ontario dairy farm accounting project
TRANSCRIPT
AnnuAl RepoRt 2016
A Co-operAtive projeCt of:Canadian Dairy Commission
Dairy Farmers of Ontario
ReleasedJune 2017
ACKNOWLEDGEMENT
This report is indebted to the 65 dairy producers who willingly participated in the Project during 2016. These people went to considerable effort and inconvenience to help the Project representa-tives collect and verify information. Without this excellent co-operation, this report would not be possible.
The Project representatives, whose job it was to collect, record, and verify all information, were vital to the Project. Their initiative, perseverance and positive attitude has provided the Project with high quality dairy farm data.
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Table of Contents Page Foreword 5 PROJECT RESULTS 7
List of Tables
Table 1 FARM REVENUE AND EXPENSES; 2016. 8
Table 2 FARM BALANCE SHEET; DECEMBER 31, 2016. 9
Table 3 BASIC FARM PRODUCTION PARAMETERS; 2016. 10
Table 4 DAIRY ENTERPRISE REVENUE AND EXPENSES; 2016, PER COW. 11
Table 5 DAIRY ENTERPRISE REVENUE AND EXPENSES; 2016, PER HL OF MILK SOLD. 12
List of Appendix and Appendix Tables
APPENDIX A FARM REVENUE, EXPENSES, NET INCOME AND SAMPLE CHARACTERISTICS; 2007 to 2016. 13
Table A.1 FARM REVENUE, EXPENSES AND NET INCOME; 2007 TO 2016. 13
Table A.2 SAMPLE CHARACTERISTICS; 2007 TO 2016. 13
APPENDIX B SAMPLE DESIGN AND CHARACTERISTICS 15 B.1 Project Methodology 15 B.2 Sample Selection 15 B.3 Enrolment Procedure 17 B.4 Labour Data Collection 17
Table B.1 SAMPLE COMPOSITION AND STRUCTURE; 2016. 16 APPENDIX C ACCOUNTING PROCEDURES 18 C.1 Account Structure 18 C.2 On-Farm Recording 18 C.3 Valuation of Fixed Assets 19 C.4 Valuation of Livestock 19 C.5 Valuation of Crops 19 C.6 Allocation of Expenses 20 C.7 Allocation of Home-grown Feed 22
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Table C.1 LIVESTOCK INVENTORY VALUES; 2016. 19
Table C.2 CROP INVENTORY AND TRANSFER VALUES ON A PER TONNE BASIS; 2016. 20
Listing Of Graphs
Graph A.1 AVERAGE REVENUE, EXPENSES AND NET INCOME; 2007 to 2016. 14
FOREWORD
The Ontario Dairy Farm Accounting Project (ODFAP) is a co-operative project of Dairy Farmers of Ontario, and the Canadian Dairy Commission (CDC). The Project was initiated in 1976.
The objective of the Project is to develop and maintain a system of obtaining regular, repre-sentative and consistent farm production and management data which meets the farm database requirements of the Ontario dairy industry in the three areas of policy, research and extension. This is being achieved (1) by maintaining a sample of farms which represents typical Ontario dairy farm situations and which reflects different levels of technology, regional differences and other significant factors and, (2) through the development and maintenance of a data collection and information reporting system which will provide the participating agencies with the informa-tion which they require.
The ODFAP Annual Report is just one aspect of this Project. The Annual Report provides a summary of the information collected, but, by no means, portrays the wealth of information available for policy, research and extension uses. The project data, along with similar data from other provinces, is incorporated into the National Cost of Production formula, which is managed by the Canadian Dairy Commission. Likewise, project data is incorporated in the cost of produc-tion component of the National Pricing Formula for fluid and industrial milk classes. Cost of production has a 50% weighting in the formula, while the other 50% is from the change in Con-sumer Price Index (CPI).
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PROJECT STAFF
Project Staff, responsible for collecting and verifying the study information for 2016 were:
Barbara Ryan Technician, Western Region
Katrina Benke Technicians, East Region
Andrew Ryzebol/John Eccelstone South-West and Niagara Regions
Jim Hanmore Technician, Central Region Project Manager, ODFAP
Individuals responsible for the final editing of the 2016 data and for the preparation of this report, include:
Kristin Benke Economist, Dairy Farmers of Ontario
Jim Hanmore Project Manager, ODFAP
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ONTARIO DAIRY FARMACCOUNTING PROJECT
RESULTS 2016
The 2016 results for the 65 farms on the project are presented in the following tables.
Farm revenue and expenses are summarized in Table 1. Balance sheet information is summa-rized in Table 2. Physical characteristics are summarized in Table 3.
