How many acres to make a living

kk09

What would you guys reckon is the min acers required to make a living? Assuming all good land suitable for any type of farming. Maybe suggest the what you would suggest for business - Dairy, Cattle, Forestry, etc. Thanks. - Also suggest what you would consider a reasonable living?

Rovi

[MOD] PHEW!
Some off-topic stuff split off to a new thread of its own; you guys post quicker than I can shift stuff around! [/MOD]

Tipp Man

Regarding the original post - it is impossible to say how few acres to make a living as it depends on the standard of living required and on the farming enterprise and on the quality of the land

I know people living off 30 acres with 30 cows - i know their neighbours with 150 cows and a few hundred acres and they are in financial trouble. Financial management is key

If you were to assume a living was 25k net profit then @800 a cow you'd need 30 odd cows so 30 acres (minimal borrowings and decent milk price).

On a calf to year and half cattle system you should be making a minimum of 300-350 an animal - so to get to 25k you'd probably need to sell 70 cattle a year so 60 acres plus (this is ignoring SFP etc, no borrowings)

Can't comment for tillage or sucklers

kk09

Tipp Man wrote: »

Regarding the original post - it is impossible to say how few acres to make a living as it depends on the standard of living required and on the farming enterprise and on the quality of the land

I know people living off 30 acres with 30 cows - i know their neighbours with 150 cows and a few hundred acres and they are in financial trouble. Financial management is key

If you were to assume a living was 25k net profit then @800 a cow you'd need 30 odd cows so 30 acres (minimal borrowings and decent milk price).

On a calf to year and half cattle system you should be making a minimum of 300-350 an animal - so to get to 25k you'd probably need to sell 70 cattle a year so 60 acres plus (this is ignoring SFP etc, no borrowings)

Can't comment for tillage or sucklers

Thanks tipp man, you seem to be making a good case for the dairy here, at €833/acre profit. Understand there is alot more work involved. And help may be needed regularly for say more than 30 cows??? which would be an outlay.

The calf to year ........ - at €416/acre, but alot less labout intensive would suggest?? Not sure I understand what you are saying here fully.

Tipp Man

kk09 wrote: »

Thanks tipp man, you seem to be making a good case for the dairy here, at €833/acre profit. Understand there is alot more work involved. And help may be needed regularly for say more than 30 cows??? which would be an outlay.

The calf to year ........ - at €416/acre, but alot less labout intensive would suggest?? Not sure I understand what you are saying here fully.

you would not need any help with 30 cows - a fella should be able to manage 100 cows with ease and probably 150 with a decent set up. Also with 30 cows you couldn't afford help

there could be plenty of work in the spring rearing 70 calves - especially if you get a scour or the like, calves can be a right pain. But for majority of year it would be very easy.

You would need to factor in your time and the opportunity cost of it. With 30 cows it would be difficult to have a job with it - it would be much easier to have a job with cattle. If you are talking about just farming then dairy is far more profitable than cattle - but if you take total income into account then cattle with a job can be hard to beat

fodda

Tipp Man wrote: »

(this is ignoring SFP etc, no borrowings)

I would ignore any payments and grant assisted schemes because if the business cant stand on its own feet without supplementary payments then it just isnt viable.

Gloom & doom moment:)......If the euro goes which looks highly possible at present, then there will be no supplementary payments ever.......sorry.

kk09

Yea, I'm sure on it's own two feet are the best. How might the Euro going affect forrestry do we think?? Anyone suggest what money is to be made from forrestry?

fodda

kk09 wrote: »

Yea, I'm sure on it's own two feet are the best. How might the Euro going affect forrestry do we think?? Anyone suggest what money is to be made from forrestry?

Forrestry or coppicing will be a big thing from now on even in its least form which is firewood because it is linked to fuel prices whose only way is up.

Pharaoh1

Unfortunately the size of your SFP (and DAS, REPS etc..) is far more important than the number of acres at the moment although it may not always be so. The guy with 100 acres and a 30k SFP is in a better position than his neighbour with 200 acres and 0k SFP.

