The four Northeast Farm Credit associations, the leading lenders to agriculture in New England, New York, and New Jersey, released information indicating that dairy farmers in 2007 had one of their strongest financial periods since the inception of Farm Credit’s Northeast Dairy Farm Summary report 29 years ago, but also showed a dramatic increase in the cost of milk production.

Dairy farmers in the northeastern United States are no strangers to dramatic swings in their business cycles.  Experiencing the year-to-year crests and dips of dairy farm performance is often compared to a ride on a super roller coaster.  The year 2007 was no exception.  After a record-breaking “down” year in 2006 in which many dairy farms incurred financial losses, recently compiled data indicates that financial returns for northeastern dairy farmers rose significantly last year.

A common indicator used to describe a dairy farmer’s bottom line: net earnings per cow, which measures sheer dollars of profit earned relative to the size of a business and is a key measure of dairy farm success.  In 2007, dairy farmers in New England, New York, and New Jersey enjoyed a very strong year, reporting net earning gains of $908 per cow.  What a difference a year makes.  Numbers for the 2006 calendar year show that earnings dropped to a record loss of $64 per cow, considerably below the $346 annual average during the last five years.