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. That simply does not make sense and it is no way sustainable.
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 but you don’t have to because you 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.
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.
Utilization numbers:
On average it takes three average 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. Of course there are exceptions, more or less.
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 enough for 60 average families or 180 people. 600,000 (rough population of VT) divided by 180 = 3333.33 micro dairy farms.
In theory this model could support over 3000 micro dairy farms in Vermont. However realistically I’d say Vermont can support 1000 Micro dairy farms very easily.
So……
1000 micro-dairy farms in Vermont (by the numbers Vermont could support 3000 micro dairies) each producing 6000 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 support businesses throughout Vermont. The other half would go into the farmer’s pockets.
And these micro-dairies will be scaled such that they will easily becomes valuable assets to the communities where they are located. No noise, pollution, manure run-off etc.
Happy cows, happy farmers and happy neighbors and a real working landscape.
