Summary

This report summarizes information obtained
in the North Texas and Corpus Christi areas dur-
ing the spring and summer of 1957 on dairy
farms which have converted their operations to
the bulk system of producing and handling milk.

Texas dairy farmers are operating larger

' units, milking more cows, selling more milk and

generally becoming more commercialized. They
also are making efforts to increase their effi-
ciency by utilizing methods which contribute to
more efficient production and marketing of fluid
milk.

Bulk handling of milk on the farm generally
adds to efficient operation. About 27 percent of
Texas’ 8,600 Grade “A” dairy farmers are op-
erating under the bulk system. Approximately
half of the 2,500 bulk tanks on Texas dairy farms

.were installed during 1957, and the rapid rate of

converting to bulk operation is continuing.

In general, the larger dairymen were the first
to substitute bulk tanks for 10-gallon cans, but
many smaller producers are converting to bulk
operation.

Bulk equipment owners who, at the time of
the interview, had been operating under the bulk
system 1 year or longer, had increased their milk

 production 24 percent at the end of 12 months

and the number of cows in their milking herds
19 percent. The increase in production by bulk
producers was about three ‘times greater than the
increase of the average producer on the market
and eight times greater than the increase of the
average producer still delivering milk in cans.

Tank owners in North Texas reported reduc-
tions in hauling costs ranging from 5 to 40 cents
per hundredweight of milk; producers in the

0 Corpus Christi area reported reductions from 4

to 36 cents in changing fromcans to bulk tanks.
North Texas producers reported that the average
difference in hauling rates between the can and
bulk system was 15 cents per hundredweight; in
the Corpus Christi area, the average difference
was 10 cents. Savings in transportation charges

is the largest monetary advantage of the bulk :1
tem of handling milk.

  
  
 
 
   
  
   
  
   
  
    
   
   
 
   
   
  
   
  

Dairymen interviewed in North Texas A
tanks ranging from 150 gallons to 1,000 gall
while tanks in the Corpus Christi area ra .
from 200 gallons to 1,000 gallons. The ave a
tank in North Texas had a capacity of 400 :4
lons of milk, and in the Corpus Christi area 1
average tank held about 550 gallons. ‘

Forty-nine percent of the dairymen in
viewed in North Texas and 25 percent in I
Corpus Christi area had purchased pipeline,
addition to tanks. The cost of pipelines insta
averaged $2,235 per farm.

The high cost of tanks and other bulk eq z
ment is the main obstacle to the rapid adopt
of the bulk system for handling milk. Lack‘
credit is not a problem since most producers q a
obtain financing at reasonable terms. w
farmers hesitate to convert to bulk equipment A
cause they are uncertain about the profitab‘,
of the system. The cost of tanks ranges f -
$2,130 or $11.88 per gallon of capacity for a 1
gallon tank to $5,250 or $5.25 per gallon of t»
pacity for a 1,000-gallon tank. _:

Dairy farmers purchase bulk equipment;
save on transportation costs, to reduce phys"
requirements of labor and to produce more :=f
tary milk. Other reasons include pressure fr
handlers, replacement of wornout can equipm,
and attainment of more accurate milk weigz
and butterfat tests. ‘

Present production, seasonality of product‘
future expansion expected in output, milk pic
schedule and possible delays in milk pick
should be considered in determining the pro
size of bulk tank. The general rule for deter
ing the proper tank size is two and one-half til
the average daily production for every day pi“,
up and four times daily production for -
other day pickup, if future production is expe p
to increase one-third more than the present l;
put. z l A

  
  
  
    
   
    
  
 
   
   
   
  
  
   
  
   
   
   
    
   
    
   
  
  
   
  
 
  
  
 

12,800 TEXAS DAIRY FARMERS SELLING MILK
ate in 248 of the 254 counties in the State.
3: dairymen produced an estimated 3.2 bil-
pounds of milk and sold about 2.6 billion
ds during 1957. The farm value of milk
J cream sold to plants and dealers by farmers
‘A nted to 138 million dollars, with 115 million
yrs coming from sales of whole milk. The
s farm income from dairying accruing to
 farmers during 1957 was 170 million dol-

The dairy industry in Texas has become high-
ommercialized during recent years. While
" number of commercial dairies in the State
} sed from 42,000 in 1954 to 12,800 in 1957,
_- milk production and sales of milk, butter
_ cream by farmers have not decreased ap-
ifiably.

uring this same period, however, total vol-
, of fluid milk sold by Texas farmers more
_ doubled while the volume consumed on
i“ ~ where produced, and not entering commer-
channels, decreased by two-thirds.

 he average Texas dairy producer selling
 during 1957 marketed seven times more
 than the average producer did during 1944
, five times more than in 1949. In addition to
lying fluid milk to a greatly increased urban
’ lation, Texas commercial dairymen also are
ucing and marketing the milk consumed by
t half of the rural residents in the State who,
rding to the U. S. Census of Agriculture, did
have milk cows in 1954. In 1940, milk cows
 found on 93 percent of Texas farms.

 ith these shifts and trends in the number
rmers selling milk and the volume of milk
eted per farm, the dairy farmer plays a
Pr‘ role in supplying milk to urban and other
M population than ever before.

g) s dairy farmers expand their business, milk
*- cows on the average, sell more milk and
rally become more commercialized, it is to
advantage to produce more efficiently by
ting as many of the innovations as possible
contribute to more efficient and economical
auction and marketing of their product.

pipeline milking and the bulk tank system
, oring and transporting fluid milk usually
‘considered the most recent and far-reaching

actively, assistant professors, and farm management
'alist, Department of Agricultural Economics and
ology, College Station, Texas.

Bulk Handling of Milk on Texas Dairy Farms

RANDALL STELLY, DONALD S. MOORE and CECIL A. PARKER*

contributions to efficiency and savings in the
amount and physical requirements of labor, Fig-
ures 1 and 2.

This report summarizes information obtained
during the spring and summer of 1957 from Tex-
as dairy farmers who have converted their opera-
tions to the bulk system of producing and hand-
ling milk.

