Table 1 illustrates key differences between the 32 high and low profit farms in the data set. Generally, higher milk income translates into higher profit and a lower cost of production. This reinforces the concept that having a balance of input costs and expenses is critically important to earning a profit.

Expenses that don't increase income on the farm should be carefully considered. Purchased feed was an important issue for the farms and will likely be even more important in These costs include purchased feed and the value of home-raised feed at cost for all animal groups on the farm.

Table 1. Dairy Cow and Heifer Enterprise, Farms sorted by Net Return over Labor and Management, The lower feed and hired labor costs were also reflected in a lower cost to produce heifers.

Sold or transferred refers to the way heifer costs are analyzed in this method. Heifer calves are "transferred" to the heifer enterprise when born and are later "transferred" back to the milking cow enterprise when freshened.

Heifers sold for cash instead of staying in the herd are also counted in this total head sold or transferred. Comparing to previous years in Table 2, the numbers across the board are slightly less favorable than in This reinforces the need to use as much home-raised feed as possible to reduce total feed cost.

The farms with lower purchased feed costs often have a better fit of cows to the amount of crop acreage they utilize. This results in less purchased grains and forages to feed their herds.

Yield per acre was higher in at Yield is a very important issue in the cost per unit for forage and grain crops. Table 3 provides some data to objectively compare the whole farm financial health for each year. Farms made some financial progress on paying off outstanding bills, lines-of-credit, and other current debt during and The current ratio remained essentially the same at 2.

This suggests most farms in the group were able to stay current with bill paying in While producers often comment that farms are exiting due to a heavy debt load, the solvency issue was improved slightly in compared to previous years.

This modest improvement in debt to asset ratio was likely due to a reduction of short-term current debt and accounts payable made possible by government payments including risk management tools like Dairy Margin Coverage and Dairy Revenue Protection the last two years.

Rate of return on assets declined to 5. This was a significant improvement over the 2. The Term Debt Coverage of 1. Stronger profitability provides more money to pay principal and provide owner draw.

Profitability drives all the other financial ratios and is essential for farms to make financial progress. The Operating Expense ratio is an excellent measure of the efficiency of converting farm expenses to sales.

This ratio slipped slightly in to This statistic shows the dairy market value worldwide from to and also provides a forecast for to The global dairy market was valued at billion U.

dollars in and was projected to grow to about billion U. dollars by You need a Statista Account for unlimited access. Get full access. Already have an account? Show source. Show detailed source information?

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