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A Comparison of Profitability and Economic Efficiencies Between Management-Intensive Grazing and Conventionally Managed Dairies in Michigan

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      Abstract

      A retrospective cohort study was designed to determine differences in profitability, asset efficiency, operating efficiency, and labor efficiency between Michigan dairy farms implementing management-intensive grazing (MIG) and conventionally managed dairy farms. Financial information and labor use data for the calendar year 1994 were collected with surveys and personal interviews from 35 MIGdairies and 18 conventionally managed dairies. Because the geographic distribution of MIG and conventionally managed farms in this study did not include Michigan's “dairy belt,” extrapolation of these results to an average Michigan or Midwest dairy should be made with care. Within the areas represented, however, multivariate linear regression indicated that MIG dairies had more economic profit than conventionally managed dairies. They captured this profit by being more efficient in asset use, operating practices, and labor use. These results suggest that MIG could provide a sustainable alternate management tool for portions of Michigan's dairy industry.

      Key words

      Abbreviation key:

      ATO (asset turnover), MIG (management-intensive grazing), NFI% (net farm income percent), aNFI (accounting net farm income per cow), eNFI (economic net farm income per cow), VFP (value of farm production per labor hour)

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