Purpose of Study

Converting from the can to the bulk tank sys-
tem of operation is one of the most important de-
cisions facing dairymen. In addition to requir-
ing a large outlay of capital for new equipment,
shifting to the bulk system usually changes dras-
tically the physical requirements of labor and the
operations in milking and fluid milk handling.
This is true especially if a pipeline system is in-
stalled along with a tank. Adjustments are neces-
sary in production practices as well as in milk
storage and handling functions.

  
 
  
  

Contents
Summary .................................................................... .. 2
Introduction ............................................................... -. 3
Purpose of Study ..................................................... .- 3
Objectives .................................................................. .. 5
Method of Study . . . . . . . . . . . .. 5
Characteristics of Bulk Producers ....................... .- 5
Effect of Bulk Operation ...................................... .. 6
Production _ 6
Size and Composition of Herd ....  ................ .- 6
Butterfat ............................................................ __ 6
Bacteria .............................................................. __ 7
Transportation Cost ....................  _________________ __ 7
Reasons for Purchasing Bulk Equipment .......... .. 7
Influence of Handlers ...................................... __ 8
Advantages and Disadvantages
of Bulk Handling ............................................ __ 8
Lower Hauling Costs ...................................... .. 8
Savings in Labor .............................................. __ 9
Savings in Cans and Can Coolers“..-..._.-__._. 9
Wastage and Stickage .................................... _, 9
Milk Weighed on Farm .................................. __ 9
Uniform Fat Test ____________________________________________ __ 9
Improvement in Milk Quality ...................... __ 9
High Initial Cost _____________________________________________ __ 9
Possible Loss of Milk __________________________ __; _________ __ 9
Bulk Tank Cost ________________________________________________________ __1()
Comparison Between Investment
and Savings ...... .. 10
Pipeline Cost ___________________________________________________________ __11
Financing ___________________________________________________ __ __12
Size of Tanks . . . . . . . . _ . . . _ . _ _ _ . . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __12
Proper Size ____________________________________ __ ____12
Producers Using Cans _______________________________________ __13
Acknowledgments ____________________________________________________ __14

~ 

Many Texas dairymen are trying to attain
Grade “A” status. Producers also are encour-
aged to increase their production to satisfy the
expanding local markets for Grade “A” milk.
Throughout the State, milk distributors, proces-
sors and producers associations are encouraging
dairy farmers to turn from the 10-gallon milk
can and pickup truck to bulk storage and trans-
portation facilities. These changes present the
dairy industry with problems of production, han-
dling and distribution and require additional cap-
ital investment and increased production in some
areas.

Texas farmers utilizing the bulk system re-
port reduction in transportation cost of 10 to 30
cents per hundredweight over the can system.
They also report increases in butterfat content,

Figure 2. Cans, can coolers and conventional-type milking parlors are being replaced with pipelines. bulk tanks and moi

milking parlors by many Texas dairymen.

4

Figure 1. Bulk tank, pipeline and modern milking parlor add generally to efficiency and to lower milk handling costs;

   
 
  
    
      
  
    
   
 
 

improvements in milk quality and reductions
labor requirements. a

Although the first bulk system Was install
on a large Texas dairy farm during the
1930’s, a substantial volume of milk was l;
handled in bulk on Texas farms until the sprk
of 1954. Since that time, Texas farmers 
converted rapidly to the bulk system. r
2,500 of the 8,600 Grade “A” dairymen in  
State are operating under the bulk system.  
the North Texas market, 61 percent of the p?
ducer milk is delivered in bulk to plants and i
ceiving stations by 42 percent of the produce .

Comparisons should be made of changes
production, storage and handling costs, chan;
in volume and product quality and increased i

   
  
 
  
  
 
   
  
  
   
 
  
   
  
  
   
  
  
  
   
 
  
   
    
   
  
  
  
   
  
   
  
  
  
  
   
   
   
  

ginvestment. The economics involved in the
_rence between the can and tank system could
pt materially the number of dairy farmers
fmake the conversionand stay in the dairy
  ess and those who do not make the change
eventually are forced out of business.

Objectives

 he main objectives of this study are to de-
line the extent to which milk producers are
lting the bulk tank system of handling milk
ithe reasons for adopting this method. This
 also attempts to find out the effects of this
 for handling milk on production, herd
jiand composition, storage and hauling costs,
 requirements, butterfat content and general
ity of the product and also to determine the
 um size of tank at various levels of produc-
 and the capital requirements and annual fix-
fcosts for conversion to the system.

Method of Study

‘The information reported in this study was
ined through personal interviews with a rep-
"ntative sample of dairy producers in the
ith Texas and Corpus Christi milk marketing
s, Figure 3.

{During the spring of 1957, when the inter-
,Ws were conducted, 736 of the 3,200 producers
‘ithfi 24-county North Texas area and 53 of the
A producers in the 7-county Corpus Christi area
ire using the bulk handling system.

TIA random sample of 230 producers was drawn
m the list of all bulk producers in the North
i as area. In the Corpus Chrisit area the sam-
 consisted of all tank owners in the area. In-
‘I ation considered reliable and complete
ugh for analysis was obtained from 191 tank
', ers in North Texas and 36 in the Corpus
Cristi area. f

TThe North Texas and Corpus Christi areas
e selected for the study primarily because pro-
ers of these areas had made the greatest prog-
is in converting to bulk method of milk hand-
g. These areas had 72 percent of the 1,100
pks on Texas farms as of January 1957. The
“ducing and marketing areas are well defined
graphically and extend over several counties;
7y are located at opposite ends of the State, rep-
enting wide differences in climate, soil and
ture conditions and general dairy farm oper-
ng conditions. a r

c During 1957, dairy farmers in the 34 counties
gluded in those, two areas comprised 42 percent
~Grade “A” milk producers in the State. Those
 ers marketed 38 percent of the 2.6 billion
lunds of whole milk sold by Texas farmers in
,57 and received 45 percent of the total 115 mil-
n dollars that Texas dairy farmers got as the
rm value of fluid milk sales.

Information also was obtained from 179 dairy
farmers in North Texas who were selling milk
in 10-gallon cans. The same sampling procedure
was used in selecting can producers as was used
for bulk producers.

