Dollar$ and ¢ents
When you go to the grocery store, you pay about $2.15 for a gallon of milk. How much of that does the farmer get? 
 
In addition to milk income, the farmer sells cows and crops for an additional 20¢ per gallon. That means that for every gallon of milk sold, the farmer earns $1.38. 
 
INCOME
Farmer's 
Share		 + other 
income		 = income 
per gallon.
($1.19) +  (20¢) = $1.38
 
However, from this amount, the farmer must subtract the expenses. These include crop cost, livestock cost, and the cost of running a business, among other various expenses.  

This means that the average Michigan dairy farm gets about a 2¢ profit per gallon of milk sold.

EXPENSES
Farmer's 
income 
per gallon		 - Expenses 
per gallon		 = Profit  
per gallon
($1.38) - ($1.36) = $0.02
 
 
 
The above example was derived from a summary compiled by Dr. Sherrill Nott in the Agricultural Economics department of MSU. The summary averaged income and expenses of 75 Michigan dairy farms in 1997. Click here for the detailed summary of average incomes and expenses. For more information, please see Dr. Nott's web page at: http://www.msu.edu/user/nott/. 
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