Milk Profits through Good Management

In a state where agriculture is the number one industry, dairy farming leads the way, accounting for more than $1.5 billion -- about 40 percent -- of Pennsylvania's agricultural output. The Commonwealth is the nation's fourth largest milk producer, churning out 1.25 billion gallons a year.
Glenn Gorrell, dairy farmer, Bradford County.

Glenn Gorrell, dairy farmer, Bradford County.

"In 10 years, our herd grew from 60 head to about 170 milking cows and 140 replacements. Dairy-MAP and other Penn State programs have helped me to become a better manager and to develop the business skills I needed to survive and expand."

Our 10,200 commercial dairy farms directly employ more than 17,000 people and support another 12,000 jobs in processing, transportation and sales. So important is dairy farming to Pennsylvania's rural economy that a 2 percent swing in dairy production would create, or cause the loss of, an estimated 570 jobs.

However, rising production costs, milk price fluctuations, changes in the global marketplace and other factors have hurt many dairy enterprises. From 1987 to 1998, 3,500 Pennsylvania dairy farms went out of business, and the number of dairy cows dropped by more than 82,000. The fact that the state's total milk production stayed relatively constant during this period reflects a significant achievement by remaining dairy farmers to adopt the latest technology and to improve their management and business skills.

Penn State's College of Agricultural Sciences provides educational programs to help dairy farmers manage their operations more efficiently and profitably. From managing the books to managing herd health, research and cooperative extension programs are working to ensure that Pennsylvania's dairy farmers can thrive in the next century.

The Payoff

A road MAP for success

Like any other business, a dairy farm must be well managed to be profitable. Recognizing a need for new management skills, Penn State in 1993 launched the Dairy Management and Profitability (Dairy-MAP) program. Entering its final year in 1999, Dairy-MAP can claim a legacy of success. More than 1,500 people representing nearly 1,000 Pennsylvania farms have attended Dairy-MAP workshops to learn how to improve their business management skills. Based on survey results, they were successful. Nearly 87 percent of Dairy-MAP alumni expect to still be active in dairy farming five years down the road, compared to 73 percent of those not taking part in the program. More than half of Dairy-MAP farmers reported an increase in profit over a five-year period, while less than a third of non-participating farmers achieved increases. And 95 percent of Dairy-MAP alumni reporting profit increases credited more effective management as a significant reason for the boost.

Better herd health means a healthier bottom line

Because so many production decisions are interrelated, dairy herd health can't be considered separately from other areas of farm management. Yet many farm veterinarians don't have the complete training they need to make comprehensive recommendations to their clients. As a result, Penn State and the University of Pennsylvania teamed up to offer the Dairy Production Medicine Certificate Program, which began in 1991 and continues today. During each three-year course, up to 24 veterinarians attend 10 intensive three-day workshops covering farm finances, nutrition, environment and health, reproduction issues and other topics. Studies show that farms served by program graduates utilize better overall management and herd-health practices. Through enhanced nutrition and health management, many of these farms have been able to reduce by two months the age at which heifers have their first calves. Reducing the age at first calving by 60 days can save a farmer with a typical 100-cow herd up to $6,700 per year.

A team approach to management

Dairy farmers have many people they can turn to for advice, but recommendations from advisers typically have been given independently from one another. Yet a change in one management factor can impact other parts of the farm's operation. Under a new program supported by the Pennsylvania Department of Agriculture and USDA's Sustainable Agriculture Research and Education (SARE) program, Penn State has helped nearly 60 farms in eight counties to form Dairy Advisory Teams. A team may include the farm family, veterinarian, nutritionist, lender, accountant, crop adviser, milk co-op representative and other professionals. In the first year of the program, participating farmers credited their teams for helping to prioritize management decisions, making faster progress toward goals and providing a wider range of ideas for solving problems. More than two-thirds of the herds had an increase in milk yield, and more than half showed a reduction in the incidence of mastitis, a disease that can cost a dairy farmer as much as $180 per cow per year. Based on these results, Penn State plans to expand the program to more areas of the state.

Good nutrition feeds profits

Without proper nutrition, dairy cows can't produce milk at peak efficiency. Hundreds of farmers have received the latest dairy nutrition recommendations by participating in Penn State satellite video conferences, and thousands more have been reached through videotapes, publications and the World Wide Web. Penn State faculty and extension staff also conduct customized seminars for feed industry representatives, who share that knowledge with client farmers, multiplying the educational impact. These educational initiatives helped Penn State specialists identify a major problem facing dairy producers: determining if forage is chopped to the right size for proper digestion. If the particles are too small, the cow's rumen doesn't function normally, and milk fat content can be reduced. As a result, Penn State developed a device -- the forage particle size separator -- that is used by farmers around the world to ensure proper particle length of rations. Penn State scientists also developed inexpensive "weigh tapes" that can be used easily to accurately estimate heifer weight, allowing farmers to adjust nutrition as needed to ensure optimal growth rates.

The College of Agricultural Sciences dairy management programs are a collaborative initiative among the Departments of Dairy and Animal Science, Agricultural and Biological Engineering, Agricultural Economics and Rural Sociology, Agronomy, Food Science, and Veterinary Science; and Penn State Cooperative Extension. For more information, contact Dr. Terry Etherton at (814) 863-3665 or visit