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Group Title: Agricultural economics mimeo report
Title: Summary of costs and returns for wholesale dairy farms, central Florida, 1958
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 Material Information
Title: Summary of costs and returns for wholesale dairy farms, central 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 ; 60-2
 Record Information
Bibliographic ID: UF00094241
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 - 320779596

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Full Text




October 1959 Agricultural Economics Mimeo Report--60-2


SUMMARY OF COSTS AND RETURNS

FOR

WHOLESALE DAIRY FARMS

CENTRAL FLORIDA, 1958

by


R. E. L. Greene, John Warrington and D. L. Brooke



TABLE OF CONTENTS

Method of Selecting Dairies to Be Studied . . . . . 1
Method of Calculating Cost . . ....... 3
Size of Farms Studied . . . ........... .. 4
Acres Operated and Use of Land . . . . . . . . 4
Distribution of Operator's Capital . . . . . . . 7
ALnual 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 . . . .. 19
Rate of Turnover of Cows in The Milking Herd . . . . 19
Average Inventory Value, Purchase Price and Sales Price per
Head . . . . . . . . . . . . 21
Seasonal Distribution of Milk Production . . . . . 23
Distribution of Total Production of Milk by Classes . . . 24
Comparison of Selected Factors for Dairies in Central and
Northeast 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
FARMS IN CENTRAL FLORIDA, AVERAGE FOR THE
CALENDAR YEAR, 1958


This report presents the results of a study of dairy farms in
Central 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 Central Florida giving the base
gallons per day for the 1959 base setting period. One base was for a
group of producers of eight members. Bases for the individual
members were obtained for these producers. These were a total of 123
producers in Central Florida with daily bases that ranged from 55 to
1940 gallons (Table 1). Forty-four percent of the producers had a daily
base of less than 225 gallons per day with about 18 percent of the total
base production. Thirty-six percent of the producers had a base of 225
to 449 gallons per day and 35 percent of the total base production.
Only 20 percent of the producers had a base of 450 gallons or more per
day but this group had 47 percent of the total daily base production.

Table l.--Variation in The Number of Producers by Base Gallons per Day,
Dairy Farms, Central 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 125 28 100 22.8 6.8
125-224 26 168 21.1 10.7
Medium:
225-314 22 270 17.9 14.6
315-449 22 387 17.9 20.9
Large:
450-599 9 506 7.3 11.2
600-899 12 715 9.8 21.1
900 or more 4 1499 3.2 14.7
Total or average 123 331 100.0 100.0












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 leaving a total of 118 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 pro-
ducers 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 34 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, Central 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 27 7 25.9 3.86
125-224 26 6 23.1 4.33

Medium:
225-314 20 4 20.0 5.00
315-449 21 5 23.8 4.20

Large:
450-599 9 3 33.3 3.00
600-899 11 6 54.5 1.83
900 or more 4 3 75.0 1.33

Total or average 118 34 28.8













































Fig. l.--Location of Dairy Farms Studied, Central 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 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 statements were not available, the information was obtained
directly from the plants to which the cooperating farmers delivered
their milk.












All farms surveyed were specializing in dairying with receipts from
the dairy enterprise being the only source of income. Therefore, 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.I/ 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. The average number of cows in the herd for the
year was based on an average of the numbers at the beginning and end of
the year. Average production per cow per year was obtained by dividing
the total production of 4 percent F. C. M. milk by the average number
of cows as calculated above.


Size of Farms Studied

The farms included in this study had daily bases that ranged from 82
to 1743 gallons (Table 3). Bases were less than 225 gallons per day on
13 farms, 225 to 449 gallons on 9 farms and 450 gallons or more per day
on 12 farms. On the basis of average volume sold per day in 1958, the
farms varied from a low of 82 gallons to a high of 1427 gallons. The
average daily sales for small, medium and large farms were 126, 324 and
665 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 304
acres, of which 47 acres, or 15 percent, were rented and 257 acres were
owned (Table 4). Acres operated averaged 161 on small farms, 294 on
medium size farms and 636 acres on large farms.


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 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 Number of Cows and Gallons of 4 Percent F. C. M.
Milk Sold per Cow per Year and per Day, Wholesale Dairy Farms,
Central Florida, 1958.

: : 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 : 1958 :(pct.) : cows : year : day
Small Farms
7 82 82 4.25 72.0 430 1.18
1 85 92 4.22 39.0 886 2.43
5 105 80 4.39 37.0 833 2.28
2 107 105 4.94 40.0 1089 2.98
3 113 109 4.26 62.5 662 1.81
6 122 94 4.79 41.0 935 2.56
4 124 133 4.32 63.5 798 2.19
13 130 119 4.13 55.5 794 2.18
8 145 133 4.36 71.0 720 1.97
9 157 167 4.18 81.0 773 2.12
11 .177 138 4.07 60.0 845 2.32
10 191 161 3.64 108.5 513 1.40
12 216 212 4.27 114.0 724 1.98
Average 138 126 4.27 65.9 729 2.00
Medium Farms
16 235 218 4.15 145.0 562 1.54
15 264 275 4.65 158.0 696 1.91
17 279 266 4.12 189.0 524 1.44
14 307 319 4.05 189.5 620 1.70
21 362 343 4.91 153.5 926 2.54
18 373 297 5.03 120.0 1041 2.85
22 428 433 4.13 267.5 602 i.i5
19 431 386 4.34 193.0 768 2.10
20 433 422 4.38 210.0 775 2 12
Average 340 324 4.40 179.8 698 1.91
Large Farms
25 461 456 3.96 318.0 520 1.42
23 508 450 3.97 193.0 846 2.32
24 535 502 4.23 254.0 746 2.04
28 627 593 4.27 210.0 1071 2.93
26 664 605 4.07 215.5 1035 2.84
27 693 590 4.03 318.5 678 1.86
29 801 777 4.16 362.5 794 2.18
31 808 651 4.37 279.5 898 2.46
30 822 692 4.05 407.5 625 1.71
32 1043 957 4.28 509.5 714 1.96
33 1269 1071 4.08 463.0 855 2.34
34 1743 1427 4.41 566.0 977 2.68
Average 749 665 4.16 317.6 783 2.14
Average
all farms 332 305 4.27 156.7 739 2.02