Characteristics of Bulk Producers

On the average, producers in South Texas con-
trol a larger acreage and have more cows in the
milking herd than those in North Texas. There
was a significant difference in herd composition
between the two regions. Holsteins were found
on more farms in North than in South Texas and
the average North Texas Holstein owner had one-
third more cows than the dairyman in the South.
The reverse holds true for Jerseys.

Interviews with producers operating with 10-
gallon cans in North Texas indicate that they are
smaller operators, on the average. They control
one-fourth fewer acres and have 60 percent as
many cows in the milking herd as bulk produc-
ers. During the spring of 1957 the average bulk
tank owner delivered twice as much milk as the
average producer handling milk in cans. The
average producer using cans is about 4 years old-
er than the bulk tank owner.

In general, the larger dairymen were the first
to install bulk equipment. However, a larger pro-
portion of the smaller producers now are buying
tanks. An indication of this trend is presented
in Table 1, which shows that during January
1956 less than 4O percent of the 307 bulk oper-
ators in North Texas produced under 30,000
pounds of milk each but during June 1957 about
61 percent of the 952 bulk producers were in this
group.

Figure 3. Location of counties included in the survey.

5

  

  

    

TABLE 1. COMPARISON OF RELATIVE VOLUME OF ||._
Pounds of milk Ianuary 1956 August 1
idneghvtigeilgst; Number of Percent of Production, Percent of . Number of Percent of .
producers producers thousand pounds total bulk producers producers tho

Less than 10.000 2 .6 18 .1 11 2.0
10.000 to 19.999 38 12.4 592 4.6 122 1,- 21.8
20.000 to 29.999 82 26.7 2.057 15.9 166*". ‘I; 29.6
30.000 to 39.999 65 21.2 2.263 17.4 106 18.9
40.000 to 49.999 43 14.0 1.934 14.9 71 12.7»
50.000 to 59.999 I 26 8.4 1.427 11.0 28 5.0
60.000 to 69.999 14 4.6 902 7.0 16 2.9
70.000 to 79.999 14 4.6 1.050 8.1 19 3.4
80.000 to 89.999 6 2.0 583 4.5 8 1.4
90.000 to 99.999 5 1.6 478 3.7 4 .7
100.000 and over 12 3.9 1.665 12.8 9 1.6

Total 307 100 12.969 100 560 100

 

‘From records of the North Texas Milk Market Administrator.

Effect of Bulk Operation

PRODUCTION

Thirty-nine percent of the tank owners in
North Texas and 47 percent in the Corpus Christi
area reported that bulk tanks had no noticeable
effect on the volume of milk they produced. How-
ever, 37 percent of the North Texas tank owners
reported a slight increase and 9 percent reported
a considerable increase while 33 percent of the
Corpus Christi producers reported a slight in-
crease and 6 percent a considerable increase in
the amount of milk produced. Fourteen percent
of the producers in both areas did not specify the
effect of bulk operation on milk volume.

Milk production records for 145 of the 191
bulk producers in the North Texas area indicate
that the total production increased 24 percent

 from the 3-month period preceding the dates they

obtained bulk equipment to the same 3 months
1 year later, Table 2. Milk delivery records of
all producers in the North Texas area indicate
that the average producer increased his produc-
tion 8 percent between the first 10 months of
1956 and the same period of 1957. Can produc-
ers delivered an average of 643 pounds of milk
per day during the spring of 1956 and 665 pounds
per day during the spring of 1957, or an increase
between the two periods of only 3 percent.

Bulk handling equipment gives a net savings
in milk volume of about 1 percent because of re-
duced spillage. However, increases in the number
of cows in the milking herds and changes toward
more Holsteins contribute more to increased pro-
duction than this reduced wastage.

The increase in total production in North Tex-
as after 1 year of operation amounted to 1 pound
of milk per day per cow. Higher producing cows,
better feed and care, weather and other factors
could contribute to this increase, but the greater
percentage of Holsteins in the herds probably
contributed the greater part.

6

  
  
   
   
  
   
  
 
  
 
  
   
  
  
  
   
  
 
 
   
  
 
   

Efforts of tank owners to minimize overhea
costs of bulk equipment ownership by obtainin
maximum utilization of tank capacity is anothe
incentive to increased production. Many farmer,
installed tanks that were one-third to one-hal
larger than required for every other day pickup’
Some were utilizing their tanks to only 25 per.
cent of capacity. While the average tank Wag
approximately 400 gallons, the average produce -
still handling milk in cans produced 65 gallon
per day and can get by with a 200-gallon tank
Thus more 200-gallon tanks are needed to ac.
comodate the smaller producers. a

SIZE AND COMPOSITION OF HERD

Dairymen interviewed in North Texas had an;
average of 52 cows in the milking herd before
they obtained bulk handling equipment, and an;
average of 61 cows while operating in bulk. Cor-
pus Christi producers reported an average of 60;
cows before installing bulk tanks and 72 at time?
of interview. Excluding farmers who reported
no change in size of herd (and including only those;
reporting either an increase or a decrease) the!
average North Texas dairyman added about 12
cows to his herd while Corpus Christi area pro-Q
ducers increased their herds by almost 24 cows-v.
on the average. Changes in size and composition»?
of herds are indicated in Tables 3, 4 and 5. I

Comparisons of size and composition of herdsl
of 145 bulk tank owners in North Texas before,
and after installing tanks indicate that they had.
increased their milking herds by 1,429 cows, or
an average of 10 cows each. However, 78 per-
cent of this increase was Holstein cows, 16 per- j;
cent Jerseys and 6 percent other breeds. 

BUTTERFAT

Sixty-one percent of the tank owners reportedfj
no noticeable change in the butterfat content of;
their milk with bulk tanks, while 37 percent re-
ported a higher fat content and 2 percent, a lowerv-
fat content. 

