CHANGES ON FARMS SUPPLYING MILK

March 1966 A. E. Res. 195 AN ECONOMIC ANALYSIS OF CHANGES IN MILK PRODUCTION IN THE NEW YORK MILKSHED. CHANGES ON FARMS SUPPLYING MILK TO THE NEW YORK-NEW JERSEY MARKET 1960-1964 Progress Report 5 G. J. Conneman Department of Agricultural Economics Cornell University Agricultural Experiment Station New York State College of A griculture A Controe! College of the State University Cornell University, Ithaco, New York

This is the fifth in a series of progress reports on Cornell University Agricultural Experiment Station State Project 58, An Economic Analysis of Long-Run Changes in Milk Production in the New York Milkshed. This project is being conducted by the Department of Agricultural Economics at Cornell in cooperation with the Departments of Agricultural Economics at the Universities of Connecticut, Delaware, Maryland, Pennsylvania State, Rutgers and Vermont, and the Market Administrator, New York-New Jersey Milk Marketing Area. The first report (A.E. Res. 135) dealt with the purpose and sampling design of the study. The second report (A.E. Res. 144) examined regional differences in the milkshed< The third report (A.E. Res. 145) described changes between June 1960 and June 1963 in the number of producers, cow and heifer numbers, size of herd, and method of delivering milk. The fourth report (A.E. Res. 155) examined similar types of changes between 1960 and 1964. This fifth report discusses changes in price, income, and production as well as changes in farm organization and producer characteristics during the fouryear period, 1960-64. Subsequent reports will discuss other types of changes as well as provide a basic analysis of the causes of change.

TABLE OF CONTENTS INTRODUCTION... ".............................. 1 Definitions.. "., < ", " 3 CHANGE IN THE NUMBER, AGE, EDUCATION, TENURE AND OFF-FARM EMPLOYMENT OF PRODUCERS............. 3 Number of Producers...,... 3 Age... "... 4 Formal Education................................. 5 Tenure.... 5 Off-farm Employment 6 CHANGE IN HERD SIZE, MILK PER COW, ACREAGE, LABOR FORCE AND METHOD OF DELIVERING MILK.... 7 Size of Herd.... 7 Amount of Milk Sold Per Cow... 9 Acres of Cropland Operated... 10 Farm Labor Force.... 11 Method of Delivering Milk 13 CHANGE IN PRICE, INCOME, AND PRODUCTION 14 Amount of Milk Sold Per Producing Unit... 14 Price Per Hundredweight. < _ 15 Gross Income From the Sale of Milk... 17 SUMMARY... < " 18

CHANGES ON FARMS SUPPLYING MILK TO THE NEW YORK-NEW JERSEY MILK MARKET 1960-1964 INTRODUCTION This publication reports on the changes made by a $ample of dairy farmers supplying milk to the New York-New Jersey market..y The changes cover the four-year period, June 1960 to June 1964. The sample was devised to reflect all of the changes occurring on farms producing milk in the market area.. Y The outflow of farm operators, the inflow of beginning operators, and market shifts were all taken into account. The sample included 1,172 New York-New Jersey Order producers in June 1960. The geographic area of the New York Milkshed covers parts of six states: New York, New Jersey, Pennsylvania, Maryland, Delaware and Vermont (Figure 1). The farms included in this representative sample have been visited and revisited each year over the four-year period of time: 1. To find out the nature of changes occurring in milk production and cow numbers 2. To identify price and non-price factors causing these changes This report discusses adjustments and changes that have taken place on this sample of farms. Subsequent publications will deal with identifying the causes of change. 1/ The New York-New Jersey Milk Order is a regulatory system consisting of a - federal milk marketing order (No. 2) and concurrent orders issued by the State Milk Control Agencies of New York and New Jersey. These orders are administered by a joint agency, the Market Administrator, New York-New Jersey Milk Marketing Area. The primary purpose of these orders is to fix minimum prices to be paid by handlers for milk produced for the specified marketing area. That marketing area includes New York City and immediately adjacent counties of New York State, as well as 13 counties of Northern New Jersey and all or parts of 35 counties of Upstate New York. The production area for this market (New York-New Jersey Milkshed) embraces most of New York State as well as substantial parts of New Jersey and Pennsylvania, and relatively small areas in other neighboring states. 2/ A detailed description of the overall purpose of the study and the sample - design is contained in A. E. Res. 135.

