77
4.42


736
6,330

520
222
742

1.22
.52
1.74
$304,095

$370
284
61
715
9.53
42.7


12
749
318


242,875
665
95
4.16


783
6,734

501
135
636

1.58
.42
2.00
$283,081

$493
325
73
891
8.70
36.5


31
395
231

157,989
433
79
4.39


725
6,235

335
104
439

1.45
.45
1.90
$172,720

$395
287
66
749
5.g4
38.6


34
332
157

111,239
305
93
4.27


739
6,355

257
47
304

1.64
.30
1.94
$134,345

$469
311
77
857
4.49
34.9


22,850 24,497 23,959 23,672 32,835 28,601 28,627 25,783






-27-


Table 17.--Continued.


: Size of Farm : All Farms
: Small Medium : Large
SNortheast :Ccntral:Northaast :Central :Northeast :Central :Northeast :Central
Cents per Gallon of 4 Percent F.C.M. Milk Sold


Income:
Milk sal2s
Other income
Total
Production Costs:
Feed
Total labor
Miscellaneous operating expenses
Total expenses before depreciation
and interest
Depreciation
Interest on investment @ 5 percent
Total Gross Cost
Less value of minor products
Net cost of milk sold

Feed
Total labor
Miscellaneous operating expenses
Total expenses before depreciation
and interest
Depreciation
Interest on investment @ 5 percent
Total Gross Cost

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


55.68
.86
56.54

27.17
15.25
8.61

51.03
5.78
6.42
63.23
.86
62.37

.43.0
24.1
13.6

80.7
9.1
10.2
100.0


-6.69

1.54
-.27


58.00
.88
58.88

30.27
14.83
10.32

55.42
3.39
6.62
65.43
.88
64.55

46.3
22.7
15.6

84.6
5.2
10.2
100.0
Cents


56.05
1.47
57.52

28.53
14.13
7.99


57.90
1.46
59.36

29.13
15.27
9.90


54.28
.67
54.95

26.74
11.98
7.37


50.65 54.30 46.09
3.12 2.92 3.76
5.34 5.53 4.36
59.11 62.75 54.71
1.47 1.46 .67
57.64 61.29 54.04
Percent of Total Gross Costs
48.3 46.4 48.9
23.9 24.3 21.9
13.5 15.8 13.4


85.7
5.3
9.0
100.0


86.5
4.7
8.8
100.0


84.2
6.9
8.9
100.0


per Gallon of 4 Percent F.C.M. Milk Soli


-6.55 -1.59


1.92
.07


4.07
3.75


-3.39

.91
2.14


.24

3.81
5.10


Item


50.39
2.20
52.59

28.32
13.73
9.94

51.99
2.62
5.59
60.30
2.20
58.10


46.9
22.8
16.5


54.90
.67
55.57

27.25
12.91
7.69

47.85
3.59
5.16
56.60
.67
55.S3

48.2
22.8
13.6

84.6
6.3
9.1
100.0


-1.03

3.62
4.13


86.2
4.3
9.5
100.0


2.29

5.45
7.98


-
- -------- --------------------------- --- ----,


59.00
1.68
60.68

28.99
14.52
9.99

53.50
2.88
5.80
62.18
1.68
60.50

46.6
23.3
16.1

86.0
4.6
9.4
100.0


-1.50

3.08
4.30






-28-


Due partly to a larger size, the average value of operator's capital was
greater for dairies in Tcktheast than in Central Florida. However, the invest-
ment per cow was greater in thc latter area. Farms in Northeast Florida had
an average of 5.84 man equivalents of labor and sold 20,527 gallons of 4 percent
F.C.M. milk per man. This compared with 4.49 man equivalents for dairies in
Central Florida and 25,703 gallons of milk per man.

The price received per gallon for milk in 1958 on a 4 percent F.C.M. basis
was 54.,C cents in Northeast Florida and 59.00 cents in Central Florida. This
reflect:Ld the lower percent of sales as Class I milk in Northeast Flor.da. The
net cost per gallon of milk sold was 55.93 cents in Northeast Florida and 60150
cents in Central Florida. With the exception of depreciation, each major item
of expenses was slightly less in the Northeast area. The value of minor prod-
ucts was 1.01 cents per gallon greater in the Central Florida area which was
reflected in a net herd appreciation due to a higher proportion of replacements
raised. When the differences between prices received and the net cost cf pro-
ducing milk between the two areas were considered there was not murch difference
in net returns. Net returns average -1.03 cents per gallon of 4 percent
F.C.M. milk in Northeast Florida and -1.58 cents in Central Florida.


