The two columns below are an attempt to describe
the typical well managed Ohio dairy farm (left) and
an emerging new high profit style of Ohio dairy
farm (right).
These lists were developed to stimulate
discussion at a meeting of graziers and
conventional dairy farmers.
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Characteristics of a
high cost structure dairy farm.
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Characteristics of a
low cost structure dairy farm.
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Full line of machinery for tillage, row
crop production, manure hauling, 3 or more
different forage, storage and feeding
methods, feed processing, feed mixing,
cattle hauling.
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One small tractor, small skid loader,
manure spreader and mower, hand cart,
pitchfork, broom.
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Newer, dependable machinery.
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Older rebuilt machinery.
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Machinery purchased with borrowed
money.
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Total fair market value of all
machinery under $5000.
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Powerful pickup truck less than 5 years
old with payments.
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No pickup or a well maintained 10 yr.
old or older truck. No payments.
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Attempts to maximize production per
acre. For example attempted corn yields of
150+ bu/A.
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No seed or herbicide purchased. A
little fertilizer and lime purchased. Max.
effort devoted to precise manure
distribution by cows.
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Near constant use of 2 to 5 tractors
and loaders.
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Tractor use usually a few minutes or
less per day.
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Year around cow exposure to concrete
stress & free stalls.
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Cow exposure to concrete limited to
milking time and winter months.
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Little or no nutrients from
pasture.
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100% of forage from pasture April 10 to
Nov. 25.
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High Cost Structure
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Low Cost Structure
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Attempt to grow most forage and
concentrates.
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Maximum use of very low cost purchased
feeds like shelled corn and coarse hay for
winter feeding.
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Purchased feed tending to be high
quality imported hay and exotic protein
supplements like cottonseed.
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Purchased feed limited to cheap low
quality hay and cheap local shelled
corn.
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High level of dependence on agri
business for products & services.
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Total lack of need for agri business
products and services.
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Hire consultants for ration balancing,
animal health, agronomy and financial mgt.
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All management functions handled by
owner-operator with vet. principal
advisor.
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Multiple employees
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No employees
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Larger herds, 3x milking. 16 to 24
hr/day milking parlor schedule.
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Herd size limited to number owner can
milk in 2 hours or less.
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High tech milking facility. Replacement
value of over $100,000 dollars.
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Simple, home built and maintained
milking facility. Replacement value of
less than $5000 total. Could be a
stanchion panel bolted to two posts and a
cheap used pipeline.
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Popular, high value, high index proven
bulls used.
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Max. use of A.I. and natural service
young sires.
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Frenzied, fast paced, toxic
lifestyle.
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Slower sustainable life style.
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High Cost Structure
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Low Cost Structure
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Focus on herd average and high
individual cow performance.
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Herd average totally ignored as
irrelevant to anything.
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Very strong temptation to ignore profit
and seek maximum cash flow to service
debt, pay employees and agribusiness
suppliers.
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No cash flowing out except the electric
bill and to buy low cost local shelled
corn and rough hay for winter.
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Net profit potential per cow break-even
or less. Herd size 100-400 milking.
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Net profit per cow of up to $800.00
Herd size up to 150 milking.
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For many years I operated a farm like the one on
the left. Through the 1970s this type of operation
was very, very profitable. By the mid 1980s it was
less profitable. By the year 1990, it was not
profitable. I now have a farm more like the one on
the right.
Unfortunately, influential people advising
farmers have picked up older (therefore misleading)
income data on the farms in the left column and
projected it into the future. As a result dairy
farmers are struggling to get into the left column,
while remaining largely unaware of the style of
dairy farming on the right.