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

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


Acres Operated:
Owned
Rented
Total


Use of Land:
Cropland and open pasture
Forage crops harvested as:
Hay
Silage
Cut green
Temporary pasture
Permanent pasture:
Im roved
Other
Total
Less acres doubled-cropped
Total crops and open pasture
Woodland pastured
Other land
Total operated

Average
Acres Operated:
Owned
Rented
Total

Use of Lend:
Cropland and open pasture
Forage harvested as:
Hay
Silage
Cut green
Temporary pasture
Permanent pasture:
Improved
Other
Total
Less acres doubled-cropped
Total crops and open pasture
Woodland pastured
Other laad
Total operated


137
24
161




4

2
16


84
______10
116
13
103
37
21
161

a Acres per Cow

2.08
.36
2.44


.06

.03
.24


1.28
.15
_ 1.76
.20
1_.56
.56
.32
2.44


269
25
294




3
25
9
11

168
33
249
39
210
66
18
294


1.50
.14
1.64




.02
.14
.05
.06

.93
.18
1.38
.21
1.17
.37
.10
1.64


501
135
636




27
60
43
45

270
114
559
91
468
121
47
-636


1.58
.42
2.00




.08
.19
.14
.14

.85
.36
1.76
.29
1.47
.38
.15
2.00


257
47
304




8
21
13
21

151
39
253
38
215
64
25
304


1.64
.30
1.94




.05
.13
.08
.13

.97
.25
1.61
.24
1.37
.41
.16
1.94


--











Most of the open land on these dairy farms was in permanent pasture.
On all farms improved permanent pasture averaged 151 acres per farm and
other permanent pastures 39 acres. Twenty-one acres were in temporary
pastures. Only a small acreage of forage crops were harvested. On all
farms, an average of 8 acres of forage crops were harvested as hay, 21
acres as silage and 13 acres cut and fed green. Thirty-eight of the
253 acres reported in forage crops and open pastures were doubled-cropped
leaving a total of 215 acres devoted to these uses.

Total acres operated averaged 1.94 per cow on all farms. This amount
was 2.44 acres on small farms, 1.64 on medium size farms and 2.00 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 1.28 acres per cow on small farms and .85 acre on large
farms; other improved pasture was .15 acre per cow on small farms and
.36 acre on large farms. Forage crops harvested per cow were greater
on large farms than on other farms. However, only .41 acre of forage
crops was harvested per cow on large 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 $134,345 for all farms, or an average investment of $857
per cow (Table 5). Fifty-five percent of the total investment was in
land and buildings and 36 percent in livestock. The value of rented
capital was not included in the average investment figure.

Operators investment averaged $63,754 on small farms and $283,081
on large farms. Average investment per cow was $965 on small farms and
$891 on large farms. The average investment per cow was only $772 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 $276 per acre, medium size farms, $263 per acre
and large farms, $312 per acre.










Table 5.--Distribution of Operator's Capital, Wholesale Dairy Farms,
Central Florida, 19581/.

: Your : Size of farm: All
Item : farm : Small2 : Medium : Large2: farms


Average Amount per Farm


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

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


$32,341 $ 63,605 $136,890
4,015 5,796 11,720
1,456 1,413 7,920
37,812 70,814 156,530
19,571 54,524 103,358
3,951 4,750 8,741
896 2,868 5,814
1,344 5,256 8,638
548 -
63,574 138,760 283,081


rage Amour


It


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


per Cow
$491
61
22
574
297
60
14
20

965


Investment


50.9
6.3
2.3
59.5
30.8
6.2
1.4
2.1

100.0


$354
32
8
394
303
27
16
29
3
772



45.8
4.2
1.0
51.0
39.3
3.4
2.1
3.8
.4
100.0


$431
37
25
493
325
28
18
27

891



48.4
4.1
2.8
55.3
36.5
3.1
2.0
3.1

100.0


2/One farmer in this group rented his entire farm.


$ 64,469
6,201
2,756
73,426
48,758
5,203
2,581
4,187
190
134,345


$411
40
18
469
311
33
16
27
1
857


48.0
4.6
2.1
54.7
36.3
3.9
1.9
3.1
.1
100.0


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











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 1958, 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, Central Florida,
1958.

