What do banks look for ? Getting into dairy !

shy_boy

With out giving too much away.. I'm looking to get into dairying in the future (only constructive criticism please ) .. In 2015 hopefully.. There is no debt on the farm but will need a substantial loan to get it going the way I'd like.. There would be 2 of us going into it fully commited if we where to borrow against the farm and all that.. Starting with 50 cows and max would be 120 on the block we have now.. Something could come up in the future to expand more... I am very dedicated and young currently in college.
So my real question is
Would you think we would have any hope in hell of getting a substantial loan to set up cubicle shed/ slurry storage/ milking parlour and bulk tank / handling facilities would also have to reseed 30h / roadways/ emm troughs/ fencing/ and of course cows but I am hoping to have 30 sucklers by 2015. So would be borrowing for 20.
I could also go the second hand route which would still mean getting a medium sized loan but I wouldn't be planning for the future!

I heard banks are throwing money at people getting into dairy !!?

Timmaay

You will need a good realistic 5yr business plan, and something that you know what all the figures mean in, ie not just one that you get your adviser to pull out of his computer which he used for a previous client ha. They will most likely look for a cashflow planner also, similar to the business plan it will need to be realistic. They will probably want security also, a figure I've heard before is security 3 times the value of the loan. And finally, for mortgages anyways most won't give 100%, instead they will want you putting something in the pot also.

Probably more importantly for yourself is to keep capital costs to an utter minimum, 50 cows only need an utter barebones 6/8unit parlour, plenty of lads ripping them out at the min, lots of tanks being sold for 1e/gallon, and 50cows will only need about 750gls storage for 3days. Buy dairy calves now and rear them yourself, will save you a decent few quid. Reseeding and laneways are the one area I wouldn't skimp on, but you can spread both of them over time, direct drilling is veey useful once you can graze out the ground as tight as possible beforehand.

whitebriar

My first question to someone like you is,have you any experience looking after dairy cows? The pitfalls,the strange diseases,detect what is wrong with them before it gets worse? The peculiar intricacies of how to get a cow milking,breeding etc.Obviously the twice a day commitment and the fact that if you need time off,you need to have people with the same skills too(not easy).

My advice is to commit at least 3 months to someone else's dairy farm,with no slacking.Up at dawn or before,do it at the height of calving,being up for every birth.
See how you feel then.

Becoming a dairy farmer from scratch is like entering an enclosed order of monks.It will age you,stress you,bewilder you ,hamper your social life,and test your all.
Best of luck.

flat out !!

Have a read at peter youngs article in last weeks journal. Some good advice in it.

delaval

I'll let you have a go from Feb to June, then you'll know if you want it or not.

You certainly are not ready to meet a banker yet well with the info you've posted.
Speak to lots of good farmers and try to get to know some one who started from scratch.

One thing you forgot is, who will buy your milk.

I wish you well, it's a great business and the best dairy farmers aren't always the ones with the flashy sheds etc.

freedominacup

Guys going in under the new entrants scheme spent between 150and 200k to start up. Most were coming from a suckler situation. If you have plans for a 2015 start you would need to be well past the planning stage by now coming in from cols as you are. 2016 is a much more realistic start date at this stage.

We got back into cows in the past couple of years and had all roadways, fencing, complete paddock infrastructure in place, cubicle sheds. The milking parlour cost around €1,500 and half a day for our milk machine service guy to get back to supply standard as we had been milking cows to feed calves when we were not supplying. We had to buy a bulk tank. We had plenty of experience and knew what we were letting ourselves in for. With all that in place it took over 5 months from the decision to liquidate the stock we had to starting to milk. How far do you think you can get in 16 months? I think you should aim towards it but you have a lot of bases to cover before you start.

