USDA report shows net returns better for larger dairy farms
Large dairy farms have significant financial advantages over small-to-midsize farms, according to a report released by the USDA.
From 2005-2018, the average net return size for herds of more than 1,000 head exceeded other herd sizes.
Because of lower average costs to produce milk, larger farms are able to turn a profit in situations where smaller farms wouldn’t.
Overall, net returns of farms with more than 1,000 head were $1.12 for hundredweight and positive net returns were averaged 10 out of the 14 years.
Meanwhile, smaller herds between 50 and 199, saw net returns in the negatives each year on average.
According to the USDA, the persistent differences in net returns have led to structural changes in the dairy industry, with cows and production shifting away from smaller farms and toward larger ones.