2023 Cost of Production on Grass-fed Dairy Farms in the Northeast

Since 2018 our research team has been collecting and analyzing financial data from 100% grass-fed dairy producers in the northeast with the goal to better understand the cost of producing milk in this production system. With several years of data, we have been able to create a useful benchmark for northeast grass-fed dairy producers.1 This article will summarize the 2023 dataset and begin to explore management system and production practice impacts on cost of production and profitability.

Dairy farms located in NY, NH, and VT that are shipping 100% grass-fed milk were able to participate in the study. Data are presented as an overall average for all farms in the study and also divided into groups by total cost of production. Three groups were created representing low ($55) production costs on a hundredweight equivalent (cwt eq.) basis. Total cwt eq. shipped for each farm was determined by converting dairy-related non-milk income (i.e., crop sales, calf sales, etc.) into an equivalent number of milk hundredweights which is then added to the milk hundredweights sold. While our focus is on the cost to produce grass-fed milk, the data collected included information on changes in inventory (herd, equipment, etc.), and asset values allowing net farm income from operations (NFIFO), return on assets (ROA), and operating profit margin (OPM) to be calculated. These data are reported in Table 1 found in the online article on the Grass-fed Dairy webpage – https://www.uvm.edu/extension/nwcrops/grass-fed-dairy

2023 Farm Demographics – Participating farms were selling milk to Organic Valley (58%), Maple Hill Creamery (19%), and other local markets (23%). The herd size ranged from 30 to 123 milking cows with an average of 60 cows per farm. Farms were managing an average of 295 acres resulting in 4.5 acres available per mature cow (Figure 1). The farms estimated they purchased on average 34.2% of their herd’s forage needs. Herds were mainly composed of crossbreeds, however, there were farms milking pure-bred Holstein, Jersey, and other breeds which differ in milk and fat production. While most farms milked year-round, there were some fully seasonal herds (16%) and herds milking at frequencies other than twice daily (16%).

Review the full factsheet on the Grass-fed Dairy webpage at https://www.uvm.edu/extension/nwcrops/grass-fed-dairy. You will review information on the income and expenses, average farm summary statistics, labor efficiency, and farm financial health metrics.

As we gain a better understanding of this production system and the range of management practices within it, we continue to refine our data collection and analysis to gain better insights into the most widely successful strategies for grass-fed dairy farms in the northeast. The information presented here is just the beginning of more in-depth analysis that will continue to develop over the next few years as we explore the connections between management, cost of production, and profitability.

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