Economist says profitable small dairies operate differently

A University of Wisconsin dairy economist says both large farms and small farms can be profitable. Mark Stephenson with the Center for Dairy Profitability says, “With large farms, we tend to find that they are using their assets more intensively, so the ones that don’t overcapitalize and use what they’ve got really well are profitable.”

Stephenson tells Brownfield many smaller farms are profitable, but they do things differently. “On the smaller farms, it tends to be not so much the intense asset utilization as it is labor utilization. That doesn’t mean working harder, longer hours. It means that they work smart and they work well on their farms.”

There are fewer dairy farms now, and more larger ones, and Stephenson says farmers have been forced to adjust.  “You can’t keep doing what you were doing five years ago to get through this kind of trough, but you know, farms have done it. We have lost more than we normally would expect to see, but we have a lot of farms that are making it through.”

Wisconsin lost 800 dairy operations from August 1st of 2018 to August 1st of this year.  Nationwide, Stephenson says dairy farm numbers dropped from 75-thousand a few years ago to about 37-thousand now, while maintaining nearly the same number of cows.

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