Though 2023 has largely been a financial disappointment for dairy farmers, those effects have been somewhat buffered by the strong milk prices received through much of last year. That’s reflected in the final analysis of the farms that participated in the Cornell Pro-Dairy Dairy Farm Business Summary in 2022, as farms of all sizes reported, on average, net farm income that at least doubled compared to 2021.
The summary helps farm managers track historical farm financial data, and there were 129 farms that participated in both 2021 and 2022. In the complete report for last year’s data, Pro-Dairy team members Jason Karszes and Lauren Augello outline business factors that affected farms of less than 500 cows, 500 to 999 cows, 1,000 to 1,499 cows, and over 1,500 cows in both years.
Net farm income without appreciation are the numbers that stand out, with all farms averaging a 178% jump in 2022 compared to 2021. Farms of 500 to 999 cows were the high mark in that category, recording a 202% climb in net farm income. Those with less than 500 cows recorded the smallest bump, but net farm income still rose 125% there.
Of course, the other half of that story is that input costs remained high for much of the year. Prices paid for purchased feed, machinery, crops, labor, and general expenses were up across the board. Karszes and Augello also divided the farm size categories into quintile ranges for each expense area to compare how the best- and worst-performing farms of each size stacked up to each other. The highest feed and crop expenses per hundredweight (cwt.) of milk sold was recorded by the lowest group of farms with less than 500 cows at $12.87 per cwt. The lowest feed and crop expense per cwt. was recorded by the most efficient farms of more than 1,500 cows at $7.93.
Labor costs and efficiency are another significant area of focus for dairy farmers, especially in New York where overtime restrictions exist. In every farm size category, milk sold per worker rose from 2021 to 2022.
In the two mid-size farm categories, this was supported by having more cows per worker (1,000 to 1,400 cows up 1.2%; 500 to 999 cows 1.9% higher). In the other two categories, cows per worker was essentially steady, dipping 0.3% among the largest herds and 0.2% in the smallest ones. However, the less than 500 cows category was the only one to see a decline in average herd size, falling 1%. Average number of cows was up 3% in the three other categories.
Though just a snapshot in time of these farms, the summary illustrates well the trends occurring in our industry and provides relevant benchmarks for other dairies looking to evaluate their operations. You can read the full report here.