Well managed dairy is profitable at current prices and tillage on owned land will probably make a small margin.
Teagasc figures show that with a few exceptions beef is essentially an unprofitable business.
Anyone who read the article on the Kepack fattening enterprise in the Journal a couple of weeks ago will realise this. A bit shocking really when you understand the advantages of scale and (apparent) efficiency that this business would have.
Beef farmers can always trumpet a pretend profit by ignoring a number of costs that should be included in the calculation. I've done it myself on occasion to make myself feel better.

kk09

Pharaoh1 wrote: »

Unfortunately the size of your SFP (and DAS, REPS etc..) is far more important than the number of acres at the moment although it may not always be so. The guy with 100 acres and a 30k SFP is in a better position than his neighbour with 200 acres and 0k SFP.

Well managed dairy is profitable at current prices and tillage on owned land will probably make a small margin.
Teagasc figures show that with a few exceptions beef is essentially an unprofitable business.
Anyone who read the article on the Kepack fattening enterprise in the Journal a couple of weeks ago will realise this. A bit shocking really when you understand the advantages of scale and (apparent) efficiency that this business would have.
Beef farmers can always trumpet a pretend profit by ignoring a number of costs that should be included in the calculation. I've done it myself on occasion to make myself feel better.

Lets keep the tread to standing on it's own two feet, even if the competition dosen't. Am i right, is farming a competition in Ireland. Does SFP and SCWS for one farmer affect the price another farmer can get for his stock??

blue5000

kk09 wrote: »

What would you guys reckon is the min acers required to make a living? Assuming all good land suitable for any type of farming. Maybe suggest the what you would suggest for business - Dairy, Cattle, Forestry, etc. Thanks. - Also suggest what you would consider a reasonable living?

OP whats a living, is it the average industrial wage?

Or is it just enough to put groceries on the table, diesel in the 10 yr old car and most of the bills paid?

I suppose if you were hrh prince charlie you'd probably need 30,000 acres:eek:

kk09

blue5000 wrote: »

OP whats a living, is it the average industrial wage?

Or is it just enough to put groceries on the table, diesel in the 10 yr old car and most of the bills paid?

I suppose if you were hrh prince charlie you'd probably need 30,000 acres:eek:

Since suggested already, lets work with 25K. Reasonable for small family, where other parent works.

Tipp Man

fodda wrote: »

I would ignore any payments and grant assisted schemes because if the business cant stand on its own feet without supplementary payments then it just isnt viable.

Gloom & doom moment:)......If the euro goes which looks highly possible at present, then there will be no supplementary payments ever.......sorry.

I personally don't think the EUR will go bang - whether Ireland is in it or not is another question. I think the EU will continue in the medium term also. Its important to note the difference between the EUR and the EU - people often use them interchangably

If the EUR survives and Ireland is not in it - this may actually be beneficial for Irish farmers as we would receive our SFP in EUR which would be very valuable against the Punt. This would also make our dairy and beef exports cheap. Of course fuel and fertiliser would be dear

Swings and roundabouts

However i would not be getting any borrowings and counting on the SFP to pay them back

F.D

kk09 wrote: »

Yea, I'm sure on it's own two feet are the best. How might the Euro going affect forrestry do we think?? Anyone suggest what money is to be made from forrestry?

hard to know what money is to be made from it when its grant aided aswell, i would be more worried about having land planted and grants falling to a pittance and no way of changing system, think faster growing crops for biofuel could be a safer bet in years to come,

as for the how many acres required to make a living depends on the system i would say it must be coming near 50 - 100 if its anything other than dairy, but i think its going to become more how much can you push out of each acre now as regards stocking rates, also on how little inputs you use, 30- 50 dairy cows crossed to a beefy bull and selling the calves as weanlings i think would be a nice system, beef and tillage from experience are low margin enough, but still making the same or more than our forestry premium for the bit we have planted

Muckit

Talking to a lad there in the mart on my lunch break.

He was teaching, farming parttime. He's now gone farming full time. Now he would have good land, big sheep flock and a few dry stock. Not ure exactly what acreage he'd have. With the job and the farming, he was up on higher tax bracket and running around like a blue ar*ed fly.

