5 year plan

tilting tim

Background

Currently milking 75 cows, rearing all heifers and selling surplus before calving. Rear 15-20 bulls and sell as weanlings or yearlings. Land is of a heavy clay nature. Farm is 65ha with one 52ha block, one 5ha block and one 7ha block. All are only separated by a crossable public road.

Improvements needed and estimated costs

Extra cubicles (65) €17000
New milk tank €18000
Upgrade parlour €25000
Upgrade slurry storage €25000
Roadway access to all fields €15000
Silage slab €25000
Calves house €5000
Machinery shed €6000

Total expenditure €135000

Expenditure/extra cow €3000

Expenditure/year €27000

Schedule of improvements

All improvements funded by reinvesting profits. New milk tank is vital straight away as under storage capacity as it is. Gradual approach to roadway improvement with reseeding program. Silage slab would be first to make room for the further developments (converting old self feed/current silage pit to cubicle house/calf house).

Year 1 budget €27000

New milk tank €18000
Roadway improvement €3000
Machinery shed €6000

Year 2 budget €27000

Silage slab €25000
Roadway improvement €3000

Year 3 budget €27000

Upgrade slurry storage €25000
Roadway improvement €3000

Year 4 budget €27000

Extra cubicles €17000
Roadway improvement €3000
Calves house €5000

Year 5 budget €27000

Upgrade parlour €25000
Roadway improvement €3000

How numbers will grow in this system

Year 1 2012
Stay at 75 cows, push heifers and profits

Year 2 2013
Push to 81 cows, retain heifer numbers

Year 3 2014
Stay at 81 cows, keep heifer numbers high, cull for young healthy herd.

Year 4 2015
90 cows, look to rent land to have enough heifers for next step

Year 5 2016
130 cows, keep all in calf heifers, look to rent heifer block or contract rear heifers.

Issues/Questions

1 Are my costs realistic or not?

2 How much can I expect profit to drop in c/l?

3 Are Holsteins too high maintenance when you go to higher numbers? Should I be looking at crossbreeding?

4 What is a good rate for contract rearing heifers/year.

countygorey

Good luck with your plan its well done

bob charles

tilting tim wrote: »

funded by profits.

sorry for picking a potential glaring hole in your plan
:rolleyes:

keep going

have you budgeted for cost of cows,even if they are home reared they still cost

pakalasa

Don't laugh but, would it be possible to rent a winterage (outwinter cows) and keep a smaller hardier cow. I know of farmers that have expanded by this route. Not for teh faint-hearted though.
Your costs for expansion would drop significantly then.

whelan1

why a new milk tank, we have 2 milk tanks , only use the 2 for about 1 month... you could pick up a cheap second hand one, also very handy to have 2 tanks if antibiotics got in to tank, you can use the other

Tipp Man

Quota??????

whelan1

bob charles wrote: »

sorry for picking a potential glaring hole in your plan
:rolleyes:

so what ya going to live on, if milk price plummets post quota ? first and foremost in my place is making sure theres food on the table, everything else is a bonus....

darragh_haven

1 Are my costs realistic or not?

2 How much can I expect profit to drop in c/l?

3 Are Holsteins too high maintenance when you go to higher numbers? Should I be looking at crossbreeding?

4 What is a good rate for contract rearing heifers/year.

I can only comment on question 2 and 3 as i would be plucking figures outta the sky for the others.

Q2 - producing milk at 20 cent per liter or less should be the objective, with approx 30 cent from the creamery at peak prodction in May/June. Profit of 10 cent. i expect this to be cut to approx 26 cent once quotas are gone (This is my opinion and may be pure balls when the time comes:P)

Q3 - Again this is my opinion. but when cows are walking bigger distances, under a bit more pressure, maybe tighter housing in winter, etc. Holsteins are definatly high maintenance. Maybe introduce a jersey cross for hardyness???

JohnBoy

You mention reseeding, but dont have any costs for it.


Is it included in your roadway costs, or is it something that's included in your current cost structures already?


Is there any scope for cost saving on the machinery shed?

I'm all in favour of storing stuff under cover, but for example does it need a floor? compacted stone is a lot cheaper than concrete for a few years.

(if it's a workshop then it'll need the slab admittedly)

Also agree with whealan1's tank suggestion. could two work out better than one? downsides would be space and possible energy efficiencies.


