Great Lakes Dairy Sheep Symposium - the Department of Animal ...

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While the average farm makes money on the processing side, now the economist comes along and dampens the situation. On an accrual income basis, a charge is made for depreciation of equipment and buildings. Total depreciation was $12,280 for the farm sector and $4630 for the processing sector. When depreciation is added, average net income drops to $1860. The range is -$23,446 to $31,850. With depreciation added, 4 farms had negative income. Value of Equity, Operator Management, and Operator Labor This is where the economists get thrown off the farm. From an economic perspective, there has to be a charge for the value of owner equity, operator labor, and operator management skills (Table 6). The owners’ equity represents a rental of assets to the business operation. There should be a charge for the operator’s labor. This labor is not free and would require a cash charge if someone was to be hired for the tasks. And management - How much is management worth? For this study, we asked what the owner/operator would require as a wage if someone were to pay them to do what they are doing. The results in Table 6 make the farms less profitable with the inclusion of a charge for interest on owner equity. The average saw net business income drop from $1860 to -$8168. The maximum income dropped to $20,231. Then the charge for owner labor and management puts the farm in the red. The stated value of operator labor and management averaged $67,348 and ranged from $20,400 to $150,000. It must be noted that owners put in different hours, and for some operations, the time of both spouses is included. It should also be noted that most folks were doing this in hope of building a business and would never pay anyone to put in the hours they did to make the business a success. But with a full economic analysis with charges for owners’ labor and management, interest on equity, and depreciation, none of the farms in this study showed a positive net income for either farming or processing. Conclusions This study is not a conclusive analysis of a sizeable number of randomly selected farms to make a representative sample. Instead, it is an in-depth analysis of a limited number of diverse farms that all conduct milk production from small ruminants and process their own dairy products. This study does allow us a few conclusions. First, value-added dairy operations are quite diverse. In this study, we had 10 of 27 farms with small ruminants instead of cows. In addition, the size of operation, processed products, and marketing techniques varied significantly across farms. Then there is the financial performance. With depreciation included, none of the farms made any profit on the farm operation. Two reasons drive this finding. First, high land values make it difficult to make profits in agriculture. Second, most farms were in business to market their own products. Yet many would be better off to buy their milk and just do processing. When charges on equity and operator labor and management are included, the conclusion is that on farm processors “ain’t gettin’ rich.” 36
Lifestyle is a definite reason for involvement in on-farm processing. People are attracted to this field with the hope of developing successful businesses. It takes this faith to build a successful business. But the income is not adequate for supporting a family. Where can we go from this study? First, we need an analysis from more farms to draw any conclusions. We need more research on reasons for entering the processing business and how people got started. There is much need for studying the markets for small farms and pricing strategies for small farmers. In addition, there needs to be some understanding of the learning curve for processing dairy products. One does not just start making high quality artisan cheese. Farmers definitely need some assistance on information that leads them through the learning process. A full business plan that examines all areas of risk would be helpful. Farmers likely need to do an apprenticeship or internship somewhere to learn the ropes of processing. Then there is the selection of the proper product and pricing. Cheese is not just cheese. What type should you try to make, where will you market the cheese, and how will you price it. This study provides some initial information for farmstead dairy processors, but hopefully this is only the beginning of research articles on this topic. Mark Twain may not think anyone does anything about examining value added processing but a least we made a step to change this assessment. Table 6. Impact of the Value of Equity and Family Labor Income Adjustments Average Minimum Maximum Farm Net Income -13,109 -42,160 -2,116 Farm Unpaid Family Labor -86 0 -770 Farm Interest on Equity -7,935 -2,432 -14,198 Farm Labor & Management Income -$21,129 -$56,358 -$6,070 Processing Net Income 14,968 -5,841 35,689 Processing Unpaid Family Labor -183 0 -1,826 Processing Interest on Equity -1,825 0 -4,373 Processing Labor & Management Income $12,961 -$5,841 $34,520 Net Business Labor & Management Income 37 -$8,168 -$36,832 $20,231 Farm Value of Operator's Labor 35,134 13,813 112,492 Processing Value of Operator's Labor 32,214 6,587 79,988 Total Value of Operator's Labor $67,348 $20,400 $150,000 Return on Farm Assets w/Equity, Operator and Family Labor Farm ROA (%) -24 -65 -8 Processing ROA (%) -44 -127 8 Total ROA (%) -27 -59 -9
Page 1 and 2: Proceedings of the 11 th Annual GRE
Page 3 and 4: Table of Contents Program of Events
Page 5 and 6: Program of Events Thursday, Novembe
Page 7 and 8: Speakers at the symposium site in B
Page 9 and 10: Gold: Sponsors Babcock Institute fo
Page 11 and 12: “YOU WANT TO MILK WHAT?” IMPORT
Page 13 and 14: already have their milking faciliti
Page 15 and 16: efficient or just selling milk (or
Page 17 and 18: production doubles. However, there
Page 19 and 20: Total production (pounds) Percentag
Page 21 and 22: Milk production (pounds) Average mi
Page 23 and 24: Percentage of ewes in each system 1
Page 25 and 26: 5. Ice Cream and Butter: • raw mi
Page 27 and 28: 3. Fresh Cheeses made from pasteuri
Page 29 and 30: The Vermont Cheese Council (www.vtc
Page 31 and 32: 1 x Brine Tank (10’ long x 3 ft.