  

HAVING BULK TANKS. NORTH TEXAS MARKET‘

 

  

December 1956 Iune 1957
lumber of Percent of Production, Percent of Number of Percent of Production. Percent of
‘producers producers _ thousand pounds total bulk producers producers thousand pounds total bulk
17 2.4 116 .4 31 3.3 202 .7
106 15.0 1.745 6.6 243 25.5 3,898 13.2
221 31.3 5.421 20.6 307 32.2 7.580 _ 25.6
136 19.3 4.728 18.0 171 18.0 5.871 19.8
85 12.0 3.801 14.5 88 9.2 3.948 13.4
49 6.9 2.546 9.7 47 4.9 2.593 8.8
27 3.8 1.726 6.6 22 2.3 1.428 4.8
24 3.4 1.809 6.9 17 1.8 1.264 4.2
10 1.4 865 3.3 13 g 1.4 1.098 3.7
12 1.7 1.140 4.4 3 .3 290 1.0
20 2.8 2.372 9.0 10 _ 1.1. 1.405 4.8
707 100 26.269 100 952 100 29.577 100

   
  
  
  
   
   
   
 
  
  
  
  
  
  
   
 
 
 
 
 
   
   
   
 
  

TThe total amount of butterfat contained in the
A marketed by 145 North Texas tank owners
ore and after obtaining tanks shows a fat con-
t decrease from 4.04 to 3.90 percent, or .14
 entage points, Table 2. This 3.5 percent de-
Tse in total butterfat content may be account-
;Jf0r by changes in herd composition and the 11
cent increase in Holstein cows.

‘CTERIA

Thirty-eight percent of the tank owners in
rth Texas and 40 percent in the Corpus Christi
H . reported no noticeable change in the bac-
l 'a count of their milk after they installed bulk
ipment. However, 56 percent of the North
Tas producers and 60 percent of the Corpus
isti producers reported decreases in bacteria
Qvnt of their milk, while 6 percent of the North
 s producers reported a slight increase in bac-
a.

; NSPORTATION COST

Although studies in other areas on bulk han-
g equipment show some reductions in bac-
'a count, less spillage of milk and savings of
sical labor, the most significant savings are
uctions in milk hauling costs.

Q Producer milk is transported to plants in
ffks owned by farmers, trucks belonging to
_‘ handlers or cooperative associations that
, hase the milk, or in trucks owned by contract
1' lers. Seventy-three percent of the farmers
North Texas and 70 percent in the Corpus
isti area had their milk hauled under contract
ing the spring of 1957. Trucks belonging to
‘dlers or cooperative associations hauled the
5 for 23 percent-of the North Texas farmers
. for 30 percent of those in the Corpus Christi
a.

The hauling costs of tank owners in North
as ranged from 15 to 40 cents per hundred-
ight compared with charges ranging from 20

to 60 cents reported by Corpus Christi producers,
Table 6. Before installing a tank the average
North Texas tank owner interviewed paid 38
cents per hundredweight to have his milk hauled
in cans. After installation of a tank, the average
hauling rate was reduced to 23 cents. In the

Corpus Christi area, the average reduction was

from 53 cents to 43 cents. ,

In North Texas, 96 percent of the dairy farm-
ers reported reductions in hauling rates between
cans and tanks of 10 to 20 cents per hundred-
weight of milk. Of these, 23 percent reported re-
ductions of 10 cents, 48 percent reported reduc-
tions of 15 cents and 25 percent reported reduc-
tions of 20 cents.

Analyses of the total cost to all North Texas
producers for transporting milk from the farms
to plants during May 1957 show that milk hauled
in cans costs an average of 37 cents per hundred
pounds while milk hauled in bulk tanks costs an
average of 23 cents or a difference of 15 cents
per hundred pounds. Transportation cost data
for individual producers are not available but,
based on total costs of transporting milk from
the farms to plant locations in North Texas, the
range in cost to producers per hundred pounds
of milk marketed during May 1957 was as indi-
cated in Table 7. '

Reasons for Purchasing
Bulk Equipment

The average tank owner gave two or more
reasons for purchasing, bulk handling equipment.
The reasons given most frequently and the per-
centage of farmers interviewed are: to reduce
the physical requirements of labor, 53 percent;
to save on transportation charges, 48 percent; to
produce more sanitary milk, 39 percent; to re-
duce the amount of labor and therefore milk more
cows, 30 percent; pressure by handlers who re-
fused to pick up or receive milk in cans, 22 per-
cent; and to replace worn out can equipment, 22

7

TABLE 2. CHANGES IN MILK AND BUTTERFAT PRODUC-
TION BEFORE AND AFTER INSTALLING BULK
HANDLING EQUIPMENT, 145 FARMERS, NORTH
TEXAS '

Milk production‘ Butterfat content

Item 90d“, period of milkiapercent

Total Production

Before tank, pounds 12,596,000 4.04

After tank, pounds 15,690,000 3.90

Percent change 24 — .14
Production per cow -

Beiore tank, pounds 1.660

After tank, pounds 1,738

Percent change 4.1

percent. Other reasons are: t0 obtain more ac-
curate Weights of the milk marketed, 8 percent
and t0 get more accurate butterfat tests, 3 per-
cent.

INFLUENCE OF HANDLERS

As the proportion of producer milk in cans re-
ceived in plants decreases relative to bulk re-
ceipts, many handlers attempt to avoid the high
cost 0f dual milk receiving by accepting only bulk
milk. Under such a situation farmers ‘still han-
dling milk in cans and selling it to those plants
must convert to bulk handling or find a handler
willing to accept milk in cans. Farmers unable
or unprepared to install tanks may suffer incon-
veniences or economic losses. However, the eco-
nomic effect on farmers usually is reduced when

TABLE 3. SIZE AND COMPOSITION OF HERD, CAN AND TANK SYSTEMS, NORTH TEXAS

  
     
 
  
   
   
  
   
  
   
 

handlers announce their intention in time for l‘
ducers to install tanks. l

Seventy-four percent of the tank owners v
terviewed in the Corpus" Christi area and 37 ~-
cent of those in North Texas reported that h"
dlers had encouraged them to install tanks.

