Dairy farm partnership

bigbucket

Hi guys. first time poster long time lurker. I am a dairy farmer with 100 cows and 100 followers. I do all the work myself and am no longer doing the job properly which is getting me down plus no free time fr family etc. So i am looking at all my options.
The farm is 130 acres plus 70 rented close by but not grazeable by milkers. Have done big investment in parlour (18 unit) bilk tank and sheds. Have cubicles for 150 and lots of loose sheds. I reckon with investment in cows and a good manager the farm could cope with 180 cows.
The options for me seem to be
keep going as i am (think i am burnt out)
Rent the farm (not what i want to do)
Employ a good manager (what cost? plus need more cows to justify and i don't have capital)
Do a partnership

What does everyone else think. I work best with someone else not on my own. But where do I find a partner (don't know of any locally) Would this sort of farm interest a partner. How long should a partnership be etc.

melly

Hi big bucket. What about taking on a farm worker to help you, someone that work every second weekend to give you a break. I think to employ a maagerwhere you are now in the business, would really mean working to pay him/her. I m in a partnership with my dad and its working out fine but as he is getting older I find myself in a similar situation to yours. The partnership option would be a good one too. Finding a suitable partner is the trouble...

mf240

Get someone to do some milkings every week and maybe a full day once a week so ye can do all those little jobs that take two people.

If you are able to get away from the farm now and again you will be able to think clearer.

loveta

Hi bigbucket, was like yourself a couple of years ago and have not as large a herd as yourself, get a guy or two in "REGULAR" even if its only one milking a week " but more would be better" that way he gets to know the run of the place and the stock and machinery so he get do a better job and if problems arise "and lets face it they do" he will be able to deal with them, and why get a 2nd guy in cause most of us "well me anyways" like day/s of at the weekends and from time to time your relief worker and you will want the same day/s off so your No.2 guy comes in to play.Missing a milking or 2 every week will do wonders for you try it and see

freedominacup

bigbucket wrote: »

Hi guys. first time poster long time lurker. I am a dairy farmer with 100 cows and 100 followers. I do all the work myself and am no longer doing the job properly which is getting me down plus no free time fr family etc. So i am looking at all my options.
The farm is 130 acres plus 70 rented close by but not grazeable by milkers. Have done big investment in parlour (18 unit) bilk tank and sheds. Have cubicles for 150 and lots of loose sheds. I reckon with investment in cows and a good manager the farm could cope with 180 cows.
The options for me seem to be
keep going as i am (think i am burnt out)
Rent the farm (not what i want to do)
Employ a good manager (what cost? plus need more cows to justify and i don't have capital)
Do a partnership

What does everyone else think. I work best with someone else not on my own. But where do I find a partner (don't know of any locally) Would this sort of farm interest a partner. How long should a partnership be etc.

I don't mean to pry but are you paying much tax? Every penny that you pay in labour is fully tax deductable but you might as well be getting something for the money you are paying out.

delaval

Big bucket
I am going to be direct, ok?
I am involved in 2 MPP's and an equity arrangement so have some experience in this matter.
You must ask yourself some very important questions.
Are you making money and quantify how much?
Do you like dairy farming?
There was a suggestion about getting some relief from a person who was where you were. I would totally agree but you must use this time prudently. Do a profit monitor straight away as I suspect you do not have one done.There are loads of options but you must know your exact position to make the proper decision.
Taking on fulltime labour or manager at your level is not on! It takes 35-45 profitable cows to employ a labour unit/manager.
Congratulations to you, you know you need to review your position.........too many leave it too late. I wish you well and I am sure you will get many suggestions on this forum.

popa smurf

bigbucket wrote: »

Hi guys. first time poster long time lurker. I am a dairy farmer with 100 cows and 100 followers. I do all the work myself and am no longer doing the job properly which is getting me down plus no free time fr family etc. So i am looking at all my options.
The farm is 130 acres plus 70 rented close by but not grazeable by milkers. Have done big investment in parlour (18 unit) bilk tank and sheds. Have cubicles for 150 and lots of loose sheds. I reckon with investment in cows and a good manager the farm could cope with 180 cows.
The options for me seem to be
keep going as i am (think i am burnt out)
Rent the farm (not what i want to do)
Employ a good manager (what cost? plus need more cows to justify and i don't have capital)
Do a partnership

What does everyone else think. I work best with someone else not on my own. But where do I find a partner (don't know of any locally) Would this sort of farm interest a partner. How long should a partnership be etc.