It should be noted that livestock and crop inventories are valued at an average of market val-ues or prices at the beginning and end of the year for purposes of accruing the revenue value of inventory changes in the Farm Revenue and Expense Statement in Table 1. As such, the reported revenue items for inventory changes only reflect income changes associated with changes in the quantities of the related inventories held. They do not capture any change in value associated with market price changes during the year.
Revenue and expense information for the dairy enterprise is broken out in Tables 4 and 5. For purposes of these tables, the dairy enterprise is defined to consist of dairy cows, the raising of replacements and/or any related livestock borne of the dairy cow herd, and the supporting crop production associated with both.
Averages are presented in each table for all farms and for 3 sample groupings ranked on the basis of cost of production (COP): the 15 farms with the highest cost (bottom); the 15 farms with the lowest cost (top), and the remaining 35 farms (middle). The COP ranking is based on the as-sumptions and calculational procedures established for the national Cost of Production pricing formula for industrial milk.
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FARM REVENUE AND EXPENSES; 2016. NUMBER OF FARMS Bottom 15 Middle 35 Top 15 All 65REVENUE $ $ $ $ Milk Sales 326,328 597,173 802,954 582,158 Cow & Bull Sales 19,301 30,728 49,884 32,512 Calf & Heifer Sales 6,627 10,281 17,571 11,120 Crop Sales 14,006 64,414 35,854 46,191 Other Farm Income 22,948 71,423 45,736 54,309Total Cash Revenue 389,210 774,019 951,999 726,290Inventory Change Dairy Enterprise 2,227 7,754 6,857 6,272 Replacement Enterprise -4,819 2,588 4,549 1,331 Other Livestock 0 -464 467 -142 Feeds, Crops, Supplies -14,941 -10,264 4,672 -7,896Total Farm Revenue 371,677 773,633 968,544 725,855EXPENSESDairy Cow Enterprise Cow & Bull Purchases 4,522 3,845 2,678 3,732 Commercial Feed Purchases 59,116 96,259 122,993 93,857 Milk & Livestock Marketing 21,297 39,111 55,300 38,736 Breeding Fees 4,635 6,067 7,300 6,021 Stable & Milkhouse Supplies 8,558 14,278 15,542 13,250 Vet. and Drugs 10,144 15,921 17,080 14,855 Other Dairy Expenses1 12,958 24,064 19,144 20,366Replacement Enterprise Cattle Purchases 390 1,212 24 748 Feed Purchases 10,697 14,607 15,280 13,860 Other Direct Heifer Expenses 2,695 6,022 6,518 5,369Crop Enterprise Grains and Forages Purchases 5,056 33,434 19,191 23,598 Seed 11,777 16,809 16,179 15,502 Fertilizer 11,071 21,959 26,407 20,473 Sprays 4,633 9,149 8,070 7,858 Custom Work 13,009 32,089 19,367 24,750 Gas & Diesel Fuel 12,692 17,088 18,528 16,406 Machinery Repairs 24,338 32,369 38,136 31,847 Other Crop Expenses2 1,629 3,985 1,976 2,978Other Farm Expenses Direct Expenses Non-Dairy Livestock3 644 154 263 292 Direct Expenses Other Crops 3,983 23,443 14,339 16,852
Wages & Salaries 38,044 63,538 80,815 61,642 Land Rent 3,324 8,640 6,883 7,008 Interest Paid 20,634 51,910 78,646 50,862 Real Estate Taxes 5,717 10,646 10,590 9,496 Telephone & Hydro 15,822 20,755 28,573 21,421 Insurance 8,221 11,823 12,432 11,132 Equipment & Building Repairs 21,342 23,771 26,689 23,884 Other General Cash Expenses4 6,704 13,833 11,045 11,544Total Cash Expenses 343,652 616,781 679,988 568,339 Building Depreciation 13,679 26,273 34,794 25,333 Machinery Depreciation 19,517 43,469 61,356 42,069Total Farm Expenses 376,848 686,523 776,138 635,741
Net Farm Income -5,171 87,110 192,406 90,114
1 Other Dairy Expenses include registration/testing fees, building rent, straw & bedding, & livestock insurance for the dairy herd.2 Other Crop Expenses include crop insurance, seed cleaning, twine, propane for corn drying & misc. crop expenses.3 Since rebates are recorded as negative expenses, the direct expense for non-dairy livestock enterprises may be negative for farms which have no such livestock.4 Other General Cash Expenses include car expenses and miscellaneous farm expenses.
Table 1
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FARM BALANCE SHEET; DECEMBER 31, 2016.
