Re: BST, scale or sector bias
Alan Furchtenicht (FURCHT@macc.wisc.edu)
Tue, 20 Jul 93 06:30 CDT
From: IN%"DAIRY-L@UMDD.BITNET" "Dairy Discussion List."
To: Multiple recipients of list DAIRY-L <DAIRY-L@UMDD.BITNET>
Subject: Re: BST, scale or sector bias
Date: Mon, 19 Jul 1993 17:13:29 -0400
From: Stephen Emanuele <semanuel@CCE.CORNELL.EDU>
Reply-To: "Dairy Discussion List." <DAIRY-L@UMDD.BITNET>
Sender: "Dairy Discussion List." <DAIRY-L@UMDD.BITNET>
Subject: Re: BST, scale or sector bias
To: Multiple recipients of list DAIRY-L <DAIRY-L@UMDD.BITNET>
X-To: "Dairy Discussion List." <DAIRY-L%UMDD.BITNET@CORNELLC.cit.cornell.edu>
Terry Howard made some excellent observations in his reply. Terry boiled
the issue down to three choices.
1) Leave Dairying
2) Continue to Dairy until all the farm equity is depleted
3) Get more efficient.
I would like to add a 4th option
4) Learn to become a business manager not just a "Farmer" and develop a
long term business plan.
My region in western NY is an ideal location for sustainable pasture
systems. Many of the soils are fair to poorly drained, pH is too low for
alfalfa and the growing season short. This land can grow grass very well.
But grassland systems are not a magic solution. I have seen
"sustainable" grassland systems with greater production costs per
hundredweight than conventional dairy operations with similar soil
resources. Wether you farm a conventional system or pasture system the
result will be the same if Labor and Management Income per operator is
small. If the rate of return on equity capital is negative, it will not
be long before the farm family eats up all their retirement and
investment. This is so tragic when it occurs.
If the small dairy farm would develop a business plan and monitor progress
toward their goals it would help avoid many sad situations.
In my region many farms selling less than 17,000 lbs of milk per cow have
a negative labor and management income per operator. We need to take a
tough but compassionate stand with these farms. We must encourage them to
exit the industry before they lose all their investment. If they are
unable to reduce production costs we should not encourage them to
continue. It is far more compassionate to help them exit the industry
voluntarily and with self respect then to see them exit involuntarily.
Many farms in western NY are already dead, they just haven't held the
funeral yet.
We do our extension clients a diservice if we don't tell it like it really is.
Inefficient production will not be tolerated. They must become business
managers and find a way to reduce costs. If the total cost of production
per cwt is not less than milk receipts per cwt, the farm should exit the
industry or develop a plan to reduce production costs.
Stephen Emanuele
Extension Specialist- Pro Dairy
Tel: 607-776-9631 ext 2300
Fax: 607-776-9631
E-mail: Semanuel@cce.cornell.edu