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Economic Potential of Amish Dairy Systems

Penn State is committed to affirmative action, equal opportunity, and diversity of its workforce. Where trade names appear, no discrimination is intended, and no endorsement by Penn State Cooperative Extension is implied. Economic Potential of Amish Dairy Systems.

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Economic Potential of Amish Dairy Systems

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  1. Penn State is committed to affirmative action, equal opportunity, and diversity of its workforce. Where trade names appear, no discrimination is intended, and no endorsement by Penn State Cooperative Extension is implied Economic Potential of Amish Dairy Systems Penn State Cooperative Extension Roland P. FreundFarm Management Agent - Retired Mary Beth Grove Dairy Agent – Lancaster Co. In cooperation with Aaron King, Timothy Fritz – King’s Agriseed Bruce Kreider – White Oak Mills

  2. Purpose of Study • Compare the economic potential of four Amish dairy production systems. • Evaluate feasibility of young Amish families getting started in the dairy business. • Compare findings with other systems research.

  3. Four Systems Conven Hybrid Intensive Seasonal -tional Grazing Jerseys Cows 48 48 60 75 Milk Kpounds 24/21 21 21/18 13 Heifers raised 17/15 14 15/13 30 Calv.Int.Mo. 14 13.5 13.5 12.5 Cull Rate% 35/31 29 25/20 25 Horses 6 6 4 2

  4. Four Systems Conven Hybrid Intensive Seasonal -tional Grazing Jerseys Rented Facilities: Barn/stalls Tie/44 CurtTie/44 40x150 BedPack Milk Parlor NewZeal Swing”6” See Text for details

  5. Four Systems Conven Hybrid Intensive Seasonal -tional Grazing Jerseys Corn Sil. 20ac 15ac Buy No Ear Corn 5ac RyeSil.D.C. 20ac 3.7ac Alfalfa 20ac 10 Sacrif.lot 5ac 1 1 1 Int.Pasture 0 24 49 49

  6. Capital Investment

  7. Capital Investment

  8. Profit with $12 / cwt milk price

  9. Profit with $12 / cwt milk price

  10. Grazing systems focus more on cattle than machinery are more profitable

  11. Buying corn silage more profitable than growing it. • Budget figures show:Conventional farms grow silage for $15 / T.Grazers buy it for $27 / T. • 12 more cows made $22,000 more than growing corn silage. • Contracting to buy corn silage will be a key to survival of small dairy farms.

  12. Cash Flow $12 milk 100% crops

  13. Net Cash Flow $12 milk 100% cropsAll systems pay cattle/machinery in 7yrs.

  14. Maintaining production level is vital in any dairy system

  15. Break-even Milk Price 100% crops

  16. Profit per Cow- Return to Labor+Managment

  17. Profit per Acre

  18. Profit per $1 invested

  19. Milk sold per worker

  20. Ending Net Worth – 7 years

  21. No system could pay for startup and real estate at the same time. Even with optimum yields: • Conventional farms failed to meet cash flow by $23,000 and 29,000 annually. • Intensive grazing at 21k milk failed by $6,000. Budget based on Real Estate loan at 5% for 20 years and cattle/machine 5.5% for 7 years.

  22. Farm purchase potential yr.8Buy 52 ac. with house - $500,000, buildings at cost

  23. Amish may not pay for land at present prices.Buy 52 ac. with house - $500,000, buildings at cost

  24. Cash Flow $12 milk 80% crops

  25. Break-even Milk Price 80% crops

  26. Profit per Cow- DAFOSYM Comparison DAFgrz DAFseas DAFconv

  27. Conclusion • Choose the system that best meets your abilities and resources. • Prepare your own budget before getting started in the dairy business. • Use conservative crop yields for planning purposes, but aim for thePotential.

  28. “Farm Decisions” (Roland P. Freund) Contact Information • Phone: 717-245-0479. • Mail: 382 Petersburg Road Carlisle, PA 17013 • Email: rpfreund@comcast.net

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