Economic Potential of Amish Dairy Systems Penn State Cooperative Extension Roland P. Freund Farm Management Agent - Retired Mary Beth Grove Dairy Agent.

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Presentation transcript:

Economic Potential of Amish Dairy Systems Penn State Cooperative Extension Roland P. Freund Farm Management Agent - Retired Mary Beth Grove Dairy Agent – Lancaster Co. In cooperation with Aaron King, Timothy Fritz – King’s Agriseed Bruce Kreider – White Oak Mills Penn State is committed to affirmative action, equal opportunity, and diversity of its workforce. Where trade names appear, no discrimination is intended, and no endorsement by Penn State Cooperative Extension is implied

Purpose of Study Compare the economic potential of four Amish dairy production systems. Evaluate feasibility of young Amish families getting started in the dairy business. Compare findings with other systems research.

Four Systems Conven Hybrid Intensive Seasonal -tional Grazing Jerseys Cows Milk Kpounds 24/ /1813 Heifers raised 17/ /1330 Calv.Int.Mo Cull Rate% 35/ /2025 Horses

Four Systems Conven Hybrid Intensive Seasonal -tional Grazing Jerseys Rented Facilities: Barn/stalls Tie/44 CurtTie/44 40x150 BedPack Milk Parlor NewZeal Swing”6” See Text for details

Four Systems Conven Hybrid Intensive Seasonal -tional Grazing Jerseys Corn Sil. 20ac 15ac BuyNo Ear Corn 5ac RyeSil.D.C. 20ac 3.7ac Alfalfa 20ac 10 Sacrif.lot 5ac1 1 1 Int.Pasture

Capital Investment

Profit with $12 / cwt milk price

Grazing systems focus more on cattle than machinery are more profitable

Buying corn silage more profitable than growing it. Budget figures show: Conventional farms grow silage for $15 / T. Grazers buy it for $27 / T. 12 more cows made $22,000 more than growing corn silage. Contracting to buy corn silage will be a key to survival of small dairy farms.

Cash Flow $12 milk 100% crops

Net Cash Flow $12 milk 100% crops All systems pay cattle/machinery in 7yrs.

Maintaining production level is vital in any dairy system

Break-even Milk Price 100% crops

Profit per Cow- Return to Labor+Managment

Profit per Acre

Profit per $1 invested

Milk sold per worker

Ending Net Worth – 7 years

No system could pay for startup and real estate at the same time. Even with optimum yields: Conventional farms failed to meet cash flow by $23,000 and 29,000 annually. Intensive grazing at 21k milk failed by $6,000. Budget based on Real Estate loan at 5% for 20 years and cattle/machine 5.5% for 7 years.

Farm purchase potential yr.8 Buy 52 ac. with house - $500,000, buildings at cost

Amish may not pay for land at present prices. Buy 52 ac. with house - $500,000, buildings at cost

Cash Flow $12 milk 80% crops

Break-even Milk Price 80% crops

Profit per Cow- DAFOSYM Comparison DAFconvDAFconv DAFgrzDAFgrz DAFseasDAFseas

Conclusion Choose the system that best meets your abilities and resources. Prepare your own budget before getting started in the dairy business. Use conservative crop yields for planning purposes, but aim for the Potential.

“Farm Decisions” (Roland P. Freund) Contact Information Phone: Mail:382 Petersburg Road Carlisle, PA