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Modernizing Wisconsin’s Dairy Farms Train the Trainer Workshop June 20 – 21, 2002 Dairy Expansion Financial Case Studies

Modernizing Wisconsin’s Dairy Farms Train the Trainer Workshop June 20 – 21, 2002 Dairy Expansion Financial Case Studies by Scott Gunderson, Manitowoc County UW-Extension Dairy Agent and Tina Struyk, Sheboygan County UW-Extension Dairy & Livestock Agent.

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Modernizing Wisconsin’s Dairy Farms Train the Trainer Workshop June 20 – 21, 2002 Dairy Expansion Financial Case Studies

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  1. Modernizing Wisconsin’s Dairy Farms Train the Trainer Workshop June 20 – 21, 2002 Dairy Expansion Financial Case Studies by Scott Gunderson, Manitowoc County UW-Extension Dairy Agent and Tina Struyk, Sheboygan County UW-Extension Dairy & Livestock Agent

  2. Why the transition from tiestalls . . . to freestalls?

  3. Why the transition from tiestalls to freestalls? • Labor Efficiency * Milk 2-3 times more cows per hour per milker * Feeding - Once a day TMR - push in 3-4 times per day * Less time spent bedding stalls • Improved cow comfort • Improved operator health and safety • Increased $$ • Improved quality of life

  4. 1998 Financial Summary of 720 Wisconsin Dairy Farms Based on Herd Size1 1Source: Lakeshore and Fox Valley Farm Management Associations & UW-Extension Center for Dairy Profitability.

  5. 1998 Financial Summary of 720 Wisconsin Dairy Farms Based on Herd Size1 1Source: Lakeshore and Fox Valley Farm Management Associations & UW-Extension Center for Dairy Profitability.

  6. Class III Milk Price

  7. 2000 Financial Summary of 618 Wisconsin Dairy Farms Based on Herd Size1 1Source: Lakeshore and Fox Valley Farm Management Associations & UW-Extension Center for Dairy Profitability.

  8. 2000 Financial Summary of 618 Wisconsin Dairy Farms Based on Herd Size1 1Source: Lakeshore and Fox Valley Farm Management Associations & UW-Extension Center for Dairy Profitability.

  9. Retrofit or Turn Key ? Easier to Finance Assume: 50-cow Stall Barn Operation

  10. Staged growth allows producers to gain experience with: • Managing more cows and replacements • Information management systems • Managing freestalls • Various feed storage options • Drive-by TMR feeding • Managing employees

  11. Costs Associated with Staged-Growth Expansion (Manitowoc County Dairy Farms)

  12. Farm 1

  13. Farm 1

  14. Costs Associated with Staged-Growth Expansion (Manitowoc County Dairy Farms)

  15. Farm 2

  16. Farm 2

  17. Costs Associated with Staged-Growth Expansion (Manitowoc County Dairy Farms)

  18. Farm 3

  19. Farm 3

  20. Farm 3

  21. Farm 3

  22. Labor Efficiency of Selected Farms Before & After Staged Expansion

  23. 1998 Financial Trends of Selected Farms (before and after a staged expansion)

  24. 2000 Financial Trends of Selected Farms (before and after a staged expansion)

  25. 2001 Financial Trends of Selected Farms (before and after a staged expansion)

  26. 2000 3.51% 1999 7.56% 1998 9.20% 1997 5.42% 1996 5.36% 1995 5.57% In 2000 27% of the farms had a negative ROROA, while 7% had ROROA of greater than 10% The average ROROA of all farmsfrom 1995 to 2000 are listed below

  27. in 2000 . . . the Basic Cost Ratio Was .59 . . . The goal is .55 or lower

  28. The market value of Machinery & Equipment per cowon dairy farms with 151 or more cows was about half of its valueper cowon small farms.

  29. The market value of Buildings per cowwas relatively constant, with a slight increase for herds with greater than 250 cows. New facilities are the likely cause.

  30. Total Farm Liabilities Remained relatively constant at $2,500 per cow until herd sizes of 151 cows or greater were reached. After that the TFL was $3,350 per cow.

  31. Dairy Modernization may result in . . . • Improved cow comfort • Improved labor efficiency • Increased income • Improved quality of life

  32. For more information on annual Wisconsin Financial Summaries go to the UW-Extension Center for Dairy Profitability at: http://cdp.wisc.edu/

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