A second, possibly second hand tank need only be used when needed, so saving cooling costs when not in use, however a new super duper tank might be so much more efficient as to reduce your running costs lower than two older tanks. do the maths carefully.

5live

whelan1 wrote: »

why a new milk tank, we have 2 milk tanks , only use the 2 for about 1 month... you could pick up a cheap second hand one, also very handy to have 2 tanks if antibiotics got in to tank, you can use the other

Dont know what part of the country the OP is in but Kerry dont allow 2 tanks except in very very limited circumstances so a new tank may be the only option. But then again kerry(and maybe others) do allow more frequent collections ie every 2 days till the tank can hold the 3 day supply but they 'encourage' suppliers to upgrade their tank

whelan1

5live wrote: »

Dont know what part of the country the OP is in but Kerry dont allow 2 tanks except in very very limited circumstances so a new tank may be the only option. But then again kerry(and maybe others) do allow more frequent collections ie every 2 days till the tank can hold the 3 day supply but they 'encourage' suppliers to upgrade their tank

glanbia have no probs with the 2 tanks, as its only for a short period... works well for us, i also had a five yearplan a few years ago ,but with the crap milk price and losing a few cows i am not as far on as i had wished, hopefully this year i will do better, roadways really need to be updated here... thats part of the reason i have 2 tanks , works out cheaper in the long run, if there was a grant well and good

dar31

id get all the road improvements done in yr 1 /2, you really need to invest in the things that will give a return first.

do you really need a machinery shed, or just want one. have you got too much machinery in the first place.

€25k for a silage slab?? use your new roads and get the cows out earlier, then make less silage

contingency of 15-20%

two milk tanks, a lot cheaper. we run two as well, still have to get tanker every day for a month or so, passes by every day anyways.

you should still be able to carry 130 cows and 30 lu (25% replacement rate) of replacements on 160 ac block no need for contract rearing

get all calves out to paddocks at 2-3 wk old, no need for more calf facilities.

grow some kale etc, for dry cows/ young stock, no need for new cubicles.

as said already
feed your self and the family first
cost of cows
costs of quota / processing rights

roads and parlour upgrade are the only ones id concider.
even at that 10-12 units is grand for 130 cows

Finno59

As for the breeding strategy i would say holstines would be too high maintenence, You should consider a 3 way cross, Fr x Mo x Bs (brown swiss) or the more popular in Europe Fr x J x NR or even Fr x MO x J These would maximise the benefits of hybrid vigour
http://www.youtube.com/watch?v=ZcjG9T-EK7M
http://www.youtube.com/watch?v=00UDREXsJCI

bogman_bass

Year 1

New milk tank €18000
Roadway improvement €3000
Machinery shed €6000


how badly do your really need a machinery shed? could that 6 grand not be better invested in cows/quota/reseeding?

poor farmer

Well done tilting tim at least you have a plan , i never had a plan in my life.
If i was spending
1 Parlour
2 farm roadways
3 Cow housing (especially if you are on heavy ground)
4 Calf housing ( stock are valuable )
5 Slurry storage
A second hand milk tank will do fine .creameries don't pay any bonus for milk out of a new one.
You can make bales for a few years ,the may cost more but you will have good fodder.

stop thelights

Year 4 2015
90 cows, look to rent land to have enough heifers for next step

Year 5 2016
130 cows, keep all in calf heifers, look to rent heifer block or contract rear heifers.

I'm young fella so aven't got the wisdom that some of the other boadies:D but why expand so much that u ave to go contract rearing heifers or renting more land to milk 130 cows. That alot of work for one person. what if u just to 90 and rear the heifers on the land u currently have.
Then sell the excess heifers after calving they should be making good money then. U have the calf out of them and the extra revenue as well as keeping the labour to just one unit. Just a thought.:)

6480

a plan is good but u never know wats around the corner this was a good year for milk in terms of price ,weather , good grass growth rates. but if we had a year or two like 08 ,09 bad summers and bad prices for milk u could be wishing u never spent at all

bob charles

my five year plan would conclude at year 5

get out of farming

allot of the above talk reminds me of the following story:

The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The fisherman replied, only a little while.

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years." "But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

countygorey

that is good

bob charles wrote: »

my five year plan would conclude at year 5

get out of farming

allot of the above talk reminds me of the following story:

The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The fisherman replied, only a little while.

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years." "But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

stop thelights

bob charles wrote: »

my five year plan would conclude at year 5

get out of farming

allot of the above talk reminds me of the following story:

The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The fisherman replied, only a little while.