Of the North Texas producerfs encouraged
handlers to purchase tanks, 53' percent repo i
they were forced to purchase bulk equipment 
cause handlers purchasing their milk quit f
cepting milk in cans. In the Corpus Christi a
16 percent of the producers reported they w
encouraged by handlers to install tanks. 0t
forms of handler encouragement consisted of-
forming farmers about the benefits of bulk
dling and granting producers premiums for ==
milk. '

Advantages and Disadvantage
of Bulk Handling

Because of the high cost of bulk tanks, da’
farmers contemplating converting from cans ~-
tanks should consider carefully both the adv
tages and disadvantages of bulk operation. 

LOWER HAULlNG COSTS

From the monetary standpoint the grea i
advantage of bulk handling of milk is the red i.
tion in milk hauling costs. Reductions in ha

Breed of cattle‘

   

Number N b Iersey Holstein Other breeds
°f ¢°W5 um er Avera e Number Avera e Number Avera
7 " in he'd of farms ljiufrgfg; numbegot of farms numbergot of tarms number '
with Jerseys cogavs per with cows per with other cows p,
arm Holstems farm breeds farm, .
Can system

No can experience 15
Less than l0 _ 1 1 5.0 1 4.0
10 to 19 3 3 8.0 3 8.3
20 to 29 27 Z3 12.7 19 13.6 10
30 to 39 28 19 19.4 20 20.4 8
40 to 49 30 22 21.6 23 26.5 8 254
50 to 59 26 21 27.7 22 26.5 13
60 to 69 22 17 25.8 16 42.4 7
70 to 79 * 19 17 27.4 16 40.5 l1
80 and over 20 16 ' 36.3 16 88.9 8

Total 191 139 23.2 136 34.1 65

. Tank system

Not given 1
Less than 10
10 to 19 .
20 to 29 - 15 15 10.7 15 12.0 7
30 to 39 38 25 16.1 29 23.6 9
40 to 49 22 19 17.9 16 27.8 9
50 to 59 33 26 21.0 29 29.7 16
60 to 69 22 18 21.8 18 40.3 9
70 to 79 25 21 36.8 17 48.4 ~ 12
80 and over 35 28 32.1 32 78.4 15

Total 191 152 23.1 156 40.0 77

‘Some farmerslhad more than one breed of cattle.

8

 

‘I TABLE 4. SIZE AND COMPOSITION OF HERD, CAN SYSTEM AND TANKI SYSTEM, CORPUS CHRISTI AREA

 

I Breed of cattle‘

 
  
 

     
 

   
    

 Number Iersey Holstein Other breeds
" N b
, f‘ “W5 ofufxgm: . Number Average Number Average Number Average
 m he'd of farms number of of farms number of of farms number of
' with cows per with cows per with other cows per
Ierseys farm Holsteins farm breeds farm
i Can system
I -~- experience 5
' than l0
'- 19
'- 29 6 6 22.0 2 5.0 1 8.0
 39 7 6 28.0 4 15.2 1 2.0
 49 4 2 40.0 3 32.0
 59 3 1 56.0 2 53.0
- 69
p’ 79 1 1 28.0 1 42.
 over 10 9 109.4 1 10.0
wTotal 36 25 58.0 ll 28.1 4 29
Tank system
_ than 10
 ‘l9
 29 1 l 25 1 2.0
 39 12 9 23.4 8 18.0 2 20.5
f - ~49
 59 5 3 52.0 2 29.0 2 27.5
I- 69 2 1 27.0 2 54.0
 79 1 1 34.0 1 33.0 1 5.0 
M- over 15 13 108.0 4 49.5 2 42.5
{Total 36 28 66.3 18 30.2 7 26.6

7e farmers had more than one breed of cattle.

  
 
  
   

" rates under the bulk system arise from con-
'dation of can routes and converting to every
er day pickup, and result in decreased mile-
j and time required per hundredweight of milk


 
  
  
   
   
    
 
   
  
    
 
   
   
 
  

AIVINGS m LABOR

‘Although it was difficult to determine the ex-
lsavings in labor requirements by changing t0
-, operation because the number 0f cows milk-
‘increased after the change, there are indica-
j- of reduction in man hours per hundred
‘nds of milk. Tank owners reported utilizing
p time for milking and barn feeding, and clean-
and sterilizing milk rooms and barns. Bulk
‘fling equipment contributes to reductions in
fphysical requirements of labor when a pipe-
f is used with a tank and lifting heavy cans of
f}. is eliminated.

IVINGS IN CANS AND CAN COOLERS

These can be applied to the depreciation and
fieep cost of tanks.

 STAGE AN]; “STICKAGE

In addition td‘ spilling of milk from cans dur-
' handling and some butterfat sticking to can
f; losses usually occur through some milk not
ining out of cans. These show up as a differ-
_‘ in weight and a decreased fat test. Under
p. handling these losses are minimized.

MILK WEIGHED ON FARM

Since milk volume is taken while the milk is
in the tank, bulk operators appear better satis-
fied with volume determination and any spillage
in handling is for the account of the handler or
hauler.

UNIFORM FAT TEST

Thorough mixing of the milk in the tank be-
fore fat samples are taken assures more uni-
formity in the fat sample.

IMPROVEMENT IN MILK QUALITY

Some handlers offer premiums for milk with
low bacteria count. Although bulk tanks will
not insure milk quality, they make it easier to
maintain milk quality and thus benefit from
premiums paid for low bacteria milk.

HIGH INITIAL COST

Other expenses usually are associated with
bulk equipment such as the cost of remodeling
and rewiring the milk room and improving the
road leading to the milk room to accomodate the
larger tank trucks.

POSSIBLE LOSS OF MILK

If milk in a tank is rejected because of qual-
ity, the supply from four milkings is lost if it is
on an every. other day pickup schedule; under the
can system only one can may be rejected.