NUMBER OF FARMS Bottom 15 Middle 35 Top 15 All 65
A. WITH ASSETS AT MARKET VALUE $ $ $ $ Machinery and Equipment 350,206 648,556 836,704 623,125 Personal Equipment 2,530 2,907 10,933 4,672 Land and Farm Buildings 2,324,947 3,771,366 3,957,232 3,480,469 Farm House & Personal Structures 40,000 236,810 428,302 235,583 Dairy Cows 77,687 154,133 211,353 149,696 Dairy Heifers 32,734 76,108 113,254 74,671 Other Livestock 3,107 1,950 1,953 2,218 Feed, Crops, Supplies, Inventory 49,746 130,482 143,228 114,792 Milk Quota 1,192,720 2,260,306 3,073,088 2,201,505Total Assets 4,073,677 7,2822,618 8,776,047 6,886,731
B. WITH FIXED ASSETS AT COST LESS DEPRECIATION1
Machinery and Equipment 200,258 403,875 543,433 389,092 Personal Equipment 3,017 4,364 27,686 9,435 Land and Farm Buildings 626,222 1,392,523 2,271,643 1,418,558 Farm House & Personal Structures 0 121,282 175,498 105,805 Dairy Cows 77,687 154,133 211,353 149,696 Dairy Heifers 32,734 76,108 113,254 74,671 Other Livestock 3,107 1,950 1,953 2,218 Feed, Crops, Supplies, Inventory 49,746 130,482 143,228 114,792 Milk Quota 300,873 823,393 1,355,488 825,603Total Assets 1,293,644 3,108,110 4,843,536 3,089,870
C. LIABILITIES Operating & Short-Term Trade Credit 64,341 109,372 30,250 80,721 Intermediate & Long Term Loans 597,338 1,126,366 1,446,854 1,078,242 F.C.C. Loans 72,398 690,903 1,643,919 768,098Total Liabilities 734,077 1,926,641 3,121,023 1,927,061
D. OWNER’S EQUITY (A) Assets At Market Value 3,339,600 5,355,977 5,655,024 4,959,670 (B) Fixed Assets at Cost Less Depreciation 559,567 1,181,469 1,722,513 1,162,809
1 Depreciation was not subtracted from the cost of the farm house, land, milk quota, or personal equipment.
Table 2
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BASIC FARM PRODUCTION PARAMETERS; 2016.
NUMBER OF FARMS Bottom 15 Middle 35 Top 15 All 65
Dairy Cows (hd) 48.2 84.7 112.5 82.7
Open Dairy Heifers, 6 months & older (hd) 14.7 27.0 39.3 27.0 Bred Dairy Heifers (hd) 14.8 28.3 40.9 28.1
Milk Sold/Farm (litres)1 413,417 782,396 1,093,815 769,113
Milk Sold/Cow (litres)1 7,415 9,175 9,699 8,890
Butterfat Test (kg/hl) 4.00 4.11 3.98 4.05
Person-Equivalents of Labour 2.0 2.6 2.2 2.4
Workable Land Farmed (hectares)2 87 151 145 135
Average Age of Principal Operator 56.3 51.2 50.3 52.2
1 Milk is expressed in terms of milk actually sold.2 One hectare = 2.47 acres.
Table 3
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DAIRY ENTERPRISE REVENUE AND EXPENSES; 2016.- PER COW -
NUMBER OF FARMS Bottom 15 Middle 35 Top 15 All 65
REVENUE $ $ $ $ Milk Sales 5,641.76 6,958.08 7,218.17 6,714.33 Quality Penalties & Levies -1.60 -2.34 -4.79 -2.47 Cows & Bulls Sold 392.28 370.90 480.06 401.02 Other Dairy Livestock Sold 166.00 138.93 144.16 146.38 Dairy Livestock Inventory Change 3.79 112.37 52.22 73.43 Net Revenue 6,202.23 7,577.94 7,889.82 7,332.42DIRECT DAIRY EXPENSE Dairy Ration 421.27 458.69 356.02 426.36 Protein Supplements 431.27 588.81 718.02 582.27 Salt & Minerals 101.05 66.36 59.13 72.70 Milk Replacer & Calf Ration 102.26 117.41 83.41 106.07 Other Purchased Feeds 2.09 59.13 58.15 45.74 Vet & Drugs 221.31 234.15 194.66 222.08 A.I. Fees 95.56 81.91 83.66 85.47 Stable & Milk House Supplies 172.58 183.13 156.20 174.48 Milk Transport & Licence Fees 363.28 440.18 467.65 428.77 Livestock Marketing 24.20 20.40 18.86 20.92 Other Dairy Expense1 180.18 238.69 169.42 209.20Total Direct Expense 2,115.05 2,488.86 2,365.18 2,374.06DAIRY SHARE OF CROP EXPENSES Bulk Grain & Forage Purchases 97.66 247.49 183.19 198.08 Seed 155.05 138.83 116.08 137.32 Fertilizers 170.12 155.08 171.90 162.43 Herbicides & Pesticides 50.90 63.15 52.99 57.98 Custom Work 135.29 276.98 162.43 217.85 Fuel & Lubricants 202.21 135.47 131.83 150.03 Field Machinery Repairs 363.52 228.38 220.56 257.76 Land Rent 63.47 53.51 40.18 52.73 Other Crop Expense2 43.72 44.73 24.08 39.73 Total Crop Expense 1,281.94 1,343.62 1,103.24 1,273.91Returns Over Direct & Crop Expenses 2,805.24 3,745.46 4,421.40 3,684.45ALLOCATED INDIRECT & OVERHEAD EXPENSES Barn Equipment & Building Repairs 288.81 227.15 171.73 228.59 Hired Labour Expenses 524.87 609.19 766.90 626.12 Interest Expense 321.41 521.29 558.02 483.64 Insurance 113.10 102.75 84.65 101.96 Hydro & Telephone 225.51 203.68 219.74 212.42 Taxes 89.24 92.98 73.74 87.67 Other Overhead Expenses3 101.04 130.74 83.65 113.02Total Indirect & Overhead Expenses 1,663.98 1,887.78 1,958.43 1,852.42Returns Over Expenses 1,141.26 1,857.68 2,462.97 1,832.03DAIRY LIVESTOCK PURCHASES Cows & Bulls Purchased 67.59 67.40 33.50 59.62 Other Dairy Livestock Purchases 7.47 16.49 0.06 10.62Total Dairy Livestock Purchases 75.06 83.89 33.56 70.24Net Returns 1,066.20 1773.79 2429.41 1,761.97TOTAL LABOUR REQUIRED (Hrs)4 135.57 97.26 66.51 99.001 Other Dairy Expense includes bedding materials, feed processing expense, livestock testing and registration, livestock insurance, livestock promotion expense and building rent.2 Other Crop Expense includes twine, seed cleaning, crop insurance and machine rentals.3 Other Overhead Expense includes hardware, car expenses and miscellaneous expense.4 Labour estimated based on the recorded hours from daily time sheets (see section B.4).
Table 4-11-
DAIRY ENTERPRISE REVENUE AND EXPENSES; 2016.- PER HL OF MILK SOLD -
NUMBER OF FARMS Bottom 15 Middle 35 Top 15 All 65REVENUE $ $ $ $ Milk Sales 75.26 76.64 74.47 75.82 Quality Penalties & Levies -0.02 -0.03 -0.05 -0.03 Cows & Bulls Sold 5.25 4.04 4.97 4.53 Other Dairy Livestock Sold 2.64 1.47 1.47 1.74 Dairy Livestock Inventory Change 0.01 1.40 0.55 0.88Net Revenue 83.14 83.52 81.41 82.94DIRECT DAIRY EXPENSES Dairy Ration 6.20 4.93 3.85 4.98 Protein Supplements 5.12 6.24 7.12 6.18 Salt & Minerals 1.35 0.76 0.59 0.86 Milk Replacer & Calf Ration 1.32 1.27 0.86 1.19 Other Purchased Feeds 0.03 0.64 0.57 0.48 Vet & Drugs 2.96 2.51 1.99 2.49 A.I. Fees 1.24 0.90 0.87 0.97 Stable & Milk House Supplies 2.37 2.00 1.66 2.01 Milk Transport & Licence Fees 4.99 4.80 4.82 4.85 Livestock Marketing 0.36 0.23 0.20 0.25 Other Dairy Expense1 2.48 2.62 1.78 2.40Total Direct Expense 28.42 26.90 24.31 26.66DAIRY SHARE OF CROP EXPENSES Bulk Grain & Forage Purchases 1.37 2.75 1.89 2.23 Seed 1.97 1.58 1.20 1.58 Fertilizers 2.21 1.72 1.80 1.85 Herbicides & Pesticides 0.61 0.69 0.54 0.64 Custom Work 1.64 3.08 1.69 2.43 Fuel & Lubricants 2.77 1.51 1.38 1.77 Field Machinery Repairs 4.83 2.68 2.34 3.10 Land Rent 0.93 0.56 0.42 0.61 Other Crop Expense2 0.65 0.50 0.24 0.48Total Crop Expense 16.98 15.07 11.50 14.69Returns Over Direct & Crop Expenses 37.74 41.55 45.60 41.59ALLOCATED INDIRECT & OVERHEAD EXPENSES Barn Equipment & Building Repairs 4.29 2.59 1.79 2.80 Hired Labour Expenses 6.30 6.82 8.08 6.99 Interest Expense 4.23 5.91 5.88 5.52 Insurance 1.47 1.14 0.88 1.15 Telephone & Hydro 3.10 2.27 2.28 2.47 Taxes 1.24 1.03 0.76 1.02 Other Overhead Expenses3 1.34 1.41 0.85 1.26Total Indirect & Overhead Expenses 21.97 21.17 20.52 21.21Returns Over Expenses 15.77 20.38 25.80 20.38DAIRY LIVESTOCK PURCHASES Cows & Bulls Purchased 0.92 0.75 0.39 0.71 Other Dairy Livestock Purchases 0.10 0.18 0.00 0.12Total Dairy Livestock Purchases 1.02 0.93 0.39 0.83Net Returns 14.75 19.45 24.69 19.55
