2023 Challenges
Introduction
In early 2022, the Center for Dairy Excellence approached several financial institutions within Pennsylvania that have dairy benchmarking programs to see if there was interest in developing a state benchmarking program. These discussions evolved into a joint project between Horizon Farm Credit, Penn State Extension, and the Center for Dairy Excellence that is called “Pennsylvania Dairy Performance Indicators.”
The Center facilitates the project while Horizon Farm Credit and Penn State Extension gather the data from their respective benchmarking programs, combine it into one larger, anonymous database, and then analyze the data to provide the key performance indicators. Pennsylvania dairy farm families and the industry representatives that support them can use these performance indicator averages to compare to their individual dairy performance against a “state” average. Furthermore, the dairy industry can use this data to track progress over time.
At 154 PA farms, it represents about 3% of the total Pennsylvania dairies. There is a mix of new herds and herds that participated in 2022 within the dataset. The results provide understandings of overall changing financial environment of Pennsylvania dairies.
Herd Performance Metrics
The 2023 data provides a comprehensive snapshot of herd performance across various sizes and production types, revealing distinct patterns in milk production, costs, and financial outcomes. For herd size groups, the average herd size of 381 cows reflects a diverse mix of small, medium, and large operations (Table 1). When compared to 2022, this represented fewer dairies, but the average cows per dairy were slightly higher. Some of this can be attributed to the reduced number of organic farms available in 2023. Herds with fewer than 99 cows, while smaller in scale, show a slightly lower average milk shipped per cow (23,604 pounds) compared to those in the 100 to 299 cows range (24,439 pounds) and significantly less than the largest herds, which average 25,199 pounds per cow. The increase in milk production with herd size indicates that larger herds might be leveraging advanced technology, more streamlined management practices, or economies of scale, which can contribute to higher overall productivity.
In terms of feed costs, 2023 total feed cost averaged just below the typical 50% of net cost of production. Smaller herds have slightly lower total feed costs per cow ($2,351) compared to larger herds ($2,441), yet they face higher feed costs per hundredweight ($10.74) compared to larger herds ($9.79). This discrepancy highlights the impact of scale on feed efficiency and costs. The net cost of production per cwt further underscores this, with smaller herds experiencing a higher net cost ($21.01) compared to larger herds ($20.87). The financial indicators reflect these operational differences, with larger herds achieving a higher net margin per cow ($526) than smaller herds ($599) but facing a lower net margin per cwt ($2.09 compared to $2.47). Due to the limited number of organic operations participating (5 in 2023 vs. 22 in 2022), no comparison based on production type was performed.
