Table 28. Net EfFect of Changes in the Price cf Replacements on Additional Net Farm 

 Income Possible on Dairy Farms with Flexible Farm Resources by Shifting from 

 Raising to Buying Replacements for Farms of Various Sizes, Price Situation |1 



Chanfie in Net Farm Inconi!-: Number of Milking Cows in Herd 



' All prices paid and received, except those for replacem-nts stay at levels consistent with the as- 

 sumptions of price situation I with milk priced at the level of the to 40 mile zone. 

 * Break-even price about S363 per replacement. 



would be reduced by S410 per year by shifting from raising to buying re- 

 placements. However, if the price paid for replacements averaged S200, 

 net farm income would be increased by S515 per year for the 11- to 17- 

 cow farm. 



The net effect on net farm income of changes in the price of cull cows 

 and veal calves is not as important as changes in the price of milk or of 

 replacements (Table 29). For example, if the prices of culled cows and 

 veal calves were $10 and $15.75 per hundredweight, respectively, a shift 

 to $20 and $26.75 per hundredweight, respectively, would increase net fann 

 income on the 11- to 17-cow farm only $115 under price situation I. The 

 effect under price situation II is shown in Appendix Table 17. 



Whereas in the analysis summarized in Tables 27, 28, and 29, the 

 price of only one product varied, the next step in the analysis, which is 

 summarized in Tables 30 through 35, shows additional net income for 2 

 levels of price of cull cows, 4 levels of price of milk, 5 levels of price of 

 replacements, and 3 levels of production of milk per cow. Prices of other 

 products are assumed to be the same as under price situation II. 



Table 29. Net Effect of Changes in the Price of Cull Cows and Calves on Additional 



Net Farm Income Possible on Dairy Farms with Flexible Farm Resources by Shifting 



from Raising to Buying Replacements for Farms of Various Sizes, Situation |1 



^ All prices paid and received, except those for beef and veal, stay at levels consistent with the 

 assumptions of price Situation I. 



50 