Reckons if a lad can't make a living now from it, there's no hope! I think he's mad!! I didn't tell him that though!!

fodda

Tipp Man wrote: »

I personally don't think the EUR will go bang - whether Ireland is in it or not is another question. I think the EU will continue in the medium term also. Its important to note the difference between the EUR and the EU - people often use them interchangably

If the EUR survives and Ireland is not in it - this may actually be beneficial for Irish farmers as we would receive our SFP in EUR which would be very valuable against the Punt. This would also make our dairy and beef exports cheap. Of course fuel and fertiliser would be dear

Swings and roundabouts

However i would not be getting any borrowings and counting on the SFP to pay them back

Whether the euro survives or not is another topic but the odds are massively by the day stacked against your view...........But how do you come to the assumption that if your overheads of fuel, fertiliser, feedstuff etc suddenly become masssively more expensive your product then becomes cheaper than any competitors? Agreed your currency may be lower, but your overheads will be colossal.

kk09

Great to see such a good reply but the thread is drifting away from It's intended purpose. So anyone suggest what the best business plan to generate say a €25K salary with the minimum of land.

dar31

kk09 wrote: »

Great to see such a good reply but the thread is drifting away from It's intended purpose. So anyone suggest what the best business plan to generate say a €25K salary with the minimum of land.

an acre of green houses would get you there, and a bit.....

polod

kk09 wrote: »

Great to see such a good reply but the thread is drifting away from It's intended purpose. So anyone suggest what the best business plan to generate say a €25K salary with the minimum of land.

25k profit in your pocket from farming with minimum land, would be a tough job if not impossible ...I find nearly every cent I make from farming Im investing it back into the farm.

greenfingers89

kk09 wrote: »

Great to see such a good reply but the thread is drifting away from It's intended purpose. So anyone suggest what the best business plan to generate say a €25K salary with the minimum of land.

kk09 i notice your a member since october just gone, i think you'll find as you hang around on boards that lots of threads drift away from the intended purpose...you'd be amazed what we end up talking about

also regarding forestry i dont think it would be suitable for what you are talking about, even if grants stayed exactly as they are and remained for 20 years your maximum payment would be €213/acre/year.....so you'd need 120 acres to clear 25k, forestry is good money on bad land and i dont really think it stacks up economically on very productive land(unless i spose you are working off farm and just plant as a labour free way of getting more income)..............whatever you decide to get into id strongly reccommend buying say 1000 trees (maybe alder ash and some willow and birch) and planting them on 1 acre (without any grants) this would at least secure your fuel supply in the medium and longterm which will be a big help as was touched on in a previous post

bob charles

I could make 25k profit on an acre no bother, but covered with concrete

if you want too make money in farming and your a new entrant forget thinking about grants, there for inefficient farmers:D:D

Fishtits

bob charles wrote: »

I could make 25k profit on an acre no bother, but covered with concrete

if you want too make money in farming and your a new entrant forget thinking about grants, there for inefficient farmers:D:D

Bob, Psst, the Tigers dead. The rest of us now live in the real world

raindodger

Muckit wrote: »

Talking to a lad there in the mart on my lunch break.

He was teaching, farming parttime. He's now gone farming full time. Now he would have good land, big sheep flock and a few dry stock. Not ure exactly what acreage he'd have. With the job and the farming, he was up on higher tax bracket and running around like a blue ar*ed fly.

Reckons if a lad can't make a living now from it, there's no hope! I think he's mad!! I didn't tell him that though!!

sounds like a man getting his croke park payment

centre 13

At 30 cent per litre dairy farming done well will deliver 800 eu net profit excl SFP so 48 cows will deliver the average ind wage of 38 k but it wont service much debt or pay labour ..one man can handle 140 cows with help in the spring asuming he has a proper parlour... take your pick .Drystock sadly according to the Journal is just a hobby for part time farmers.

bob charles

bob charles wrote: »

I could make 25k profit on an acre no bother, but covered with concrete

No lads I would be using the acre of concrete for farming reasons

Corkfarmer

bob charles wrote: »

No lads I would be using the acre of concrete for farming reasons

Care to elaborate Bob?

moy83

Im guessing he is talking about finishing cattle ?

F.D

centre 13 wrote: »

At 30 cent per litre dairy farming done well will deliver 800 eu net profit excl SFP so 48 cows will deliver the average ind wage of 38 k but it wont service much debt or pay labour ..one man can handle 140 cows with help in the spring asuming he has a proper parlour... take your pick .Drystock sadly according to the Journal is just a hobby for part time farmers.