~: 'Size ot farm:
Item :Your; : : : All
:farm: Small : Medium : Large : farms

Average number of cows 65.9 179.8 317.6 156.7

Milk sold per farm per year--
gallons 46,139 118,338 242,875 111,239

Average B. F. test--percent 4.26 4.40 4.16 4.27

Amount of 4 percent F.C.M. milk:
Sold per farm per year--gallons 48,015 125,460 248,829 115,767
Sold per cow per year:
Gallons 729 698 783 739
Pounds 6,269 6,003 6,734 6,355
Sold per cow per day:
Gallons 2.00 1.91 2.14 2.02
Pounds 17.20 16.43 18.40 17.37



The data on costs and returns are based on averages weighted to
represent the distribution of dairy farms in Central Florida 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 cf individual items, however, total income and
expenses remain .he same.





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


Item


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
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 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
Returns on average 'investment
Percent return on investment


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


$68,309 $436
288 2
383 2
1,122 7
150 1
70,252 448

31,835 203
1,728 11
33,563 214

10,193 65
1,316 8
5,297 34
16,806 107
415 3
679 6
1,328 8
1,968 12
188 1
1,150 7
1,086 7
226 1
737 5
376 2
126 1
233 1
311 2
1,967 13
775 5

61,934 395


97.2
.4
.6
1.6
.2
100.0

44.2
2.4
46.6

14.2
1.8
7.3
23.3
.6
1.0
1.9
2.7
.3
1.6
1.5
.3
1.0
.5
.2
.3
.4
2.7
1.1

86.0


844 5 1.2
737 5 1.0
788 5 1.1
961 6 1.3
3,330 21 4.6


6,717 43
71,981 459
1,943 12
70,038 447

-1,729 -11


3,568
4,988
3.7


9.4
100.0


59.00
.25
.33
.97
.13
60.68

27.50
1.49
28.99

8.80
1.14
4.58
14.52
.36
.59
1.15
1.70
;16
.99
.94
.20
.63
.32
.11
.20
.27
1.70
.67

53.50


.73
.64
.68
.83
2.88

5.80
62.18
1.68
60.50


- -1.50

- 3.08
- 4.30


$6.86
.03
.04
.11
.02
7.06

3.20
.17
3.37

1.02
.13
.53
1.68
.04
.07
.13
.20
.02
.12
.11
.02
.08
.04
.01
.02
.03
.20
.08

6.22


.08
.07
.08
.10
.33

.68
7.23
.20
7.03


-.17







-11-


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 $436 per cow. The average price
was 59.00 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 $12 per cow, or 1.68 cents 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.

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 in-
crease 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 $214
per cow, or 28.99 cents per gallon of milk sold. Feed costs on individual
farms ranged from 23.17 to 38.83 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 1958.
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 $11 per cow, or 1.49 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 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 8.80 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 20 of the 34
farms surveyed. The amount of unpaid family labor averaged $8 per cow,
or 1.14 cents 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







-12-


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 33 operators on the 34 farms
surveyed. One farm was operated by a hired manager and there was no
charge for operator's labor. Some operators estimated they spent only a
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 $5,297 per farm,
or 4.58 cents per gallon of milk sold.

Total cost of all labor amounted to $107 per cow, or 14.52 cents
per gallon of milk sold. Labor costs were the second largest item of
expenses and amounted to 23.3 percent of the gross costs. The cost of
labor and feed, including the cost of fertilizer, lime and seed, amounted
to 70 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 $415 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 1.15 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 1.70 cents
per gallon of milk sold.

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.

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
milking 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.







-13-


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 $13 per cow, or 1.70
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.--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
+ amount received from all sales) equals net change in value for the
year. This method gives a depreciation expense based on the actual
turnover and lose 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.

On the average for all farms there was a net appreciation rather than
a depreciation on the dairy herd. This figure amounted to $7 per cow,
or .97 cent per gallon of milk sold. Thirty-six percent of all replacements
were raised.






-14-


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, 8.1 percent; dairy equipment, 14.2 percent; autos and trucks,
30.5 percent and tractors and miscellaneous equipment, 23.0 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 $3,330 per farm, $21 per cow, or 4.6
percent of the gross cost of producing milk. On the basis of a gallon
of milk sold, depreciation averaged .73 cent for buildings and fences,
.64 cent for dairy equipment, .68 cent for autos and trucks and .83 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.

The interest charged averaged $43 per cow, or 5.80 cents per gallon
of milk sold. On these farms the amount of interest actually paid in
1958 amounted to $1,315 per farm, or 1.1 cents 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 $459,
or 62.18 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 $12 per cow, or 1.68 cents per gallon
of milk sold. Thus, the net cost per gallon of milk sold was 60.50 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
$11 to cover costs. This was a loss of 1.50 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.







-15-


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
$23 per cow, or 3.08 cents per gallon of milk sold.

Returns on average investment.--This is the return for operators
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 $32
per cow, or 4.30 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, and 10.

Large size farms had the highest average price per gallon of milk
sold; 60.39 cents compared to 57.90 cents for the medium size farms.
Large farms also had the largest gross income per gallon. This group had
a net appreciation on all livestock of 1.27 cents per gallon of milk sold.

