How Much Do Dairy Farmers Make in a Year? | How Do They Make Money?

As recorded by the Department of Agriculture, 9.5 million cows are under the supervision of farmers in the US. California is in the number one spot because of its total milk sales of 6.5 billion.

This leading state has a 17% contribution to $36.7 billion, total milk sales of the country.

How much do dairy farmers make in a year? The monthly salary of dairy farmers differs from state to state. Based on Zippia, the salary of dairy farmers ranges from $34,000 to $20,000 in the US. The average salary is around $27,000.

The farm size is not the only determinant of the profitability of a dairy farm. Even those with small herds run the business well. This happens when the farm creates additional revenue, such as raising high-quality breeding herds for another sale.

There are a lot of things going on in a dairy farm since a farmer can venture into another sector to make the business flourish for the sake of profitability.

Is the Startup Costs for a Dairy Farm High?

Is the Startup Costs for a Dairy Farm High

Expect that the startup costs for a dairy farm are high. One cow can cost around $1,200 to $1,600 and getting a hundred will sum up to $120,000 to $160,000. Unless you own an ideal land for farming, you have to buy it.

Each cow must be given two acres of land. An acre is usually sold at $1,000 to $4,000. For 100 cows, you have to buy land that costs $200,000 to $800,000.

Other necessary things when starting a dairy farm are a barn and milking system. They’re additional expenses of $100,000 to $200,000. To sum up the mentioned amount, the startup cost of a dairy farm ranges from $620,000 to $1,000,000.

How Much Do Dairy Farms Cost to Operate?

The operation cost of dairy farms covers the operating cost and capital recovery cost. The operating cost is composed of feed, needed medicine and veterinary fee, repairs, fuel, lube, electricity, and operating inputs.

Capital recovery cost is the capital expenditure when buildings, equipment, and machinery need replacement.

In the recent data of the Department of Agriculture, here’s the breakdown of operating expenses. It’s the total of all the dairy farms in the United States.

Billion dollars
Feed14.9
Hired Labor3.9
Supplies and necessary repairs2.2
Medicine and vet1.2
Fuel1.0
Custom work and hauling1.2
Interest1.2
Other expenses7.7

All the expenses summed up to $33.33 billion, and the feed takes the most part.

Related: 11 Best Equipment for Small Dairy or Micro Farms | The Ultimate Guide

How Much Do Dairy Farmers Actually Make?

How Much Do Dairy Farmers Actually Make

The dairy farmers that are on the top-notch can earn up to $42,000 a month, while the ones in the lowest spot only make $17,000.

How Much Do Dairy Farms Make Per Cow?

Each cow gives around 2,695 gallons of milk annually, and it’s 7.4 gallons of milk a day. As confirmed by the Department of Agriculture, conventional whole milk is $3.88 per gallon. Thus, a cow can give $10.456.60 a year or $28.71 a day.

What Are the Best States for Dairy Farmers to Earn Money?

What are the Best States For Dairy Farmers to Earn Money

The best states for dairy farmers to earn money are as follows with the expected salary.

  • Maine – $34,507
  • New Jersey – $34,507
  • Ohio – $34,507
  • New Jersey – $34,342

Specifically, there are cities in Ohio that offer a good pay for dairy farmers. $34,471is offered in Newark, Polding, Sidney, South Solon, and Wauseon.

How Much Does Milk Sell For?

As mentioned, conventional milk per gallon costs $3.88. This milk is processed into other forms, so price variations emerge.

  • Conventional milk with fat reduced to 2% – $3.84/gal
  • Organic whole milk – $8.56 / gal
  • Organic whole milk with fat reduced to 2% – $8.56/gal

These digits are from the survey of Agricultural Marketing Service. Conventional milk is sold in gallon containers, while organic whole milk is available in half-gallon containers.

How Do Farmers Make Money From Dairy Products?

Apart from bottled conventional or organic milk, farmers can make money through value-added dairy products. Milk can be processed to be converted into different byproducts.

Cheese

This is the common and popular byproduct of milk. There’s a wide selection which is from soft to hard cheese. Before embarking on this industry, you have to take a course to be knowledgeable about this product.