Hi Big Bucket I have been looking into this myself but I have no land or quota but i do have capital and experience in large scale dairying, not enough capital to buy my own dairy farm but i would have enough to buy 100 dairy cows and could work on farm for 3 or 4 days a week including every second week end, Ok whats in it for the farmer well he would get a cash injection , pay off some loans etc, he would also get a working partner that would be interested in doing things right being reliable and some one you could trust when you are away for weekends etc , but what about the partner what could he realistically achieve , in the line of a monthly income.

rs8

the poster "whelan" could give you good advice,she has a guy working 3/4 days a week i think.

whelan1

rs8 wrote: »

the poster "whelan" could give you good advice,she has a guy working 3/4 days a week i think.

yup, have a lad on 3 day week, he gets 283 euro a week home, works from 6.50am til 6 pm with 1 hour for lunch and half an hour for breakfast. Can get him for 4 or 5 days if we are really busy- for frbruary and march normally- as other posters said you need a break, maybe put an ad in local shop or ask around, i am sure there would be someone available.... maybe even get someone from frs , with the view of taking him on outside the frs after a while if he works out ok... also be wary there are alot of people that will say mass when it comes to taking someone on:cool:

delaval

I spent this evenings milking mulling over your delima and still have questions, you certainly do not have to answer them here but you must ask them of yourself.On the labour front a milker two evenings per week is what i would recommend to take time to asess. On Whelan's figures someone 3 days per week, thats €14 + noonan's bit a significant amount, so be careful with your money.I know it's deductable but it comes out of the pot first and from a cashflow point of view it must be there to come out.
If quota was gone tomorrow would you be able to stock milking block fully out of your own resorces, if not do you have the resources (repayment capacity) to borrow it.
What is your stock breakdown as per cows, springers and maiden heifers? I just think your stock numbers are a bit low or perhaps you are selling pregnant animals or are you having a lot of empties?
Tell me to buzz off if you like but this is important info. if you need some answers here.

bigbucket

Well I have had lots of people work for me over the years some good, 1 brilliant and lots of bad ones. I used to be good at farming or at least i taught so. But my standards have slipped and thats more to do with problems off farm which took up a lot of money and time. And I am not getting the buzz I got when i done the job right. I am actually young enough but have already put nearly 20 yrs in. I need a new burst of life at the job. Thats why I taught if i had a partnership with a young entusiastic person that had no land or a drystock farm it would be a good idea. That there is enough work for 2 doing the job right. But a lot of hired help don't care its only a pay check. But if a partner was able to build up his cow numbers at the same time we both would be better off finacially and better life style. Just not sure of the mechanics of it. Plus would my size operation interest some one.
Nearly all 1 man band farms i know of are actually father and son, or husband and wife farms. And how ever slow or annoying the aul lad is, he can stand in a gap or check the cattle for illness etc. Very few are totally on there own. I am on my own. So not interested in a relief milker now and then.
Raising more capital is not going to be easy. But I taught this way might help grow my business

loveta

bigbucket wrote: »

Well I have had lots of people work for me over the years some good, 1 brilliant and lots of bad ones. I used to be good at farming or at least i taught so. But my standards have slipped and thats more to do with problems off farm which took up a lot of money and time. And I am not getting the buzz I got when i done the job right. I am actually young enough but have already put nearly 20 yrs in. I need a new burst of life at the job. Thats why I taught if i had a partnership with a young entusiastic person that had no land or a drystock farm it would be a good idea. That there is enough work for 2 doing the job right. But a lot of hired help don't care its only a pay check. But if a partner was able to build up his cow numbers at the same time we both would be better off finacially and better life style. Just not sure of the mechanics of it. Plus would my size operation interest some one.
Nearly all 1 man band farms i know of are actually father and son, or husband and wife farms. And how ever slow or annoying the aul lad is, he can stand in a gap or check the cattle for illness etc. Very few are totally on there own. I am on my own. So not interested in a relief milker now and then.
Raising more capital is not going to be easy. But I taught this way might help grow my business