Timmays idea mightened be far wrong in regards to buying heifers, but I would think about calves. If you do go you will have 2 years from buying calves to get ready and if you don't go I don't see you losing too much money on those calves once they are ready to calve early in 2016 unless the wheels come off the milk price wagon in the mean time. Best of luck.

bob charles

delaval wrote: »

I wish you well, it's a great business and the best dairy farmers aren't always the ones with the flashy sheds etc.

or they dont be throwing down concrete willy nilly to be part of the latest fad

stanflt

delaval wrote: »

I'll let you have a go from Feb to June, then you'll know if you want it or not.

You certainly are not ready to meet a banker yet well with the info you've posted.
Speak to lots of good farmers and try to get to know some one who started from scratch.

One thing you forgot is, who will buy your milk.

I wish you well, it's a great business and the best dairy farmers aren't always the ones with the flashy sheds etc.

No the best ones have topless cubicles

shy_boy

Timmaay wrote: »

You will need a good realistic 5yr business plan, and something that you know what all the figures mean in, ie not just one that you get your adviser to pull out of his computer which he used for a previous client ha. They will most likely look for a cashflow planner also, similar to the business plan it will need to be realistic. They will probably want security also, a figure I've heard before is security 3 times the value of the loan. And finally, for mortgages anyways most won't give 100%, instead they will want you putting something in the pot also.

Probably more importantly for yourself is to keep capital costs to an utter minimum, 50 cows only need an utter barebones 6/8unit parlour, plenty of lads ripping them out at the min, lots of tanks being sold for 1e/gallon, and 50cows will only need about 750gls storage for 3days. Buy dairy calves now and rear them yourself, will save you a decent few quid. Reseeding and laneways are the one area I wouldn't skimp on, but you can spread both of them over time, direct drilling is veey useful once you can graze out the ground as tight as possible beforehand.

I have seen a few on dd alright! If I was to go secondhand what sould I look out for when buying a parlour and tank? And what price? i wouldnt mind spending time milking! im looking forward to having an excuse for special occasions ha..There is currently 15acres of grass as is so I would be converting another 15 acres around the yard and start with thirty cows! That's probably the better option to start with! We would also be carrying on with the tillage we have! Thanks for your feed back timmay.!

shy_boy

whitebriar wrote: »

My first question to someone like you is,have you any experience looking after dairy cows? The pitfalls,the strange diseases,detect what is wrong with them before it gets worse? The peculiar intricacies of how to get a cow milking,breeding etc.Obviously the twice a day commitment and the fact that if you need time off,you need to have people with the same skills too(not easy).

My advice is to commit at least 3 months to someone else's dairy farm,with no slacking.Up at dawn or before,do it at the height of calving,being up for every birth.
See how you feel then.

Becoming a dairy farmer from scratch is like entering an enclosed order of monks.It will age you,stress you,bewilder you ,hamper your social life,and test your all.
Best of luck.

I have small bit of experience with cows and my ould fella knows his stuff too.. I get where your coming from though and i have no doubts how tough it will be at the start and if we get hit with any thing but like i said im looking forward to a future in dairy and so is my ould fella.. as he used to work off farm and cant get work now ...and if work came up in the future for me i could take it and milk in the mornings and do the paper work and leave the rest to dad ha..And I just might take delaval up on his offer ha...

shy_boy

delaval wrote: »

I'll let you have a go from Feb to June, then you'll know if you want it or not.

You certainly are not ready to meet a banker yet well with the info you've posted.
Speak to lots of good farmers and try to get to know some one who started from scratch.

One thing you forgot is, who will buy your milk.

I wish you well, it's a great business and the best dairy farmers aren't always the ones with the flashy sheds etc.

To be honest I just presumed it wouldnt be a problem selling our milk ! Would it ? I heard there is charge for new entrants alright ! I might jus take u up on your offer delaval ha..

jersey101

shy_boy wrote: »

I have seen a few on dd alright! If I was to go secondhand what sould I look out for when buying a parlour and tank? And what price? i wouldnt mind spending time milking! im looking forward to having an excuse for special occasions ha..There is currently 15acres of grass as is so I would be converting another 15 acres around the yard and start with thirty cows! That's probably the better option to start with! We would also be carrying on with the tillage we have! Thanks for your feed back timmay.!

if your to start off with 30 cows on 30 acres you wont need roadways just yet. If you got together enough money for a parlour and tank thats all you need. And set up the 30 acres into paddocks. Id presume you have some sheds? Could you not straw bed the cows? Or if your going to keep on the tillage for a few years could you sow down the tillage ground to westerwolds or forage rape.

