Animal Industry Report

Extension Number

ASL R3249



Summary and Implications

The economics of various dairy production systems is a topic of frequent conversation in Extension’s work with Iowa dairy producers and industry professionals. This article attempts to shed further light on the economics of four dairy systems: 1) Conventional/Confinement dairy (CONV) 2) Hybrid Grazing dairy (HGRAZ) 3) Organic dairy (ORG) 4) Organic No-Grain dairy (ORG-NG) This study uses the “Millionaire Model Dairy Farm Performance in Iowa” publications and data from both 2015 and 2016 to compare relative profitability of these systems. Bottom line is that depending on manager skills and desires, all the systems studied have merit for the future of the Iowa dairy industry. The most profitable system depends on the milk prices; maintaining high levels of labor efficiency; producing decent volumes of milk production per cow and per farm relative to their system; ability to secure quality feed resources; and managing acceptable levels of capital efficiency (depreciation and interest/equity charges). 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.

Copyright Holder

Iowa State University





Included in

Dairy Science Commons