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The U.S. milk production industry experienced significant structural changes between 1955 and 1993. Fewer and larger operations have more and more come to characterize the industry. Data from the Farm Costs and Returns Survey show that cash and capital replacement costs of milk producers range from $5 to more than $25 per hundredweight of milk sold. Size of operation, animal performance, and milk production methods all distinguish low- from high-cost milk producers. However, differences in feed and labor efficiency have the greatest influence on milk production costs.


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