This can be as expensive or as cheap as you like. Id prefere go cheap incase the worst happens and something happens the cows.

I know a lad down in east waterford whp started milking cows in his own right two years ago. Leased land of his mother abd set it all to grass. Bought cows of his father, he built a nice parlour alright but that was about it, for the first winter he out wintered the cowd in a wood, it did the job, and then last year he put in outdoor cubicles.

Buy a second parlour abd tank and work for there. When the mobey starts coming in then go to your bank for a loan, you will have a much better chance than now with nothing

Timmaay

shy_boy wrote: »

To be honest I just presumed it wouldnt be a problem selling our milk ! Would it ? I heard there is charge for new entrants alright ! I might jus take u up on your offer delaval ha..

Where are you based? If you would be supplying Glanbia, they will take 2c/l for the 1st 5yrs as a loan to build the new milk plant down in Waterford. Someone else can educate me if you need share in Glanbia to supply milk? I know all current suppliers have them, but will future new suppliers need shares?

shy_boy

jersey101 wrote: »

if your to start off with 30 cows on 30 acres you wont need roadways just yet. If you got together enough money for a parlour and tank thats all you need. And set up the 30 acres into paddocks. Id presume you have some sheds? Could you not straw bed the cows? Or if your going to keep on the tillage for a few years could you sow down the tillage ground to westerwolds or forage rape.

This can be as expensive or as cheap as you like. Id prefere go cheap incase the worst happens and something happens the cows.

I know a lad down in east waterford whp started milking cows in his own right two years ago. Leased land of his mother abd set it all to grass. Bought cows of his father, he built a nice parlour alright but that was about it, for the first winter he out wintered the cowd in a wood, it did the job, and then last year he put in outdoor cubicles.

Buy a second parlour abd tank and work for there. When the mobey starts coming in then go to your bank for a loan, you will have a much better chance than now with nothing

Yes forage could and would be an option for us! And yes we have sheds.. And plenty of straw every year ! And we have abit of forestry now that you mention it as we'll ha.. I see! If I got a fella in with a digger he'd make me paddocks alright ha.. In a 15acre field we have there's an overgrown now ditch but was a lane for cows once upon a time! Clear that out and we wouldn't be to bad..! Others are 1ac , 3ac , and 11acres fields!!
What size paddocks would you think..!? Thanks for your feed back!

shy_boy

Timmaay wrote: »

Where are you based? If you would be supplying Glanbia, they will take 2c/l for the 1st 5yrs as a loan to build the new milk plant down in Waterford. Someone else can educate me if you need share in Glanbia to supply milk? I know all current suppliers have them, but will future new suppliers need shares?

South east! Yeah I heard about that alright! To build? Will I get interest back on my kind contribution do you think ha.. I was wondering about shares alright!

jersey101

shy_boy wrote: »

Yes forage could and would be an option for us! And yes we have sheds.. And plenty of straw every year ! And we have abit of forestry now that you mention it as we'll ha.. I see! If I got a fella in with a digger he'd make me paddocks alright ha.. In a 15acre field we have there's an overgrown now ditch but was a lane for cows once upon a time! Clear that out and we wouldn't be to bad..! Others are 1ac , 3ac , and 11acres fields!!
What size paddocks would you think..!? Thanks for your feed back!

if your going to milk 120 cows 10 acre paddocks would do. You can split them up easily with a wire. If you have sheds and straw then thats your accomodation sorted. Dung is better than slurry. All ye need then is a parlour and tank and a contract with the coop. Start of with the 30 cows and see how it goes. Roadways and cubicles will come in time

shy_boy

freedominacup wrote: »

Guys going in under the new entrants scheme spent between 150and 200k to start up. Most were coming from a suckler situation. If you have plans for a 2015 start you would need to be well past the planning stage by now coming in from cols as you are. 2016 is a much more realistic start date at this stage.

