Despite last year’s dismal dairy economics, a few farms in Michigan managed to eke out positive cash flows. However, the income generated from those operations was far smaller than just one year earlier in 2017. That’s according to on-farm data from Nietzke & Faupel.

Top 30 percent (19 dairy farms) in 2018 compared to the top 30 percent in 2017:
Revenue per hundredweight (cwt.): 82 cents in 2018 versus $1.78 in 2017.
Revenue per cow per day: 56 cents in 2018 versus $1.28 in 2017.

A clear observation is that the top 30 herds, when measured by profitability, were not the same the two past years. The most profitable herds in the 2017 dataset averaged 4,138 cows, while the 2018 group had 2,438 cows.

All 61 client dairy farms in 2018 versus 2017:
Revenue per hundredweight (cwt.): lost 48 cents in 2018 versus gaining $1.18 in 2017.
Revenue per cow per day: lost 32 cents in 2018 versus making 82 cents in 2017.

The 32 largest client dairy farms in 2018 (over 2,000 cows) versus 2017 (over 1,500 cows):
Revenue per hundredweight (cwt.): lost 46 cents in 2018 versus earning $1.18 in 2017.
Revenue per cow per day: lost 31 cents in 2018 versus making 81 cents in 2017.

The remaining 31 client dairy farms in 2018 (under 2,000 cows) versus 2017 (under 1,500 cows):
Revenue per hundredweight (cwt.): lost 57 cents in 2018 versus netting a positive $1.17 in 2017.
Revenue per cow per day: lost 40 cents in 2018 versus making 84 cents in 2017.

Only one group stands out
The financial field data from the Michigan-based Nietzke & Faupel reveals there isn’t much difference between the clients . . . those with herd sizes over 2,000 cows and those with under 2,000 cows. However, the group of dairy farms in the top one-third of profitability had two distinguishing features:
• Garnered $1.01 more per hundredweight (cwt.) for their milk than contemporaries.
• Reduced operating costs and expenses by 29 cents.

To dig deeper into the Nietzke & Faupel data, click on Dairy Averages Report.

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(c) Hoard's Dairyman Intel 2019
July 1, 2019
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