Beef over dairy ?

Kevin the sheep

Just wondering is there many beef farmers on here who considered dairying and didn't go for it what reasons for not doing it also is there people not long in milking and how do you plan to cope with a lower price next year as you will be more at risk than the farmers set up for years unless they are borrowed heavily

epfff

Kevin the sheep wrote: »

Just wondering is there many beef farmers on here who considered dairying and didn't go for it what reasons for not doing it also is there people not long in milking and how do you plan to cope with a lower price next year as you will be more at risk than the farmers set up for years unless they are borrowed heavily

I considered
but farm fragmented only 60ish acres in biggest plot
Have good off farm job(dont like it)
Also the tied to it 7 days a week didnt appeal as I could never see my way to being big eneough to hire labour with many progressive farmers close by
Did consider partnership but only considered 1 guy locally suitable and he wasnt interested

Kevin the sheep

How big a job is the partnership is there much legal with it

Timmaay

Kevin the sheep wrote: »

How big a job is the partnership is there much legal with it

No legal required AFAIK, however I guess it would be no harm to have your solicitor check over everything. Teagasc use to be over it, and had plenty of forms to fill out, with some awkward questions about the partnership, however these are extremely useful to know about on hindsight, and do make you think about some aspects of the partnership which you might not have considered otherwise. Other than that you will need a joint bank account, and then watch out for other things, I know when I was setting up a partnership with my dad our SFP got delayed as there was a minor change of name on something or other which we had not confirmed in writing to them.

There most certainly are plenty of benefits to partnerships, increased limits on grants for 1, reduced tax liability in some cases also. Of course finding the right person is key.

Future Farmer

Think there are a good few new entrants about:

53 in Aurivo alone....

_Brian

Allot of very small new entrants here in Cavan, too small in my mind to be viable.. Starting off with plans to go no further than 20 cows.. However most seem to be loosing money in sucklers and reckon even a small profit would be something for their time..

There is surely a minimum viable herd size going forward, maybe 40-50 ??

rangler1

_Brian wrote: »

Allot of very small new entrants here in Cavan, too small in my mind to be viable.. Starting off with plans to go no further than 20 cows.. However most seem to be loosing money in sucklers and reckon even a small profit would be something for their time..

There is surely a minimum viable herd size going forward, maybe 40-50 ??

Have a friend milking 30, and he always seems to have money or is building, changing tractor etc, wife bakes for a stall in the market and that's the income. two children and grand parent...beefs the progeny

Roundbale

When my father was milking 30 cows and finishing the calves he was told by his teagasc advisor that he was making more money than some with 100 cows. Not all about big numbers but cost control.

visatorro

sold old orby feeders out of the parlour to fella from cavan, he had twenty springing heifers bought. he was goin to milk 25-30. he and his son were working full time

Future Farmer

Totally dependent on type of system, high yield vs low yield, range of 250 kg/ms to 1,000 kg/ms solids, we milk 50 cows but sell more than lots of fellas (and women) milking 80-90!

Coonagh

Roundbale wrote: »

When my father was milking 30 cows and finishing the calves he was told by his teagasc advisor that he was making more money than some with 100 cows. Not all about big numbers but cost control.

But if you do have big numbers and a very good handle on cost control you are making serious gravy.

lakill Farm

talking to a lad at the ploughing last year.

He milks 22/24 cows for the last 30 odd years and works also

Buys his replacement heifers off the one lad all the time
sells culls and all calves.

He said his eyes were opened when last year he had a lad do relief milking for a week wheh he was away and the lad told him that he found it impossible to get paid from the lads with 80/100 cows still the lad with 22/24 could pay him going out the door.

Reggie.

lakill Farm wrote: »

talking to a lad at the ploughing last year.

He milks 22/24 cows for the last 30 odd years and works also

Buys his replacement heifers off the one lad all the time
sells culls and all calves.

He said his eyes were opened when last year he had a lad do relief milking for a week wheh he was away and the lad told him that he found it impossible to get paid from the lads with 80/100 cows still the lad with 22/24 could pay him going out the door.

Nothing worse than chasing money. Always pay workmen heading out the gate here

Kevin the sheep

Reggie. wrote: »

Nothing worse than chasing money. Always pay workmen heading out the gate here

We're always chasin money here
With sucklers

Deano7

The bigger men definitely get cash flow problems, I considered dairy as I have land block for 150 cows or more but I won't go near it, 7 days week, 365 days a year, 200k to be borrowed for to produce it. Sure the repayments are mad.