We got back into cows in the past couple of years and had all roadways, fencing, complete paddock infrastructure in place, cubicle sheds. The milking parlour cost around €1,500 and half a day for our milk machine service guy to get back to supply standard as we had been milking cows to feed calves when we were not supplying. We had to buy a bulk tank. We had plenty of experience and knew what we were letting ourselves in for. With all that in place it took over 5 months from the decision to liquidate the stock we had to starting to milk. How far do you think you can get in 16 months? I think you should aim towards it but you have a lot of bases to cover before you start.

Timmays idea mightened be far wrong in regards to buying heifers, but I would think about calves. If you do go you will have 2 years from buying calves to get ready and if you don't go I don't see you losing too much money on those calves once they are ready to calve early in 2016 unless the wheels come off the milk price wagon in the mean time. Best of luck.

To be honest as long as I'm there or there abouts in 2015/2016 when the quotas go I won't feel to bad.. Well I would hope to be after getting mulla from the bank and be after putting up a secondhand parlour... but weather id get it or not is another story! I would also have hoped to be finished college then so I would be looking for work ! May I ask how many units in your parlour? And how much was yr bulk tank? Thanks for your feed back!

jaymla627

jersey101 wrote: »

if your to start off with 30 cows on 30 acres you wont need roadways just yet. If you got together enough money for a parlour and tank thats all you need. And set up the 30 acres into paddocks. Id presume you have some sheds? Could you not straw bed the cows? Or if your going to keep on the tillage for a few years could you sow down the tillage ground to westerwolds or forage rape.

This can be as expensive or as cheap as you like. Id prefere go cheap incase the worst happens and something happens the cows.

I know a lad down in east waterford whp started milking cows in his own right two years ago. Leased land of his mother abd set it all to grass. Bought cows of his father, he built a nice parlour alright but that was about it, for the first winter he out wintered the cowd in a wood, it did the job, and then last year he put in outdoor cubicles.

Buy a second parlour abd tank and work for there. When the mobey starts coming in then go to your bank for a loan, you will have a much better chance than now with nothing

Would Bill be that chaps first name by any chance.

jersey101

jaymla627 wrote: »

Would Bill be that chaps first name by any chance.

it would

jaymla627

jersey101 wrote: »

it would

I know who the chap is now,they pulled a nice stroke their with the new entrant quota saved them a serious super-levy fine.

jersey101

jaymla627 wrote: »

I know who the chap is now,they pulled a nice stroke their with the new entrant quota saved them a serious super-levy fine.

ah they've done a nice few tricks now alright over the few years ha

jaymla627

jersey101 wrote: »

ah they've done a nice few tricks now alright over the few years ha

Yeah I heard a few stories about them aright.
A good friend of mine farms down there he actually only started milking there the last couple of months he wouldn't have a good word to say about them and he"z not the kind of lad that's easily offended.

delaval

stanflt wrote: »

No the best ones have topless cubicles

I'm a shyte farmer, or so I'm told here on an almost daily basis;);)

razor8

these are some things you need to consider

believe loan rate would be around 6% for 15 years approx
need to show payment capacity and show you still have around €1500 a month to live on
accounts for last 3 years
some banks look for you to raise 35% of total costs needed yourself

Toplink

razor8 wrote: »

these are some things you need to consider

believe loan rate would be around 6% for 15 years approx
need to show payment capacity and show you still have around €1500 a month to live on
accounts for last 3 years
some banks look for you to raise 35% of total costs needed yourself

I see where your coming from but...

Hmmm... Add at least 1000 to that if you plan on building a house and raising kids within 15 years.

jersey101

Toplink wrote: »

I see where your coming from but...