2 Figure 1 REGIONS IN THE NEW YORK-NEW JERSEY MILKSHED Legend, 2 3 5 6 7 B NontHHn Ne... York Mohawk V alley Areo. Eoslern Fleleau C entra l Plateau Wester n Ploteau Control L o ker. A r ea Central P ennsylv Qnlo New Jersey Area 9 Eo.616rn New York \0 Butfalo-Rocho!.ter Area Regio nal Number l5!i Non-o.grlc ultural Lake Ma:u ]K,",,~... I'--" ----c~i"'~ / / f! I (l ) I ) ( I ( I L Penna. -V\i"-:v.. -, I f\ ( '.-oj ) I /".v / /

3 Definitions A producing unit is defined as consisting of that bundle of farm resources - land, buildings, cattle and machinery -- under the single management and control of one or more operators. A producing unit may therefore include more than one farm (as that term is often defined), and will include all the milk cows under one management, even though the cows are milked in more than one barn. An operator or a producer is defined as an individual who manages and controls a producing unit, and who delivers milk to a market, however small the amount, including intermittent shippers. A producing unit may have more than one operator. References in this report to farms or producers, unless otherwise noted, refer to producing units and operator(s) as defined above. The four-year period covered by the study runs from June 1, 1960 to June 1, 1964. Such items as number of cows and age of operator are discussed in terms of these dates. The production year covers the twelve month period from May 1 to April 30 inclusive. Thus, the 1960 production year covers the period May 1, 1960 to April 30, 1961. Factors such as the amount of milk sold per producing unit, and milk sold per cow are calculated on a production year basis. CHANGE IN THE NUMBER, AGE, EDUCATION, TENURE AND OFF-FARM EMPLOYMENT OF PRODUCERS The change in the number of producers supplying milk to the New York-New Jersey market, and the characteristics of these producers with respect to age, education, tenure and off-farm employment are described below. N umber of Producers The number of producing units delivering milk to plants regulated by the New York-New Jersey Order has been declining. Between June 1960 and June 1964, there was a net decrease of 19 per cent in the number of units in the sample (Table 1). The net rate of decline increased during the three-year period, averaging 3.5 per cent from 1960 to 1961, and 7.4 per cent between 1963 and 1964.

4 Table 1. CHANGE IN NUMBER OF PRODUCING UNITS Sample of New York-New Jersey Order Producers, JlU1e 1960-64 Date Number of producing units Net change from previous year in: Number Per cent of units of units June 1960 June 1961 June 1962 June 1963 JlU1e 1964 1,172 1,131 1,083 1,028 952-41 -3.5-48 -4.2-55 -5.1-76 -7.4 The average age of operator supplying milk to the New York-New Jersey market was 44.4 in 1960. In that year two out of five operators were less than 40 years of age and one out of three were over 50 years or older. By 1964 the average age of operator was 45.3 years, with 15 per cent over 60 years of age. A distribution of age of operator is shown in table 2. Table 2. AGE OF OPERATOR Sample of New York-New Jersey Order Producers, JlU1e 1960-64 Age of Number of producing lu1its Per cent of lu1its operator JlU1e 1960 June 1964 JlU1e 1960 JlU1e 1964 Less than 30 142 104 12% 11% 30-39 323 221 28 23 40-49 304 288 26 30 50-59 236 199 20 21 60-69 129 112 11 12 70 and over 38 -- 28 3 3 TOTAL 1,172 952 100% 100% Of the 1,172 New York-New Jersey Order producing units, in the sample in 1960, 113 had more than one operator, i.e., a partnership of one type or another. The age of the second operator was not included in the previous distributions and averages. Including the second operator, the average age for all operators was 45.3 years in 1960 and 46.5 years in 1964.

