A Comparison of New York and Ontario Dairy Farms

¹ Department of Agricultural Economics, Cornell University, Ithaca, NY 1483-7801

The objective of this study was to compare characteristics, revenues and production costs, profitability, and efficiency measures for New York and Ontario dairy farms in 1990. Records were from the New York Dairy Farm Business Summary and the Ontario Dairy Farm Accounting Project. Amounts of milk per cow and milk sold per farm were higher in New York, but farm assets per cow were much higher in Ontario. Under current policies, revenues per 45.4 kg (hundredweight) of milk sold were $3.00 higher in Ontario than New York. Operating costs of production per 45.4 kg were $.67 to $.89 (6 to 8%) higher in Ontario. However, total costs per 45.4 kg, including interest on equity capital and operator's labor and management, were $5.00 to $6.00 lower for New York farms, and the opportunity cost of equity capital in quota for Ontario was about $1.19/45.4 kg. Dairy farms in both regions earned less than a 5% return on equity capital in 1990. The average Ontario farm was more profitable than a New York farm with the same number of cows, but New York farms with average assets equal to those of the average Ontario farm were decidedly more profitable. New York farms were more efficient in use of labor and spent more on commercial feeds per 45.4 kg of milk sold, but grain and hay yields in the two regions were similar.

Key Words: profitability • efficiency • costs of production • dairy farms

Submitted on August 24, 1992
Accepted on January 15, 1993