TABLE 5. CHANGES IN SIZE AND COMPOSITION OF HERD ON FARMS CHANGING TO BULK METHOD OF OPERA

NORTH TEXAS AND CORPUS CHRISTI AREAS

 
  

Total

Farms with increase

Farms with decrease Net change

 

       
 

A A i ,.
Breed‘ number Farms _ Total inbizg: Farms Total dellireiriz Total 2;?
farms reporting increase per farm reporting decrease per farm cows reporfi
reporting reporting X _ ,
A North Texas f’
Iersey 45 400 8.9 23 231 10.0 + 169 + 2
Holstein - 70 1389 19.8 18 253 14.0 + 1136 + 12.
Other 26 176 6.8 10 126 12.6 + 50 + 1
iTotal 112’ 131 1965 15.0 51 610 12.0 + 1355 +12
Corpus Christi area
Iersey 10 288 28.8 4 58 14.5 + 230 + 16.
Holstein 9 178 19.8 1 15 15.0 + 163 + 16.
Other 4 37 9.2 0 0 0.0 + 37 + 9
Total l8“ 23 503 21.9 5 73 14.6 + 430 +23

‘Some farmers had more than one breed of cattle.

“Excludes 15 farms which had no can experience and 64 farms reporting no change in total number oi cows.
sExcludes 5 farms which had no can experience and 13 farms reporting no change in total number of cows.

TABLE 6. TRANSPORTATION CHARGES AND MILES TO
PLANT. NORTH TEXAS AND CORPUS CHRIST]

AREAS
Can system Tank system
Elifizlaefirzztjifi: Number Average Number Average
P91’ hundred ot {arms numiaer of farms numioer
Pm-mds reporting of mlles reporting of mlles
to plant to plant
North Texas
Not given 28‘ 71

15 1 9.0
20 88 32.0
25 6 24.8 87 71.8
30 23 31.6 6 124.2
35 10 36.8 1 30.0
40 115 65.0 1 125.0
42 1 65.0
43 2 18.5
45 2 39.0
50 1 105.0
55 1 30.0
60 2 40.0

Total 167 54.6 184 54.3

Corpus Christi area
Not given 9‘ 1

20 1 32.0
25
35 3 46.7
40 1 4 61.0
41 1 4 69.5
42 1 68.0
44 3 73.3
45 1 75.0 4 75.5
46 1 78.0
47 1 80.0
50 10 69.3 12 102.1
51 1 50.0
60 2 64.0 1 71.0
61 1 80.0
62 1 68.0
65 6 89.1
75 4 115.0

Total 27 78.2 35 78.2

‘Includes farmers who had no can experience, farmers who
did their own hauling and farms ior which data were not
available.

10

   
  
  
   
  
   
  
   
  
  
   
  
   
  
   
   
   
  
 
  

Bulk Tan/< Cost

The average cost of milk tanks installed
North Texas dairy farms is shown in Table;
These costs include the basic unit with a calib
tion chart, the compressor, freight and insta,
tion charges. For a 400-gallon tank, these av
age about $2,200 for the basic unit, $600 fort a
compressor and $320 for freight and installati‘
Usually there are other cost items associated W
ownership and operation of a bulk tank aver
ing about $100 per farm. This includes $50 _
labor and material to rewire the milk room, $
for an agitator timer and $30 for cleani‘
brushes and fluid, wall opening and tank sanita
cap. 

The cost per gallon capacity ranges fro,
$11.83 for a 180-gallon tank to $5.25 for a 1,0
gallon tank.

Comparison Between

Investment and Savings

Texas tank owners believe that tanks shouf
last an average of 17 years, while most tank 
ers estimate that the basic tanks should last
or more years. However, tanks have not been"
use long enough for anyone to know exactly ho ‘V
long they will last under operating conditions.

At total savings of 15 cents and 10 cents 5
hundredweight of milk as indicated for N0 5
Texas and Corpus Christi producers and 15-y
tank life, and allowing 3 percent of the install
tank cost for upkeep and repairs, insurance l",
taxes, the break-even points between additio
investment for bulk equipment and total savin
are shown in Table 9.

Maximum savings can be obtained only Wh
tanks are utilized to capacity. After consideri

  
  
   
  
   
   
    
  
  
  
   
  
 

erences in ownership and use costs between
 and bulk equipment, North Texas tank own-
pwith savings of 15 cents per hundredweight
Q’ ilk can expect to break even on an additional
istment for bulk equipment of about $452 per
idred pounds of milk marketed per day over
.,estimated 15-year ‘life of tanks. Corpus
;isti producers reporting average savings of
 ents per hundredweight, can expect to break
n on an additional investment of $301 per
dred pounds of milk marketed per day. With
average production of 665 pounds per day,
j= h-Texas producers still selling milk in cans
2d afford to repay an additional investment of
‘l 16 for bulk equipment over an estimated tank
i‘ 0f 15 years with savings of 15 cents per hun-
weight of milk, Figure 4.

In addition to direct savings in transportation
' , producers may want to include less notice-
.' savings such as reduced labor requirements,
c and can cooler replacement, reduced milk
go and stickage, when these apply to their
a 1on.

Figure 4 shows how a dairy farmer, produc-
= 600 pounds of milk per day, may determine
. much he can afford to pay for bulk equip-
t and break even at the end of 15 years if his

savings will amount to 15 cents per hundred-
weight during that time. He can do this by lo-
cating the 15-cent point on the horizontal axis of
Figure 4. Directly above this point on the verti-
cal axis to the line representing 600 pounds, the
two lines intersect at a point which the scale on
the left indicates will support an additional in-
vestment of about $2,700.

A farmer may know that bulk equipment will
cost him $3,000 and that he will save 10 cents per
hundredweight if he markets his milk in bulk. By
using Figure 4, he can determine how much milk
he will have to sell per day to break even over a
15-year period by buying the equipment. In this
case he locates the $3,000 figure to the left of the
chart; the vertical line directly‘ across represents
the 10 cents per hundredweight savings. At that
point the chart indicates that he will have to mar-
ket about 1,000 pounds of milk per day to pay for
the equipment out of savings during 15 years.