Comparison of Selected Factors for Dairies
in 1949 and 1950

A survey was made of 20 dairy farms in the Jacksonville area of 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 was done of
sampling and all of the dairies were located in the Jacksonville area. However,
it is felt that a comparison of selected items for all farms for the two sur-
veys are significant. The production of milk in 1949 was not corrected to a
4 percent F.C.M. basis. Therefore, for comparative purposes, costs and returns
per gallon of milk sold in 1958 have 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 164 cows per farm compared to 231 cows for the average farm for the
present survey (Table 10). The gallons of milk sold per cow per year on an
uncorrected fat basis was 662 in the 1949 survey and 684 in the present survey.


Distribution of operator's capital.--The operators included in the 1949
survey estimated that their capital investment amounted to $51,292 per farm
(Table 19). This was less than one-third of the investment of $172,720 for
the average farm in 1958. On a per cow basis, the average investment in 1949
was $314 compared to $749 in 1958, or an increase of 130 percent. The biggest
change in investment was in real estate which averaged only $106 per cow in
1949 but $396 in 1958. In 1949, the value of livestock accounted for 55 per-
cent of the total investment but only 38 percent in 1950.






-29-


Table 18.--Comparison of Average Number of Cows, and Milk Sold per Farm and
per Cow, 194) and 1958 Surveys of the Cost of Producing Milk.


Item : 1949 : 1958


Average number of cows 164 231
Milk sold per farm--gallons 108,275 157,989
Milk sold per cow per year:
Gallons 662 684
Pounds 5,693 5,882
Milk sold per cow per day:
Gallons 1.81 1.87
Pounds 15.57 16.08



Table 19.--Distribution of Operator's Capital, 1949 and 1958 Surveys of the
Cost of Producing Milk. /

: Average amount :Percent of total
Item : Per farm : Per cow : investment
: 1949 : 1958 :1949:1958 : 1949 : 1958

Land and improvements $ 9,576 $ 72,843 $ 58 $316 19 42
Buildings 7,780 18,411 48 80 15 11
Total real estate 17,356 91,254 106 396 34 53

Livestock 28,141 66,186 172 287 55 38
Dairy equipment 2,269 5,911 14 26 4 3
Tractors and automobiles 2,225 3,747 14 16 4 2
Other machinery and equipment 1,301 4,632 8 20 3 3
Feed and supplies 2/ 990 2/ 4 2/ 1
Total 51,292 172,720 314 749 100 100


1/
The value of the capital furnished by the landlord
is in addition to the amount shown in this summary.
No estimate.
-- No estimate.


(rented capital)


Average costs and returns.--On an uncorrected fat basis, the average price
received per gallon for milk in 1949 was 57.89 cents and 58.10 cents in 1958
(Table 20). The value of other income in the two years was .94 cent and
.71 cent, respectively.






-30-
>Ible 20.--Average Costs and Returns per Gallon of Milk Sold and Percent
of Total for Costs and Returns, 1949 and 1958 Surveys of the
Cost of Producing Milk.

:Average per gallon :Percent of total
Item : of milk sold : :
: 1949 1958 1949 : 1958
Cents Cents


Income:
Milk sales
Other income
Total
Production Costs:
reed
Fertilizer, lime, seed, etc.
Total
La) r:
Hired labor
Unpaid family labor
Operator's labor & supervision
Total
Breeding fees
Veterinary and medicines
Dairy supplies
Transporting milk
Dues
Gas, oil, fuel, electricity
Trucks and automobile expenses
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
Building and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Costs
Less value of minor products
Net cost of milk sold
Returns:
Nec returns
Returns to operator for labor and
supervision
Return on average capital
i/Included in miscellaneous cash
2/Not separated in 1958.
3/Less than .05 pe'aert.


57.89
.94
58.83

31.80
.65
32.45

7.49
.18
3.27
10.94

.22
1.00

1/
.99
1.25
.07
.71
.02

.24
1.00
.39

49.28

3.40
.47
.30
.59
.26
5.02

2.37
56.67
.94
55.73

2.16

5.43
4.53
expenses.


