News Release 

Date: April 11, 2008

Contact: Rebecca Schuelke, communication specialist
Telephone: (315) 453-3823 extension 103
Cell phone: (315) 427-2714
Email: rschuelke@nyfvi.org


Dairy Farm Business Summary helps measure success, ID areas to improve

The cows have moved out of stanchions and into free stalls. They eat forage, not high moisture corn. Their dinner is stored in bunk silos, not uprights.

Family and neighbors work alongside workers who travel halfway around the world for a job.

``It seems like everything is the same, but I guess nothing is the same,’’ observed Dave Green, owner of Evergreen Farm in Petersburg, NY.

Green took over the family’s 1848 dairy farm after graduating from college in 1981. He has grown Evergreen from 100 milking cows to 340.

At least one constant for Green has been the Dairy Farm Business Summary, an annual review of dairy farm business practices around the state produced by the Cornell University Department of Applied Economics and Management.

Every year since 1955, New York farmers, Cooperative Extension educators and agri-business field staff have rounded up data on individual farms’ expenses and income.

Since 2005, the New York Farm Viability Institute provided grants for efforts through December 2009 to increase farmer participation in the summary.

Apples-to-apples: ``The numbers collected in the Dairy Farm Business Summary represent an attempt to provide an apples-to-apples basis for comparison for dairy farmers,’’ said John Lincoln, chair of the Farm Viability Institute board of directors. ``A farm needs to do well financially to stay in business and be attractive to the next generation of farmers.’’

The Institute is a farmer-led nonprofit organization that funds research to help farms increase profits and foster a vibrant, renewable agriculture system of diverse farm sizes, production practices, commodities, sectors and geographic regions. With support from federal and state funds, the Institute has invested more than $14 million in on-farm applied research projects since 2003.

There is no cost to farmers for participating in the summary. Cooperative Extension educators sometimes use data collecting to identify topics for workshops or to facilitate discussion groups among farmers.

Dave Green and four other dairy farm operators in the area meet at least once each year to go over their summaries together.

Green said he anticipated savings of at least $8,000 in 2007 in veterinary and medical bills. Seeing what his peers were spending helped him see he was spending too much, Green said.

He developed a protocol to help employees determine when animals are sick and need to have a doctor called in. The experience, Green said, reminded him to give as much attention to what is going on in the barn as to what is going on in the field.

Measuring success: Dairy Farm Business publishes statewide and regional summaries each spring; the books represent an annual snapshot of dairy farm profitability for New York State.

Each participating farm gets a personal summary for comparison to regional or statewide versions. The farm then has a tool for gauging business practices. If one’s expenses in a given category are higher than average, that could be a red flag to start investigating a particular aspect of the farm business. (All individual farm data is confidential. Published data is averages of groups of farms.)

``How do you measure your financial goals? You measure it by doing a summary at the end of the year,’’ said Wayne Knoblauch, Cornell professor of farm business management and director of the Dairy Farm Business Summary program.

``The old saying that you cannot manage what you cannot measure is very applicable to a farm business,’’ Knoblauch said. ``If your goal is to reduce feed costs, how do you know if you are cutting costs? If your goal is to build an addition, buy a piece of equipment, pay down debt, or any number of goals, you need to be able to measure progress and evaluate if you are meeting the goal and if not, why not?

``Businesses needed to have financial as well as production goals, perhaps more so.’’

Farm business experts have long touted the belief that recordkeeping makes better managers, and the Dairy Farm Business Summary seems to support this. In 2006, farms participating in Dairy Farm Business Summary enjoyed a $.45 per cwt advantage in operating costs, compared to the average reported by USDA Economic Research Services for states in Northeast and Great Lakes regions. The savings are attributable to lower costs of production, especially purchased feed costs, Knoblauch said.

The savings can be significant. Farms that participated in Dairy Farm Business Summary that year had average milk production of 80,862 cwt. Those farms saw an average of $36,000 in increased profitability.

New and improved: Not your father’s Dairy Farm Business Summary, the benchmarking tool has adapted with changing times.

Since 2001, the Dairy Farm Business Summary program has evolved to include an interactive web-based component. Farmers, Cooperative Extension educators and other stakeholders can enter data into an online system and receive a personal farm business report instantaneously.

Computerized technology also allows users to generate customized benchmarking reports, multi-year comparisons, cost basis balance sheets, after tax profit and balance sheet calculations, and more.

Pete Wagner of Poetsenkill, NY has used Dairy Farm Business Summary since the early 1980s.

He referred to the summary as his ``report card.’’

Wagner and his brother Bob milk 340 cows spread over three farmsteads. They are located within a heavily developed residential and commercial area and do not consider herd expansion an option.

``We have to get better at what we do and be more cost-effective,’’ Wagner said.

He used the business summary to help reign in labor and heifer-raising costs, as well as bring up crop yields.

Now, he has set his sights on examining energy costs, particularly those related to manure handling; he is exploring the feasibility of installing a methane digester.

Wagner said the Dairy Farm Business Summary helps him run a more-focused business, but acknowledged that sharing financial information with a third party can be uncomfortable.

``Many people are hesitant to share their numbers, but if you cannot share it is hard for people to help,’’ he said. ``If you cannot learn from your mistakes, it holds you back. People make mistakes all the time, but we try not to keep making the same mistakes.’’

Read all about it: The web-based summary is available only to those that supply data to the summary. Printed versions of regional and statewide Dairy Farm Business Summary are available at county Cornell Cooperative Extension offices or by contacting Cornell University’s Department of Applied Economics and Management.

For more information, visit dfbs.aem.cornell.edu or call (607) 255-1599.




New York Farm Viability Institute is an independent, farmer-led nonprofit organization that directs and funds farm-level research to increase profits, reduce costs and other barriers, create jobs and encourage practical innovation on the farm. The Institute receives funds from the New York State Department of Agriculture and Markets. Visit www.nyfvi.org.