The net cost per gallon of milk sold was 64.55 cents on small farms
and 58.10 cents on the large farms, or a difference of 6.45 cents. The
main items that varied in cost were feed, labor and depreciation. Feed
costs per gallon of milk sold on small farms were 1.95 cents higher than
on large farms, labor, 1.10 cents and depreciation, .77 cent. On small
farms, the average value of operator's labor and management was $4,068
per farm compared to $7,854 on large farms, or only 52 percent as much.
The larger interest charge per gallon of milk sold on small farms as
compared to large farms was due mainly to the higher investment per cow.
Small farms had an average investment of $965 per cow and large farms,
$891.





-16-
Table 8.--Average Total Income and Production Costs per Farm, by Size of
Farm, Wholesale Dairy Farms, Central Florida, 1958.

: 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:
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 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
Returns on average investment
Percent return on investment


$27,849
89
151
177
6
28,272

13,889
647
14,536

2,124
931
4,068
7,123
110
250
624
1,247
59
508
706
24
248
216
9
53
154
560
181


$72,639
187
370
1,149
127
74,472

35,155
1,393
36,548

11,542
2,232
5,389
19,163
574
809
1,270
2,064
177
1,074
1,169
206
958
358
168
231
51
2,229
1,074


26,608 68,123 129,374


492
471
313
353
1,629

3,179
31,416
423
30,993


900
732
873
1,156
3,661

6,938
78,722
1,833
76,889


-3,144 -4,250


924
35
0.1


1,139
2,688
1.9


-
1,525
1,333
1,690
1,970
6,518

14,155
150,047
5,486
144,561

5,702

13,556
19,857
7.0


$150,263
900
918
3,163
505
155,749

65,791
4,690
70,481

25,707
601
7,854
34,162
815
1,405
2,982
3,399
494
2,699
1,782
705
1,440
760
309
635
1,101
4,629
1,576





-17-
Table 9.--Summary of Costs and Returns per Gallon of 4 Percent F.C.M. Milk
Sold, by Size of Farm, Wholesale Dairy Farms, Central Florida,
1958.


: Your
Item : farm :


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
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 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
Returns on average investment


, J I


-


Small

58.00
.19
.31
.37
.01
58.88

28.92
1.35
30.27

4.42
1.94
8.47
14.83
.23
.52
1.30
2.60
.12
1.06
1.47
.05
.52
.45
.02
.11
.32
1.17
.38

55.42


1.02
.98
.65
.74
3.39

6.62
65.43
.88
64.55

-6.55

1.92
.07


Size of farm
: Medium
- Cents --
57.90
.15
.29
.92
.10
59.36

28.02
1.11
29.13

9.20
1.77
4.30
15.27
.46
.64
1.01
1.65
.14
.86
.93
.17
.76
.29
.13
.18
.04
1.78
.86

54.30


.72
.58
.70
.92
2.92

5.53
62.75
1.46
61.29

-3.39

.91
2.14


Large

60.39
.36
.37
1.27
.20
62.59

26.44
1.88
28.32

10.33
.24
3.16
13.73
.33
.56
1.20
1.37
.20
1.08
.72
.28
.58
.31
.12
.26
.44
1.86
.63

51.99


.61
.54
.68
.79
2.62

5.69
60.30
2.20
58.10

2.29

5.45
7.98





-18-


Table 10.--Percent of Total Income
Items, by Size of Farm,


and Percent of Total Costs for Various
Wholesale Dairy Farms, Central Florida,
1958.


: Your : S
Item : farm : Small :


Income:
Milk sales
Bags and manure
Calves sold
Net appreciation on livestock
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 expenses before
depreciation and interest
Depreciation:
Net depreciation on herd
Buildings and fences
Dairy equipment
Auto and trucks
Tractors and misc. equipment
Total depreciation
Interest on average investment
@ 5 percent
Total Gross Cost


ize of farm


98.5
.3
.6
.6
1/
100.0

44.2
2.1
46.3

6.8
3.0
12.9
22.7
.4
.8
2.0
4.0
.2
1.7
2.3
.1
.8
.7
.1
.2
.5
1.2
.6

84.6


1.6
1.5
1.0
1.1
5.2


Large


Medium :
Percent -

97.5
.3
.5
1.5
.2
100.0

44.6
1.8
46.4

14.7
2.8
6.8
24.3
.7
1.0
1.6
2.6
.2
1.4
1.5
.3
1.2
.5
.2
.3
.1
2.8
1.4

86.5


1.2
.9
1.1
1.5
4.7


10.2 8.8 9.5
100.0 100.0 100.0


!/Less than .05 percent.


96.5
.6
.6
2.0
.3
100.0

43.8
3.1
46.9

17.2
.4
5.2
22.8
.5
.9
2.0
2.3
.3
1.8
1.2
.5
1.0
.5
.2
.4
.7
3.1
1.1

86.2


1.0
.9
1.1
1.3
4.3






-19-


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 1.96 man equivalents of labor on small farms, 5.30 on
medium size farms and 8.70 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 an increase in labor efficiency
on large farms. There was an average of 33.6 cows per man on small farms,
33.9 on medium size farms and 36.5 on large farms. Gallons of 4 percent
F. C. M. milk sold per man averaged 24,497 on small farms, 23,672 on
medium size farms and 28,601 on large farms.

Wages paid per week for hired labor averaged $72.24 on small farms,
$65.56 on medium size farms and $55.37 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 $88.19 per week,
medium size farms, $96.18 and large farms, $153.55.


