A feasibility study of operating a sheep dairy in central Iowa
Budgets were created and used to determine the revenues and costs of operating a sheep dairy, and producing and selling three different end products for sale: fluid milk, cheese and bars of soap. Microsoft Solver was used to determine the product mix that would maximize the total profit of the enterprise.
The profit of the enterprise depends on a number of factors including the cost of feed, the number of ewes milked and the amount of milk each ewe produces. A maximum profit of $66,993 could be generated by selling 74% of the milk as fluid milk, 25% of the milk processed into cheese and 1% of the milk processed into soap. The diversification of products would help buffer the enterprise from volatility in the product markets.
While the budgets show that this enterprise is profitable, local markets for these products must be identified and/or developed for the profits to be realized.
School:Kansas State University
School Location:USA - Kansas
Source Type:Master's Thesis
Keywords:sheep milk dairy cheese iowa economics agriculture food science and technology 0359 agricultural 0503 finance 0508
Date of Publication:01/01/2008