Pipeline Cost

Ninety-six of the 191 bulk operators inter-
viewed in North Texas and 10 of the 36 in the
Corpus Christi area had pipelines along with
tanks. However, pipeline owners enjoy decreased

 7
3' . {Loo
 _ At volume oi milk sales indicated by diagonal
6 lines, producers with total savings per hundred 0Q
pounds indicated can expect to break even \\
with an additional investment on ‘the vertical 0Q
axis at the end oi 15 years of bulk equipment O64. \O
5 — use. $00‘ o
o ° Q0
6° \\ o
4 \\o“\°“ so
- o
09° 100
, 3 -
. \'\ot\ "°“‘ 500
l 00 a
» 400
r 2 _ 
 zoo q<\“°“ 300
\  . °“°.“ lQ\'\k) 
I ' Non N“) 2
IOO
i, o/
 o * | | |
- 5 IO l5 2O

v Savings between can and bulk systems (cents per hundred pounds of milk)
it .4. Relationship between savings through bulk handling of milk and additional investment possible for bulk equipment.

ll

TABLE 7. AVERAGE COST OF TRANSPORTING 100
POUNDS OF MILK. NORTH TEXAS MARKET

Plant location Can Bulk _ Difference
——————Cents——-———
Location A 37 24 13
Location B 29 21 8
Location C 41 26 15
Location D 40 25 15
Average, all locations 37 23 14

physical labor requirements attributable to this
equipment only at a substantial cost. The cost
of pipelines installed averaged $2,235 per farm.
Glass pipelines had average cost of $2,294 as com-
pared with $1,882 for metal pipelines. However,
the average length of metal pipes reported was
51.7 feet compared with 72.4 feet for glass and

on a linear foot basis, metal pipelines averaged

$36.40 per foot as compared with $31.70 for glass.
Where applicable, costs of pipelines should be con-
sidered with tank costs in any analysis of total
savings versus additional investment for bulk op-
eraton.

Financing

Eighty-three percent of farmers having bulk
milk handling equipment obtained credit to pur-
chase tanks. Forty percent of those farmers ob-
tained credit from local banks, 35 percent from
bulk equipment dealers, 10 percent from milk
handlers, 5 percent from producers associations
and the remaining 10 percent obtained credit from
the Production Credit Association, Farmers Home
Administration and other sources. Interest rates
on this borrowed capital ranged from 4 to 8 per-
cent per year and averaged 5 percent per year.

Most loans called for repayment between 3
and 4 years, and 9 out of 10 stipulated monthly

“repayment amounts usually deducted from the

producer’s milk checks. The financing aspects
of converting to bulk operation by Texas dairy
farmers are reported in a separate bulletin.

Size of Tanks

Tanks on farms visited in North Texas during
this survey ranged from 150 gallons to 1,000 gal-
lons, Table 10. The average tank had a capacity

TABLE 8. COST OF BULK TANKS INSTALLED ON TEXAS
DAIRY FARMS

Cost per gallon

Size oi tank Cost to iarmer of capacity
Gallons — -—- — — Dollars — —— — —
180 ‘ 2,130 11.83
250 2.330 9.32
300 2.750 9.17
400 3.120 7.80
500 3.650 7.30
600 4.000 6.67
700 4.300 6.14
800 4.645 5.81
1.000 5.250 5.25

12

  
  
  
   
   
 
   
   
 
   
   
  
    
  
   
  
   
  
   
   
  
  
  
   
  

of 400 gallons and 27 percent of the produc"
had tanks of this size. Ninety-three percent,
the producers interviewed had purchased ta
ranging from 250 to 600 gallons. Thirty-four j
cent of all tanks had ‘a capacity of 250 and p,
gallons, and 33 percent were 500 to ‘600 gallo I

In the Corpus Christi areaqthe size of ta
ranged from 200 to 1,000 gallons and the aver
tank had a capacity of 450 gallons. Twenty-n
percent of the producers in that area purcha
a 300-gallon tank and 20 percent purchased a i,
gallon tank. Eleven percent purchased a 400-
lon tank and the same number purchased a i‘
gallon tank. ’

TABLE 9. BREAK-EVEN POINTS BETWEEN TOTAL S
INGS AND ADDITIONAL INVESTMENT ‘

Daily milk production Additional investment possible tor i

Total savings of Total savings.
10 cents per cwt. 15 cents per '
over 15 years over 15 ye

Pounds —- — — -— — Dollars — — —
100 301 452
150 452 798
200 602 904
250 753 1.130
300 903 1.356
350 1.054 1.582
400 1.204 1.808
500 1.505 2.260
600 1.806 _ 2.712
700 2.107 3.164
800 2.408 3.616
900 2.709 4.068

1.000 3.010 4.520
1.100 3.311 4.972
1.200 3.612 5.424

Most producers interviewed purchased i
hot water heaters because those they had did '
meet the requirements for bulk handling. I

PROPER SIZE

Present and expected future volume of p
duction should be considered in determining t
proper tank size. Texas dairymen who have i;
tained tanks that are too large for most econo
ical use at present production can get maxim
utilization of their equipment only through l
additions to their resources and greatly increa
milk sales. Farmers who have purchased ta
too small for their present production must res'
to daily milk pickup which results in higher ha
ing charges. Additional expenditures for 
bulk handling equipment will be necessary for a
future expansion of production. '

Dairymen contemplating purchasing b”
tanks should consider the following factors in i
ciding on the size of tank: present producti
seasonality of production, or amount produ
during the peak production season; future ex J
sion expected in production; milk pickup sci
dule; and possible delays in pickups. '

  
   
   
  
  
  
 
  
  
  
   
   
  
  
 
   
  
  
  
  
 
 
  
  
   
  
  
   
    
   
  

 Although pricing regulations in milk market-
}: orders are designed to reduce seasonal fluc-
tions in milk deliveries by producers, most
“as markets operating under Federal Market-
I Orders still have large seasonal fluctuations
fluid milk delivered by local producers. Bulk
ration has not resulted in reduced seasonality
iproduction. Seasonality of average daily pro-
Jction for the 191 bulk tank owners included in
f study and all milk producers in the North
" as area from the spring of 1954 through the
 ing of 1957 are shown in Table 11.

f The average dairyman contemplating install-
p‘ a tank should allow for about 25 percent be-
(een his low and peak production season.

f Since 93 percent of the producers interviewed
North Texas and 89 percent interviewed in the
 us Christi area had their milk hauled by con-
.- t haulers under every other day pickup sche-
‘_ es, tanks should be large enough to hold 2 full
ys’ production. An extra allowance should be
de to hold one additional milking to take care
“possible delays in the pickup schedule.

l‘ North Texas bulk equipment owners increased
_uction an average of 24 percent after 1 year
bulk operation. The average dairyman should
w for a future increase of one-third more than
Al; present production.

