The 10 year (1995-2004) average advantage that Wisconsin graziers had over
Wisconsin confinement was $1.84/CWT EQ, (not CWT sold). Furthermore, the
Wisconsin grazier advantage over the Wisconsin traditional confinement
herds was $1.31 and over the Wisconsin large modernconfinement was $2.31.
Labor accounted for some but not all of the advantage. You can find these
numbers and more explanation at;
<http://cdp.wisc.edu/pdf/Ten%2
0Yr%20COP3.pdf>http://cdp.wisc.edu/pdf/Ten%2
0Yr%20COP3.pdf
Ten years of complete COP reports by year for Wisconsin graziers an
Wis confinement can be found at
http://cdp.wisc.edu/Mil
k%20Production%20Costs.htm
For the average (93 cow) grazing farm in the Great Lakes Grazing Network
summary, $1/CWT EQ equaled $19,314 of net farm income from operations in 2004.
For the average (87 cow) grazing farm in the Great Lakes Grazing Network
summary, $1/CWT EQ equaled $19,116 of net farm income from operations in 2003.
Wisconsin graziers have a lower COP/CWT EQ at the basic, non-basic,
allocated, and total cost levels compared to Wisconsin confinement.
I am looking at several years of data from Genske, Mulder & Co., LLP and
other California accounting firms that have western dairy clients. So far,
Im finding that Western confinement groups have COPs much closer to large
modernconfinement herds in Wisconsin than grazing herds or traditional
confinement herds in Wisconsin.
The Missouri data Ive seen does not go beyond the gross margin level and
therefore is not directly comparable to the other data, unless the other
data is viewed at the gross margin level too. I have compared Wisconsin
data at the gross margin level with Missouris data at the gross margin
level. Those comparisons showed a noticeable advantage to Wisconsin
graziers over Missouri graziers. Of course, every group will likely have
individuals that are far above or below the group average.
There are enough differences from state-to-state to make it dangerous to
compare financial performance of one system in one state to another system
from another state in an attempt to fairly compare the systems.
In practically every comparison Ive made of graziers versus confinement
within a state, graziers have had an advantage in NFIFO/CWT EQ and a lower
COP/CWT EQ.
I have compared top half to bottom half Wis graziers to Wis top half to
bottom half confinement (using NFIFO/CWT EQ). In this comparison reported
in Pastures of Plenty, (page 8-10) the bottom half confinement easily had
the least desireable performance. You can see Pastures of Plenty at
http://cdp.wisc.edu/pdf/grzgfin1.pdf
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At 01:46 PM 6/8/2006 -0500, Bernie VanDalfsen wrote:
>Date: Thu, 08 Jun 2006 13:46:35 -0500
>From: Bernie VanDalfsen <bvandalf@direcway.com>
>Subject: Re: [Graze-l] Growth of U.S. grazing farms vs. other farms
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>----- Original Message ----- From: "KV9U" <mrfarm@mwt.net>
>To: <graze-l@witt.ac.nz>
>Sent: Thursday, June 08, 2006 8:57 AM
>Subject: [Graze-l] Growth of U.S. grazing farms vs. other farms
>
>
>>Bernie,
>>
>>How much better do you see managed grazing? Tom Kriegl's studies have
>>shown some benefit to the bottom line, in the area of $1/CWT or
sometimes
>>a bit more on average. Therefore, some individual farms could do even
>>better than that, and that can be significant in a mature industry such
>>as farming. With, say, 100 cows, wouldn't that be only $10,000 dollars
>>difference, give or take?
>
>In Mo. the difference between grazing and conventional is more i believe.
>The extra
>bonus grazing provides when you reach the herd size that suits your farm
>is being able to
>sell surplus cattle back into the dairy industry instead of slaughter.
>
>On strictly cost of production the grazers COP compares about even with
>the confinement
>clients of Genski, Mulder and Co. We have more room for improvement. Add
>in dairy sales
>and we win.
>
>
>>What do you see as the COP for a CWT of milk with the two separate
>>models? Or maybe four separate models, of the older small farm vs. the
>>large confinement farm, vs. the moderate size grazing farm vs., the
>>large grazing farm.
>
>COP is important but not the whole picture. Don't get hung up on that. The
>assets of a grazing operation are weighted towards appreciable assets, land
>and cattle. Some confinements are on a small parcel of land with buildings
>and waste facilities and the system is more like to depreciate cattle.
>
>
>>With roughly equal management ability, how much lower a COP can you
>>estimate using the older small farm as a sort of baseline? I know that
>>this is difficult to do, but any idea of some relative difference?
>
>Ya that is real hard to figure. Just throwing a number out, 20% lower.
>
>>Also, it is not only the COP, but the net farm income that counts too
so
>>you would want to take that into consideration.
>
>yup.
>
>>If you did not have to have buildings, land was low cost, and labor
>>efficiency was high, aren't those the main factors? And couldn't that
be
>>done with different managerial approaches other than grazing?
>
>Those will always key factors. I believe top end grazers will beat top
>end confinement in return on investment over time. Middle grazers will
>beat middle confinement. Bottom end of both will be out of business.
>
>
>>In talking to a local dairy farmer, in the past day about MO, it turns
>>out that he has spent some time down there because a relative lives
close
>>to the Arkansas border. He wondered how you would weather the
>>horrifically high temperatures which can go one for months, the lack of
>>dairy infrastructure, the extremely poor soils, and the severe weather
>>conditions and the winter weather which can get cold in winter and
might
>>still require shelter at times or have a disaster waiting to happen.
>
>Thinkers can deal with these challenges. Heat- shade trees (requires
>management-
>multiple areas) shade structures (portable or fixed), cooling under
>pivots, cooling ponds.
>Don't buy extremly poor soil. There are good areas. We have infrastructure
>here. If t
>here is non you need to be big enough to attract it or know how to deal
>with things yourself.
>
>
>>As you know, on Grazersedge, we have a number of extension personnel,
>>several DVM's, one being a DVM pathologist, one of the top dairy
>>nutritionists, and of course some very capable farmers who have a lot
of
>>practical knowledge and have helped many. You are also on that group
and
>>former agriculture agent Turner has commented in the past day or so.
>>Maybe I have the wrong state, but I thought he was in MO or close to
that
>>area of the south.
>
>I think Keenan and Lucky may have both spent time in Mo. but when that
>last was i don't recall and exactly what part i don't know.
>
>
>>One nice thing about Grazersedge group is that while you will get
>>differences of opinion, there does not seem to be quite the acrimonious
>>attitude of the know it all types who only believe their way is the
right
>>one and anyone who even questions them are personally attacked. Also,
the
>>group keeps growing and is now over 1100 members, which is substantial
in
>>my view.
>
>
>Well Dave is the know it all on Grazersedge but is not challenged there. I
and
>others can't be bothered. FW, Vaughn, and others have the will to
challenge.
>Only one thing I agree on with Dave is the 15 cent check off. Better yet
>they should
>stop talking it out of my milk check. Its no net gain to producers. The
>milk price
>pendulum will always swing back to near the cost of production.
>
>The big crock of BS Dave spouts is currency exchange subsidy. That only
>applies
>to country's who have a fixed exchange rates like China.
>
>Bernie
>Reeds, Mo
Tom Kriegl
University of Wisconsin Center For Dairy Profitability
Animal Sciences Building Rm 202
1675 Observatory Drive
University of Wisconsin
Madison, WI 53706-1284
Phone (608) 263-2685
Fax (608) 263-9412
NTERNET: tskriegl@wisc.edu
http://cdp.wisc.edu