TOTAL LABOUR REQUIRED (Hrs)4 2.07 1.07 0.68 1.211 Other Dairy Expense includes bedding materials, feed processing, expense, livestock testing and registration, livestock insurance, livestock promotion expense and building rent.2 Other Crop Expense includes twine, seed cleaning, crop insurance and machine rentals.3 Other Overhead Expense includes hardware, car expenses and miscellaneous expense.4 Labour estimated based on the recorded hours from daily time sheets (see section B.4)
Table 5-12-
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Tabl
e A.2
SA
MPL
E C
HA
RA
CT
ER
IST
ICS;
200
7 TO
201
6.D
ata
Year
20
07
2008
20
09
2010
20
11
2012
20
13
2014
20
15
2016
Num
ber o
f Far
ms
84
73
73
65
61
56
58
65
71
65H
erd
Size
(hea
d)
77.4
74
.6
75.5
75
.5
86.2
88
.7
85.3
80
.7
85.6
82
.7M
ilk S
ales
(litr
es)
659,
597
616,
427
633,
715
619,
236
720,
343
759,
686
742,
230
714,
021
784,
547
769,
113
Milk
Sal
es P
er C
ow (l
itres
) 8,
252
7,97
1 8,
054
7,85
3 7,
937
7,89
3 8,
152
8,35
6 8,
583
8,89
0Ti
llabl
e H
ecta
res
140
115
122
130
142
152
151
140
151
135
Tota
l Per
son
Equi
vale
nts
2.30
2.
30
2.25
2.
22
2.40
2.
4 2.
3 2.
3 2.
3 2.
4A
ge o
f Prin
cipa
l Ope
rato
r 47
.0
47.4
49
.5
49.5
50
.6
53.3
52
.3
51.7
51
.9
52.2
A
PPE
ND
IX A
Tabl
e A.1
FAR
M R
EV
EN
UE
, EX
PEN
SES
AN
D N
ET
INC
OM
E; 2
007
to 2
016.
Year
20
07
2008
20
09
2010
20
11
2012
20
13
2014
20
15
2016
Num
ber o
f Far
ms
84
73
73
65
61
56
58
65
71
65
RE
VE
NU
E
$ $
$ $
$ $
$ $
$ $
Milk
Sal
es
480,
154
455,
880
475,
906
474,
444
580,
364
601,
449
596,
407
589,
229
612,
963
582,
158
Live
stoc
k Sa
les
16,7
28
25,4
15
16,8
40
21,6
20
29,4
59
34,9
95
37,7
61
49,7
54
60,3
71
43,6
32C
rop
Sale
s 31
,224
27
,485
25
,262
33
,060
47
,786
66
,242
43
,486
38
,297
49
,702
46
,191
Oth
er F
arm
Inco
me
39,1
67
30,7
28
33,1
43
38,3
76
34,2
62
51,7
06
55,8
18
49,8
68
46,3
07
54,3
09To
tal C
ash
Rev
enue
56
7,27
3 53
9,50
8 55
1,15
1 56
7,50
0 69
1,87
1 75
4,39
2 73
3,47
2 72
7,14
8 76
9,34
3 72
6,29
0
Inve
ntor
y C
hang
e All
Ente
rpris
es
-3,2
54
14,8
07
5,34
6 5,
547
8,54
5 -8
,039
6,
240
-2,5
79
8,51
5 -4
35T o
tal F
arm
Rev
enue
56
4,01
9 55
4,31
5 55
6,49
7 57
3,04
7 70
0,41
6 74
6,35
3 73
9,71
2 72
4,56
9 77
7,85
8 72
5,85
5
EX
PEN
SES
Dai
ry C
ow E
nter
pris
e 25
4,48
4 12
5,14
0 13
0,48
3 12
2,64
6 15
5,54
3 16
8,30
4 17
2,83
5 17
3,76
4 19
4,33
6 19
0,81
7R
epla
cem
ent E
nter
pris
e 11
,355
14
,076
12
,045
12
,096
16
,865
18
,490
17
,455
18
,226
21
,060
19
,977
Cro
ps E
nter
pris
es
89,0
89
93,4
88
87,3
09
89,0
37
105,
854
122,
888
128,
404
119,
687
138,
877
143,
412
Oth
er F
arm
Exp
ense
s 18
3,98
2 16
5,72
4 16
1,56
3 15
8,12
2 19
3,27
2 20
0,19
6 20
7,75
3 20
8,83
5 22
7,22
3 21
4,13
3To
tal C
ash
Exp
ense
s 40
7,66
4 39
8,42
8 39
1,40
0 38
1,90
1 47
1,53
4 50
9,87
8 52
6,44
7 52
0,51
2 58
1,49
6 56
8,33
9 B
uild
ing
& M
achi
nery
Dep
reci
atio
n 36
,710
38
,027
38
,325
40
,823
51
,270
57
,874
58
,371
57
,150
63
,483
67
,402
Tota
l Far
m E
xpen
ses
444,
374
436,
455
429,
725
422,
724
522,
804
567,
752
584,
818
577,
662
644,
979
635,
741
NE
T F
AR
M I
NC
OM
E
119,
645
117,
860
126,
772
150,
323
177,
612
178,
601
154,
894
146,
907
132,
879
90,1
14
AVE
RA
GE
RE
VE
NU
E, E
XPE
NSE
S A
ND
NE
T FA
RM
INC
OM
E;
2007
TO
201
6.