Rate of Turnover of Cows in The Milking Herd

Twenty-four percent of the cows covered in this study were replaced
in 1958 (Table 12). At this rate the average cow would remain in the
herd 4.2 years. The rate of replacement was 27.9 percent on small farms,
22.4 percent on medium size farms and 23.1 percent on large farms.

Sixty-four percent of the additions to the herd were purchased and
36 percent raised. The percent of replacement raised was 30 on small
farms, 52 on medium size farms and 39 percent on large farms. Ten
percent of the cows taken out of the herd left because of deaths. The
proportion of cows removed because of death averaged 7 percent on small
farms, 11 on medium size farms and 9 on large farms. Percent death loss
in all herds averaged 2.3 percent.

For each size of farm, the average number of cows in the herds
increased between the beginning inventory and the ending inventory. The
greatest increase was on large farms where it averaged 11 percent.






-20-


Table 11.--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, Central Florida, 1958.

: :Gallons of : : Amount of 4% F.C.M.
Farm :Base gallons:milk sold : Man : Cows : milk sold per man
No. :per day,1959: per day, :equivalents: per :
:base period : 1958 : of labor : man : Gallons : Pounds


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

16
15
17
14
21
18
22
19
20
Average

25
23
24
28
26
27
29
31
30
32
33
34
Average
Average
all farms


82
85
105
107
113
122
124
130
145
157
177
191
216
138

235
264
279
307
362
373
428
431
433
340

461
508
535
627
664
693
801
808
822
1043
1269
1743
749


82
92
80
105
109
94
133
119
133
167
138
161
212
1-26

218
275
266
319
343
297
433
386
422
T2-

456
450
502
593
605
590
777
651
692
957
1071
1427
665


Small Farms
1.51
1.42
1.00
2.35
1.00
2.26
2.00
1.57
3.65
1.62
2.20
2.00
2.64
1.96
Medium Farms
4.45
4.16
3.27
5.14
7.44
5.30
5.77
5.69
7.24
5.30
Large Farms
6.23
4.00
6.96
7.04
9.58
6.55
10.30
11.54
7.67
9.16
9.64
27.00
8.70


34.9 25,783 221,734


47.7
27.5
37.0
17.0
62.5
18,1
31.8
35.4
19.4
50.0
27.3
54.2
43.2
33.6

32.6
38.0
57.8
36.9
20.6
22.6
46.4
33.9
29.0
33.9

51.0
48.2
36.5
29.8
22.5
48.6
35.4
24.2
53.1
55.6
48.0
21.0
36.5


20,521
24,327
30,821
18,529
41,348
16,961
25,346
28,077
14,016
38,658
23,054
27,849
31,254
24,497

18,304
26,452
30,260
22,841
19,100
23,579
27,925
26,050
22,482
23,672

26,561
40,837
27,226
31,955
23,284
32,987
28,171
21,741
33,215
39,692
41,059
20,478
28,601


176,481
209,215
265,057
159,351
355,594
145,865
217,979
241,465
120,506
332,460
198,261
239,502
268,786
210,674

157,411
227,486
260,233
196,436
164,262
202,778
240,158
224,026
193,346
203,579

228,421
351,198
234,143
274,816
200,244
283,692
242,271
186,970
285,647
341,349
353,108
176,107
245,969


305 4.49







-21-


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 Hand at The End of The Year and Rate of Turnover, by Size
of Farm, Wholesale Dairy Farms, Central Florida, 1958.

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

On hand beginning of the year 65.0 179.4 302.2 153.0

Additions:
Purchased 14.2 19.8 74.8 28.5
Replacements raised 6.0 21.2 29.4 16.0
Total 20.2 41.0 104.2 44.5

Subtractions:
Sold 17.1 35.6 66.6 33.6
Died 1.3 4.6 6.7 3.6
Total 18.4 T402 73.3 -37.2

On hand end of year 66.8 180.2 333.1 160.3

Percent turnover 27.9 22.4 23.1 23.7

Average years in herd 3.6 4.5 4.3 4.2



Average Inventory Value, Purchase Price
and Sales Price per Head

The average value placed on mature cows at the beginning and ending
of the yeariwas $270 per head (Table 13). Herd bulls were valued at
$317 per head, heifers over one year, $159 and heifers under one year,
$72. Replacements raised that entered the milking herd during the year
were valued at the time of freshening at $243 per head on small farms,
$244 on medium size farms and $269 on large farms.

The average price paid per head for cows and springers during 1958
was $265 on small farms, $227 on medium size farms and $242 on large
farms. The average sales price of cows removed from the herd was $152
on small farms, $143 on medium size farms and $164 on large farms.






-22-


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

: 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

Purchases:
Cows 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


65.9 179.8 317.6 156.7
1.7 3.0 4.5 2.7


.3 .1 1/


10.3 25.8 45.5 22.8
12.2 24.9 48.1 23.9


6.0 21.2 29.4 16.0


14.2
.2

.2


19.8 74.8 28.5
.3 1.0 .4

.1


.2


17.1 35.6 66.6 33.6
.2 .5 1.2 .5


- .1

-.6
-.3


- I/


.3
.1


$253 $263 $285 $270
382 328 252 317

54 394 200 145


164 168 159
77 74 72


243 244 269 253



265 227 258 252
286 454 242 303


34


67 67


152 143 164 154
241 228 210 222


420

97
90


- 420

266 152
- 90


l/Less than .05.