Kevin the sheep

Deano7 wrote: »

The bigger men definitely get cash flow problems, I considered dairy as I have land block for 150 cows or more but I won't go near it, 7 days week, 365 days a year, 200k to be borrowed for to produce it. Sure the repayments are mad.

I work on a dairy farm already 12 days on 2 days off so the 7 days a week I don't mind What you need the 200k for unless greenfield site ?

TITANIUM.

Deano7 wrote: »

Sure the repayments are mad.

So are the milk cheque's ;-)

rangler1

Deano7 wrote: »

The bigger men definitely get cash flow problems, I considered dairy as I have land block for 150 cows or more but I won't go near it, 7 days week, 365 days a year, 200k to be borrowed for to produce it. Sure the repayments are mad.

A lot of good drystock farmers had a good SFP which has made the transition very easy.....SFP covering repayments

stretch film

rangler1 wrote: »

A lot of good drystock farmers had a good SFP which has made the transition very easy.....SFP covering repayments

Also the sale of the overpriced suckler cow was covering the purchase of the underpriced milker. :-0

Timmaay

rangler1 wrote: »

A lot of good drystock farmers had a good SFP which has made the transition very easy.....SFP covering repayments

Better again fair few dairy lads have started from nothing and build up a decent business for themselves. If a beef farmer with a big sfp cannot make a good profitable conversation to dairying and keep control of his cashflow then simple as is he is a pisspoor businessman.

rangler1

Timmaay wrote: »

Better again fair few dairy lads have started from nothing and build up a decent business for themselves. If a beef farmer with a big sfp cannot make a good profitable conversation to dairying and keep control of his cashflow then simple as is he is a pisspoor businessman.

Thats my point, they're doing it in every county, 200 suckler to 200 dairy beside me, a friend converted 150, drystock farming would give you a good basic education in controlling costs I can tell you

rangler1

stretch film wrote: »

Also the sale of the overpriced suckler cow was covering the purchase of the underpriced milker. :-0

and a bit pocket money as well, a neighbour used 2009 to convert to dairying .....some opportunity
Cows cost way under what he got for sucklers

Damo810

Thought about the switch here, but would near to buy a neighbouring block of land for it to be viable. Silage taken from our own land 1.6 km away. 400K investment for 40-50 cows. I don't think so. :P

If I was converting I'd be holding off to let things settle, it's inevitable that a few will go bust and along with the ones upgrading surely there will be plenty of used kit knocking about?

stretch film

Damo810 wrote: »

Thought about the switch here, but would near to buy a neighbouring block of land for it to be viable. Silage taken from our own land 1.6 km away. 400K investment for 40-50 cows. I don't think so. :P

If I was converting I'd be holding off to let things settle, it's inevitable that a few will go bust and along with the ones upgrading surely there will be plenty of used kit knocking about?

400k to set yourself up to milk 40 cows ?
Are you saying you could buy 40 acres to run an extra 40 or its your outlay
needed to start out

Greengrass1

Deano7 wrote: »

The bigger men definitely get cash flow problems, I considered dairy as I have land block for 150 cows or more but I won't go near it, 7 days week, 365 days a year, 200k to be borrowed for to produce it. Sure the repayments are mad.

200k over ten yrs? Tbh that's very small payments when you consider you will milk 150 cows.
Why are some lads afraid of the bank? 200k is small money now a days

Timmaay

I guess my minor frustration is due to knowing afew beef/sheep farmers with a large block perfect for a milking platform, but very hesitate to convert over as they think it's too much of a step, both in terms of the conversation cost and lifestyle change! I keep telling them they will be able to easily pay a milker both days if the weekend with the extra income they will be earning. But actually I guess the biggest thing I advice then to do is sit down and do out the sums, either way, ie dairying or sticking with drystock, and that seems to be a major hurdle, they write off dairying before they have begun.

rangler1

Greengrass1 wrote: »

200k over ten yrs? Tbh that's very small payments when you consider you will milk 150 cows.
Why are some lads afraid of the bank? 200k is small money now a days

That's a good one,
here's another good one.
'Don't worry, it'll be a soft landing' or
'You have to sweat your assets'
We'll never learn

tomwaterford

Greengrass1 wrote: »

200k over ten yrs? Tbh that's very small payments when you consider you will milk 150 cows.
Why are some lads afraid of the bank? 200k is small money now a days

will you not be paying back the bones of 30K a year in loan repayments??