Gra
ph A
.1
-14-
Dollars
0
1000
00
2000
00
3000
00
4000
00
5000
00
6000
00
7000
00
8000
00
9000
00
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Year
Rev
enue
Expe
nses
Net
Far
m In
com
e
APPENDIX BSAMPLE DESIGN AND CHARACTERISTICS
B.1 Project MethodologyTo provide uniformity of data collection, Project representatives are assigned to do on-farm recording of financial transactions. Farms are visited, on average, three to four times a year, to record financial transactions and collect relevant production information. Various techniques are used to solicit data due to the many differences in farm types and the level of organization.
B.2 Sample SelectionThe project sample is based on a regionally stratified random sample of farms. The sample was selected from the files of Dairy Farmers of Ontario (DFO).
The 2016 sample is composed of five sub-samples of dairy farms. The first sub-sample consists of 13 farms which was recruited in late 2011 and enrolled in the Project for 2012. The second sub-sample consists of 20 farms recruited in late 2012 for enrolment in 2013. The third sub-sample of 10 farms was recruited in late 2013 for enrolment in 2014. The fourth sub-sample of 11 farms was recruited in late 2014 for enrolment in 2015. The fifth and final sub-sample of 11 farms was recruited in late 2015 for enrolment in 2016.
All five sub-samples were randomly selected on the basis of region. That is, the number of farms selected within a region for each sub-sample reflected the proportion of the farms present in the population for that region at the time the sub-sample was drawn. In 2013 the original 6 regions were replaced by 14 new regions, matching the DFO Field Supervisor Representative zones, al-lowing for a more streamlined recruiting process.
The counties1 included in each region of the sampling grid area are: Region 1 Glengarry, Prescott Region 2 Russell, Stormont, Dundas, Carleton Region 3 Grenville, Leeds, Carleton, Dundas Region 4 Lennox & Addington, Frontenac, Lanark, Renfrew, Carleton Region 5 Hastings, Northumberland, Peterborough, Prince Edward Region 6 York, Peel, Durham, Simcoe, City of Kawartha Lakes Region 7 Brant, Haldimand, Niagara, Norfolk, Halton, Waterloo, Wentworth, Oxford, Wellington Region 8 Oxford Region 9 Middlesex, Elgin, Lambton, Essex-Kent Region 10 Perth, Huron Region 11 Perth, Wellington Region 12 Waterloo, Wellington Region 13 Bruce, Huron Region 14 Dufferin, Grey, Wellington
1 Counties are as they were defined prior to amalgamation under regional government.
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The sample is based on a five year rotation. Each year the new sample is based on the existing population within each of 14 regions. Any producer that had participated in the project within the past 3 years was excluded from the sample selection process.
The sample composition and structure for the 65 farms on which this report is based are summa-rized in Table B.1.
SAMPLE COMPOSITION AND STRUCTURE; 2016.