> On the basis of this analysis, the general rule
Qfigurihg the proper tank size is two and one-
if times the average daily production for every
fy pickup and four times daily production for
 other day pickup if an allowance of one-
 d of present production is desired to hold fu-
- increases in production.

Producers Using Cans

;t-1Ilt€I‘VI€WS with North Texas dairymen using
l s indicate that they hesitate to purchase bulk
ipment because of the high initial cost, re-
;;ance to borrow money, uncertainty of the
fitableness of bulk operation, lack of suffi-
u volume of milk production and age.

PA large number of the can producers express-
Pa desire to convert to bulk operation. Almost
jpercent reported they had discussed the mat-
Iwith tank dealers. However, 43 percent of
Q: stated they had not discussed the matter
btaining credit for that purpose.

jThe number of bulk operators on the North
l s market increased from 736 in January 1957
1,325 in January 1958, indicating that many
hose can producers fulfilled their desire to con-
. their operation.__to bulk.

Eighty-six of the 179 can producers interview-
anticipated no difficulty in getting their milk

TABLE l0. NUMBER OF FARMERS WITH TANKS OF
VARIOUS SIZES

Size of tank, gallons North Texas area Corpus Christi area

-— — — Number of farmers -— — —

150 1 0
200 1 3
250 32 2
300 33 - 10
400 50 4
500 34 8
600 29 4
700 6 2
800 4 2
1,000 1 1
Total 191 36

hauled to the plant if they handled milk in bulk.
About 5 percent thought they could not get their
milk picked up by a contract bulk hauler. How-
ever, as larger proportions of producers in an area
convert to bulk operation and the relative route
densities between can and bulk tanker-truck
routes shift in favor of bulk milk, can producers
may find it increasingly difficult to get contract
haulers to pick up their milk. In such a situation

differences in transportation charges may shift...

further in favor of the bulk method.

If the trend toward handling bulk milk exper-
ienced in Texas during 1956 and 1957 continues
at the same rate, it is doubtful that any Grade
“A” milk will be handled in cans in the State by
the end of 1962. The result could mean great
hardships for dairymen still handling milk in cans
at that time.

Thus, every dairy farmer planning to remain
in the dairy business should start planning now
for the day when a market will no longer exist
for milk handled in cans.

TABLE 11. SEASONALITY OF MILK PRODUCTION, NORTH
TEXAS MARKET, SPRING 1954 THROUGH
SPRING 1957

Daily average production for the season

191 tank All producers
producers on the market
 P32???‘  Pairs‘
 ..:::;r.:;%:.. agggg- .::.‘:.i::s:.. (1133--
pounds period pounds period
Spring 1146 104 720 110
Summer 1076 98 606 93
Fall 957 - 88 609 94
Winter 1205 110 671 103
Yearly av. 1099 100 657 100

‘Spring includes March through Maypsummer, Iune through
August: tall, September and October; winter, December
through February.

l3

14

Acknowledgments

Appreciation is expressed to the management
of the North Texas Producers Association of Ar-
lington and the Coastal Bend Milk Producers As-
sociation of Corpus Christi for their cooperation
in this study.

The help given by the North Texas Milk Mar-
ket Administrator’s Office in furnishing produc-
tion and marketing data for the North Texas
Market is gratefully acknowledged.

This study Was made under the Texas Agri-
cultural Experiment Station’s State Contributing
Project to the Southern Regional Dairy Market-
ing Project Number SM-10, “Adopting the Mar-
ket Structure for Milk and Dairy Products to
Changing Supply and Demand Conditions in the
South.”

 

[Blank Page in Original Bulletin]

Location oi field research units oi the Texas
Agricultural Experiment Station and cooperating
agencies

ORGANIZATION

OPERATION.

Research results are carried to Texas farmers,
ranchmen and homemakers by county agents

and specialists of the Texas Agricultural Ex-

lcnsion Service

joclay ,6 Kedearcb .96 jomorrowl/S rogrezid

. Two additional programs are maintenance and upkeep, and central se i_

  
 
 
 
 
 
 
   
    
 
 
 

State-wide Research

.‘_
g _

6.": “if

i’

The Texas Agricultural Experiment Station’
is the public agricultural research agency?
oi the State of Texas. and is one oi ten,
parts oi the Texas A&M College System.

IN THE MAIN STATION, with headquarters at College Station, are 16 sub
matter departments, 2 service departments, 3 regulatory services and§
administrative staff. Located out in the major agricultural areas of Texafi
21 substations and 9 field laboratories. In addition, there are 14- coope A
stations owned by other agencies. Cooperating agencies include the n
Forest Service, Game and Fish Commission of Texas, Texas Prison Syj,
U. S. Department of Agriculture, University of Texas, Texas Technolo‘
College, Texas College of Arts and Industries and the King Ranch. ~.
experiments are conducted on farms and ranches and in rural homesf

.,

THE TEXAS STATION is conducting about 400 active research projects, groi
in 25 programs, which include all phases of agriculture in Texas. A
these are: '

Conservation and improvement of soil Beef cattle
Conservation and use of water Dairy cattle

Grasses and legumes Sheep and goats

Grain crops Swine

Cotton and other fiber crops Chickens and turkeys g,
Vegetable crops Animal diseases and parasites '~ '
Citrus and other subtropical fruits Fish and game I

Fruits and nuts Farm and ranch engineering 
Oil seed crops Farm and ranch business 
Ornamental plants Marketing agricultural produ F
Brush and weeds Rural home economics i
Insects Rural agricultural economics -:

Plant diseases 7"

AGRICULTURAL RESEARCH seeks the WHATS. the
WHYS. the WHENS, the WHERES and the HOWS ot
hundreds of problems which confront operators of farms
and ranches, and themany industries depending on
or serving agriculture. Workers of the Main Station .-
and the field units oi the Texas Agricultural Experiment I
Station seek diligently to’ find solutions to these
problems.

Texas Agricultural Experiment Station, R. D Lewis, Director, College Station, Texas.