5 The distribution of age of operator shifted slightly between 1960 and 1964. A higher proportion of operators were 40 years of age or over in 1964 than in 1960 (66 per cent vs. 60 per cent), and a smaller proportion (34 per cent vs. 40 per cent) were less than 40 years of age. This would appear to indicate that somewhat fewer young men are entering dairy farming. Formal Education The average producer supplying milk under the New York-New Jersey Order has 10 years of formal schooling. A distribution of the level of formal education of producers is shown in table 3. Slightly over 7 per cent of all operators had continued their education beyond high school. Table 3. FORMAL EDUCATION OF FARM OPERA TOR Sample of New York-New Jersey Order Producers, June 1960-64 Grade Number of operators Per cent of operators completed June 1960 June 1964 June 1960 June 1964 Less than 8 125 73 11% 8% 8 362 275 31 28 9-11 262 216 22 23 12 342 321 29 34 13-15 56 50 5 5 16 20 15 2 2 17 or more 5 2 * * TOTAL 1,172 952 100% 100% * Less than one-half of one per cent. A slightly higher proportion of operators had a high school education in 1964 than in 1960. Forty-one per cent had completed 12 or more years of formal schooling in 1964. Tenure The great majority of producers delivering to the New York-New Jersey market are owner-operators. A relatively small number rent their entire farm. Eighty-two per cent of the farmers in 1960 and 84 per cent in 1964 were classified as owner-operators. Only 7 per cent in each period rented their farm for cash or on shares. Tenure was essentially unchanged during the four-year period (Table 4),

6 Table 4. TENURE OF FARM OPERATORS Sample of New York-New Jersey Order Producers, June 1960-64 Number of producing units Per cent of units Tenure June 1960 June 1964 June 1960 JLme 1964 Owner-operator 961 807 82% 84% Cash rent 54 44 5 5 Share rent 28 16 2 2 Partnership 109 75 9 8 Hired manager 12 6 1 1 Other (misc.) 8 4 1 * TOTAL 1,172 952 100% 100% * Less than one-third of one per cent. Off-Farm Employment Off-farm employment occurs in most communities among dairy farmers. In June 1960, one out of four New York-New Jersey Order producers in a sample of 1,172 producers had a job that involved 30 or more days of work off the farm. One out of eight operators held a full -time off-farm job, i.e., 120 or more days of work off the farm. Most commonly these producers held jobs as factory workers, carpenters, plumbers, mechanics, road workers, construction workers, or truck drivers. One out of eight milk producers worked part-time off the farm, Le., between 30 and 119 days of work off the farm. Types of part-time work included driving a school bus, hauling milk, driving a truck, doing carpentry work, or working as a town official (e.g., assessor, supervisor, justice of the peace). Low incomes in dairying in recent years have undoubtedly encouraged many milk producers to work off the farm. For some producers, a part-time or fulltime job off the farm often is one of the first steps in moving out of farming. In some areas this process has been taking place for a number of years. The proportion of milk producers working off the farm was unchanged between 1960 and 1964 (Table 5).

7 Table 5. PERCENTAGE OF PRODUCERS WITH OFF-FARM EMPLOYMENT Sample of New York-New Jersey Order Producers, 1960 and 1964 Off-farm employment June 1960 June 1964 Per cent of producers None 30 or more days of off-farm work TOTAL 76 24 100% 75 25 100% CHANGE IN HERD SIZE, MILK PER COW, ACREAGE, LABOR FORCE, AND METHOD OF DELIVERING MILK Between 1960 and 1964 important changes occurred in the size of herd, the amount of milk sold per cow, and method of delivering milk on producing units supplying milk to the New York-New Jersey market. The nature of these changes as well as those in the number of crop acres operated, and labor force are discussed below. Size of Herd Although the number of New York-New Jersey Order producing units in the sample decreased by 19 per cent during the four-year period, the total number of cows kept on the remaining units decreased only four per cent. The change in the number of producing units, number of cows, and number of cows per producing unit are shown in table 6. The changes in the aggregate number of cows reflect the decisions of many individual farmers. The total number of cows is the result of the number of herds multiplied by the number of cows per herd. The increase in the number of cows per producing unit was nearly enough to compensate for the decrease in the number of units. Although the average number of cows per producing unit increased from 28 to 33 between June 1960 and June 1964, the majority of herds continue to be relatively small. In making size comparisons, all the cows under one management, even though the cows were milked in more than one barn, were counted as one herd.

