Estimation and analysis of cow-level cumulative lifetime break-even on financial resiliency.

A dairy farm's ability to generate positive profit is dependent on the cow's response to management decisions made in conjunction with input cost management. Therefore, farm managers consider a multifaceted set of choices, managing their herd not as a homogeneous group of animals, but justifying the influence of individual cows on the farm's financial performance. We combined cow-level performance records from Minnesota DHIA and farm-level financials from the University of Minnesota Center for Farm Financial Management database FINBIN (https://finbin.umn.edu/) from 2012 to 2018 to evaluate farm- and cow-level profitability. The objective of this study was to evaluate individual cow performance matched with farm-level input expenses allocated to the cow level to measure a dairy farm's ability to be profitable over time, considering input and milk price fluctuations. Conventional Minnesota dairy farms were divided into 2 groups-financially resilient and non-resilient-based on their adjusted net farm income ratio over time. Yearly farm-level expenses and revenues were allocated to cows based on performance measures provided in monthly DHIA test data, and a cumulative lifetime break-even was calculated for all cows with consecutive farm data from 2012 to 2018. Herd-level and cow-level characteristics were analyzed to test for statistical difference between resilient and non-resilient farms as well as cows who achieved their break-even versus those that did not for resilient and non-resilient farms. Results showed that resilient farms had statistically different and lower expenses than non-resilient farms, with lower heifer raising expenses ($1,839.32 vs. $1,886.20), lifetime feed expenses ($4,197.07 vs. $4,975.39), and lifetime non-feed expenses ($2,761.63 vs. $4,502.67). Resilient farms had 38.3% of cows reach break-even, whereas non-resilient farms had 25.2% of cows break even. On average, cows who achieved their break-even remained in the herd for approximately 1 yr longer for both resilient farms (1,011 d for cows who break even and 627 d for those that do not) and non-resilient farms (1,033 d for cows who break even and 683 d for those that do not). Cows on resilient farms who achieved their lifetime break-even had an average lifetime profit of $1,613.48, which was $3,095.10 higher than the lifetime profit of -$1,481.62 of cows who never reach their break-even. Cows who reached their break-even on non-resilient farms had a lifetime profit of $1,270.51, which was $3,854.11 higher than the lifetime profit of -$2,583.60 for those who did not break even. Therefore, financially resilient dairy farms were utilizing a low-input, low-output model that proved to be successful and resulted in maintained profitability across volatile and fluctuating commodity prices.

Dairy producer perceptions of the Farmers Assuring Responsible Management (FARM) Animal Care Program.

Dairy farms producing 98% of the US milk supply participate in the Farmers Assuring Responsible Management (FARM) Animal Care Program. Producers who sell milk to cooperatives or processors participating in FARM must follow program standards. The objectives of this study were to assess producer perceptions about the knowledge, experience, and value of FARM and to determine whether perceptions differ based on demographics. A concurrent triangulation design was implemented through collecting quantitative and qualitative data using a 30-question survey instrument. Quantitative questions aimed to address project objectives, and qualitative data were provided through 1 open-ended survey question that asked participants what they thought the main goal of the FARM program was. Participants offered additional feedback through providing text in comment boxes, writing on the back of the survey, or writing a separate letter and returning it with their survey. Quantitative data were analyzed using principal components analysis and modeling, and qualitative data were analyzed through thematic analysis. Dairy producers from cooperatives or processors that participate in the FARM program were recruited via electronic and postal mail. A total of 487 respondents from 40 states completed the survey. Of the survey participants, 414 (85.0%) answered the open-ended question and 190 (39.0%) provided additional qualitative feedback. Thematic analysis revealed 5 main themes: distrust of program, producers on the defense, anger, efficiency, and nostalgia. Of respondents, 73.6% reported being knowledgeable about the FARM Animal Care Program. Greater level of formal education and larger herd size were associated with greater producer knowledge. More dairy producer input in the revisions of FARM was identified as a need by 83.3% of respondents. Although 89.3% of respondents reported positive experiences with evaluations and relationships with evaluators, 45.6% did not think that the program had value overall. Respondent age was positively associated with perceived value of FARM. Respondent age was also significant in determining the reasons why FARM was considered to be important. Results indicate that to increase buy-in and positive perceptions from producers, future versions of FARM should solicit producer input during the development of program standards, target specific producer demographics for program promotion, and address perceived communication deficits and program inequalities. Findings from this study can be used to inform future versions of the program.