I could not have wrote that better 3 0r 4 years ago myself. I am farming a long time and still only in my 30s and am/was totally one man outfit from the start even as you said to get some one to stand in a gap had to get someone in. What has happened to you "imho" is you have got lost in the process and are basically fed up. You need time off to clear your head and think of where you are,where you have came from eg"progress made" and where you would realistically like to see yourself being/getting.Then get advice, proper advice chat to guys who are getting on and stay well clear of the moaners "they will only suck the life out of you" then set out a plan and when you got a plan and goals to aim for you will be surprised of the hunger for the job that will come back to you, best of luck;)

delaval

Sounds to me like you've lost interest for the moment. You also say that your business needs capital and I deduce from tone of your comments that banks are not an option.
You really only have one option take on active equity partner. The reason they need to be active is your lack of interest, putting money into your business while you feel the way you do would be burning cash.
If you go down this route and find a prospective partner be very careful and walk if there is even the slightest problem with this person. The smallest thing can derail you completely. All the best.

20silkcut

How would the mechanics of such a partnership work out?

Would it be a capital based arrangement where the incoming partner invests a certain amount?

Would it be land based where the incoming partner rears all dry stock/cuts silage on their farm ?

It is unknown territory and a bit alien in capitalist society for two business's to merge without one devouring the other.

Tipp Man

I think that if i was in your position i would be upping the cows to 150 plus and getting in a full time manager

The cost of the manager will take about 50 cows profit - you are still left with profit from 100 cows solely for yourself and at most you are working a couple of days a week

On top of that you don't have to get too involved in the day to day small decisions - but you still have ultimate control over the farm (and that is huge in my opinion)

I think partnerships only suit a very limited number of people - in your situation where you have a great land base, a good parlour and what sounds like a good set up i think its madness - somebody else is going to benefit for your previous 20 years of hard work and investment and then to top it all off you can't make decisions on your own farm without consulting somebody else - that would be a massive issue for me. I don't think anybody can bring enough to the table to match what you have - all you need is labour imo.

How much labour (and responsibility) you need is completely up to you

Of course it depends on your financial positon - if you have large borrowings then it will be a lot more difficult to pay labour. If they are relatively low then farm manager is the way to go imo

bigbucket

Well i have a good sfp. And yes I have come a hell of a long way started with 50 cows plus drystock. Got up to 100 and milked in a little parlour for 6 hrs a day. and i done the job right but I was focused which gives more reward than a monetary value.

Whats a good guy costing these days. I was told 30-40 k gross. At this sort of money a good guy i believe should be able to make enough savings and boost output to pay for himself. I can see your point about partnerships and not many on here are too excited by them. so maybe a good guy to work with me is the answer. i get a kick out of the job when its going well.

John_F

delaval wrote: »

Big bucket
I am going to be direct, ok?
I am involved in 2 MPP's and an equity arrangement so have some experience in this matter.
You must ask yourself some very important questions.
Are you making money and quantify how much?
Do you like dairy farming?
There was a suggestion about getting some relief from a person who was where you were. I would totally agree but you must use this time prudently. Do a profit monitor straight away as I suspect you do not have one done.There are loads of options but you must know your exact position to make the proper decision.
Taking on fulltime labour or manager at your level is not on! It takes 35-45 profitable cows to employ a labour unit/manager.
Congratulations to you, you know you need to review your position.........too many leave it too late. I wish you well and I am sure you will get many suggestions on this forum.

can we get any more information on this / the other persons role etc because it wouldn't be very common in ireland i would say

popa smurf

bigbucket wrote: »

Well i have a good sfp. And yes I have come a hell of a long way started with 50 cows plus drystock. Got up to 100 and milked in a little parlour for 6 hrs a day. and i done the job right but I was focused which gives more reward than a monetary value.

Whats a good guy costing these days. I was told 30-40 k gross. At this sort of money a good guy i believe should be able to make enough savings and boost output to pay for himself. I can see your point about partnerships and not many on here are too excited by them. so maybe a good guy to work with me is the answer. i get a kick out of the job when its going well.

