Balance sheets are showing that dairy farms made a profit in the first half of 2022 after the tumultuous COVID-19 years. Those positive cash flows were buoyed by the combination of high milk prices and feed supplies either grown or booked during a period with lower prices. Certainly, those margins will shrink as milk prices recede and input costs needed to grow feed continue to be stubbornly high.

In the meantime, let’s look at some data released by a widely respected accounting firm. Located in the Michigan milk shed, Nietzke & Faupel, P.C. has 52 dairy farms that participate in its Dairy Averages Report. While the average Michigan herd size is 70 cows higher than the U.S. national average of 317 head, the herds in the Nietzke & Faupel report have 3,942 cows on average.

• All 52 dairy farms: With a $25.37 milk price, the herds generated $27.82 total revenue from operations. Feed costs averaged $10.78, and expenses totaled $21.91. Income from operations netted $5.91 per hundredweight (cwt.) When compared to 2021, the milk price was $17.69 per cwt. and total farm revenue was $19.86. Feed costs averaged $9.27, and expenses totaled $19.29. That netted 57 cents per cwt. through the first nine months of 2021.

• Dairies over 2,000 cows (average herd size was 4,858): With a $25.41 milk price, the herds generated $27.90 total revenue from operations. Feed costs averaged $10.77, and expenses totaled $21.83. Income from operations netted $6.07 per cwt. When compared to 2021, the milk price in this group was $17.72 per cwt. and total farm revenue was $19.94. Feed costs averaged $9.25, and expenses totaled $19.23. That netted 71 cents per cwt. through the first nine months of 2021.

• Dairies under 2,000 cows (average herd size was 1,143): With a $25.11 milk price, the herds generated $27.34 total revenue from operations. Feed costs averaged $10.84, and expenses totaled $22.41. Income from operations netted $4.93 per cwt. When compared to 2021, the milk price in this group was $17.49 per cwt. and total farm revenue was $19.41. Feeds costs averaged $9.42, and expenses totaled $19.66. That created a loss of 25 cents per cwt. through the first nine months of 2021.

• Top 30% of income (average herd size was 6,685): With a $25.61 milk price, the herds generated $28.20 total revenue from operations. Feed costs averaged $10.52, and expenses totaled $21.56. Income from operations netted $6.64 per cwt. When compared to 2021 (average herd size was 4,985), the milk price in this group was $17.74 per cwt. and total farm revenue was $19.93. Feed costs averaged $9.08, and expenses totaled $18.59. That netted $1.34 per cwt. through the first nine months of 2021. Note that the herds in this group shift each year as the qualifier is “Top 30% of income.”