Statistical Bulletin No. (SB-974-6) 20 pp

February 2004

Characteristics and Production Costs of U.S. Dairy Operations

Total costs of producing milk in 2000 ranged from an average of $11.58 per hundredweight (cwt) of milk sold in the Fruitful Rim-West region to $18.23 per cwt in the Eastern Uplands. Milk producers in the West had a significant cost advantage over producers in other regions in 2000 because their operations were much larger. Operations with 500 or more milk cows had significantly lower total operating and ownership costs, indicative of the economies of size experienced by larger operations. Also, differences in animal performance, feed efficiency, and labor efficiency were critical in determining whether producers were in the low- or high-cost group for producing milk. These findings were based on the 2000 Agricultural Resource Management Survey (ARMS), the most recent national survey of milk producers.

Keywords: milk, operation characteristics, production practices, costs of production, cost variation

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