Profitability/ viability of 50-80 Cow Dairy Farm going Forward!

Icelandicseige

Hi lads,
My dad is only 5 years from retirement and has asked me to take over the running of the farm. I am happy too. I enjoy it but the farm needs serious investment in parlour, Housing, Cubicles, Newish tractor.
For me to be happy running it. There is no debt on farm at present but as I said it needs serious investment. All land farmed is owned.
There might be a possibility of extending grazing block in the near future probably a 50/50 chance of adding another 40 acres if the opportunity came.

50 milking Cows at the minute on 80acres. Good free draining land. I reckon with good grass management I could milk more Cows maybe 80 or 90. I would get really tough on growing grass and measuring.

I done up figures and reckon a Investment of around 80,000 is needed. Milking 50 Cows is it achievable to pay back 80,000 over say 10 years? I can apply for 60% grant also for the housing.

There is no question weather the money is needed or not. I have told dad if the facilities can't be upgraded and paid for out of the milk check I have no interest in taking it over, to which he agrees with me.
What do you lads think of my situation? Is it worth moving forward with this or should I pull the plug on the idea?

freedominacup

Icelandicseige wrote: »

Hi lads,
My dad is only 5 years from retirement and has asked me to take over the running of the farm. I am happy too. I enjoy it but the farm needs serious investment in parlour, Housing, Cubicles, Newish tractor.
For me to be happy running it. There is no debt on farm at present but as I said it needs serious investment. All land farmed is owned.
There might be a possibility of extending grazing block in the near future probably a 50/50 chance of adding another 40 acres if the opportunity came.

50 milking Cows at the minute on 80acres. Good free draining land. I reckon with good grass management I could milk more Cows maybe 80 or 90. I would get really tough on growing grass and measuring.

I done up figures and reckon a Investment of around 80,000 is needed. Milking 50 Cows is it achievable to pay back 80,000 over say 10 years? I can apply for 60% grant also for the housing.

There is no question weather the money is needed or not. I have told dad if the facilities can't be upgraded and paid for out of the milk check I have no interest in taking it over, to which he agrees with me.
What do you lads think of my situation? Is it worth moving forward with this or should I pull the plug on the idea?

I was at a dg meeting on the next door neighbours farm yesterday. Smaller base than you. New entrant a couple of years ago. Milking 130 this year. If 80k gets it done you'll have no bother.

Icelandicseige

freedominacup wrote: »

I was at a dg meeting on the next door neighbours farm yesterday. Smaller base than you. New entrant a couple of years ago. Milking 130 this year. If 80k gets it done you'll have no bother.

Thanks freedom. I was expecting a lot of doom and gloom responses. You have lifted my spirits.

Sam Kade

Would you get an 80k loan over 10 years? Last time I got a loan it was 5 years 7 at a stretch.

kevthegaff

Timmaay wrote:

For a small country there is some variation in weather ha, but in general I unfortunately need yous in the northern and western parts of the country to suffer for me to get enough rain ha! It's been a fantastic summer here so far but some paddocks are definitely drying out again now, and I certainly wouldn't say no to abit more rain, otherwise I could well yet be feeding out bales, August and September in general tend to be the most drought prone months around here.

Sam Kade wrote:

Would you get an 80k loan over 10 years? Last time I got a loan it was 5 years 7 at a stretch.

He will with security, most I can get is 5 yrs as have non, not sure would I give them

Sam Kade

kevthegaff wrote: »

He will with security, most I can get is 5 yrs as have non, not sure would I give them

Same here, last time they wanted security which would set me back 3k for solicitors fees both ways so i just reduced the amount I was borrowing. They said if it goes over 50k you need security.

Buford T. Justice XIX

Icelandicseige wrote: »

Hi lads,
My dad is only 5 years from retirement and has asked me to take over the running of the farm. I am happy too. I enjoy it but the farm needs serious investment in parlour, Housing, Cubicles, Newish tractor.
For me to be happy running it. There is no debt on farm at present but as I said it needs serious investment. All land farmed is owned.
There might be a possibility of extending grazing block in the near future probably a 50/50 chance of adding another 40 acres if the opportunity came.

50 milking Cows at the minute on 80acres. Good free draining land. I reckon with good grass management I could milk more Cows maybe 80 or 90. I would get really tough on growing grass and measuring.

I done up figures and reckon a Investment of around 80,000 is needed. Milking 50 Cows is it achievable to pay back 80,000 over say 10 years? I can apply for 60% grant also for the housing.

