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Animal Industry Report

Extension Number

ASL R3248

Topic

Dairy

Summary and Implications

A Millionaire Model Dairy Farm (MMDF) project was created by this author in the 1990’s. Its goal was to show beginning and transitioning dairy producers how to become “millionaires” within 25 years of a dairy career by practicing a hybrid grazing and confinement operation. It has been a very successful Extension program. In 2012, organic dairy producers were added and in 2015, conventional dairy producers were added to the data. In 2016, GrassMilk® or “no-grain” farms were separated into their own data set due to their competitive profitability with the Higher Profit farms. Note the small number of herds in each data set may or may not be representative of an average of those types of farms. Bottom line is that all four systems studied can be profitable. It is the opinion of this author that, in all of the systems, the labor efficiency is key to profit success, even more so than milk production per cow. It is hoped this study will assist current and aspiring dairy producers, in any of the systems, to analyze and benchmark their dairy operations to better plan for future profits. Thanks to a Risk Management Education (RME) Competitive Grant, ISU Extension and Outreach has created a 2016 comparative analysis of the following four MMDF systems: 1) 5 Conventional Dairy Farms (CONV)—milking an average of 284 cows and operating 652 acres. These farms tend to house cows in a confinement freestall facility year-round. 2) 4 Hybrid Grazing Dairy Farms (HGRAZ)—milking an average of 179 cows and operating 216 acres. These farms graze 6-8 months of the year but house cows in a freestall facility as desired. 3) 8 Organic Grazing Dairy Farms (ORG)—milking an average of 78 cows and operating 319 acres. These farms graze 6-8 months of the year and have facilities ranging from tie-stall to freestall barns. 4) 3 Organic, No-Grain Farms (ORG-NG)—milking an average of 77 cows and operating 245 acres. These farms graze 6-9 months of the year, feed a “no-grain” diet and house cows like the other organic farms. Profitability was determined based on a combination of the following measures: 1)return to unpaid labor per hour 2)cost of milk production per cwt equivalent (cwt eq) 3)rate of return on assets For each of the MMDF systems, the data was analyzed into both an Average group and a Higher Profit group. The Averages of each MMDF system are displayed in Table 1 (page 4) while the Higher Profit farms for each MMDF system are displayed in Table 2 (page 5).

Copyright Holder

Iowa State University

DOI

https://doi.org/10.31274/ans_air-180814-379

Language

en

Included in

Dairy Science Commons

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