Page 33 and 34: LAMB REARING STRATEGIES: FARMER PAN
Page 35 and 36: BONNIEVIEW FARM’S LAMB REARING ST
Page 37 and 38: REARING LAMBS AT 3-CORNER FIELD FAR
Page 39 and 40: PROFITABILITY OF SMALL RUMINANT FAR
Page 41 and 42: Table I. General Farm Description L
Page 43 and 44: Table 4. Business Balance Sheet Ass
Page 45: Table 5. Income Statement Income Av
Page 49 and 50: Grossman et al., 1999). Animals wit
Page 51 and 52: Physiological Factors Affecting Lac
Page 53 and 54: Recently, it has been hypothesized
Page 55 and 56: (co)variate in the genetic model us
Page 57 and 58: show that milk production increases
Page 59 and 60: Figure 6 - Lactation curves of ewes
Page 61 and 62: milk yield (g/d) 3000 2500 2000 150
Page 63 and 64: a genetic potential to produce more
Page 65 and 66: when compared with the control grou
Page 67 and 68: probability (%) 70 60 50 40 30 20 1
Page 69 and 70: considered “healthy” if every S
Page 71 and 72: Finally, udder health has to be con
Page 73 and 74: De Maria Ghionna C., Dell’Aquila.
Page 75 and 76: Manalu, W., Sumaryadi, M.Y., Sudjat
Page 77 and 78: Rupp R., Boichard D., Barbat A., As
Page 79 and 80: Introduction MILK FAT SYNTHESIS AND
Page 81 and 82: The variety of fatty acids allows t
Page 83 and 84: Germany); we have shown previously
Page 85 and 86: Manipulating Milk Fatty Acid Compos
Page 87 and 88: increase in rumen output of vacceni
Page 89 and 90: Luna et al., 2005; Nudda et al., 20
Page 91 and 92: Cabiddu, A., M. Decandia, M. Addis,
Page 93 and 94: MANAGING YOUR OWN RETAIL SHOP: MARK
Page 95 and 96: The Reality our feta demonstrates t
Page 97 and 98:
Meat and meat dishes: 1. Legs: whol
Page 99 and 100:
5. We have daily visits from chefs
Page 101 and 102:
HOW TO GRAZE DAIRY SHEEP AND SUPPLE
Page 103 and 104:
significantly increase milk product
Page 105 and 106:
All parameters are significantly di
Page 107 and 108:
Table 6 - Dry matter intake and mil
Page 109 and 110:
animals can reduce intake, as they
Page 111 and 112:
Milk fat and protein concentrations
Page 113 and 114:
fat concentration can be used as a
Page 115 and 116:
(1998), working with adult Sarda ew
Page 117 and 118:
equirements. The relationship found
Page 119 and 120:
that there have not been enough stu
Page 121 and 122:
Grazing methods Grazing methods are
Page 123 and 124:
How should the number of paddocks b
Page 125 and 126:
Table 16 - Description of four past
Page 127 and 128:
a) concentrates supplied during mil
Page 129 and 130:
References Arnold G.W., and Dudzins
Page 131 and 132:
supplemented with corn grain. Optio
Page 133 and 134:
succeeding add on pastures smaller
Page 135 and 136:
diverse forage have much to do with
Page 137 and 138:
dairy farming. In fact, Vermont agr
Page 139 and 140:
thermized (holding at a temperature
Page 141 and 142:
speaking, the risks associated with
Page 143 and 144:
FARMER PANEL ON LABOR HOW TO ATTRAC
Page 145 and 146:
• Animal Health Products • Spec
Page 147 and 148:
Cultivating Healthy Communities UVM
Page 149 and 150:
139
Page 151 and 152:
Hudson Valley Camemberts Pure Sheep
Page 153 and 154:
Premier Dairy Service, LLC Argyle,
Page 155 and 156:
www.vermontagriculture.com 145
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