--






-23-


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 all frms was in October,
November and December. No doubt producers were building up their
production in order to increase the size of their bases during the base
setting period. This was reflected partly by an increase in number of
cows.


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

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

Average Number of Gallons Sold per Day

January 126 328 684 309
February 126 336 674 310
March 124 341 672 311

April 124 336 649 304
May 123 315 636 294
June 117 310 593 281

July 114 285 553 263
August 112 286 578 267
September 126 321 674 305

October 142 332 747 331
November 142 351 765 341
December 141 350 762 340

Average 126 324 665 305






-24-


Distribution of Total Production of Milk by Classes


Producers in Central Florida did a good job of holding their pro-
duction of milk in line with Class I sales (Table 15). The proportion
of total sales in Class I varied from 91 percent on small and medium
farms to 95 percent on large farms.

The proportion of sales in Class I milk varied some by months
throughout the year (Table 16). On small farms, the variation was
from 83 percent in June to 98 percent in September. Medium farms varied
from a low of 88 percent in June to 99 percent in September. Large farms
varied from 92 percent in June to 99 percent in September.


Table 15.--Amount and Percent of Milk in Various Classes, by Size of Farm,
Wholesale Dairy Farms, Central Florida, 1958.


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

Gallons of Milk

Class I 41,935 108,177 231,350 103,477
Class II 2,845 3,435 8,045 4,107
Class III 1,359 6,726 3,405 3,640
Other 75 15
Total 46,139 118,338 242,875 111,239

Percent of Total

Class I 90.9 91.4 95.2 93,0
Class II 6.2 2.9 3.3 3.7
Class III 2.9 5.7 1.4 3.3
Other _-- .1 1
Total 100.0 100.0 100.0 100.0


I/Less than .05.





-25-


Table 16.--Monthly Variation in Percent of Total Sales as Class I Milk,
by Size of Farm, Wholesale Dairy Farms, Central Florida, 1958.

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

January 92 93 95 94
February 94 92 96 94
March 91 87 95 91

April 90 89 95 92
May 90 92 97 94
June 83 83 92 89

July 88 89 98 93
August 96 92 98 95
September __98 99 99 99

October 89 92 96 93
November 87 88 91 89
December 92 95 90 92

Average 91 91 95 93



Comparison of Selected Factors for Dairies in
Central and Northeast Florida

A study was made for dairies in Northeast as well as Central Florida.
Records were obtained for 31 dairies. 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 some larger than that
in Central Florida. The 1959 average base gallons per day for the two
areas were 332 and 395, respectively. The average daily deliveries in
1958were 305 and 433 gallons, respectively.

The average production of milk per cow per year was almost the same;
739 gallons in Central and 725 gallons in Northeast 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 of total sales
of milk as Class I was 93 percent in Central Florida and 79 percent in
Northeast Florida.





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

: Size of farm : All farms
Item : Small : Medium : Large : :
:Central:Northeast: Central:Northeast: Central:Northeast: Central:Northeast


Number of farms surveyed 13 8 9 10 12 13 34 31
Base gallons per day, 1959 base period 138 146 340 318 749 722 332 395
Average number of cows 66 86 180 181 318 425 157 231
Gallons of milk sold in 1958:
Total per farm 46,139 55,434 118,338 124,097 242,875 294,436 111,239 157,989
Average per day 126 152 324 340 665 807 305 433

Percent of total sales of milk as Class I 91 89 91 81 95 77 93 79

Average B. F. test-percent 4.27 4.26 4.40 4.37 4.16 4.42 4.27 4.39
Amount of 4 percent F.C.M. milk sold
per cow per year:
Gallons 729 668 698 724 783 736 739 725
Pounds 6,269 5,145 6,003 6,226 6,734 6,330 6,355 6,235
Total acres operated:
Owned 137 228 269 256 501 520 257 335
Rented 24 25 91 135 222 47 104
Total 161 228 294 347 636 742 304 439
Average acres operated per cow:
Owned 2.08 2.64 1.50 1.42 1.58 1.22 1.64 1.45
Rented .36 .14 .50 .42 .52 .30 .45
Total 2.44 2.64 1.64 1.92 2.00 1.74 1.94 1.90
Total value of operator's capital $63,574 $73,901 $138,760 $140,166 $283,081 $304,095 $134,345 $172,720
Value of operator's capital per cow:
Real estate $574 $484 $394 $413 $493 $370 $469 $396
Livestock 297 280 303 297 325 284 311 287
Other 94 93 75 64 73 61 77 66
Total 965 857 772 774 891 715 857 749
Man equivalent of labor 1.96 2.52 5.30 5.47 8.70 9.53 4.49 5.84
Cows per man 33.6 34.9 33.9 33.1 36.5 42.7 34.9 38.6
Gallons of 4 percent F.C.M.
milk sold per man 24.497 22.850 23_672 23_q- 9 IR An5 A Qq o 0 4 2i


S.- -. -


-0, vW 31,J La, OUJ






-27-
Table 17.--Continued.