The trouble with farm managers is finding a good one and keeping him is the key and you could in up with the tail waging the dog and him calling the shots . partnerships work all over the world, Irish farmers don't like the word profit share I would do a bit of research in to it before i would dismiss it talk to farmers that are doing partnerships and see what you think, would you mind telling us what province you are in

delaval

John_F wrote: »

can we get any more information on this / the other persons role etc because it wouldn't be very common in ireland i would say

I would be glad to share some limited info. The info I have cost me a lot of money to get but if you post some specific questions I will answer if I can. II am sure that you understand that I won't divulge too much. Would have no prob with general stuff:)

Tipp Man

popa smurf wrote: »

The trouble with farm managers is finding a good one and keeping him is the key and you could in up with the tail waging the dog and him calling the shots . partnerships work all over the world, Irish farmers don't like the word profit share I would do a bit of research in to it before i would dismiss it talk to farmers that are doing partnerships and see what you think, would you mind telling us what province you are in

The problem is not necessarily about sharing the profit

The problem (IMO of course) is that if you want to make a change on your own farm then you have to consult your partner before you can do it. With a manager you tell him about the change and get him to implement it if you want.

It's a huge difference.

that coupled with what i said of nobody being able to bring enough to the table compared to what BigBucket is bringing to the table would make me think that an employee/manager is much better in this situation

delaval

Tipp Man wrote: »

The problem is not necessarily about sharing the profit

The problem (IMO of course) is that if you want to make a change on your own farm then you have to consult your partner before you can do it. With a wamanager you tell him about the change and get him to implement it if you nt.

It's a huge difference.

that coupled with what i said of nobody being able to bring enough to the table compared to what BigBucket is bringing to the table would make me think that an employee/manager is much better in this situation

A few things
What does IMO mean
Re. changes These are the things that are dealt with in contract. A manager will not implement unless he wants!!!!!!!

Tipp Man

delaval wrote: »

A few things
What does IMO mean
Re. changes These are the things that are dealt with in contract. A manager will not implement unless he wants!!!!!!!

IMO = In My Opinion

How can changes be dealt with in the contract? Surely it is impossible to forsee all potential future changes that might be needed or wanted?

delaval

Tipp Man wrote: »

The problem is not necessarily about sharing the profit

The problem (IMO of course) is that if you want to make a change on your own farm then you have to consult your partner before you can do it. With a manager you tell him about the change and get him to implement it if you want.

It's a huge difference.

that coupled with what i said of nobody being able to bring enough to the table compared to what BigBucket is bringing to the table would make me think that an employee/manager is much better in this situation

Tipp Man wrote: »

IMO = In My Opinion

How can changes be dealt with in the contract? Surely it is impossible to forsee all potential future changes that might be needed or wanted?

What changes need to be made dairy farming is the most simple business in the world. You go into a business to draw as much cash as poss out and as I said earlier in this thread if you are uncomfortable with anything to do with the other partner WALK at set up stage of course

John_F

delaval wrote: »

I would be glad to share some limited info. The info I have cost me a lot of money to get but if you post some specific questions I will answer if I can. II am sure that you understand that I won't divulge too much. Would have no prob with general stuff:)

• are you now farming as a limited company
• typically these arrangements are between retired farmers wishing to keep in touch with farming and a younger person wishing to one day own a farm - would this be the objective, or is it just to raise capital (i.e. which side of the fence are ya on ). they can of course bring 'city money' into the farm also
• are you happy with the arrangement in that the other person brings a set of skills to the business
• must others be consulted about decisions and how often would ye meet
• how many partners are involved and how much shareholding does the largest shareholder have (presumably you the farmer)
• these tend to be geared towards larger farms (well over 500 cows in nz . .) and also farms just being established, is this one of the main goals of the arrangement
• how did it come about, like who approached who
• was there much legal costs to set up
• is there an exit option

i don't expect an answer on everything just find it interesting as wouldn't think they would be common in eire :cool:

popa smurf

There is a lot of business men out there that would love to invest in agriculture I personally don't want to own any land or buildings because its away over valued like what other business would you have assets worth a million and an income in some cases of only 20k If you had a good business head (partner) and a farmer working together i think you would have a good mix going forward , but for some people its like doing a deal with the devil.

delaval

popa smurf wrote: »

There is a lot of business men out there that would love to invest in agriculture I personally don't want to own any land or buildings because its away over valued like what other business would you have assets worth a million and an income in some cases of only 20k If you had a good business head (partner) and a farmer working together i think you would have a good mix going forward , but for some people its like doing a deal with the devil.