8 Table 6. CHANGE IN NUMBER OF PRODUCING UNITS, NUMBER OF COWS, AND COWS PER PRODUCING UNIT Sample of New York-New Jersey Order Producers, June 1960-64 Number of Number Cows per unit Year producing units* of cows* Mean Median June 1960 46,880 1,329,680 28.4 25 June 1961 45,240 1,355,080 30.0 26 June 1962 43,320 1,348,040 31.1 27 June 1963 41,120 1,319,160 32.1 28 June 1964 38,080 1,271,600 33.4 29, * Estimated number based on a 2.5 per cent sample. Sixty-two per cent of all producing units had less than 30 cows in June 1960. Small herds of less than 20 cows were found on over one-third of all units in 1960. On the other hand, only 5 per cent of the producing units kept over 60 cows. Only one per cent had 100 cows or more. Between June 1960 and June 1964, there was a decrease of 12 per cent tn the number of producing units with less than 20 cows, but an increase of 8 per cent in producing units that kept 20 to 59 cows. By 1964, two per cent of the units had 100 or more cows. A distribution by number and per cent of producing units in each size-group is shown in table 7. I Table 7. CHANGE IN THE DISTRIBUTION OF SIZE OF HERD Sample of New York-New Jersey Order Producers, June 1960-64 Number Number of producing units Per cent of units of cows June 1960 June 1964 June 1960 June 1964 Under 20 394 211 -r~,~ 34% 22% ~ ~ 47 49 40-59 168 195 I I~ 14 20 60-79 35 46./ 31 ~ 3 5 80-99 9 15 I II /, 1 2 100 and over 10 14 '1 '" 1 2 20-39 556 471... TOTAL 1,172 952 - ~ 100% 100% In 1964, the highest proportion of units, 29 per cent, was in the 20 to 29 cow size-group.

9 Although producing units with 60 or more cows accounted for only a small proportion of all units, these units kept a large proportion of the cows. Comparing 1960 to 1964, large herds accounted for an increasing proportion of total cows. Producing units with 60 or more cows accounted for only 5 per cent of all herds, but these herds kept 13 per cent of the total number of cows in June 1960 (Table 8). Herds of less than 20 cows accounted for 34 per cent of the total herds, but kept only 16 per cent of the cows. Between 1960 and 1964, the percentage of total cows kept in producing units with herds of less than 20 cows decreased from 16 per cent to 10 per cent, whereas the units with herds of more than 40 cows increased their percentage of total cows from 37 to 48 per cent. Units with herds of less than 30 cows accounted for 51 per cent of all units in 1964, but kept only 31 per cent of all cows. Table 8. PERCENTAGE OF PRODUCING UNITS AND COWS BY SIZE-GROUPS Sample of New York-New Jersey Order Producers, June 1960-64 Number Per cent of units Per cent of cows of cows 1960 1964 1960 1964 Under 20 34% 22% 16% 10% 20-39 47 49 47 42 40-59 14 20 24 28 60-79 3 5 7 10 80-99 1 2 3 4 100 and over 1 2 3 6 TOTAL 100% 100% 100% 100% Amount of Milk Sold Per Cow Milk production per cow has increased rapidly in recent years as a result of technological advances in feeding, breeding, and management. On the sample farms from 1960 to 1964 the amount of milk sold per cow increased from 8,328 to 9,019, or by nearly 700 pounds per cow. This is an increase of 8 per cent, or roughly 250 pounds per cow per year. The change in the distribution of the amount of milk sold per cow is even more striking (Table 9). In 1960 only about one out of five producing units sold over 10,000 pounds of milk per cow, compared to nearly one out of every three in 1964.

10 Table 9. POUNDS OF MILK SOLD PER COW* Sample of New York-New Jersey Order Producers, 1960-61 and 1963-64** Pounds of milk sold per cow Per cent of producing units 1960-61 1963-64 less than 5,000 5,000-5,999 6,000-6,999 7,000-7,999 8,000-8,999 9,000-9,999 10,000-10,999 11,000-11,999 12,000-12,999 13,000 and more TOTAL 8% 10 14 16 19 13 11 5 3 1 100% 7% 7 13 15 14 13 13 9 5 4 100% * Does not include producers who delivered milk for less than 12 months. ** The 1960-61 production year covers the 12 month period May 1960 to April 1961. The 1963-64 production year covers the 12 month period May 1963 to April 1964. Acres of Cropland Operated The number of crop acres operated per producing unit increased between 1960 and 1964 from 113 to 123 acres. This includes both crop acres owned and rented. Permanent pasture, woods, wasteland, etc. are not included in the above total. In 1960 half of the units operated less than 100 crop acres with only 11 per cent cropping 200 or more acres. The distribution was approximately the same in 1964 as in 1960 (Table 10). The change in crop acreage has been much less rapid than the change in cow numbers. Cropland is being used more intensively. One way to illustrate this is to calculate crop acres per cow. For all producing units, crop acres per cow averaged 4.0 in 1960 compared to 3.7 in 1964.