: Size of farm : All farms
Item : Small : Medium : Large: :
:Central:Northeast: Central:Northeast: Central:Northeast: Central:Northeast

Cents per Gallon of 4 Percent F.C.M. Milk Sold


Income:
Milk sales
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


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


-6.55

1.92
.07


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


57.90
1.46
59.36

29.13
15.27
9.90

54.30
2.92
5.53
62.75
1.46
61.29
Percent
46.4
24.3
15.8


80.7 86.5
9.1 4.7
10.2 8.8
100.0 100.0
Cents per Gallon


-6.69 -3.39


1.54
-.27


.91
2.14


56.05
1.47
57.52

28.53
14.13
7.99

50.65
3.12
5.34
59.11
1.47
57.64
of Total
48.3
23.9
13.5

85.7
5.3
9.0
100.0


60.39
2.20
62.59

28.32
13.73
9.94

51.99
2.62
5.69
60.30
2.20
58.10


Gross Costs
46.9
22.8
16.5


86.2
4.3
9.5
100.0


54.28
.67
54.95

26.74
11.98
7.37

46.09
3.76
4.86
54.71
.68
54.03


48.9
21.9
13.4


84.2
6.9
8.9
100.0


of 4 Percent F.C.M. Milk Sold


-1.59

4.07
3.75


2.29

5.45
7.98


.24 -1.50

3.81 3.08
5.10 4.30


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


54.90
.67
55.57

27.25
12.91
7.69

47.85
3.59
5.16
56.60
.67
55.93

48.2
22.8
13.6

84.6
6.3
9.1
100.0


-1.03

3.62
4.13


--






-28-


Due partly to a larger size, the average value of operator's capital
was greater for dairies in Northeast than in Central Florida. However,
the investment per cow was higher in the latter area. Farms in Central
Florida had an average of 4.49 man equivalents of labor and sold 25,783
gallons of 4 percent F. C. M. milk per man. This compared with 5.84
man equivalents for dairies in Northeast Florida and 28,627 gallons of
milk per man.

The price received for milk in 1958 on a 4 percent F. C. M. basis
was 59.00 cents in Central Florida and 54.90 cents in Northeast Florida.
This reflected the lower percent of sales as Class I milk. The net
cost per gallon of milk sold was 60.50 cents in Central Florida and 55.93
in Northeast Florida. With the exception of depreciation, each major
item of expenses was slightly less in the Northeast area. The value of
minor products was 1.01 cents per gallon greater in the Central Florida
area which was reflected in a net herd appreciation due to the higher
proportion of replacements raised. When differences between prices
received and cost of producing milk between the two areas were considered,
there was not much difference in net returns. Net returns averaged -1.58
cents per gallon in Central Florida and -1.03 cents in Northeast Florida.


Comparison of Selected Factors for Dairies in 1949 and 1958

Dairy cost records were obtained from 19 farm operators in the
Orlando 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 Otlando 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 1958 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 79 cows per farm compared to 157 cows for the average
farm for the present survey (Table 18). The gallons of milk sold per
cow per year on an uncorrected fat basis was 633 in the 1949 survey and
710 in the present survey, or up 11 percent.

Distribution of operator's capital.--The operators included in the
1949 survey estimated that their capital investment amounted to $33,450
per farm (Table 19). This was less than one-fourth of the investment of
$134,345 for the average farm in 1958. On a per cow basis, the average
investment in 1949 was $424 compared to $857 in 1958, or an increase of
102 percent. The biggest change in investment was in real estate which
averaged only $162 per cow in 1949 but $411 in 1958. In 1949, the value
of livestock accounted for 45 percent of the total investment but only
36 percent in 1958. In both surveys, the value of rented capital was not
included in the investment figures reported above.







-29-


Table 18.--Comparison of Average Number of Cows, and
and per Cow, 1949 and 1958 Surveys of The
Milk, Ceatral Florida Area.


Milk Sold per Farm
Cost of Producing


Item : 1949 : 1958


Average number of cows 79 157
Milk sold per farm--gallons 50,025 111,239
Milk sold per cow per year:
Gallons 633 710
Pounds 5,444 6,106
Milk sold per cow per day:
Gallons 1.73 1.94
Pounds 14.88 16.68





Table 19.--Distribution of Operator's Capital, 1949 and 1958 Surveys
of The Cost of Producing Milk, Central Florida.I/


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

: 1949 1958 :1949:1958: 1949 : 1958

Land and improvements $12,776 $ 64,469 $162 $411 38 48
Buildings 3,008 8,957 38 58 9 7
Total real estate 15,784 73,426 200 469 47 55

Livestock 15,007 48,758 190 311 45 36
Dairy equipment 1,313 5,203 17 33 4 4
Tractors and automobiles 999 2,581 13 16 3 2
Other machinery and equipment 347 4,187 4 27 1 3
Feed and supplies 190 1 1/
Total 33,450 134,345 424 857 100 100

1/The value of capital furnished by the landlord (rented capital) is
in addition to the amount shown in this summary.
2/Less than .5.
Average costs and returns.--On an uncorrected fat basis, the average
price received per gallon for milk in 1949 was 56.8 cents and 61.4 cents
in 1958 (Table 20). The value of other income in the two years was .8
cent and 1.7 cents, respectively.






-30-
Table 20.--Average Costs and Returns per Gallon of Milk Sold and Percent
Various Items wereof Total Costs and Returns, 1949 and 1958
Surveys of The Cost of Producing Milk, Central Florida.