Hmmm... Add at least 1000 to that if you plan on building a house and raising kids within 15 years.

ah he says he's only young so he might put the majority of the money back into the farm for a few years

Timmaay

Your 20s are for blowing all your moneys travelling the world :P (Why I didn't listen to that, suppose I still got time though :P)

jersey101

Timmaay wrote: »

Your 20s are for blowing all your moneys travelling the world :P (Why I didn't listen to that, suppose I still got time though :P)

your right on that i wanted to do more traveling but i couldnt, but i was mad to get home to and its nice to see the progress being made that you had a hand in. But your right, theres plenty of time in the future

razor8

Toplink wrote: »

I see where your coming from but...

Hmmm... Add at least 1000 to that if you plan on building a house and raising kids within 15 years.

sorry i phased that wrong, should of read 1500 spare cash/capacity. this €1500 is on top of your living costs

put a end to my ideas!!

Timmaay

Hmm in fairness you've been to NZ, not bad to have experience like that ticked off at your age!

jersey101

Timmaay wrote: »

Hmm in fairness you've been to NZ, not bad to have experience like that ticked off at your age!

ah ye once ye have that out of your system and seen what its all about your not to bothered about it any more. Id like to go to America, thats about it really

Timmaay

Going off topic here ha, but I wouldnt mind doing a Nuffield scholarship at some stage, tick off likes of NZ/Australia/Brazil and look at the various grass based dairysystems around the world. The thing about NZ for me also, I'd have to be going there with 10k in my back pocket to blow on adventure sports, I'd never forgive myself if I was there and didn't take the opportunity ha! (have been watching too much of the travel channel on sky recently I'll admit!)

jersey101

Timmaay wrote: »

Going off topic here ha, but I wouldnt mind doing a Nuffield scholarship at some stage, tick off likes of NZ/Australia/Brazil and look at the various grass based dairysystems around the world. The thing about NZ for me also, I'd have to be going there with 10k in my back pocket to blow on adventure sports, I'd never forgive myself if I was there and didn't take the opportunity ha! (have been watching too much of the travel channel on sky recently I'll admit!)

i doubt id be smart enough to go for the nuttfield scholarship ha, i did tge bunjy jump when i was out there off a bridge. Shat some serious brick ha

freedominacup

jaymla627 wrote: »

Yeah I heard a few stories about them aright.
A good friend of mine farms down there he actually only started milking there the last couple of months he wouldn't have a good word to say about them and he"z not the kind of lad that's easily offended.

I'm intrigued here lads. Bill, leased land from his mother, hmmm........

shy_boy

Just doing up a few simple figures there! Anybody know how much 30 dairy cows would be costing for fertiliser/ meal /average electricity cost every 2 months.. Contracter costs?
animal health costs?
Insurance?

jaymla627

freedominacup wrote: »

I'm intrigued here lads. Bill, leased quota from his mother, hmmm........

Basically bill gets new entrant quota in july 2011, parlours built by september, daddy whoz milking 200 cows way over quota transfers cows into bills herd and hey presto superlevy fine is a worry no more, the land he rented was in his mammys name, pretty sure the two farms are bordering each other.
Lots of cases where large dairy farmers sons got new entrant quota.

tomwaterford

I think I know this lad,he wouldn't be the most poular around (if its the right man,and by all accounts so far it is)

jaymla627

tomwaterford wrote: »

I think I know this lad,he wouldn't be the most poular around (if its the right man,and by all accounts so far it is)

He"d have a big red head, and loves gettin in the comic was even on the rte news id say nailed on we are talking about the same chap

tomwaterford

jaymla627 wrote: »

He"d have a big red head, and loves gettin in the comic was even on the rte news id say nailed on we are talking about the same chap

near on 100 percent certain now;) big macra man regulary on wlr...god he really isn't liked by some around here...stepping on a lot of toes,god I could tell some stories but ill say no more.