How many litres per cow are you assuming to get that figure, just curious as to how much it costs per cow per year
e.g .30cent x 5500ltr =€1650 meaning the cow is costing you €850 to run
or at 6000 ltrs shes costing €1000 correct me if i'm wrong here
also i assume you are not including your calf in the 800 so that would be another bonus, thanks for your figures btw

centre 13

30 cents per litre plus 4 cents for calves and culls and retain 50 % of output delivers 850 euro per cow actually...didnt want to talk up dairying too much !..higher yields does not necessarily return higher profits..I m talking about a 5000 litre cow with a calving interval less than 368 days..a herd median calving of 16 days..the day half herd is calved .. 400 kilo of meal or less and no heavy metal disease..most herds will average 34 cent plus this year.

bbam

moy83 wrote: »

Im guessing he is talking about finishing cattle ?

I'd like to see the numbers crunched on that... I presume the thing is to have a deal with the factory before filling the shed??

bbam

Here's one..
Came a farm for sale nearby, very convenient to me..
40 Acres with newish slatted unit fit for about 80 cattle..
Land is good enough and wouldn't require much work...
Spoke with the auctioneer and €270,000 would buy it...

Where would you go to make a modest living of it..??

bob charles

bbam wrote: »

Here's one..
Came a farm for sale nearby, very convenient to me..
40 Acres with newish slatted unit fit for about 80 cattle..
Land is good enough and wouldn't require much work...
Spoke with the auctioneer and €270,000 would buy it...

Where would you go to make a modest living of it..??

well 270k @ 6.5% interest is 17,550 a year to cover the interest. shed is worth say 40k so that values land at 5750 an acre. If what you consider good land and what I consider good land is the same I would consider that an okay price to deal at

funny man

How long is a piece of string?

bbam

funny man wrote: »

How long is a piece of string?

Never mind the string... the damn rope is impossible :rolleyes:

Juniorhurler

bob charles wrote: »

well 270k @ 6.5% interest is 17,550 a year to cover the interest. shed is worth say 40k so that values land at 5750 an acre. If what you consider good land and what I consider good land is the same I would consider that an okay price to deal at

I know you need to factor in interest hikes but 4.5-5% is kind of about where its at now. Interest will also drop as the capital does and is therefore averaged out over the life of the loan so it won't be near that figure. Also the most you could borrow for that is 70% of 270k ie €189k which over 15 years is about €19-€20,000 per annum off the top of my head.
If you had €81,000 lying idle you could have a go at it as you'd defo keep at least 30 suckler cows on even poor land. 30 autumn calved weanlings at this years prices is probably about €27,000. If there is even low value entitlements, say €150 per hectare thats €2,500 plus another €2,400 for scws. Your looking at abou €32k income there all going well. I know it doesn't all always go well.
If you already are farming and are set up with machinery your expenses will be minimal. That parcel sounds like right value.
Land is making about €10-€12k per acre for anything around here.

Joe the Plumber

Juniorhurler wrote: »

I know you need to factor in interest hikes but 4.5-5% is kind of about where its at now. Interest will also drop as the capital does and is therefore averaged out over the life of the loan so it won't be near that figure. Also the most you could borrow for that is 70% of 270k ie €189k which over 15 years is about €19-€20,000 per annum off the top of my head.
If you had €81,000 lying idle you could have a go at it as you'd defo keep at least 30 suckler cows on even poor land. 30 autumn calved weanlings at this years prices is probably about €27,000. If there is even low value entitlements, say €150 per hectare thats €2,500 plus another €2,400 for scws. Your looking at abou €32k income there all going well. I know it doesn't all always go well.
If you already are farming and are set up with machinery your expenses will be minimal. That parcel sounds like right value.
Land is making about €10-€12k per acre for anything around here.

What about stamp duty?

A stocking loan?

Consumables - fertiliser, vets, nuts, plastic, etc, etc.

you would have to subsidise the repayments from other sources.

You'd get a serious house in dublin that would rent for 2k a month and no calving jack needed.

