Dairy farming is about as brutal a business as there is. Long hours, hard work, tight margins. I've got a few close friends that still milk. Prices were somewhere in the $16's per hundred weight for milk last month with an annual production per cow around here of 24000-28000 pounds. At a 30000 pound annual yield and a price of 16 per hundred that's around 4000 per cow coming in the front door. There's very little left after the bills are paid out of that. Hence, more cows. It's just like feeding steers. I figured my clear profit was around $11 per head after all costs including labor on a 10 year average. Feeding 100 head a year, that's $1100. Hence I don't feed steers any more, but if I were feeding 10,000 head per year that $11 makes a good living.
From what I understand with equipment. Most of your larger firms are leasing. The dealer maintains the equipment and they have access to an immediate replacement if it breaks down. Over the last few years, the annual price increases over two years were about what the first two years depreciation was, so you can replace every other year effectively for free. But, you never own anything. For most of us that's a bad things but in a purely business sense it may be more profitable. I know several highway mowing contractors that do the same thing.
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