The Dairy Farm Business Summary and Analysis Program (DFBS) improves farm production and financial recording keeping, business analysis, goal setting, and economic decision making skills of dairy farmers.

The dairy industry needs profitable farms for a sustainable industry. Monitoring and controlling costs and attaining labor and capital efficiency are factors that will allow this to occur. The DFBS program facilitates this outcome by providing measurable benchmarks and improved decision making on farms.

The DFBS website allows farmers to enter data and compare their performance to that of other farms, set goals, and monitor performance. Publications are prepared and distributed and workshops are held to further enhance the benefits of the program.

Reducing the cost of production was a major goal of the DFBS participants. DFBS participants reduced the cost of purchased feed per cwt. of milk sold by $0.07, from $4.37 to $4.30. The Economic Research Service (ERS) of the United States Department of Agriculture (USDA) conducts surveys of dairy farmers on the cost of producing milk. They found that all dairy farms in the Northern Crescent region (New York is located in the Northern Crescent) saw purchased feed costs per cwt. of milk sold increase by $0.46 per cwt. This is very significant. The dairy industry saw feed costs increase while DFBS participants controlled feed costs and achieved a decrease.
Total operating costs of producing milk from the ERS study in comparison to DFBS participants showed a similar result. The ERS study found the operating cost of producing milk increased by $0.28 per cwt. for the region, while DFBS participants decreased the operating cost of producing milk. The ERS study showed costs increasing from $13.56 to $13.84 per cwt. of milk sold, while the DFBS participants decreased operating costs from $12.25 to $12.08, a decrease of $0.17.
This comparison is significant and striking in that it demonstrates the benefits of setting goals and monitoring progress towards those business goals. The DFBS program enables dairy farmers to analyze their farm business and set goals, the results of which are an improvement in dairy farm profitability. The DFBS farms’ reduction in operating costs in comparison to the increase for all farms resulted in a $0.45 ($0.28 ERS increase plus a $0.17 DFBS decrease) per cwt. advantage. That translates into an over $36,000 improvement in profit for the average size farm, 350 cows, in the summary.

Improving Farm Profitability