An Economic Simulation Study of Large-Scale Dairy Units in the Midwest

Bailey, Kenneth W.; Hardin, David K.; Spain, J.N.; Garrett, Jeremy R.; Hoehne, John A.; Randle, Richard F.; Ricketts, R. E.; Steevens, Barry J.; Zulovich, Joseph M.

doi:10.3168/jds.s0022-0302(97)75929-0

Cited by 32 publications

(23 citation statements)

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“…As explained by Bailey et al (1997), the economies of scale on modern dairy farms: (1) reduce the investment per cow, (2) lower the variable costs of production per doi: 10.17221/126/2015-AGRICECON unit, and (3) increase the labour and management efficiency. According to Olegginy et al (2001), the increased herd size and specialization within the farm operation can bring efficiency improvements, which are in fact now becoming vital for the survival.…”

Section: Doi: 1017221/126/2015-agriceconmentioning

confidence: 99%

“…According to Olegginy et al (2001), the increased herd size and specialization within the farm operation can bring efficiency improvements, which are in fact now becoming vital for the survival. Bailey et al (1997) concluded that only dairy herd sizes in the range of 500 to 1 000 cows would be economically viable for the start-up operations. Von Keyserlingk et al (2013) added that large herds tended to increase the production and to reduce the unit cost of milk, mainly as a result of spreading fixed costs across more production.…”

Section: Doi: 1017221/126/2015-agriceconmentioning

confidence: 99%

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Dairy farm profit according to the herd size, milk yield, and number of cows per worker

Krpálková¹,

Cabrera²,

Kvapilík³

et al. 2016

Agric. Econ. - Czech

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Th e study evaluates the associations of the farm herd size (HERD), the milk yield (MY, kg/cow per year), and cows per worker (CW) with the production, reproduction, and economic traits in 60 commercial dairy herds (34 633 cows) in the Czech Republic. Each parameter was split into 3 groups. Th e largest herds (≥ 750 cows) had the highest profi tability of costs without subsidies (−3.8 ± 4.3%), the lowest cost for roughages (1.2 CZK/L milk), and the lowest cost for breeding operations (0.17 CZK/L milk), but the highest costs for the cereal grains and concentrates (2.4 CZK/L milk). Herds with the lowest MY (≤ 7 499) had the lowest profi tability of costs without subsidies (−15.8 ± 3.93%), the highest total costs (9.27 CZK/L milk), the highest labour costs (1.6 CZK/L milk), and the highest cow depreciation costs (0.97 CZK/L milk). Herds with the lowest CW (≤ 39) had the highest mean labour costs (1.51 CZK/L milk) and the highest costs for breeding operations (0.22 CZK/L milk). Herds with the highest CW (≥ 60) and the lowest CW (≤ 39) also diff ered in the total feed costs (4.1 vs. 3.73 CZK/L milk) and the costs of cereals and concentrates (2.34 vs. 1.96 CZK/L milk). Th e increasing herd size tended to be accompanied by higher milk yields and the overall effi ciency.

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Section: Doi: 1017221/126/2015-agriceconmentioning

confidence: 99%

Section: Doi: 1017221/126/2015-agriceconmentioning

confidence: 99%

Dairy farm profit according to the herd size, milk yield, and number of cows per worker

Krpálková¹,

Cabrera²,

Kvapilík³

et al. 2016

Agric. Econ. - Czech

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“…In agreement with research conducted in other regions (Oleggini et al, 2001;van Schaik et al, 2002;Ingham et al, 2011), larger herds had the lowest annual mean SCC and TBC. Capital investments in improved herd facilities often require a critical herd size to generate income for improvements (Bailey et al, 1997;Archer et al, 2013). Therefore, it is often more feasible for larger herds to improve herd infrastructure compared with smaller herds.…”

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confidence: 99%

Seasonal trends in milk quality in Ireland between 2007 and 2011

O'Connell

McParland

Ruegg

et al. 2015

Journal of Dairy Science

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The objectives of this study were to evaluate annual and seasonal trends in bulk tank somatic cell count (SCC), total bacterial count (TBC), and laboratory pasteurization count (LPC) in Ireland between 2007 and 2011 (inclusive), and to compare trends based on herd type and herd size. The unadjusted median SCC and TBC of all records were 266,000 and 17,000 cfu/mL, respectively. Data were transformed to log values and analyzed using a mixed model. Fixed effects included milk processor, year, month, and total monthly milk volume; milk producer was fitted as a random variable. After analysis, means were back transformed for interpretation. Annual SCC increased slightly from 259,000 cells/mL in 2007 to a peak of 272,647 cells/mL in 2009 and then declined slightly thereafter. Although statistically significant changes in annual TBC are probably not biologically relevant, values ranged between 23,922 and 26,290 cfu/mL. Annual LPC peaked in 2008 (265 cfu/mL), declined in 2009, and increased thereafter. Monthly mean SCC of all records increased from April onward, with the greatest increases seen from October to December, when the majority of cows entered late lactation. Monthly mean TBC exhibited a seasonal trend, whereby TBC was greatest at the beginning and end of the year, coinciding with winter housing. Seasonal milk production herds (n=8,002 herds) calve all cows in spring (February to April), whereas split-calving herds (n=1,829 herds) calve cows in the spring and autumn. From February to September, monthly SCC was lower for seasonal herds than for split-calving herds, whereas SCC was lower for split-calving herds for the remaining months. During winter (October to March), split-calving herds had lower monthly TBC than seasonal herds, most likely because of stricter regulations imposed upon them. Herd size was approximated using total annual milk production figures. Across all months, larger herds had lower SCC and TBC compared with smaller herds. No obvious improvements in milk quality were seen between 2007 and 2011. Farmers have the opportunity to improve milk quality by reducing bulk tank SCC in late lactation and by imposing stricter hygiene practices at the beginning and end of the year to overcome the seasonal variation of bulk tank TBC.

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“…From the literature, it is clear that economies of scale are most significant at the lower end of the size scale. Empirical analysis has shown that, with growing size, production cost savings decrease steadily and eventually come to a halt at, for example, a size of perhaps 500 cows or 500 ha (Bailey et al, 1997;Fuchs, 1998;Lee et al, 1998). For the vast majority of Swiss farms, the economies of scale connected with farm growth are expected to be considerable for the production of market goods.…”

Section: Introductionmentioning

confidence: 99%

Farm Size Growth and Participation in Agri‐environmental Schemes: A Configural Frequency Analysis of the Swiss Case

Mann

2005

J Agricultural Economics

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This paper examines the relationship between farm growth and participation in agri-environmental schemes, using the example of meadow extensification schemes in Switzerland. As a result of small farm sizes in Swiss agriculture, theory would suggest that economies of scale are considerable for market production activities, so that for growing farms it would be rational to intensify. Configural frequency analysis is used to identify and describe combinations of farm size development and proportion of meadows placed under agri-environmental schemes. In the Swiss case, growing farms are likely to reduce their participation, whereas shrinking farms have a growing share of their meadows under extensification schemes. Copyright 2005 Blackwell Publishing Ltd.

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An Economic Simulation Study of Large-Scale Dairy Units in the Midwest

Cited by 32 publications

References 1 publication

Dairy farm profit according to the herd size, milk yield, and number of cows per worker

Dairy farm profit according to the herd size, milk yield, and number of cows per worker

Seasonal trends in milk quality in Ireland between 2007 and 2011

Farm Size Growth and Participation in Agri‐environmental Schemes: A Configural Frequency Analysis of the Swiss Case

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