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Dairy Marketing Dr. Roger Ginder Econ 338a Fall 2009 Lecture # 5

Dairy Marketing Dr. Roger Ginder Econ 338a Fall 2009 Lecture # 5. DAIRY PRODUCTION METHODS AND FACILITIES. Manure Handling in “Modern” Free Stall Operations in the Arid Areas More Water is used than in drylot Water May Be Used Multiple Times

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Dairy Marketing Dr. Roger Ginder Econ 338a Fall 2009 Lecture # 5

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  1. Dairy Marketing Dr. Roger Ginder Econ 338a Fall 2009 Lecture # 5

  2. DAIRY PRODUCTION METHODS AND FACILITIES • Manure Handling in “Modern” Free Stall Operations in the Arid Areas • More Water is used than in drylot • Water May Be Used Multiple Times • Flush Water Has to be Managed To Meet Environmental Regs.

  3. DAIRY PRODUCTION METHODS AND FACILITIES • Advantages Modern Free Stall Facilities In Arid and Semi Arid Areas • Low labor • Cow comfort and high milk quality • Capital cost/cow $3,300 - $3,600 (including cow and land) • Expansion is more practical

  4. DAIRY PRODUCTION METHODS AND FACILITIES • Problems -- Modern Free Stall Systems • Large size and scale requirements to reach low average costs • Manure handling in humid climates • Oder Control in warmer months • Freezing can create problems during winter months in UMW • Limited time window for manure application requires storeage

  5. DAIRY PRODUCTION METHODS AND FACILITIES • “Modern” dry lot system (in arid and semi arid areas • Confinement in paddocks (open) • Dry manure waste management • Modern parlors

  6. DAIRY PRODUCTION METHODS AND FACILITIES • Advantages --- Modern Dry Lot • Low labor cost • Capital cost/cow - $3,000 (include cow and land) • No investment in free stall ($850/cow) • Problems --- Modern Dry Lot • Large scale requirements • Climate limitations in some areas • Heat can reduce production • Unusually wet conditions some years

  7. DAIRY PRODUCTON METHODS AND FACILITIES • “New Zealand” rotational grazing system • Paddocks of high grade pasture • Rotated grazing • Little/no concentrates fed • Advantages • Low concentrate feed cost • Less labor and machinery for forage production • Low housing costs

  8. DAIRY PRODUCTON METHODS AND FACILITIES • Problems---New Zealand Rotational System • Lower production of milk per cow • Muddy seasons can be a problem • In cold climates, some of the advantages in housing and forage are lost

  9. DAIRY PRODUCTON “PLANT” CHARACTERISTICS Approximately how much of the total milk supply is produced in the various production systems? How do farm numbers and production relate?

  10. U.S. Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2001 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 5/20/02

  11. U.S. Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2004 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 3/21/05

  12. U.S. Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2007 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 3/21/08

  13. Iowa Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 1999 Source: NASS, USDA, Milk Production, 2/16/2000 Percentages may not add to 100% due to rounding.

  14. Iowa Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2001 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 5/20/02

  15. Iowa Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2004 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 3/23/05

  16. Iowa Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2007 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 7/23/08

  17. California Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2004 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 3/23/05

  18. California Dairy Farms:Percent of Operations vs. Percent of Milk Productionfor Various Herd Sizes, 2007 Percentages may not add to 100% due to rounding. Source: NASS, USDA, on-line database, 3/23/05

  19. DAIRY PRODUCTON “PLANT” CHARACTERISTICS • Would you expect these trends toward more concentrated production to continue? • What factors might tend to make the trends continue? • What factors might tend to slow the trends?

  20. DAIRY PRODUCTON “PLANT” CHARACTERISTICS • Differences in input procurement practices exist among: • Production systems • Regions • Scale of operation

  21. DAIRY PRODUCTON “PLANT” CHARACTERISTICS • Midwestern tie stall and “traditional” systems • Home produced forage and grain • Purchased concentrates • Diversified farming operations • Often combined with non-dairy enterprises • Significant management and capital invested in land /non-dairy activities

  22. DAIRY PRODUCTON “PLANT” CHARACTERISTICS • Mid Atlantic and Piedmont areas tie stall, traditional and modern operations • Significant home produced forage and grain but some purchased • Purchased concentrates • Specialized dairy operations • Management and capital more focused on dairy and related activities

  23. DAIRY PRODUCTON “PLANT” CHARACTERISTICS • Western modern and drylot operations • Few home produced feedstuffs • Associated input services purchased • Some diary enterprise activities are outsourced • Almost all of the capital and management focused directly on milk production

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