But sure we would'nt be happy doing that.

funny man

Juniorhurler wrote: »

I know you need to factor in interest hikes but 4.5-5% is kind of about where its at now. Interest will also drop as the capital does and is therefore averaged out over the life of the loan so it won't be near that figure. Also the most you could borrow for that is 70% of 270k ie €189k which over 15 years is about €19-€20,000 per annum off the top of my head.
If you had €81,000 lying idle you could have a go at it as you'd defo keep at least 30 suckler cows on even poor land. 30 autumn calved weanlings at this years prices is probably about €27,000. If there is even low value entitlements, say €150 per hectare thats €2,500 plus another €2,400 for scws. Your looking at abou €32k income there all going well. I know it doesn't all always go well.
If you already are farming and are set up with machinery your expenses will be minimal. That parcel sounds like right value.
Land is making about €10-€12k per acre for anything around here.

Thats the best bit of creative accounting i've ever seen:D.
Firstly your 81,000 is worth €3442.5 on deposite before tax, you should never do projections on the best price scenario, value of entitlements may be short term (5 years) and scws (next 2 weeks will decide) and on the cost side just over €500/cow and thats a spring calving one that's €15000 for all costs before tax and then repayments after that from an income of (you say 32k thats 1,122/calf allowing for 5% mortality thats an exceptional price. Maybe i'm been over critical of the figures but i'd like to see numbers crunched in a more realistic manner.

Pharaoh1

Juniorhurler wrote: »

I know you need to factor in interest hikes but 4.5-5% is kind of about where its at now. Interest will also drop as the capital does and is therefore averaged out over the life of the loan so it won't be near that figure. Also the most you could borrow for that is 70% of 270k ie €189k which over 15 years is about €19-€20,000 per annum off the top of my head.
If you had €81,000 lying idle you could have a go at it as you'd defo keep at least 30 suckler cows on even poor land. 30 autumn calved weanlings at this years prices is probably about €27,000. If there is even low value entitlements, say €150 per hectare thats €2,500 plus another €2,400 for scws. Your looking at abou €32k income there all going well. I know it doesn't all always go well.
If you already are farming and are set up with machinery your expenses will be minimal. That parcel sounds like right value.
Land is making about €10-€12k per acre for anything around here.

I don't think creative accounting goes far enough - methinks (and please don't take offence juniorhurler) that this is from the Walt Disney school of business plans. It is not an uncommon thought process for many of us though.
I was discussing the economics of cattle farming with a neighbour last week and when I revealed that the gross margin on my 30 summer grazed cattle was 400 euro per head his immediate reaction was to say that I'd be mad not to rent another 25 acres and double my numbers for next year.

Juniorhurler

Pharaoh1 wrote: »

I don't think creative accounting goes far enough - methinks (and please don't take offence juniorhurler) that this is from the Walt Disney school of business plans. It is not an uncommon thought process for many of us though.
I was discussing the economics of cattle farming with a neighbour last week and when I revealed that the gross margin on my 30 summer grazed cattle was 400 euro per head his immediate reaction was to say that I'd be mad not to rent another 25 acres and double my numbers for next year.

No offence taken (from any of the posts above).
I have bought land on three different occasions. I have never bought it without having to subsidise payments from elsewhere, be it the day job or earnings from other land.

I sold 46 weanlings this year, well some of them were 13 months old (due to being locked up with TB) They left €49000 behind them minus costs.
My current sfp is a lot larger than I mentioned, €550 per ha roughly, and I managed to cover all of my costs from this and the scws.
Cows never get meal.
Weanlings get creep for 6 weeks.

I do agree that my costings above were very very basic but tbh even if your costs ran at 50% you could pay for most of that land out of itself. If you want to expand you will have to take the hit and supplement the payments from elsewhere imo.

Juniorhurler

funny man wrote: »

Thats the best bit of creative accounting i've ever seen:D.
Firstly your 81,000 is worth €3442.5 on deposite before tax, you should never do projections on the best price scenario, value of entitlements may be short term (5 years) and scws (next 2 weeks will decide) and on the cost side just over €500/cow and thats a spring calving one that's €15000 for all costs before tax and then repayments after that from an income of (you say 32k thats 1,122/calf allowing for 5% mortality thats an exceptional price. Maybe i'm been over critical of the figures but i'd like to see numbers crunched in a more realistic manner.