keep going

This is no more than my own opinion but you snould not gonear a bank unless you own your stock and that is without any loanon them or by the back door (owing money to people).at least have the equivalent in value to the number of cows you want to start with.the reason for this is that even if you convince the banks to loan you money for everything you will stuggle to pay it back.I would suggest that you need to work for another dairy farmer if you have little experience of dairying.I would also suggest you get involved in contract rearing heifers as they are skills you will need to build up and it would suit if you are building your own herd prior to milking startup and sell those dam suckers

jersey101

jaymla627 wrote: »

Basically bill gets new entrant quota in july 2011, parlours built by september, daddy whoz milking 200 cows way over quota transfers cows into bills herd and hey presto superlevy fine is a worry no more, the land he rented was in his mammys name, pretty sure the two farms are bordering each other.
Lots of cases where large dairy farmers sons got new entrant quota.

when i was there the the cow road actually connected the two parlours

Viewtodiefor

tomwaterford wrote: »

near on 100 percent certain now;) big macra man regulary on wlr...god he really isn't liked by some around here...stepping on a lot of toes,god I could tell some stories but ill say no more.

I'm sure his father got extra quota years ago in a dodgy deal too!

jaymla627

tomwaterford wrote: »

near on 100 percent certain now;) big macra man regulary on wlr...god he really isn't liked by some around here...stepping on a lot of toes,god I could tell some stories but ill say no more.

Ive heard a few of them, a lot of its over land.
Would yeah know luke casey by any chance.

jaymla627

jersey101 wrote: »

when i was there the the cow road actually connected the two parlours

I had to get a new herd number to go milking, rented ground of the father to do so had to put a five strand barbed wire fence, followed by two strands of electric on any land bordering my fathers that was still in his name in order to get herd number from department.
Just shows how havin a bit of pull lets yeah get away with murder

delaval

jaymla627 wrote: »

Basically bill gets new entrant quota in july 2011, parlours built by september, daddy whoz milking 200 cows way over quota transfers cows into bills herd and hey presto superlevy fine is a worry no more, the land he rented was in his mammys name, pretty sure the two farms are bordering each other.
Lots of cases where large dairy farmers sons got new entrant quota.

So he uses the system that's available to us all, and you have a problem with this guy, why?

delaval

tomwaterford wrote: »

I think I know this lad,he wouldn't be the most poular around (if its the right man,and by all accounts so far it is)

Too successful?

delaval

shy_boy wrote: »

South east! Yeah I heard about that alright! To build? Will I get interest back on my kind contribution do you think ha.. I was wondering about shares alright!

Of course you'll need shares, do you think we've invested in a business for people to ring and say they have a tank of milk for collection. When Belview is up and running there will be space but at a cost

jaymla627

delaval wrote: »

So he uses the system that's available to us all, and you have a problem with this guy, why?

He played the system and won proberly pulled lots of strings along the way to.
must be disheartening to the 100 plus lads who also applied that year many of them genuine new entrants who were turned down while this lad in question and his father used it as a way to get out of a superlevy fine, if you seen jerseys comment about the roadways being interconnected between the two parlours it dosent take a rocket scientist to work out whats going on.

freedominacup

Viewtodiefor wrote: »

I'm sure his father got extra quota years ago in a dodgy deal too!

Right this is getting out of hand someone pm me with the details ffs:D:D.

tomwaterford

delaval wrote: »

Too successful?

A lot of it too IMO....also many other things like I said earlier id like not to say too much when the man not here to defend himself
BTW...im not saying anything against the man ive had v.little dealings with him tbh.i try keep outa other peoples business.sorry I said anything atal

he is a good farmer IMO and right to use the system I would have probily done the same if twoz me. just saying he not popular from what I hear anyway,over a lot of different things

tomwaterford

jaymla627 wrote: »

Ive heard a few of them, a lot of its over land.
Would yeah know luke casey by any chance.

I know the chap to see him around is all