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Stop the Presses! MIG More Profitable Than Conventional Dairy Farming!
Who knew, right? Well, except for all of us...but the details, the data, that is the good stuff. For example, did you know that the profitability per cow on a MIG dairy farm is $636, versus $464 for a conventional dairy farm?
But, we're jumping ahead of ourselves here. Back in 1995, Dale Johnson of the University of Maryland started collecting economic information on 62 dairy farms each year, a mix of conventional confined dairy farms and management intensive grazing dairy farms (CC and MIG, respectively). In 2009, he crunched the data and came up with some really stunning facts.
So he could compare apples to apples, Johnson looked at the data on a per cow basis. The gross income per cow was $3920 on a CC farm, compared to only $3147 on a MIG farm. Overall, milk production on a CC farm is 33% higher, and gross income is 25% more. But, expenses were also that much higher on the CC farms, meaning that profits per cow were a heck of a lot lower. And, even though CC farms were larger, with more land, overall profitability was higher on the MIG farms, with overall per farm profits at $53,383 versus $47,826 for CC farms.
In case you're curious as to why, there are a number of reasons. You can probably guess: costs on a MIG farm are lower. Labor costs are three times higher for CC farms than for MIG far
Good info Rachel and good additions Jim!
For those in the area, you have a great opportunity to meet and tap into Jim’s great wealth of knowledge/experience on 12/6/14: http://www.missourilivestock.com/Forages_Section_Speakers.html
I had the opportunity to take in several hours of his presentation at a fencing company’s customer appreciate day last year. I was so impressed I bought and have enjoyed (several times) his audio book:
Kick the Hay Habit (A Practical Guide to Year-around Grazing) Audiobook (6 Compact Disc Set) and likely can get it at his website:
http://www.americangrazinglands.com/
No affiliations with any of above, but think all are great assets!
Also, I have friends that MIG dairy farm here in SE MO and have learned a great deal from them. Always tell others considering MIG to make friends with a dairy that is doing it as the dairies have great feedback system (milk production) to let the know what does and does not work in their area.
Rachel, nice article and I concur with Jim’s opinion.
Also, in a study done a few years back, I compared MIG, Conventional and Continuous grazing and found MIG to be more sustainable than conventional/continuous in five (out of nine) indicators: water, soils, biodiversity, financials and animal husbandry.
Hi Juan,
Thanks for your kind words. Your study sounds interesting. We’d be interested in learning more (Kathy’s on the phone as I type!). Any info you can share?
Happy Holidays,
Rachel
Hi Rachel, Another good article on the bottom line value of grazing vs. conventional dairy farming. The sad thing is Dr. David Zartman at Ohio State University reported essentially the same thing as far back as the late 1980s. U of Wisconsin found the same results and published them back in the early to mid-1990s. U of Missouri published similar reports before I left there in 2003. This sort of info and the known economic response has been around for decades now.
The Big Question is why hasn’t the entire industry moved towards grass-based dairy production in light of such significant differences in profitability and environmental benefits?
I see two main road blocks. For the farmer, I think it the fear of change more than any other factor. For the overall dairy industry, there are too many supporting businesses and services with vested interest in maintaining the status quo. As the profit margin grows for the farmer, it usually means someone else is making less money in the associated industries. Our ‘friends’ in agri-business have little motivation to change production models because it means fewer inputs the farmer needs to purchase.