11 Table 10. CROP ACRES PER PRODUCING UNIT Sample of New York-New Jersey Order Producers, June 1960-64 Crop acres Number of producing units Per cent of units per farm June 1960 JW1e 1964 JW1e 1960 June 1964 Less than 50 168 109 14% 12% 50-99 423 319 36 34 100-149 301 275 26 29 150-199 149 127 13 13 200-249 64 61 5 6 250 and over 67 61 6 6 TOTAL 1,172 952 100% 100% Farm Labor Force The average size of labor force on New York-New Jersey Order producing W1its was less than two men, averaging 1.8 man equivalents per unit (Table 11). Man equivalent is calculated by adding the total months of labor supplied or hired by the farm (operator, family, and hired) and dividing by twelve o The structure of the labor force was W1changed between the two periods, averaging 12 months of operator labor, 5 months of family labor, and 4 months of hired labor for a total of 21 months. Table 11. AVERAGE SIZE OF LABOR FORCE Sample of New York-New Jersey Order Producers, 1960 and 1964 Kind of labor 1960 1964 Months of labor Operator Family labor Hired labor TOT A L MONTHS Man equivalent 12 5 4 21 1.8 12 5 4 21 1.8

12 Nearly two-thirds of the units had a labor force of less than two man equivalents in 1960, and only about two in every 100 producing W1its had 4 or more man equivalents. The distribution of size of labor force in 1960 and 1964 is shown in table 12. Table 12. DISTRIBUTION OF SIZE OF LABOR FORCE Sample of New York-New Jersey Order Producers, 1960 and 1964 Man Number of producing units Per cent of units equivalent 1960 1964 1960 1964 Less than 1.0 47 37 4% 4% 1.0-1.4 452 379 39 40 1.5-1.9 257 221 22 23 2.0-2.4 261 189 22 20 2.5-2.9 61 56 5 6 3.0-3.4 58 37 5 4 3.5-3.9 15 7 1 * 4.0 and over 21 26 2 3 TOTAL 1,172 952 100% 100% * Less than one-half of one per cent. There was essentially no change in the amounts of labor used on these producing units between 1960 and 1964. However, more cows were handled and more milk produced on these units with the same number of men (Table 13). Between 1960 and 1964, cows per man increased from 16 to 18, orby 12 per cent. The amow1t of milk sold per man increased 22 per cent during the same period, increasing from 137,000 to 167,000 pounds. Table 13. COWS PER MAN AND MILK SOLD PER MAN Sample of New York-New Jersey Order Producers, 1960 and 1964 Item 1960-61 1963-64 Per cent change Cows per man Lbs. milk sold per man 16 137,000 18 167,000 + 12 + 22

13 Method of Delivering Milk Compared to most milk markets in the northeastern part of the United States, a relatively small percentage of New York-New Jersey Order producers deliver milk in bulk (Table 14). Based on reports from the Market Administrators, only 21 per cent of the producers in the New York-New Jersey market had tanks in January 1964, compared to 84 per cent in the Connecticut market. In other northeastern markets somewhere between 2/3 and 4/5 of the farmers delivered milk in bulk. Table 14. Market PER CENT OF PRODUCERS WITH BULK TANKS January 1960 January 1964 Per cent of producers New York-New Jersey Rochester Connecticut Boston 11 37 63 30 21 64 84 79 Source: Reports issued by the Market Administrators in the respective markets. In the sample of New York-New Jersey producers, only 12 per cent had tanks on June 1, 1960. By June 1964, the proportion with tanks had increased to 23 per cent. Table 15. METHOD OF DELIVERING MILK Sample of New York-New Jersey Order Producers, June 1960-64 Bulk or Number of producing units Per cent of units cans June 1960 June 1964 June 1960 June 1964 Cans 1,035 729 88% 77% Bulk 137 223 12 23 TOTAL 1,172 952 100% 100% Although only 12 per cent of the sample producers had tanks in 1960, nearly 25 per cent of the total amount of milk was delivered in bulk that year. In general bulk producers operated larger farms than can producers. In 1964, while

