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Dairy Gauge Initiative Southeastern Dairy Benchmarking Program

Agricultural Economics & Community Development

David Bilderback
Extension Area Specialist - Farm Management
University of Tennessee
Loudon

Abstract

The purpose of this educational program is to increase the individual profitability of the dairy producers in Tennessee, Kentucky, and North Carolina with funding from the USDA Dairy Business Innovation Initiatives Grant. Dairy Gauge allows dairy producers to compare their farm’s financial performance to peers on a financial benchmark, per cow, and per hundredweight (cwt) basis. An Excel spreadsheet is used to create a balance sheet and income statement from readily available information.  The information required is an annual milk marketing summary, annual income and expense report, most current balance sheet, and the average number of cows milked.  Thirty dairies participated in the Dairy Gauge Benchmark Program in 2021 creating one of the largest data sets in the Southeastern United States. This group represented 14 percent of the milk produced in the three-state area. Tennessee participants accounted for 42 percent of the state’s production.

Dairy Gauge program has generated a peer-group of six Tennessee producers that share their cost structure. This group meets annually and discusses their production cost side-by-side.  One dairy in 2021 reported changing their cow transitioning program because of the Dairy Gauge data, saving an estimated $200,000.  Multiple producers in the group stated the benchmarking program was one of the best educational programs they have completed. As a result of the program, eight dairies in 2019 focused on their cost structure and cost-saving strategies. Those eight dairies reduced expenses by eight percent annually for 2018 to 2019, with a total direct economic impact of $2.32 million. For more information go to https://utdairy.tennessee.edu/dairy-gauge-program/ .

Authors: Charles Martinez, Seth Ingram, David Bilderback, Liz Eckelkamp
  1. Charles Martinez Assistant Professor, University of Tennessee, Tennessee, 37996
  2. Seth Ingram Graduate Research Assistant, University of Tennessee , Tennessee, 37996
  3. David Bilderback Extension Area Specialist - Farm Management, University of Tennessee , Tennessee, 37774
  4. Liz Eckelkamp Assistant Professor, University of Tennessee, Tennessee, 37996