Butter

Although this is a traditional dairy product, it’s being upgraded by using organic milk. Since the process of making butter requires an ample amount of milk fat, cow dairy is the ideal ingredient. Other options are sheep milk and goat milk, as they’re filled with high fat.

Yogurt

The popularity of this item is credited to its probiotic content which is deemed to aid digestion. Some yogurts are flavored and made into drinks.

Ice Cream

It’s a delectable treat, so ice cream is popular. The process is uncomplicated once you learn it from a course.

Is Selling Cows Profitable for Farmers?

Is Selling Cows Profitable for Farmers

The University of Kentucky has recently conducted a study regarding the profitability of selling cows. Each cow can bring revenue of $608 if you deduct the total expenses of $440.

This amount is what a farmer spends on hay, mineral, vet, pasture maintenance, winter feeding, and other machinery, breeding, marketing, trucking, and interest and depreciation of cows. Utility bills, taxes, and insurance are also included.

The given numbers leave you with a $168 gross return. Unfortunately, other expenses like labor, land, facilities, and fencing are not included.

For further explanation, the equipment that has a value of $50,000 depreciates by $1,000 every year. When you have 40 cows, you can get $25 from each of them to cover up for the depreciation.

Other charges are from depreciation and interest fencing facilities for $75, land rent for $100, and labor for $100. You may not need to add land rent if you own the land. But if you bought it, you have to add it to your expenses.

The matter of depreciation also applies to the heifer. You could have bought it for $1,300 and benefited from it. For instance, this cow has continued to serve you for 8 years, but there will be $700 depreciation which is inevitable. 

So you’ll just have $600 left that can’t cover all of the expenses. Therefore, you can say that selling cows is not that profitable for farmers. Because of this, farmers consider dairy farming as they can earn money from milk each year and even every day.

What Do Dairy Farmers Feed Their Cows?

Dairy farmers feed their cows protein supplements, minerals, grains, forage, and salt for each meal. A pound of this dry ration should be washed down with 3 to 5 pounds of water.

How Much Do Farmers Spend on Cows?

How Much Do Farmers Spend on Cows

To determine the amount that farmers spend on cows, cwt or hundredweight per milk is the basis. Farmers who indulge in low-cost production spend $12.17 or less for every cwt of milk. Those who have high-cost operations need to spend $18.79 or even per cwt of milk.

What is Required to Become an Organic Certified Dairy Farmer?

As an organic certified dairy farmer, one should be inclined to practice recycling and conservation, and resources. Before getting certified, some requirements must be fulfilled.

Land Requirements

The land that you will use for dairy farming should pass through the qualifications of the organic certificate. When crops are also grown in the land for your livestock, no prohibited substances should be placed on it.

The Origin of Livestock

The easiest way to meet this requirement is to buy an organic herd. You may choose to go through the transition of making your animals into organic ones, but you can accomplish it in a year.

The dairy herd should be under organic management beginning the third gestation and a year before milk production.

Feed

The feed given to the livestock is completely organic. The use of hormones and other animal drugs is prohibited. Supplements, vitamins, and minerals are given to the animals should be approved by the FDA.

Living Conditions

A sufficient supply of water and food should be given to the herd. These needs also go hand in hand with proper ventilation and sanitation. The animals are not allowed to be confined when they’re more than 6 months old. They should be free to normally move around.

Labeling and Marketing

Adding ‘organic’ or ‘100% organic’ is not the only information you have to add to the label of an organic product. The label must include the handler’s name and address as well as the agent’s name responsible for getting the farmer dairy organic certified.

Summary

Dairy farming is way better than just selling the livestock because the farmers can earn every year and even every day. Despite the size of the farmer, it doesn’t hinder farmers to max out their profits. Moreover, dairy farming is not only focused on bottled milk but other byproducts such as butter, cheese, yogurt, and ice cream.

List of Sources

Characteristics and Production Costs of U.S. Dairy Operations

Consolidation in U.S. Dairy Farming

Costs to Produce Milk in 2020: What Is the Range?

Get More From Your Milk: Increasing Profit Through Value-Added Dairy Food Products

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