There is no question weather the money is needed or not. I have told dad if the facilities can't be upgraded and paid for out of the milk check I have no interest in taking it over, to which he agrees with me.
What do you lads think of my situation? Is it worth moving forward with this or should I pull the plug on the idea?

Just on the term of the loan, after 8 years you will have the capital allowances used up so the last 2 years of payments will also be taxed as income tax(52% top rate atm). Those 2 years are also when the highest levels of capital are paid off so be sure you budget for those 2 years in your planning.

Tbh, I would concentrate in improving your grassland first, if it's needed as that will give the biggest return on your money and only borrow for the essential spending now eg, improving housing, parlour, roadways etc.

I would be slow to invest in machinery unless it's necessary, like the tractor falling to bits, when your cashflows improve there is time and money for investing in smaller return spending.

Just my 2c worth from someone who has the t-shirt:)

Timmaay

Icelandicseige wrote: »

Hi lads,
My dad is only 5 years from retirement and has asked me to take over the running of the farm. I am happy too. I enjoy it but the farm needs serious investment in parlour, Housing, Cubicles, Newish tractor.



I done up figures and reckon a Investment of around 80,000 is needed. Milking 50 Cows is it achievable to pay back 80,000 over say 10 years? I can apply for 60% grant also for the housing.

Being nosy here, what's your breakdown on that 80k?? If you are going to bother at all I think the 90cows on the 80acres is your best bet defo, and 90cows should definitely be able to pay back 80k, or say 9k/year, that's roughly 1.5c/l in repayments which should be well doable. However my worry would be that 80k won't cover the investment needed?

Also as bull said the best investment is in grassland, 2nd to that I would said is stock, unless you can grow lots of "cheap" grass and efficiently convert that to milk solids your at nothing, be it 40 cows or 200! If ya got a good contractor then aim to keep the machinary investment to an utter minimum, any basic reliable 4wheel drive tractor and loader to feed for an hr in the winter and spread afew ton of fertiliser/top etc is all ya need, spending any more really is a bad investment for a dairyfarmer!!

visatorro

Are you working off farm at present op?
Have you qualications?
Have you a significant other that might or might not be thinking along the same lines as you?

Icelandicseige

Working off farm at present.
Have the green cert.
the missus is 100% supportive of the idea.

blackdog1

Icelandicseige wrote:

There is no question weather the money is needed or not. I have told dad if the facilities can't be upgraded and paid for out of the milk check I have no interest in taking it over, to which he agrees with me. What do you lads think of my situation? Is it worth moving forward with this or should I pull the plug on the idea?

Depends on what your doing now. Another way of looking at it is you could rent the land for 5 years and put all that money in a start up fund instead of borrowing 80k straight out. Would also try and work for 6 months at a top operator so you know what you want straight away. Nothing worse than figuring out that you could have built something better than what you have now...plenty of us have had to learn the hard way. You can do quite well with 90 cows so long as your a good operator.

mf240

Borrow as little as possible.

Make do with the facilities you have now until you get money gathered up and the stock on the ground.

A system that size will work with low borrowings.

visatorro

Icelandicseige wrote: »

Working off farm at present.
Have the green cert.
the missus is 100% supportive of the idea.

Tbh I'd be thinking twice about leaving the job. You can't justify paying someone to milk. Don't try work and milk, it's lunacy. Is a robot an option?
Don't mean to be negative at all here. Like you said you have green cert so 60% grant. And your partner is supportive. Which is a plus!!! Just don't get over excited, do your sums. Just don't think you Have to milk cows either.

Snowfire

I was at a dg meeting on the next door neighbours farm yesterday. Smaller base than you. New entrant a couple of years ago. Milking 130 this year. If 80k gets it done you'll have no bother.[/quote]
[quote=freedominacup;1

Is +4lu/ha really sustainable.? I'd have my doubts it is.

freedominacup

Snowfire wrote: »

I was at a dg meeting on the next door neighbours farm yesterday. Smaller base than you. New entrant a couple of years ago. Milking 130 this year. If 80k gets it done you'll have no bother.

[quote=freedominacup;1

Is +4lu/ha really sustainable.? I'd have my doubts it is.[/quote]

He has a good bit of ground rented. A lot of it across an otherwise unused boreen from his yard.

Snowfire

freedominacup wrote: »

Snowfire wrote: »

I was at a dg meeting on the next door neighbours farm yesterday. Smaller base than you. New entrant a couple of years ago. Milking 130 this year. If 80k gets it done you'll have no bother.