(taking interest around 6%)...even at 4% its still well over 25K

between reinvesting in the farm...reseeding,roadways etc
how many years will it be before you have as much as the bank out of all these cows....(which many people forget....some genuinely don't like milking!!!)

200K is a lot of money to borrow if you cant pay it back...espially from banks with extremely questionable balance sheets....they will easily give you 200K of a loan with assets 1million+ gaurenteeing it....will they give as much lee way on repayments...if you hit two or three consective bad years/get locked up with TB or a price collapse in milk???

Willfarman

Look guys the lifestyle isn't for everyone. I wish the new entrants well and every success but on my own farm when I look at the potential extra gross income minus the repayments on the money for conversion the difference in household income isn't massive, definitely not enough to ruin up my Sunday lie on. My ability to say feck it and have an afternoon off!

But never is a long day as they say so I won't say it

frazzledhome

tomwaterford wrote: »

will you not be paying back the bones of 30K a year in loan repayments??

(taking interest around 6%)...even at 4% its still well over 25K

between reinvesting in the farm...reseeding,roadways etc
how many years will it be before you have as much as the bank out of all these cows....(which many people forget....some genuinely don't like milking!!!)

200K is a lot of money to borrow if you cant pay it back...espially from banks with extremely questionable balance sheets....they will easily give you 200K of a loan with assets 1million+ gaurenteeing it....will they give as much lee way on repayments...if you hit two or three consective bad years/get locked up with TB or a price collapse in milk???

Your dead right , dairy not for you. I admire that. It's become a fashion to talk of fairy but if you don't like risk or changing your time off needs don't do it as you will fail.

Kevin the sheep

greengrass is right it's not a Hugh amount these days but sayin that I don't want that kind of dept personally I'm buying fr calves but three for every incalf heifer roughly getting second hand milking Machiene and bulk tank cows will be on straw bed for first year maybe two till I get in cubicles have a lane running full length of farm to get cows to paddocks water set up already there will start with 45 in 2016 I hope and build from there don't understand lads wanting to go to 100 starting off straight away for next year my thinking is let next year pass and let things settle and have me go at it in 2016 my point is this will all be done very low cost which is key

Ps I know about scc on straw bed and useing lot more straw but cheeper for moment

tomwaterford

frazzledhome wrote: »

Your dead right , dairy not for you. I admire that. It's become a fashion to talk of fairy but if you don't like risk or changing your time off needs don't do it as you will fail.

as id never have enough to do full time...and wouldn't like it anyway...its not for me
though I don't like the way everyone is mad into encouraging each other to over extend each other in borrowings..(very like the building boom)....as I was led to believe milk is at a recordish high at the min

so realistically what is the 10 year average (go on low side due to increased supply) price....this is what people should be budgeting for...in my opinion

I see neighbours who took years to build up bigish herds and there farms to top class conditions (I know quotas etc make it different)...worked very hard....some are among the best in the country IMO
there didn't/don't have exactly extravagant lifestyle.(comfortsble no doubt).....that they have a spare 30K thrown around every year...to pay off loans with...there is always something needs reinvesting...tractor/spinner/repairing/widening roadways etc

lads are looking into this as a pot of gold....I just remain to be convinced

*im aware its the most profitable out there and the cashflow is great....I just remain to be convinced that there is enough risk anaylsis being taken by farmers/banks

frazzledhome

Kevin the sheep wrote: »

greengrass is right it's not a Hugh amount these days but sayin that I don't want that kind of dept personally I'm buying fr calves but three for every incalf heifer roughly getting second hand milking Machiene and bulk tank cows will be on straw bed for first year maybe two till I get in cubicles have a lane running full length of farm to get cows to paddocks water set up already there will start with 45 in 2016 I hope and build from there don't understand lads wanting to go to 100 starting off straight away for next year my thinking is let next year pass and let things settle and have me go at it in 2016 my point is this will all be done very low cost which is key

Ps I know about scc on straw bed and useing lot more straw but cheeper for moment

No Scc issue with straw

Coonagh

Kevin the sheep wrote: »

greengrass is right it's not a Hugh amount these days but sayin that I don't want that kind of dept personally I'm buying fr calves but three for every incalf heifer roughly getting second hand milking Machiene and bulk tank cows will be on straw bed for first year maybe two till I get in cubicles have a lane running full length of farm to get cows to paddocks water set up already there will start with 45 in 2016 I hope and build from there don't understand lads wanting to go to 100 starting off straight away for next year my thinking is let next year pass and let things settle and have me go at it in 2016 my point is this will all be done very low cost which is key

