Economies of scale can be realized on livestock farms due to improved technology and automation.  Data collected from 253 New York dairy farms for more than 50 years indicate variances in terms of tillable land, labor efficiency and capital efficiency.  Large farms (>300 cows) show a decrease in acres required for feed per cow, primarily as the result of an increase in hay production per acre.  Milk production per tillable acre on large farms is twice as much as on small ones (40 – 55 cows).  Labor is more efficient for larger farms with 45 cows per full-time equivalent position (FTE) for large farms compared to 35 cows per FTE for small farms.  Technology favors capital efficiency for large farms that can track individual cows and provide the most efficient milking system.  While small farms may appear to be economically viable, this is due to small debt and large equity which is not included in evaluating capital costs.  However, they are not economically sustainable in the long term.

The economics of milk production are also affected by whether the objective is economic performance or nitrogen efficiency.  Analysis of income over feed costs are $5.86/cow/day if the objective is maximizing income/feed cost but are $5.16/cow/day is the objective is nitrogen efficiency.  However, studies indicate that a diet containing high-lysine crude protein of 16.9% complemented with ??? results in the same milk production as a diet containing crude protein of 19.3% and reduces nitrogen excretion.  Grouping of cows to ensure greater uniformity for selective feeding can also improve nitrogen efficiency, with six groups maximizing efficiency.

Although current economics indicate that the smallest, efficient milking parlor is 650 cows milked 3 times per day, Ohio is experiencing resistance to new or expanding or farms of this size.  While public education and hearings have been promoted to overcome this barrier, their effectiveness has been limited.