An analysis of the costs of producing Grade A milk in the Portland, Oregon and Boise, Idaho areas

Graduation date: 1966The objectives of this study are:\ud (1) Determine and compare the relative costs of\ud producing Grade A milk in the Portland, Oregon and Boise,\ud Idaho areas for the year 1964.\ud (2) Determine by analysis the extent of inefficiencies\ud in milk production and whether adjustments can be made.\ud (3) Determine adjustments and investments needed to\ud change from producing non-Grade A milk to Grade A production\ud and the economic feasibility of such a change under varying\ud conditions.\ud (4) Determine why dairy farmers have quit dairying in\ud recent years in Oregon.\ud Thirty dairymen in each of the Portland and Boise areas\ud were interviewed. Their dairy operations were analyzed and\ud compared with each other. Comparisons were also made among\ud herd sizes, feeding systems, and breed of cows in an attempt\ud to determine reasons for differences which were found to\ud exist.\ud Results showed that Boise dairymen had advantages over\ud Portland dairymen in higher milk production per cow, lower\ud labor costs, and higher prices received for cull cows and\ud young stock. Portland dairymen received a higher milk\ud price. Some 30% of the dairymen interviewed in the Portland\ud area and 59% in the Boise area had more total receipts than\ud expenses.\ud In general, dairymen with larger herd sizes have a\ud potentially greater net return to the factors of production\ud than those with smaller herd sizes. Dairymen feeding pasture\ud had significantly less total feed costs per cow than\ud dairymen whose caws received no pasture. No significant\ud differences in expenses or receipts were found which could\ud be specifically attributable to breed of cows.\ud The production of milk and butterfat per cow was the\ud most important factor in the profitability of dairying.\ud Other factors exerting considerable influence were herd size and efficiency in the use of feed and labor.\ud Many non-Grade A dairymen in Oregon considering upgrading\ud facilities to meet Grade A standards can pay off\ud the entire cost of upgrading within two or three years time\ud from the increase in milk price. The feasibility of upgrading\ud is proportional to herd size, milk production per\ud cow, and price spread between Grade A and non-Grade A milk.\ud Questionnaires were sent to 497 ex-dairymen in Oregon\ud to determine their reasons for leaving dairying. Some 377.\ud of those whose questionnaires were analyzed, indicated they\ud quit because of factors somewhat beyond their control such\ud as age, health, or natural disaster. Another 28% indicated\ud they left dairying mainly because of low milk price and/or\ud high production costs ("cost-price squeeze")