The American then asked why didn't he stay out longer and catch more fish?

The Mexican said he had enough to support his family's immediate needs.

The American then asked, "but what do you do with the rest of your time?"

The Mexican fisherman said, "I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life."

The American scoffed, "I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise."

The Mexican fisherman asked, "But, how long will this all take?"

To which the American replied, "15-20 years." "But what then?"

The American laughed and said that's the best part. "When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions."

"Millions.. Then what?"

The American said, "Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos."

Exactly. Why does everyone seem to be under the impression that when quotas go they have to be milking 200 cows or as many as they can or else they wont survive!

pakalasa

The real expense, be it Dairying or Beef, is the cost of wintering cattle, sheds, slurry storage etc. If you can do this as cheaply as you can, you're a long way to profitability...

tilting tim

Thanks for the responses, lot of food for thought. Will clear up a few things:

Have a grant for tank so will work out at around 12 after grant, which I think is well worth it. Good idea though to use a second tank.

Also see lads point about doing the roadways first, guess if you could get the cows on grass for 2-3 weeks longer, it'd pay well quickly. Doing well on our farm currently if you had cows out from 17 March to 10 November but thats more down to land type than growth.

As for the crossbreeding, I would be interested in the hardiness of the jersey cross. It's a big step though, what would be a good average yield for these? Would you milk 5000 litres off them? Would my stock sales drop off massively? Can't see a jersey cross ever making as much as a purebred friesian heifer. Know a herd who is one of the top bred herds in the country and 1100 was as much as they got selling top heifers last year.

As for the mentality of 200 cows after quota is gone, I don't have it. The idea I have with going up to 130 and contract rear heifers is the simplicity of the system. The land type means there would be no chance of both 130 cows and 30 LU as replacements. Made it out if you milk 40 extra cows (compared to the 90 cow system mentioned) @ 5000 litres/cow, that's 200,000 litres @ 30 c/l is 60k extra milk sales. You would not have the cost of rearing heifers but that would prob just offset the cost of contract rearing which I put at 23k (450/hd/yr @ 20% replacement rate). Not sure if this a fair rate or not. Then you will have the cost of keeping 40 extra cows. I will put it at 20k (tell me if I'm way out). That leaves you 17 extra k. Made it out to be 28k more than where I am now.

I used 30 c/l as I don't think it will average under this post quotas. Just my take but overall think demand is growing more than production. And we can produce cheaper than most.

stanflt

tilting tim wrote: »

Background

Currently milking 75 cows, rearing all heifers and selling surplus before calving. Rear 15-20 bulls and sell as weanlings or yearlings. Land is of a heavy clay nature. Farm is 65ha with one 52ha block, one 5ha block and one 7ha block. All are only separated by a crossable public road.

Improvements needed and estimated costs

Extra cubicles (65) €17000
New milk tank €18000
Upgrade parlour €25000
Upgrade slurry storage €25000
Roadway access to all fields €15000
Silage slab €25000
Calves house €5000
Machinery shed €6000

Total expenditure €135000

Expenditure/extra cow €3000

Expenditure/year €27000

Schedule of improvements

All improvements funded by reinvesting profits. New milk tank is vital straight away as under storage capacity as it is. Gradual approach to roadway improvement with reseeding program. Silage slab would be first to make room for the further developments (converting old self feed/current silage pit to cubicle house/calf house).

Year 1 budget €27000

New milk tank €18000
Roadway improvement €3000
Machinery shed €6000

Year 2 budget €27000

Silage slab €25000
Roadway improvement €3000

Year 3 budget €27000

Upgrade slurry storage €25000
Roadway improvement €3000

Year 4 budget €27000

Extra cubicles €17000
Roadway improvement €3000
Calves house €5000

Year 5 budget €27000

Upgrade parlour €25000
Roadway improvement €3000

How numbers will grow in this system

Year 1 2012
Stay at 75 cows, push heifers and profits

Year 2 2013
Push to 81 cows, retain heifer numbers

Year 3 2014
Stay at 81 cows, keep heifer numbers high, cull for young healthy herd.

Year 4 2015
90 cows, look to rent land to have enough heifers for next step

Year 5 2016
130 cows, keep all in calf heifers, look to rent heifer block or contract rear heifers.