14 only 23 per cent of the producers had bulk tanks, 39 per cent of the total amount of milk was delivered in bulk. CHANGE IN PRICE, INCOME, AND PRODUCTION Between 1960 and 1964 significant changes occurred in prices, income, and production on producing units supplying milk to the New York-New Jersey milk market. During this four-year period, the amount of milk sold per producing unit increased 54,000 pounds, gross income from the sale of milk increased nearly $2,000 per unit, while the average gross price received for milk (before deduction for hauling) decreased 14 cents per hundredweight. The changes in these factors are summarized in table 16, and are discussed below in detail. Table 16. CHANGES IN PRICE, INCOME AND PRODUCTION Sample of New York-New Jersey Order Producers, 1960-61 and 1963-64* Item 1960-61 1963-64 Percentage change Pounds of milk sold per producing unit Gross price received per cwt. Gross income from sale of milk per producing unit 245,956 $ 4.44** $10,930 300,213 $ 4.30** $12,919 + 22% 3 + 18 * Does not include producers who delivered milk for less than 12 months. ** Includes all premiums and adjustments for location, butterfat, etc. Hauling not deducted o Amount of Milk Sold Per Producing Unit The average amount of milk sold per producing unit increased from 245,956 to 300,213 pounds or by about 54,000 pounds between 1960 and 1964, Of even greater interest than this average figure, is the change in distribution of the amount of milk sold per unit (Table 17). In 1960 over one-half of the producers delivering milk to the New York-New Jersey market sold less than 200,000 pounds of milk whereas only 7 per cent sold more than 500,000 pounds. In 1964, thirteen per cent of the producing units sold over half-a-million pounds of milk, whereas about 40 per cent sold less than 200,000 pounds.

15 Table 17. DISTRIBUTION OF AMOUNT OF MILK SOLD PER PRODUCING UNIT* Sample of New York-New Jersey Order Producers, 1960-61 and 1963-64** Milk sold Per cent of producing units 1960-61 1963-64 Per cent of milk 1960-61 1963-64 Thousand pounds Less than 100 100-199 200 299 300 399 400 499 500 599 600 and more TOTAL 16% 11% 35 28 22 23 13 16 7 9 3 4 4 9 100% 100% 5% 3% 21 14 21 19 18 18 12 13 8 8 15 25 100% 100% * Does not include producers who delivered milk for less than 12 months. ** The 1960-61 production year covers the 12 month period May 1960 to April 1961. The 1963-64 production year covers the 12 month period May 1963 to April 1964. Although only seven per cent of the units sold more than 500,000 pounds of milk in 1960, they accounted for 23 per cent of the total amount of milk delivered to New York-New Jersey Order plants. On the other hand, those units selling less than 200,000 pounds of milk represented over 50 per cent of the number of units, but sold only one-fourth of the total amount of milk. By 1964, producing units selling more than 500,000 pounds of milk accounted for 13 per cent of the units but supplied 33 per cent of the total amount of milk. Price Per Hundredweight During the 1960-64 period, a relatively small change occurred in the blend or uniform prices paid to producers (Table 18). As reported by the New York New Jersey Market Administrator, the uniform price paid to producers for milk testing 3.5 per cent butterfat at the 201-210 mile zone was $4.27 per hundredweight for the calendar year 1960. The uniform or blend price for 1963 was $4.11, but rose to $4.18 in 1964. Thus, the change between calendar year 1960 and 1964 amounted to a decrease of 9 cents per hundredweight.

16 Table 18. PRICE OF MILK IN THE NEW YORK-NEW JERSEY MARKET 1960 to 1964 Uniform Price Uniform Price 3.5% Milk, 3.5% Milk, Calendar 200-210 200-210 year Mile Zone* Period Mile Zone** 1960 $4.,27 1960-61 $4.28 1961 4.17 1961-62 4.18 1962 4,12 1962-63 4.12 1963 4,11 1963-64 4.19 1964 4.18 Change between Change between 1960-61 and 1960 and 1964-9 1963-64 - 9 Average Price*** $4.40 4.31 4.24 4.31-9 * Weighted 12 month average as reported by Market Administrator. ** Simple average of monthly prices reported by Market Administrator. *** Total dollars -;- total pounds as reported by Market Administrator. On a production year basis (May 1 to April 30) the same pattern of prices prevailed with a relatively small change during the four-year period. For the sample of New York-New Jerseyproducers, the gross price received per hundredweight declined from an average of$4.44 in 1960-61 to $4.30 in 1963-64 or a decrease of 14 cents per hundredweight. The gross price received by an individual producer delivering to a plant regulated by the New York-New Jersey Order depends upon his location, butterfat test, and other adjustments and premiums (if any). A uniform price is paid based on the butterfat test ofthe milk and the freight zone. Generally the further a producer is located from market, the lower is the price received per hundredweight. Also some cooperatives may pay their producers more or less than the uniform price. In addition various special location, bulk, quality, or other premiums are paid to some producers. The gross price calculated for producers in the sample includes all premiums and other adjustments. It is arrived at by dividing the total gross dollars (before any deductions) by the total hundredweight delivered. The net price is calculated by deducting a hauling charge (if any) from the gross price. A distribution of both the gross price and net price during the four-year period is indicated in table 19. In the 1960-61 period, about one-third of the producers received a gross price per hundredweight over $4,50 with the majority