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


Income:
Milk sales
Other income
Total
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
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
Returns on average capital
I/Included in miscellaneous c<
2/Not separated in 1958.
3/Less than .05 cent.


56.8
0.8
57.6

32.5
0.8
33.3

7.8
0.8
5.9
14.5

0.7
1.0

1/
1.2
1.6
3/
0.6
0.1

0.6
1.0
0.6

55.2

0.2
0.3
0.3
0.4
0.2
1.4

3.3
59.9
0.8
59.1

-2.3


3.6
1.0
ish expenses.


61.4
1.7
63.1

28.6
1.6
30.2

9.2
1.2
4.7
15.1
.4
.6
1.2
1.7
0.2
2.0
2/
.2
1.0
0.1
.2
.3
1.8
0.7

55.7


0.7
0.7
0.7
0.9
3.0

6.0
64.7
1.7
63.0


98.6
1.4
100.0

54.2
1.4
55.6

13.0
1.4
9.8
24.2

1.2
1.7

1/
2.0
2.6

1.0
.2

1.0
1.7
1.0

92.2

.3
.5
.5
.7
.3
2.3


97.2
2.8
100.0

44.2
2.4
46.6

14.3
1.8
7.2
23.3
.6
1.0
1.9
2.7
.3
3.1
2/
.3
1.5
.2
.3
.4
2.7
1.1

86.0


1.2
1.0
1.1
1.3
4.6


5.5 9.4
100.0 100.0


-1.6

3.1
4.4







-31-


The net cost per gallon of milk sold in 1949 was 59.1 cents and 63.0
cents in 1958, or an increase of 3.9 cents per gallon. The cost of feed,
including fertilizer, lime and seed, in 1958 was 30.2 cents which was 3.1
cents less than the cost in 1949. The cost per gallon for labor in 1958
including hired, unpaid and operator's was 15.1 cents, which was only
0.6 cent more than the labor cost in 1949. The charge for depreciation
in 1958 was 1.6 cents more than the charge in 1949. The charge for interest
was 2.7 cents more reflecting the increase in investment per cow. The net
return per gallon of milk in 1949 was-2.3 cents and -1.6 cents in 1958.
The return on average capital per gallon of milk sold was 1.0 cents in
1949 and 4.4 cents in 1958.

Rate of turnover of cows in milking herd.--Sixteen percent of the
cows in the herds in 1949 were replaced during the year and 24 percent
in 1958 (Table 21). Sixty-eight percent of the additions were purchased
in 1949 and 64 percent in 1958. Of the cows taken out of the herd, 22
percent in 1949 and 10 percent in 1958 were removed because of deaths.


Table 21.--Average Number of Cows on Hand at Beginning and End of The
Year, Number Added to The Herd, Number Taken Out of The Herd
and Rate of Turnover, 1949 and 1958 Survey of The Cost of
Producing Milk, Central Florida.


Item : 1949 : 1958


Number of head on hand at the
beginning of the year 76.3 153.0

Additions:
Purchased 12.8 28.5
Replacements raised 6.0 16.0
Total 18.8 44.5

Subtractions:
Sold 10.1 33.6
Died, etc. 2.9 3.6
Total 13.0 37.2

On hand at the end of the year 82.1 160.3

Percent turnover 16.4 23.7

Average years in the herd 6.1 4.2






-32-


Summary


A study was made of the cost of producing milk on wholesale dairy
farms in Central 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 34 farms that varied in size from
37.0 to 566.0 cows based on an average of the number on hand at the
beginning and end of the year. The average amount of milk sold per
day varied from a low of 82 gallons to a high of 1427 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 Central Florida 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 1958 data. In order to compare
results in 1958 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 1958 averaged 304 per farm, of which 257 were
owned and 47 acres were rented. The average capital investment of the
operator was $134,345 per farm. This amounted to $857 per cow of which
55 percent was in real estate. The value of all livestock made up only
36 percent of the total investment.

The average number of cows per farm for all farms was 157. The
average annual sales per cow were 739 gallons of 4 percent F. C. M. milk.
The average price received per gallon for milk sold was 59.00 cents.
Returns from the sale of bags and manure, veal calves and other minor
products amounted to 1.68 cents per gallon to give a gross return of
60.68 cents.

The net cost per gallon for milk sold was 60.50 cents. Feed costs,
including fertilizer, lime and seed, averaged 28.99 cents per gallon and
labor costs, 14.52 cents. These two items of expenses accounted for 70
percent of the gross cost of producing milk. All depreciation amounted
to 2.88 cents per gallon and interest on capital, 5.80 cents.

The net cost per gallon for milk sold was 64.55 cents on small farms
and 58.10 cents on large farms, or a difference of 6.45 cents. The two
main items showing differences in costs were feed and value of minor
products.







-33-


Twenty-four percent of the cows in the herds were replaced in 1958.
Sixty-four 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 $270 per head. Replacements raised that entered the
milking herd during the year were valued at the time of freshening at
$253 per head. Cows and springers purchased during 1958 cost an average
of $252 per head. Cows sold during the year brought an average of $154
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 did a good job of adjusting
production in line with requirements for Class I milk. The percent of
total sales as Class I milk was 91 on small and medium farms and 95
percent on large farms.




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