Estimating milk yield and value losses from increased somatic cell count on US dairy farms.

Milk loss due to increased somatic cell counts (SCC) results in economic losses for dairy producers. This research uses 10 mo of consecutive dairy herd improvement data from 2013 and 2014 to estimate milk yield loss using SCC as a proxy for clinical and subclinical mastitis. A fixed effects regression was used to examine factors that affected milk yield while controlling for herd-level management. Breed, milking frequency, days in milk, seasonality, SCC, cumulative months with SCC greater than 100,000 cells/mL, lactation, and herd size were variables included in the regression analysis. The cumulative months with SCC above a threshold was included as a proxy for chronic mastitis. Milk yield loss increased as the number of test days with SCC ≥100,000 cells/mL increased. Results from the regression were used to estimate a monetary value of milk loss related to SCC as a function of cow and operation related explanatory variables for a representative dairy cow. The largest losses occurred from increased cumulative test days with a SCC ≥100,000 cells/mL, with daily losses of $1.20/cow per day in the first month to $2.06/cow per day in mo 10. Results demonstrate the importance of including the duration of months above a threshold SCC when estimating milk yield losses. Cows with chronic mastitis, measured by increased consecutive test days with SCC ≥100,000 cells/mL, resulted in higher milk losses than cows with a new infection. This provides farm managers with a method to evaluate the trade-off between treatment and culling decisions as it relates to mastitis control and early detection.

An evaluation of the social and private efficiency of adoption: anaerobic digesters and greenhouse gas mitigation.

Climate science has begun to recognize the important role of non-carbon dioxide greenhouse gas emissions, including methane. Given the important contribution of methane, anaerobic digesters (ADs) on dairy farms in the U.S. present an opportunity to reduce greenhouse gas (GHG) emissions. We quantify the social and private costs and benefits of ADs that have been adopted in California and find that, despite high initial costs, large reductions in GHG emissions bring significant social benefits and represent good social investments given a $36 per-ton social cost of carbon. Subsidies that lower the initial private investment cost can help align socially and privately optimal adoption decisions.

Citizen complaints and environmental regulation of Michigan livestock operations.

Citizen environmental complaints filed against agricultural producers in Michigan were examined to determine farm and community factors influencing citizen complaints and the subsequent response of the farmer. Secondary citizen environmental complaint data were obtained from the Michigan Department of Agriculture from 1998 to 2007 with 1,289 observations. Citizen complaints were grouped into 5 categories: odor, surface water, ground water, combination, and other complaints. Complaints were further classified as nonverified or verified where verified meant that the inspected farm was not complying with relevant generally accepted agricultural and management practices. These data were used to examine how farm characteristics affected the likelihood of a verified complaint. Odor and surface water complaints accounted for 75% of all complaints. A probit regression analysis was used to estimate the probability of a verified complaint as a function of complaint type, farm characteristics, county characteristics, and seasonal factors. Results from the probit regression analysis revealed that larger operations, poultry, and hog farms received more nonverified complaints than other livestock farms. Surface water issues were 17% more likely to be verified complaints compared with odor issues, of which the surface water complaints often originated from sources other than neighbors. In contrast, odor issues were more likely to result from accepted management practices requiring no mitigation. Farms that received a verified citizen complaint were required to mitigate the complaint by implementing corrective practices. A log-level (log Y) regression was used to evaluate how farm characteristics influenced the cost to implement corrective practices on those farms receiving a verified citizen complaint. Costs to implement corrective practices to mitigate verified complaints were greatest for dairy operations and surface water complaints. Corrective practices required to mitigate a surface water complaint were predicted to cost 46% more than an odor complaint with an estimated average cost of $7,442. The most expensive practices were associated with manure incorporation, stream bank fencing, and controlling runoff.