17 of the producers receiving $4.00 to $4.49. In the latter period (1963-64) only 16 per cent of the producers received a gross price per hundredweight in excess of $4.50. Table 19. PRICE RECEIVED PER HUNDREDWEIGHT OF MILK* Sample of New York-New Jersey Order Producers, 1960-61 and 1963-64 Price per hundredweight $3.50 3.99 4.00-4.49 4.50-4.99 5.00 and over TOTAL Gross price** 1960-61 1963-64 Per cent 4 9 67 75 21 14 8 2 100% 100% Net price*** 1960-61 1963-64 Per cent 18 34 63 54 14 11 5 1 100% 100% * Does not include producers who delivered milk for less than 12 months. ** Total dollars including all premiums divided by cwt. of milk sold. *** Gross price less hauling charge. Gross Income From the Sale of Milk Gross income from the sale of milk is the product of the amount of milk sold and the gross price received per hundredweight. Nearly 60 per cent of the New York-New Jersey market producers had a gross income from the sale of milk of less than $10,000 in 1960 0 Only 6 producers in every 100 grossed $25,000 or more from the sale of milk in that year (Table 20). The increase in the amount of milk sold per producing unit was more than enough to offset the decrease in the price of milk. Gross income in the 1963-64 period was nearly $2,000 greater than in 1960-61. By 1963-64, one in ten farms had a gross income of over $25,000 from the sale of milk. However, 48 per cent of the units grossed less than $10,000 from milk sales during the 1963-64 production year.

18 Table 20. GROSS INCOME FROM THE SALE OF MILK** Sample of New York-New Jersey Order Producers, 1960-61 and 1963-64*** Gross income from Per cent of producing units sale of milk 1960-61 1963-64 Less than $5,000 21% 16% $ 5,000-9,999 38 32 10,000-14,999 20 23 15,000-19,999 10 13 20,000-24.,999 5 6 25,000-29,999 3 5 30,000-34,999 2 2 35,000-39,999 * 1 40,000 and over 1 2 TOTAL 100% 100% * Less than one-half of one per cent. ** Does not include producers who delivered milk for less than 12 months. *** The 1960-61 production year covers the 12 month period May 1960 to April 1961. The 1963-64 production year covers the 12 month period May 1963 to April 1964. SUMMARY This report describes changes in price, income, and production as well as changes in farm organization and producer characteristics for a representative sample of producing units supplying milk to the New York-New Jersey market. Changes covering the four-year period, June 1960 to June 1964 are summarized in table 21. The number of producing units delivering milk to plants regulated by the New York-New Jersey Order has been declining. Between 1960 and 1964, the number of producing units decreased 19 per cent. The average age of operator supplying milk to the New York-New Jersey market was 44..4 in 1960, The distribution of age of operator shifted slightly during the four-year period. A higher proportion of the operators were over 40 years of age in 1964 than in 1960. The average producer supplying milk under the New York-New Jersey Order had 10 years of formal schooling.

19 Table 21. CHANGES ON A SAMPLE OF PRODUCING UNITS SUPPLYING MILK TO THE NEW YORK-NEW JERSEY MARKET 1960 to 1964 Percentage Item 1960 1964 change Number of producing units 1,172 952-19% Cows per producing unit 28 33 + 18 Crop acres per unit 113 123 + 9 Man equivalent per unit 1.8 1.8 0 Pounds of milk sold per unit 245,956* 300,213* + 22 Gross income from milk per unit $ 10,930* $ 12,919* + 18 Average price received/cwt. $ 4.44* 4.30* 3 Lbs. milk sold per cow 8,328* 9,019* + 8 Age of operator (years) 44.4 45.3 % of operators with 30 or more days of work off the farm 24% 25% Level of formal education (grade completed) 10 10 Tenure: % of producers owner-operators 82% 84% % of producers with bulk tanks 12% 23% % of milk delivered in bulk 25% 39% * Does not include producers who delivered milk for less than 12 months. The great majority of producers delivering to the New York-New Jersey market are owner-operators, with only a relatively small number renting their entire farm. Tenure was essentially unchanged during the four-year period. In both 1960 and 1964, one out of four producers had a job that involved 30 or more days of work off the farm. Nearly one out of eight operators held a fulltime off-farm job, Le., 120 or more days of work off the farm. Low income in dairying in recent years has undoubtedly encouraged many milk producers to work off the farm. For some producers, a part-time or full-time job off the farm often is one of the first steps in moving out of farming. During the four-year period, the total number of cows kept on these producing units decreased about four per cent. The increase in cows per unit was nearly enough to offset the decrease in the number of producing units.