Participation by Year of Initial Enrolment
REGION 2012 2013 2014 2015 2016 Total
1 0 0 0 1 0 1
2 5 2 0 1 1 9
3 2 1 0 0 1 4
4 2 1 0 1 1 5
5 2 0 2 0 1 5
6 2 2 0 1 0 5
7 0 5 1 1 0 7
8 0 1 3 2 2 8
9 0 0 2 0 0 2
10 0 1 0 1 0 2
11 0 4 2 2 2 10
12 0 1 0 0 0 1
13 0 2 0 1 1 4
14 0 0 0 0 2 2
Total 13 20 10 11 11 65
Table B.1
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B.3 Enrolment ProcedureFarms selected for enrolment were initially contacted and recruited by a DFO Field Services Representative. A serious attempt was made to handle all contacts in the same manner and to give essentially the same message in all cases. In discussions with the farmers, and in seek-ing their co-operation, it was emphasized that the confidentiality of individual records would be respected, that there were benefits to the industry and to the individual and that we were seeking their co-operation. It was also stressed that the data collection visits would occur at the conveni-ence of the producer.
B.4 Labour Data Collection
Labour data for the project is collected using daily time sheets. Producers are asked to complete the time sheets for their first year on the project. Sheets are completed for all individuals contrib-uting labour to the farm. Completion of the time sheets in the second and subsequent years on the project is encouraged, but not mandatory, unless changes have occurred which would signifi-cantly alter the labour requirements for the operation.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Total Hours
100
PLEA
SE D
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OT
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HA
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Name:Month:Year Born:
Employees please fi ll-in the section below:
DAIRY COWS AND BULLS• Herd management, milking equipment maintenance, milking, feeding, health care, etc.
DAIRY REPLACEMENTS• Feeding, health care, management, etc.
OTHER LIVESTOCK: BEEF, SWINE ETC.• Feeding, health care, management, etc. Indicate type of livestock: _____________________
COMMON LIVESTOCK WORK• Main dairy barn, stable maintenance & cleaning, preparing rations, silo unloader, building repair.
FIELD MACHINERY• Maintenance and repairing of fi eld machinery.
OTHER BUILDINGS• Maintenance and repairing of other farm buildings other than main dairy barn.
BARNYARD AND FENCES• Maintenance and repairing of barnyard and farm fences.
LAND• Stone picking, farm lanes, snow removal, ponds.
ADMINISTRATION AND MANAGEMENT• Bookkeeping, meetings, errands, professional reading, agricultural courses, banking.
HAY AND HAYLAGE• Plowing, tillage, fertilizing, spraying, planting, spreading manure, harvesting, etc.
SMALL GRAINS, WINTER WHEAT, STRAW• Plowing, tillage, fertilizing, spraying, planting, spreading manure, harvesting, etc.
CORN GRAIN AND CORN SILAGE• Plowing, tillage, fertilizing, spraying, planting, spreading manure, harvesting, etc.
SOYBEANS, OTHER CROPS, MAPLE SYRUP
• Plowing, tillage, fertilizing, spraying, planting, spread- ing manure, harvesting, etc. crop:_____________
CONSTRUCTION, LAND CLEARING• Building construction, tree removal, etc.
CUSTOM HIRE FOR OTHERS• Farm related work performed for others but not part of your own farming operation.
WO
RK
IN T
HE
BA
RN
MA
INTE
NA
NC
E &
REP
AIR
SO
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FI
ELD
WO
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YEAR BORNPAY STAT EFFICIENCY EMPLOYEE NAMEFARM # YEAR MONTH
APPENDIX CACCOUNTING PROCEDURES
C.1 Account StructureA computerized accounting program is used as the data collection vehicle for the Project. The computer program permits separating information into enterprises or profit centres and accounts or cost centres. Six basic enterprises are being registered:
(i) general farm (ii) dairy herd (iii) replacement (iv) small grain (v) corn/corn silage (vi) hay/haylage/pasture
The general farm account includes any other crop or type of livestock. Specialized enterprises are not registered. One overhead cost account is registered.
The number of farms which had other livestock or crops activity in the general farm account in 2016 is as follows:
(i) Beef 5 (ii) Swine 0 (iii) Poultry 2 (iv) Sheep 1 (v) Other Crops 35
C.2 On-Farm RecordingProject representatives work within very specific guidelines in order to get as much uniformity as possible. As a general rule, the recording methods required for filing tax returns are used. All income and expense items are recorded on an accrual basis. A complete list of items recorded and the recording procedure can be obtained from the Project Manager.
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C.3 Valuation of Fixed AssetsAll fixed assets (land, buildings, houses, machinery, and intangibles) are recorded at both original cost and estimated current market value.
Depreciation is recorded using a diminishing balance rate: 5% for buildings and structures, 10% for farm machinery and 15% motorized equipment and machinery. The assumption is made that the equipment will reach its salvage value when it is worth 20 per cent of its original cost.
C.4 Valuation of LivestockDairy livestock is valued according to three different quality categories. Beginning and ending inventory values, used for 2016, are as indicated in Table C.1.
LIVESTOCK INVENTORY VALUES; 2016.
