The Micro-Dairy Dollar Advantage
Let’s do the numbers: if a conventional dairy farmer receives $17 per hundred weight for his milk, he is being paid $1.67 per gallon. If his production costs are $22 per hundred weight then his production costs are $1.90 per gallon and he looses $.23 per gallon or $5 per hundred weight. This is in no way sustainable for a farmer.
A micro-dairy farmer selling his milk off his farm can easily get $6 to $8 per gallon. (Let’s call it $7.) $7 per gallon is $81.20 per hundred weight compared to $17 per hundred weight! If his production costs are as high as $35 per hundred weight, or $3.02 a gallon, he still makes nearly $4 per gallon or over $46 a hundred weight.
Assume a farmer sells 100 gallons of milk per week. His weekly gross will be $700 and he’ll net $400 weekly – $20,800 annually.
The kicker is that you can’t support a family on that income. However, you don’t have to, since you can still have the time for a day job whether it be working in an office like me or running a CSA. And if you run a CSA you will have a source of home grown manure for your gardens. If you don’t run a CSA then you can compost your manure and sell it for added revenue. Compost is a valuable product
Getting Started on a Micro-Dairy
If you want to sell your raw milk you can get started with a new bucket milking system for $1500 or less and a household refrigerator. There are complete and approved pasteurization and bottling systems that can be purchased for less than $15,000. A little 40 gallon bulk tank, which does a much better job with the milk than jars in a refrigerator, costs around $4700. Figure cows at $1000 each. Start-up costs can range between $5500 and $50,000 for a four cow micro dairy depending on how luxurious you want your farm to be.
On average, it takes three families (the average family size in Vermont is three people) to utilize one gallon of daily milk production (assuming the average consumer buys a gallon of milk every three days).
One relaxed cow on a a micro-dairy may produce 5 gallons per day or enough milk for 15 average families or 45 people.
Assuming the average micro-dairy milks four cows and produces 20 gallons of milk per day, this is enough for 60 average families or 180 people. 600,000 (rough population of VT) divided by 180 = 3333.33 micro-dairies to provide for the population of Vermont.
In theory, this model supports over 3000 micro-dairy farms in Vermont. This number may seem a little high, and realistically I’d say Vermont can support 1,000 Micro dairy farms very easily.
So: If we had 1,000 micro-dairy farms in Vermont, each producing 6,000 gallons of milk per year and selling their milk from the farm at $7 per gallon would generate $42,000,000 in gross sales for the state. Approximately 1/2 of that (or $21,000,000) would go to cost of production and support hundreds of small (new) dairy businesses throughout Vermont. The other half would go straight into the farmer’s pockets.
Plus, the great thing about micro-dairies is that they can be scaled in such a way that they easily become valuable assets to the communities in which they are located. No noise, pollution, manure run-off etc. No trucks barrelling up and down the dirt roads.
Which means happy cows, happy farmers and happy neighbors, all enjoying the benefits of a real working landscape.