Business Summary New York State 2009

Abstract

R.B. 2010-02Business and financial records for 2009 from 204 New York dairy farm businesses are summarized and analyzed. This analysis uses cash accounting with accrual adjustments to measure farm profitability, financial performance, and costs of producing milk. Traditional methods of analyzing dairy farm businesses are combined with evaluation techniques that show the relationship between good management performance and financial success. The farms in the project averaged 469 cows per farm and 24,208 pounds of milk sold per cow, which represent above average size and management level for New York dairy farms. Net farm income excluding appreciation, which is the return to the operator's labor, management, capital, and other unpaid family labor, averaged $-126,820 per farm. The rate of return to all capital invested in the farm business including appreciation averaged -3.5 percent. Differences in profitability between farms continue to widen. Average net farm income excluding appreciation of the top 10 percent of farms was$189,108, while the lowest 10 percent was $-861,956. Rates of return on equity with appreciation ranged from positive 4 percent to negative 46 percent for the highest decile and the lowest decile of farms, respectively. Large freestall farms averaged the highest milk output per cow and per worker, the lowest total cost of production and investment per cow. However, in 2009, they averaged the lowest returns to labor, management and capital. Farms milking three times a day (3X) were larger, produced more milk per cow but had lower net farm incomes in 2009 than herds milking two times per day (2X). Operating costs per hundredweight of milk were$0.08 per hundredweight lower for 3X than 2X milking herds, while output per cow was 5,222 pounds higher. Farms adopting intensive grazing generally produced less milk per cow than non-grazing farms but averaged higher labor and management incomes per operator. One should not conclude that adoption of these technologies alone were responsible for differences in performance