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Thread: Profit from Organic Systems

  1. #1
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    Default Profit from Organic Systems

    With the riseing interest in organic dairy products, how is the profitability from their systems in comparison to conventional systems ?
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

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    I ran a low input grazing herd for a bit. We weren't making tons of money but there were some tweaks I could have done had I kept at it.
    Talking to other guys, once you start running an organic dairy like a regular one the profit drops.
    Knew a couple of guys that grazed their herd during the day but fed tmr evenings and they weren't making big money.
    This was several years ago and I have not kept up with current prices.
    I think the key is to run low input, and be happy with the milk you get. Concentrate on your pastures and they will pay off.
    I knew a guy back in 96 that ran his non organic herd totally on grass and hay in the winter. Had a few feed guys come out and try to work up a ration...none could give him the same profitability as what he was doing.

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    With the grazing dairys that I have seen convert to organic production it's a case of no conventional fertilisers , herbicides , insecticides, antibiotics etc and what happens over time is the property gets a run down unloved look about it resulting in a reduction in value were it to be sold . I'm sure with the right attention to detail organic dairy operations can be great businesses but I see the above happening more often then not . Whether any serious money can be made going that way , I just don't know .
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

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    It has been very good to me.

    You don't have to look very hard to find neglected conventional farms and if that's what your looking for with organic you will darn sure find it there also.

    The biggest difference IMO is you have to be far more pro active in your management.

    No question there is much more potential for profit per cow, but getting there is up to the individual.

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    Here are some of my cows this morning.Name:  image.jpg
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Size:  73.4 KB

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    Quote Originally Posted by whistle pig View Post
    Here are some of my cows this morning.Name:  image.jpg
Views: 196
Size:  73.4 KB
    You have nice rolling hills, clean cows.

    Here in our flatlands they couldn't go out till about June when things dry up.

    From the road I can't tell the organic from the conventional as far as general upkeep of the buildings goes.

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    What kind of milk production average can you expect from a grazing organic dairy?

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    As a baseline 5000 pounds is probably possible with just about any system. A neighbor is doing an excellent job making 8000 pounds off only grass, and that is probably close to the maximum possible off of just grass. Feed some organic grain and 10000-15000 pounds is pretty normal. Manage a high input high output organic dairy and 20000 pounds is probably achievable, but I am not sure it would be affordable buying organic grain.

    Fun math: 100 pounds of conventional milk at $16/cwt, or 40 pounds of 100% organic grassfed milk at $40/cwt....which is worth more?

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    Quote Originally Posted by BLOOMFIELD View Post
    What kind of milk production average can you expect from a grazing organic dairy?
    I feed corn pretty much all year, but no grain protien. Depending on time of year and feed quality I get 45-65 lbs a day.

    Where you are at, all grass would probably work better.

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    Quote Originally Posted by whistle pig View Post
    I feed corn pretty much all year, but no grain protien. Depending on time of year and feed quality I get 45-65 lbs a day.

    Where you are at, all grass would probably work better.
    What was your conventional production before switching to organic?


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    Quote Originally Posted by cows250 View Post
    As a baseline 5000 pounds is probably possible with just about any system. A neighbor is doing an excellent job making 8000 pounds off only grass, and that is probably close to the maximum possible off of just grass. Feed some organic grain and 10000-15000 pounds is pretty normal. Manage a high input high output organic dairy and 20000 pounds is probably achievable, but I am not sure it would be affordable buying organic grain.

    Fun math: 100 pounds of conventional milk at $16/cwt, or 40 pounds of 100% organic grassfed milk at $40/cwt....which is worth more?
    8000 pounds off only grass . Sounds ok but what about the production per hectare and the presumably lower stocking rate under organic over time ? How the agronomy is managed will be critical to making sustainable profits IMO . Commercial fertilisers and broardleaf weed control makes a huge difference .
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

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    Quote Originally Posted by milklotsofcows View Post
    What was your conventional production before switching to organic?


    Sent from my iPhone using Tapatalk
    I started converting in 2001, my herd average was 26,000 at that time.

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    He is 18 years into 100% grass based dairy. Yields will be 2.5-3 DM tons per acre (as consumed by the animal), with about $900 gross income per acre utilized by the milking herd. Growing irrigated conventional corn would give a much higher yield per acre, maybe 4.25 DM tons and 6 DM tons of silage, but the gross income would only be $600 with far higher input costs.

    Also, weeds are forage if some animal is willing to eat it (and fertilizer if they trample it to the ground.

  14. #14

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    Quote Originally Posted by Lead Cow View Post
    With the riseing interest in organic dairy products, how is the profitability from their systems in comparison to conventional systems ?
    Larry Tranel recently published probably the most comprehensive analysis of Iowa organic dairy farms profitability. Can't find his 2016 one online but here are his older ones. http://www.extension.iastate.edu/dai...e/larry-tranel

  15. #15

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    Quote Originally Posted by Lead Cow View Post
    8000 pounds off only grass . Sounds ok but what about the production per hectare and the presumably lower stocking rate under organic over time ? How the agronomy is managed will be critical to making sustainable profits IMO . Commercial fertilisers and broardleaf weed control makes a huge difference .
    How is broadleaf weed control and commercial fertilizers key to sustainable profits?

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    Quote Originally Posted by BoerMaak'nPlan View Post
    Larry Tranel recently published probably the most comprehensive analysis of Iowa organic dairy farms profitability. Can't find his 2016 one online but here are his older ones. http://www.extension.iastate.edu/dai...e/larry-tranel
    Very interesting and thanks for posting . Obviously a lot of work went into the report .
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

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    Quote Originally Posted by BoerMaak'nPlan View Post
    How is broadleaf weed control and commercial fertilizers key to sustainable profits?
    No fertiliser application = less grass grown + no weed control = land covered in thistles etc then stocking rate drops off from say 4 cows/hectare to maybe about 2.5/hectare ! I'm probably missing a whole lot here and obviously the report that you posted shows that well run organic farms can compete profit wise with the best of conventional farms .

    Nice pic Whistle Pig . Sounds like going organic has worked out well for you.
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

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    Quote Originally Posted by cows250 View Post
    He is 18 years into 100% grass based dairy. Yields will be 2.5-3 DM tons per acre (as consumed by the animal), with about $900 gross income per acre utilized by the milking herd. Growing irrigated conventional corn would give a much higher yield per acre, maybe 4.25 DM tons and 6 DM tons of silage, but the gross income would only be $600 with far higher input costs.

    Also, weeds are forage if some animal is willing to eat it (and fertilizer if they trample it to the ground.
    Fair enough . The figures seem very low to me .

    $900 gross income per acre or around $2225/hectare . So I would presume that's just from milk sales ? If the milk cheque is more than the fixed costs then no problem..
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

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    Quote Originally Posted by whistle pig View Post
    It has been very good to me.

    You don't have to look very hard to find neglected conventional farms and if that's what your looking for with organic you will darn sure find it there also.

    The biggest difference IMO is you have to be far more pro active in your management.

    No question there is much more potential for profit per cow, but getting there is up to the individual.
    Can you describe what you mean by being more proactive with your management?
    "Those people who say they have no time for bodily exercise will soon have to find time for illness ". Joseph Pilates

  20. #20
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    Quote Originally Posted by Lead Cow View Post
    Can you describe what you mean by being more proactive with your management?
    With organic there are very few quick fixes for problems. Much more time spent heading problems off rather than reacting to them.

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