I like your style my thoughts exctly:D

delaval

John_F wrote: »

• are you now farming as a limited company
• typically these arrangements are between retired farmers wishing to keep in touch with farming and a younger person wishing to one day own a farm - would this be the objective, or is it just to raise capital (i.e. which side of the fence are ya on ). they can of course bring 'city money' into the farm also
• are you happy with the arrangement in that the other person brings a set of skills to the business
• must others be consulted about decisions and how often would ye meet
• how many partners are involved and how much shareholding does the largest shareholder have (presumably you the farmer)
• these tend to be geared towards larger farms (well over 500 cows in nz . .) and also farms just being established, is this one of the main goals of the arrangement
• how did it come about, like who approached who
• was there much legal costs to set up
• is there an exit option

i don't expect an answer on everything just find it interesting as wouldn't think they would be common in eire :cool:

A lot here I'll reply tomorrow going to check calving shed then hit the hay

delaval

John_F wrote: »

• are you now farming as a limited company
• typically these arrangements are between retired farmers wishing to keep in touch with farming and a younger person wishing to one day own a farm - would this be the objective, or is it just to raise capital (i.e. which side of the fence are ya on ). they can of course bring 'city money' into the farm also
• are you happy with the arrangement in that the other person brings a set of skills to the business
• must others be consulted about decisions and how often would ye meet
• how many partners are involved and how much shareholding does the largest shareholder have (presumably you the farmer)
• these tend to be geared towards larger farms (well over 500 cows in nz . .) and also farms just being established, is this one of the main goals of the arrangement
• how did it come about, like who approached who
• was there much legal costs to set up
• is there an exit option

i don't expect an answer on everything just find it interesting as wouldn't think they would be common in eire :cool:

1 Formed a company that is a partner in one arrangement. Other ones no company involved
2 One is a 50-50 where we each have our own responsibilties
One is an 80-20 arrangement where I supply all management and finance
The equity one (city money as you call it) is simply an investment and all I'm looking for is ROI We are 33% share holders
3 I now my limitations therefore will use other peoples resources when I can
4 50-50 we speak daily as we work together meet officially every Tues at 10am and first Monday every month to review plans cashflow etc.80-20 we meet monthly he is silent partner.In equity we meet 4 times a year get all results emailed to us weekly.
5 My reasons are three fold, moronic quota designed to restrict business growth (socialist bull), grow my wealth and it is more profitable to milk cows than sell them.
6 50-50 two farms side by side put cows together and diluted fixed costs
80-20 I was approached as other partner in bad health
Equity I went looking for it
7 Legal cost high and very slow to draw up as all aspects of business need to be agreed
8 I have included a get out in each one of 12 months notice. No get out in equity unless I sell to another investor

funny man

bigbucket wrote: »

The options for me seem to be
keep going as i am (think i am burnt out)
Rent the farm (not what i want to do)
Employ a good manager (what cost? plus need more cows to justify and i don't have capital)
Do a partnership

What does everyone else think. I work best with someone else not on my own. But where do I find a partner (don't know of any locally) Would this sort of farm interest a partner. How long should a partnership be etc.

option 1; can work but you need more to be more efficient with your own labour, get extra labour for calving and breeding season and get contractors to do ALL the tractor work (this can include feeding in the winter).

option 2; if it's not what you want to do why include it. is there more to this than your telling?

option 3; employing a good farm manager will work when you have built up numbers, at the moment after spending on infrastructure and going from 100 to 180 there will be a serious drain on cash flow, especially if there is debt over 2k/cow.

option 4; has most potential if the other partner can bring more than labour to the party, stock or finance is good but if you can get a neighbour that can bring land, facilities and labour then this gives you the greatest potential to make ROI and ensure you aren't a slave to the business.

Derrick mac

Hi just wondering if you have done anything on your farm since you posted this if not can you call me on 0857787107