An analysis of costs and returns for Florida dairy operations suggests they will lose $4.92/cwt on all milk produced in 2009. Average loss per farm could exceed $700,000, and the total loss for the state could reach $99 million.
The analysis, done by University of Florida researchers Albert De Vries and Russ Giesy, pegs the average Florida milk price at $17.08 for 2009. Add in cull cow and calf sales, and total revenue jumps to $18.08. Total cost of production, however, comes in at $23/cwt.
In 2007, Florida dairies netted $3.28/cwt over total production costs of $21.44. Profit per farm averaged $529,000. In 2008, profits dropped to $1.61/cwt. That happened despite the fact milk prices averaged $23.50 last year. But total costs jumped to $24.02. Profit per farm came in at $238,000.
The researchers estimate Florida dairies profited $77 million in 2007 and $38 million in 2008. If this year's projected losses of $99 million come true, they will virtually wipe out the profits of the previous two years.