District Specialist Farm Management
Northeast District Extension, Wooster, OH
Ohio and New York dairy farms have many similarities. Therefore the 1999 New York dairy summary of business and financial records contains much information of interest to progressive Ohio milk producers. The NY analysis measures farm profitability, cash flow, financial performance, and costs of producing milk of 314 New York dairy farm businesses.
Labor and management income per operator measures the return to one full-time operators labor and management. In the chart below, we see that in the first 7 years of the 90s labor and management income per operator never exceeded $20,000. Labor and management income per operator in 1998 jumped to an all time high of $55,000. 1999 was also a very good year for many milk producers with labor and management income per operator of nearly $43,000.
Records are not yet available for 2000 but it is unlikely that profits were similar to 1998 or 1999. Therefore one must be careful when comparing year 2000 records with 1999 records. It is also important to note that the average herd size of participants in the summary increased from 107 cows to 224 cows during the last decade.
The three hallmarks of a successful dairy (or any business) are: knowing the quality goals of the dairy, understanding the system so that work can be described and organized to meet the dairys goals, and managing the herd and workers so that goals are met. These three processes are interdependent so that quality goals dictate how work is organized which results in a management tool for the producer and dairy consultants. One method for doing this is Total Quality Management.