20 The majority of herds still continue to be relatively small, although the average number of cows per producing unit increased from 28 to 33 between June 1960 and June 1964. Fifty-one per cent of all producing units had herds of less than 30 cows in June 1964. Although producing units with 60 or more cows accounted for only a small proportion of all units, they kept a large proportion of the cows. Producing units with 60 or more cows accounted for only 9 per cent of all herds, but kept 20 per cent of the cows in June 1964. Units with 40 or more cows accounted for an increasing proportion of total cows. The amount of milk sold per cow has also changed rapidly, increasing nearly 700 pounds per cow between 1960 and 1964, from 8,328 to 9,019 pounds. This is an increase of 8 per cent or nearly 250 pounds per cow per year. The number of crop acres operated per producing unit increased from 113 to 123 acres between 1960 and 1964. However, the change in crop acreage has been much less rapid than the change in cow numbers, and cropland was used more intensively in the latter period. The average size of labor force on New York-New Jersey Order producing units averaged 1.8 man equivalents per unit. Therewas essentially no change in the amount of labor used on these units between 1960 and 1964. However, more cows were handled per man, and more milk was sold per man. Compared to most milk markets in the northeastern part of the United States, a relatively small percentage of New York-New Jersey Order producers deliver milk in bulk. In June 1960, only 12 per cent of sample producers delivering to New York-New Jersey Order plants had bulk tanks. By June 1964, this had increased to 23 per cent. In general bulk producers operated larger farms than can producers. In 1964, while only 23 per cent of the producers had bulk tanks, 39 per cent of the total amount of milk was delivered in bulk. Between 1960 and 1964 important changes occurred in prices, income, and production on farms supplying milk to the New York-New Jersey milk market. During this four-year period, the amount of milk sold per producing unit increased 54,000 pounds, gross income from the sale of milk increased over $2,000 per unit, while the average gross price received for milk (before deduction for hauling) decreased 14 cents per hundredweight. The average amount of milk sold per producing unit increased from approximately 246,000 to 300,000 pounds between 1960 and 1964. In 1960 over one-half of the producers delivering milk to the New York-New Jersey market sold less than 200,000 pounds of milk whereas only 7 per cent sold more than 500,000 pounds. In 1964, thirteen per cent of the producing units sold over 500,000 pounds of milk, whereas about 40 per cent sold less than 200,000 pounds. Although only seven per cent of the units sold more than 500,000 pounds of milk in

21 1960, they accounted for 23 per cent of the total amount of milk delivered to Order 2 plants. On the other hand, those units selling less than 200,000 pounds of milk represented over 50 per cent of the number of units, but sold only onefourth of the total amount of milk. By 1964, producing units selling more than 500,000 pounds of milk accounted for 13 per cent of the units but supplied 33 per cent of the total amount of milk. For this sample of New York-New Jersey producers, the gross price received per hundredweight declined from an average of $4.44 in 1960-61 to $4.30 in 1963-64 or a decrease of 14 cents per hundredweight. In the 1960-61 period, about one-third of the producers received a gross price per hundredweight over $4.50 with the majority of the producers receiving $4.00 to $4.49. In the latter period (1963-64) only 16 per cent of all producers received a gross price per hundredweight in excess of $4.50. The increase in the amount of milk sold per producing unit was more than enough to offset the decrease in the price of milk. Gross income in the 1963-64 period was nearly $2,000 greater than in 1960-61. By 1963-64, one in ten farms had a gross income of over $25,000 from the sale of milk. However, 48 per cent of the units grossed less than $10,000 from milk sales during the 1963-64 production year.