Half of that interest goes on tax.
I thought that the entitlements were all going to go to an average value towards 2019?
This should be €270 ha which would be an increase on my above post.
Yes my calculations were very basic but as I have already replied I know this and don't mind supplementing payments for land once its at an acceptable level.

bob charles

One of the small farms I rent is a 40ac farm (70% under maize and wheat) with slatted shed for 60 cattle, its a basic shed but a shed none the less, for 2.5% of the farms value

sinewc

Pharaoh1 wrote: »

Unfortunately the size of your SFP (and DAS, REPS etc..) is far more important than the number of acres at the moment although it may not always be so. The guy with 100 acres and a 30k SFP is in a better position than his neighbour with 200 acres and 0k SFP.

Well managed dairy is profitable at current prices and tillage on owned land will probably make a small margin.
Teagasc figures show that with a few exceptions beef is essentially an unprofitable business.
Anyone who read the article on the Kepack fattening enterprise in the Journal a couple of weeks ago will realise this. A bit shocking really when you understand the advantages of scale and (apparent) efficiency that this business would have.
Beef farmers can always trumpet a pretend profit by ignoring a number of costs that should be included in the calculation. I've done it myself on occasion to make myself feel better.

hi,
i am a beef farmer and i fail to see where i have left out any costs that should be included. I am not in the business as a pastime. What are these costs you refer to?
si

funny man

Juniorhurler wrote: »

Half of that interest goes on tax.
I thought that the entitlements were all going to go to an average value towards 2019?
This should be €270 ha which would be an increase on my above post.
Yes my calculations were very basic but as I have already replied I know this and don't mind supplementing payments for land once its at an acceptable level.

Deposit interest 27%
income tax 20%

at the moment my take on the proposals was status-quo till 2014-2015, then an area payment based on 2014 and after 2019 the figure of €70/hectare was mentioned that would be €28/acre. It wasn't that your calculations were basic it was the way you justified the purchase by gross margin and the only cost you mentioned was

If you already are farming and are set up with machinery your expenses will be minimal

.

the point i was making is it costs money to keep a suckler cow, €500 was the figure that i heard maybe you can disprove this figure and do it for less that would give you an advantage. With other variables like interest rate rises, beef prices, rising input costs and uncertainty on direct payments it would make this more of a gamble than an investment.

I do agree that my costings above were very very basic but tbh even if your costs ran at 50% you could pay for most of that land out of itself. If you want to expand you will have to take the hit and supplement the payments from elsewhere imo.

I'm afraid not because if the farm makes a profit you have to pay income tax on that profit at 20%/41% thats after interest and before capital, so take 28 wealings @€;800 (more realistic long term) €22,400 take off 15,000 costs leaves €7,400 plus €2500 sfp leaves €10,000 less €2000 income tax gives you €8000 for capital repayments on a 15 year loan €270,000 €18k/annum approx

Pharaoh1

sinewc wrote: »

hi,
i am a beef farmer and i fail to see where i have left out any costs that should be included. I am not in the business as a pastime. What are these costs you refer to?
si

All I can say is that in my experience some farmers are inclined to think of profit as their margin less the typical variable costs such as feed, fertiliser, veterinary, fuel etc..
IMO the likes of the Journal reinforce this type of thinking constantly quoting terms like gross margin and in the case of winter finishers something they call "margin over feed"
Obviously costs such as loan interest, fencing and building repairs, machinery repairs, accountancy fees, all types of insurance(public liability and employers liability), depreciation, motoring costs including apportioned maintenance, tax and insurance charges, electricity, telephone, hedgecutting and all farm related purchases should be included in the profi figure calculations.
In my case I reseed about 10% of my land each year and I regard this as a maintenance cost for the land as opposed to an investment.

I'm not saying it is impossible to make a profit by including all of the related costs and more luck to those that can.
But I would say that some of the farmers who have told me that they made "great money" on cattle farming over the past few years would'nt be telling the revenue the same story once their accountant has finished with them.
Finally I am amused when I am in a queue in the local merchants of the number of farmers who throw a couple of bags of ration or a bucket lick in the boot of the car, pay in cash and don't even bother with a receipt. Even my silage contractor tells me he still gets a fair amount of unreceipted cash from mostly older smallish farmers.
Maybe these guys are selling stuff for cash and want to keep their turnover down but most of them are just kidding themselves as to the true level of their outgoings.