The Profitable Dairy Martha Pickard Grazing Program Coordinator Adirondack North Country Association

The situation Between 2002 and 2007, the cost to produce milk in the Northeast averaged around $14.25 per hundredweight (CWT). The price received by the producer around $15.58 per CWT. (Data from Northeast Farm Credit, Dairy Farm Summary)

To calculate profit per CWT, simply subtract the cost from the price. $ $14.25 = $1.33 $ $14.25 = $1.33 Price - Cost = Profit

If a farm consisted of 100 cows producing 20,000 CWT per year, the profit would be 20,000 CWTs X $1.33 = 20,000 CWTs X $1.33 = $26,600 per year (Incidentally, this is only about $6,000 more per year than the poverty guidelines established by the US Department of Health and Human Services for a family of four in 2007)

So if that is not enough money to live on lets expand the herd by 10% 22,000 CWTs X 1.33 = $29,260 per year Sure enough, herd expansion did in fact increase profit by $2,660.

Now let us see what happens to profit if instead of increasing production we reduce production costs by the same 10% $14.25 – 1.43 = $12.82 $15.58 – = $2.76 profit/CWT

Using the same farm consisting of 100 cows producing 20,000 CWT per year, the profit would be 20,000 CWTs X $2.76 = $55,200 per year $55,200 per year

Thus, on a whole herd basis: Increasing production by 10% improved profit by $2,660 But, decreasing production costs by 10% improved profit by $25,940 $25,940

Real Farm Example Dan and Anne Carey in Groton, New York milk 200 Holstein Dairy cows. In the winter, their purchased feed costs are $3.96/cow/day. During the 160 day pasture season, their purchased feed costs drop to 91 cents/cow/day.

Due the sums! 200 cows X $3.05/cow/day X 160 days = a savings of $97,600 $97,600

Pasture: Milk it for all its worth

Pennsylvania’s Raw-Milk Cheese Boom Thanks to good grass and artisanal techniques, one state’s dairy farmers have rediscovered terroir—and great taste

Wisconsin’s Value Added Dairy Initiative Dairy Business Innovation Center Goal: Increase Artisan/ Specialty Cheeses by 25% Grow Wisconsin Dairy Team Support Business Plan Implementation Technical Consulting for Graziers Aid Economic Development organizations to assist producers with modernization efforts

20% Increase in membership in 2009

Windy Ridge Dairy West Potsdam, NY Yogurt Raw Milk Pasteurized Milk Soft Cheeses

“When milk prices are down interest in value –added dairy increases but it is hard to find the cash to get started.” Don’t go into debt to get started!” Ray Hill, Windy Ridge Dairy “Cheese makers need new markets. Farmer’s markets are getting loaded with cheese and that means no one makes enough.” Linda Smith, NYS Cheese Guild

Needs Mentoring/Education Capital to get started Marketing Skills and access to markets