58.10
.71
58.81

27.18
1.66
28.84

8.36
.30
4.92
13.58
.15
.41
.94
1.09
.29
1.83
2/
.12
1.05
.25
.05
.20
1.34
.49

50.63

.61
.91
.68
.76
.84
3.80

5.47
59.90
.71
59.19


98.4
1.6
100.0

56.1
1.1
57.2

13.2
.3
5. 8
19.3

.4
1.8

1/
1.9
2.2
.1
1.2
3/

.4
1.8
.7

87.0

6.0
.8
.5
1.0
.5
8.8


98.8
1.2
100.0

45.4
2.8
48.2

14.0
.5
8.2
22.7
.3
.7
1.6
1.8
.5
3.1
2/
.2
1.7
.4
.1
.3
2.2
.8

84.6

1.0
1.5
1.1
1.3
1.4
6.3


4.2 9.1
100.0 100.0


-1.09

3.83
4.38








-31-


The net cost per gallon of milk sold in 1949 was 55.73 cents and 5919
cents in 1950, or an increase of 3.46 cents per gallon. The cost of feed,
including fertilizer, lime and seed, in 1958 was 28.84 cents which was 3M61
cents less than the cost in 1949. The cost per gallon for labor in 1950 includ-
ing hired, unpaid and operator's was 13.50 cents which was 2.64 cents more
than the labor cost in 1949. The charge for depreciation in 1950 was 1.22
cents less than the charge in 1949 but the charge for interest was 3.10 cents
more reflecting the increase in investment per cow. The net return per gallon
of milk in 1949 was 2.16 cents, but -1.09 cents in 1958. The return on
average capital per gallon of milk sold was 4.53 cents in 1949 and 4.33 cents
in 1953.


Rate of turnover of cows in milking herd.--Thirty-three percent of the
cows in the herds in 1949 were replaced during the year and 28 percent in
1958 (Table 21). Ninety-two percent of the additions were purchased in 1949
and 05 percent in 1953. Of the cows taken out of the herd, 14 per.:ent in 1949
and 10 percent in 1958 died or were stolen. Several farm operators in the
Jacksonville area reported cows stolen during 1949.


Table 21.--Average Number of Cows on
Number Added to the Herd,
of Turnover, 1949 to 1958


Hand at Beginning and End of the Year,
Number Taken Out of the Herd and Rate
Surveys of the Cost of Producing Milk.


Item 1949 1958

Number of head on hand at thr
beginning of the year 159.2 225.3
Additions:
Purchased 50.0 64.2
Replacements raised 5.3 11.1
Total 63.3 75.3

Subtractions:
Sold 46.9 53.2
Died, etc. 7.6 6.3
Total 54.5 64.5

On hand at the end of the year 168.0 236.1

Percent turnover 33.3 28.0

Average years in the herd 3.0 3.6








-32-


Summary


A study was made of the cost of producing milk on wholesale dairy farms
in Northeast Florida for the 1958 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
31 farms that varied in size from 35.5 to 812.5 cows based on an avera-e of
the ntm'.,er on hand at the beginning and end of the year. The average amount
of milk cold per day varied from a low of 70 gallons to a high of 1414 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 fare.s in
the Northeast area. The production of milk on each farm was adjusted to a
4 percent F.C.M. basis. Costs and returns per unit are expressed in terms of
4 percent F.C.M. milk in the general summary of the 1958 data. In order to
compare results in 1958 with a similar study for 1949, costs and returns a:,e
expressed in terms of actual number of gallons of milk sold. Butterfat tests
were not obtained for the 1949 data.

Acres operated in 1953 average 439 per farm, of which 335 were owned
and 104 were rented. The average capital investment of the operator was
$172,720 per farm. This amounted to $749 per cow of which 53 percent was in
real estate. The value of all livestock made up only 38 percent of the total
investment.

The average number of cows per farm for all farms was 231. The average
annual sales per cow were 725 gallons of 4 percent F.C.M. milk. The average
price received per gallon for milk sold was 54.90 cents. Returns from the
sale of bags and manure, veal calves and other minor products amounted to
.67 cent per gallon to give a gross return of 55.57 cents.

The net cost per gallon for milk sold was 55.93 cents. Feed costs,
including fertilizer, lime and seed, averaged 27.25 cents per gallon and labor
costs, 12.91 cents. These two items of expense accounted for 71 percent of
the gross cost of producing milk. All depreciation amounted to 3.59 cents
per gallon and interest on capital, 5.16 cents.

The net cost per gallon for milk sold was 62.37 cents on small farms
and 54.03 cents on large farms, or a difference of 8.34 cents. The three
main items showing differences in costs were labor, depreciation and interest
on investment.

Twenty-eight percent of the cows in the herds were replaced in 1958. All
but 15 percent of the replacements were purchased. Ten percent of the cows
taken out of the herd were due to deaths.











The average value placed on mature cows at the beginning and end
of the year was $263 per head. Replacements raised that entered the
milking herd duriLg the year were valued at the time of freshening
at $213 per head. Cows and springers purchased during 1958 cost an
average of $227 per head. Cows sold during the year brought an average
of $140 per head.

The lowest production on these farms was during the summer months.
The large farms showed a definite tendency to increase production
towards the end of the year. These farms showed an increase or 35.4
cows between the inventory at the beginning of the year and the inventory
at the end of the year. On small farms, 89 percent of the total pro-
duction was sold as Class I milk compared to 81 percent on medium farms
and 77 percent on large farms.




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