5,000 or Below 5,001-7,750 Over 7,750Description Litres/Cow/Year Litres/Cow/Year Litres/Cow/Year
Beginning Ending Beginning Ending Beginning Ending ($) ($) ($) ($) ($) ($)
Cows 800 800 1300 1300 1850 1850Bred Heifers 750 750 1000 1000 1600 1600Open Heifers 500 500 750 750 1000 1000Heifer Calves 100 100 150 150 250 250Bull Calves 120 120 120 120 120 120
Note: Information in the table is based on current auction market value as collected by Project representatives. Beef, swine and poultry were valued at current market value.
C.5 Valuation of CropsGrain values are based on estimates obtained from Agricorp 2016 AgriStability Fair Market Values list. Forage values are based on the equivalent feed value of grain corn. Values for 2016 are as indicated in Table C.2.
Table C.1
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CROP INVENTORY AND TRANSFER VALUES; 2016.
- Per Tonne Basis -
Inventory Valuation Transfer Values used for Beginning Ending Value $ $ $
Home-grown Feed:Wheat (Feed) 219.00 172.00 195.50Oats 246.00 213.00 229.50Barley 165.00 183.00 174.00Mixed Grain 156.00 163.00 159.50Grain Corn 181.00 174.00 177.50Hay 155.00 171.00 163.00Corn Silage 36.00 38.00 37.00Haylage @ 45% DM 80.00 90.00 85.00Straw 159.00 135.00 147.00Oatlage/Barlage 45.00 50.00 47.50
C.6 Allocation of Expenses Direct expense items, such as seed and fertilizer, pose no problem with respect to allocation as their use is generally confined to a single farm enterprise.
Indirect and overhead expenses are more difficult to allocate as they are normally used in more than one enterprise. These expenses are allocated on the basis of the following guidelines.
(a) Building Depreciation Allocated to livestock enterprises according to the building space used. If the buildings used for certain types of enterprises are obviously depreciating at a higher rate than others, the allocation is accordingly adjusted.
(b) Machinery Depreciation Allocated according to use as defined on the basis of the classification of individual machinery and equipment items.
(c) Heating Fuels Normally all personal use unless auxiliary heating is required for certain livestock enterprises (e.g. broilers).
Table C.2
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(d) Barn Equipment Repair Normally about 80 per cent to the cows, 20 per cent to heifers (milking equipment
milk tank, stable cleaners, etc. are used mainly for the dairy enterprise). If other livestock enterprises are on the farm, costs are allocated according to use.
(e) Building Repair (building repair, fence repair, hardware) Normally about 80 per cent cows, 20 per cent heifers if housed in the same type
of facilities.
(f) Gas, Diesel (gas, diesel, oil, grease) Allocated to crops on the basis of hectares or use. Gasoline for personal use is
being recorded directly, and not allocated.
(g) Field Machinery (equipment repair) Allocated according to hectares or use.
(h) Machinery Miscellaneous Expenses (hardware, tools, machine insurance, licence, rent) Allocated according to hectares or use.
(i) House Repairs and Maintenance Almost always 100 per cent personal.
(j) Labour (wages, EI, CPP, WSIB, EHT) According to use.
(k) Interest (interest, life insurance premium) Allocation of short term interest is based on the percentage that the direct expense for
each enterprise represents of the total direct expense for the farm. Intermediate and long term interest including life insurance premium is allocated 50 per cent to the livestock enterprises based on the percentage overhead allocated, and 50 per cent to crops according to hectares.
(l) Farm Insurance (fire, liability, accident) Allocated to livestock.
(m) Car (car insurance, maintenance) Normally 70 per cent personal, 15 per cent livestock, 15 per cent crops.
(n) Hydro Normally, if highly mechanized, 30 per cent personal, 70 per cent livestock. If low mechanization, 50 per cent personal, 50 per cent livestock.
(o) Water Allocated to livestock.
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(p) Telephone Normally 50 per cent personal, 25 per cent livestock, 25 per cent crops.
(q) Real Estate Taxes Approximately half land, half buildings, allocated 10 per cent to personal use for the house, pro-rated 40 per cent to livestock according to animal units, 50 per cent to crops according to hectares of each crop.
(r) Other Overhead Expenses (Fees, accounting, legal, office supplies, advertising, etc.) Fifty per cent livestock, 50 per cent crops.
C.7 Allocation of Home-grown FeedAll home-grown feed is allocated to the various livestock enterprises based on information sup-plied by the farmer. In order to check for accuracy, an edit is carried out at the end of the year. This involves checking the estimated feed consumption
(Beginning Inventory + Production + Purchases - Sales - Ending Inventory )
for each farm to make sure that it is in line with accepted industry benchmarks for feed consump-tion. If feed consumption is not close to the benchmarks, the crop yields and other related infor-mation are double-checked to clarify the discrepancy.
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