VI. Summary and Conclusions 



This study examines the influence of several variables upon farm 

 organization, income, and resources valuation. These variables are: 



(1) The ratio of cows to cropland. 



(2) The quality of dairy cows. 



(3) The presence or absence of the alternative of selling hay. 



(4) Price of milk. 



Multiple linear programming solutions were used to analyze 

 production and price data typical of New Hampshire dairy farms. 



Marginal value products were used to determine break-even 

 prices which may be paid for cropland and cows of varying qualities. 

 Discounting methods were applied to the marginal value products 

 to determine break-even prices of durable assets. 



The cropping pattern, the feeding program, and the replacement 

 programs are all highly responsive to changes in the ratio of cows to 

 cropland. The presence or absence of the alternative of selling hay 

 modifies the cropping pattern. Optimum cropping patterns range 

 from very extensive plans to very intensive plans, as the ratio of cows 

 to cropland increases. The profitableness of adjustments in forage 

 and grain feeding depends primarily on the quality of cows and the 

 price of milk. Changes in the ratio of cows to cropland have little 

 effect on the level of grain feeding. The replacement program 

 depends on the intensity of use of resources. In very intensive plans 

 (high ratios of cows to cropland), it pays to buy replacements, thus 

 freeing resources for milk production. In extensive plans or when 

 resources are under utilized, it pays to raise and sell replacements. 



The analysis indicates that the income potential of a farm in- 

 creases greatly as higher milk prices, higher milk responses, and 

 optimal ratios of cropland to cows are attained. Differences in the 

 milk price causes greater differences in income potential than dif- 

 ferences in resource combinations. Resource requirements to pro- 

 duce a specified net income increase greatly when farmers receive 

 lower milk prices or have low quahty cows. The optimal ratios of 

 cows to cropland appear to occur on fairly intensive farms. 



The effect of the quality of the cow is less marked than the effect 

 of milk price. Cows of low quality at a high milk price yield some- 

 what higher incomes than cows of a high quality at a low milk price. 

 In contrast, the net income potential with high quality cows and a high 

 milk price is more than four times the net income potential with low 

 quality cows and a low milk price. 



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