Issues/Questions

1 Are my costs realistic or not?

2 How much can I expect profit to drop in c/l?

3 Are Holsteins too high maintenance when you go to higher numbers? Should I be looking at crossbreeding?

4 What is a good rate for contract rearing heifers/year.

before you spend any money ask yourself how you can make yourself more effecient.
how many litres did you supply per cow this year-
you could probably increase production by 15%by being more effecient-grass measuring-bull selection etc etc

increasing numbers could lead to poorer effeciency-but thats just my opinion

dar31

stanflt wrote: »

before you spend any money ask yourself how you can make yourself more effecient.
how many litres did you supply per cow this year-
you could probably increase production by 15%by being more effecient-grass measuring-bull selection etc etc

increasing numbers could lead to poorer effeciency-but thats just my opinion

very true.
its nearly guaranteed, that for any major increase in production, there will be a 10 - 15% decrease in efficiency for the first 5 years after scale has been achieved.
that would be the case for the most efficient of farmers.
if your inefficient at the moment, scale will only compound the problems

mattthetrasher

first, good job on sitting down to do the plan.on the contract rearing part of your plan no one will rear heifers for 18 mths for 450/hd the greenfield farm in kilkenny is paying 600 and some of the vet and ai,and performance was poor up to dec i read.your extra 40 cows you said 60000 gross.lets say 200,000ltrs @ a margin of 10 cent =20k. weigh this up against the cost of rearing the hfrs and to be honest its 6 of one and a half dozen of the other return wise.but having the hfrs in the home farm gives you more flexability grazing wise and for a one man unit 90 might be better thats just the conclusion i came to when looking at the same idea also bio security will suffer getting hfrs contract reared

tilting tim

mattthetrasher wrote: »

first, good job on sitting down to do the plan.on the contract rearing part of your plan no one will rear heifers for 18 mths for 450/hd the greenfield farm in kilkenny is paying 600 and some of the vet and ai,and performance was poor up to dec i read.your extra 40 cows you said 60000 gross.lets say 200,000ltrs @ a margin of 10 cent =20k. weigh this up against the cost of rearing the hfrs and to be honest its 6 of one and a half dozen of the other return wise.but having the hfrs in the home farm gives you more flexability grazing wise and for a one man unit 90 might be better thats just the conclusion i came to when looking at the same idea also bio security will suffer getting hfrs contract reared

Firstly I did price it at 450/hd/yr, more than greenfield but would want them coming back 1-2 weeks from calving so they would have wintering costs. Think any dry stock farm would think this good money. Maybe fairer to increase and decrease this with milk price, keep costs lower when milk price is struggling.

As for the margins, the 60k was gross before costs so ya your margin of 10 cent will let you around 20k but that's after costs not before like you were making out. The heifers will only cost the difference of what it costs you to rear them compared to what you pay someone. Big thing like you say is performance of the heifers and if that farmer had other stock.

funny man

any chance you will tell us what are you doing for quota?

John_F

funny man wrote: »

any chance you will tell us what are you doing for quota?

+1 and at what price

JohnBoy

tilting tim wrote: »

Maybe fairer to increase and decrease this with milk price, keep costs lower when milk price is struggling.

The thing is, once you start sub-contracting work, you have to pay whatever price is agreed. it's not your subcontractors fault that your milk price has dropped.


I could see how a subcontractors costs+ margin pricing could be worked out alright, but not the other way round.

tilting tim

Haven't been on in a while, thanks for all comments.

I don't see quota for Kerry suppliers being a major stumbling block, if it is I'd prob just stay with the 90 to 100 cow plan (the 20% increase would easily cover this).

As for contract rearing, The farmer is joining the dairy sector as such, would it be wrong to have a price for when milk price is between 28-32c/l and maybe a lower price below it, and a higher above it. Would a farmer take this on?

JohnBoy

if the price paid can rise as well as fall then they might be interested, but if it's fall only then I'd doubt it.

PMU

tilting tim wrote: »

Haven't been on in a while, thanks for all comments.

I don't see quota for Kerry suppliers being a major stumbling block, if it is I'd prob just stay with the 90 to 100 cow plan (the 20% increase would easily cover this).

As for contract rearing, The farmer is joining the dairy sector as such, would it be wrong to have a price for when milk price is between 28-32c/l and maybe a lower price below it, and a higher above it. Would a farmer take this on?

surely he has to be paid for doing the rearing job irrespective of the milk price!