Ps I know about scc on straw bed and useing lot more straw but cheeper for moment

Just be careful with rearing heifer calves, big drain on cash flow, I did the figures here and it made more sense to buy calved or incalf heifers, still a bit of value to be got with Incalf heifers at the minute

Kevin the sheep

frazzledhome wrote: »

No Scc issue with straw

Taught it would be harder controll as regards mastitis

Coonagh

Kevin the sheep wrote: »

Taught it would be harder controll as regards mastitis

Are you going to milk off straw? can't see it being an issue either way, housed dry cow cows on slats here last year worked grand, no plans for cubicles at the minute

Kevin the sheep

Coonagh wrote: »

Just be careful with rearing heifer calves, big drain on cash flow, I did the figures here and it made more sense to buy calved or incalf heifers, still a bit of value to be got with Incalf heifers at the minute[/

My biggest thing is disease if I get them young and rear them on farm my hope is they will get immunity to what's on my farm

Kevin the sheep

Coonagh wrote: »

Are you going to milk off straw? can't see it being an issue either way, housed dry cow cows on slats here last year worked grand, no plans for cubicles at the minute

Yes prob will be for a month or two when in at night

Coonagh

Kevin the sheep wrote: »

Coonagh wrote: »

Just be careful with rearing heifer calves, big drain on cash flow, I did the figures here and it made more sense to buy calved or incalf heifers, still a bit of value to be got with Incalf heifers at the minute[/

My biggest thing is disease if I get them young and rear them on farm my hope is they will get immunity to what's on my farm

If you get into cows the biggest thing will be cash flow for the first couple of years!
New dairy farm Is a savage on cash

Greengrass1

tomwaterford wrote: »

will you not be paying back the bones of 30K a year in loan repayments??

(taking interest around 6%)...even at 4% its still well over 25K

between reinvesting in the farm...reseeding,roadways etc
how many years will it be before you have as much as the bank out of all these cows....(which many people forget....some genuinely don't like milking!!!)

200K is a lot of money to borrow if you cant pay it back...espially from banks with extremely questionable balance sheets....they will easily give you 200K of a loan with assets 1million+ gaurenteeing it....will they give as much lee way on repayments...if you hit two or three consective bad years/get locked up with TB or a price collapse in milk???

Fair enough some lads don't like owing money.
Doesn't bother us here were used to it never been any other way.
200k over ten yrs at say 6% now is 21,200/yr
We owed a hell of a lot more than that in the last 10yrs and everything happened that could happen to us. Ye just have to adapt and deal with it.
I still think 200k is Fine to owe.
Maybe 2.5/3 k per cow is what a new entrant should be looking at?

Greengrass1

Kevin the sheep wrote: »

Yes prob will be for a month or two when in at night

We milk cows off straw here. No major problems. Odd case of mastitis but you will get that any way if winter milking.
We won't be milking on near as many cows thus yr just what calves so shouldn't be too bad

jaymla627

Greengrass1 wrote: »

Fair enough some lads don't like owing money.
Doesn't bother us here were used to it never been any other way.
200k over ten yrs at say 6% now is 21,200/yr
We owed a hell of a lot more than that in the last 10yrs and everything happened that could happen to us. Ye just have to adapt and deal with it.
I still think 200k is Fine to owe.
Maybe 2.5/3 k per cow is what a new entrant should be looking at?

Hope your not in charge of the cheque book yet 6% on 200,000 is 32, 000 yr over 10 years

Willfarman

jaymla627 wrote: »

Hope your not in charge of the cheque book yet 6% on 200,000 is 32, 000 yr over 10 years

Would you be paying interest on the full principle sum for the 10 years?

tomwaterford

Willfarman wrote: »

Would you be paying interest on the full principle sum for the 10 years?

AFAIK if from a bank...yes
not if from a CU

RightTurnClyde

jaymla627 wrote: »

Hope your not in charge of the cheque book yet 6% on 200,000 is 32, 000 yr over 10 years

Hope you're not either :)
€2220/month for 120 monthly repayments
€27,500/year for 10 annual repayments

tomwaterford

RightTurnClyde wrote: »

Hope you're not either :)
€2220/month for 120 monthly repayments
27500/year for 10 annual repayments

I think he be going on the rather basic figure of
6% of 200K is 12K and paying 10%per year off is 20K a year

so 12K + 20K is equal to 32K a year??

tomwaterford

RightTurnClyde wrote: »

Attachment not found.

I was always led to believe irish banks work on compound interest???

that your interest payments stay the same as principal reduces....ie that's how they make their money

RightTurnClyde

tomwaterford wrote: »

I think he be going on the rather basic figure of
6% of 200K is 12K and paying 10%per year off is 20K a year

so 12K + 20K is equal to 32K a year??

Tom, here is how it breaks down
image.jpg

jaymla627

RightTurnClyde wrote: »

Hope you're not either :)
€2220/month for 120 monthly repayments
€27,500/year for 10 annual repayments

Was a ball park rough guide figure, whats to say some guys might only go interest only for first couple of years thus making your figures wrong, your also assuming a fixed intrest rate what happens if the rate is variable, the cheque books in my name haha

Farmer Pudsey

First off 200K over 10 years @6% will cost around 26K/year from FP easy calc interest. If interest is same rate over 10 years then you half no of year so it is 6%X5 years 0r 30% of 200K =60K. So total repayments are 260K divide by 10 26K/year.

Not exactly accurate but near enough

Greengrass1 wrote: »

200k over ten yrs? Tbh that's very small payments when you consider you will milk 150 cows.
Why are some lads afraid of the bank? 200k is small money now a days

rangler1 wrote: »

That's a good one,
here's another good one.
'Don't worry, it'll be a soft landing' or
'You have to sweat your assets'
We'll never learn

It all depends on what you are doing a large suckler operation 150 cows on 200 acre switching to milking 150 cows then 200K is not an awfull lot of borrowing. If you swop stock for stock and manage to adapt housing at end this you need Milking parlour, bulk tank roadway and paddocks.

What will your return be. My own estimation is that milk will average 32c/L over next 3-5 years in a worst case senario. Will not go into too many details why but that is my guess.

150 goodish cows milking 6K litres/year (1330 gallons in old money) will generate 1920/cow or 288K in milk sales.

The trick is like lads in 2009 buy in at bad end of dairy cycle and sell suckler cows at good prices. Even at present good suckler cows are worth as much as dairy cows why I cannot figure. Add in calves etc and a 150 cow change over might have over 50-80K left over in stock balance. However he might have to take a years income out as well.

If with 288K in milk I could not pay off 26K/year the bank could have the farm. Yes sh!t happen you can get sick or break a leg or someone runs off with the wife but you cannot live life always expecting the worst.

If milk averages 28c/L you will still be turnover 1680/cow or 250K. Work the figures yes you have your costs. A 150 suckler farm may have a fairly hefty SFP remember milking you will have an income from milk as well even if milk really fell on it hole.

The politician always say worst days in power are better than best days in opposition,

We could quote the same for these type operations worst days in milk are better that best days in beef

freedominacup

Farmer Pudsey wrote: »

First off 200K over 10 years @6% will cost around 26K/year from FP easy calc interest. If interest is same rate over 10 years then you half no of year so it is 6%X5 years 0r 30% of 200K =60K. So total repayments are 260K divide by 10 26K/year.

Not exactly accurate but near enough





It all depends on what you are doing a large suckler operation 150 cows on 200 acre switching to milking 150 cows then 200K is not an awfull lot of borrowing. If you swop stock for stock and manage to adapt housing at end this you need Milking parlour, bulk tank roadway and paddocks.

What will your return be. My own estimation is that milk will average 32c/L over next 3-5 years in a worst case senario. Will not go into too many details why but that is my guess.

150 goodish cows milking 6K litres/year (1330 gallons in old money) will generate 1920/cow or 288K in milk sales.

The trick is like lads in 2009 buy in at bad end of dairy cycle and sell suckler cows at good prices. Even at present good suckler cows are worth as much as dairy cows why I cannot figure. Add in calves etc and a 150 cow change over might have over 50-80K left over in stock balance. However he might have to take a years income out as well.

If with 288K in milk I could not pay off 26K/year the bank could have the farm. Yes sh!t happen you can get sick or break a leg or someone runs off with the wife but you cannot live life always expecting the worst.

If milk averages 28c/L you will still be turnover 1680/cow or 250K. Work the figures yes you have your costs. A 150 suckler farm may have a fairly hefty SFP remember milking you will have an income from milk as well even if milk really fell on it hole.

The politician always say worst days in power are better than best days in opposition,

We could quote the same for these type operations worst days in milk are better that best days in beef

Pudsey you'll have to stop using the calculator on these threads. You're taking the fun out of it for the hard of thinking.