[quote=freedominacup;1

Is +4lu/ha really sustainable.? I'd have my doubts it is.

He has a good bit of ground rented. A lot of it across an otherwise unused boreen from his yard.[/quote]

Ya, silage from outside block & outside land for rearing heifers/ contract rearing would be a must for original poster. Personally if I was in his shoes I'd be considering robot and off farm work.

Icelandicseige

How many Cows is it possible to graze on 80 acres If I had another 20 acres for cutting elsewhere?
I was also thinking if I found a decent farmer who I knew was using AI and had good herd health I would buy in-calf heifers from him when I wanted to expand..
I would put all my cows to easy calving BB bulls and get top prices in the mart for the calves. It would bring in a good bit of cash flow in the spring when there isn't much of a milk check and I wouldn't have to worry about grazing heifers..
Just one grazing herd on the farm then.

Timmaay

Icelandicseige wrote: »

How many Cows is it possible to graze on 80 acres If I had another 20 acres for cutting elsewhere?
I was also thinking if I found a decent farmer who I knew was using AI and had good herd health I would buy in-calf heifers from him when I wanted to expand..
I would put all my cows to easy calving BB bulls and get top prices in the mart for the calves. It would bring in a good bit of cash flow in the spring when there isn't much of a milk check and I wouldn't have to worry about grazing heifers..
Just one grazing herd on the farm then.

100cows would be comfy once your growing the likes of 14tons across the whole 100acres, your talking 2.5cows/ha overall, and 3.1 on the milking block. Don't stock to that in year 1 whatever ya do ha, however it's certainly a fairly realistic longer term aim. What sort of gestation length do BBs have? You'd want to be well on top of any fertility issues etc using BB, and be sure about body condition etc with the cows.

OverRide

At those stocking levels,be prepared for housing in April if it's wet and cold
Ditto in October and for feeding silage in summer at times
90 tops is a good compromise
7 or 8 rounds in a 12 unit parlour

Icelandicseige

Timmaay wrote: »

100cows would be comfy once your growing the likes of 14tons across the whole 100acres, your talking 2.5cows/ha overall, and 3.1 on the milking block. Don't stock to that in year 1 whatever ya do ha, however it's certainly a fairly realistic longer term aim. What sort of gestation length do BBs have? You'd want to be well on top of any fertility issues etc using BB, and be sure about body condition etc with the cows.

Oh I know. Just thinking out load really of ways of going about it... Now that I think of it it probably isn't the best idea.

OverRide

If you are going ahead with this,keep the servicing of your borrowings to under 1k a month
Forget about the newest and latest machinery or gadgets
Go visit new entrants elsewhere ,find out what they would change,what were their mistakes
Arm yourself to the teeth with information

It's a good enterprise but unfortunately it is exploited left right and centre by unscrupulous co op's lead by people who've long lost touch with what it is to farm
So go into it by all means but eyes wide open
Have plenty of funds to cope with low price periods and bad weather

6270red

This might sound crazy but why don't you keep the job.
Buy 80-90 cows that are suited to once a day milking.
Get cows in calf to beef Bulls, do not keep any calves or incalf heifers.
Buy in replacements calved in Feb and March.
Nice simple system no need for massive expenditure on calving facilities or room for hefiers.
It'll be all about the cows, once you have them calved in the spring time and the calves sold you have a very labour friendly system.
There are also lots of things to go wrong in this system. Eg. Health of herd etc. But it might suit ya.

mahoney_j

Icelandicseige wrote: »

Hi lads,
My dad is only 5 years from retirement and has asked me to take over the running of the farm. I am happy too. I enjoy it but the farm needs serious investment in parlour, Housing, Cubicles, Newish tractor.
For me to be happy running it. There is no debt on farm at present but as I said it needs serious investment. All land farmed is owned.
There might be a possibility of extending grazing block in the near future probably a 50/50 chance of adding another 40 acres if the opportunity came.

50 milking Cows at the minute on 80acres. Good free draining land. I reckon with good grass management I could milk more Cows maybe 80 or 90. I would get really tough on growing grass and measuring.

I done up figures and reckon a Investment of around 80,000 is needed. Milking 50 Cows is it achievable to pay back 80,000 over say 10 years? I can apply for 60% grant also for the housing.

There is no question weather the money is needed or not. I have told dad if the facilities can't be upgraded and paid for out of the milk check I have no interest in taking it over, to which he agrees with me.
What do you lads think of my situation? Is it worth moving forward with this or should I pull the plug on the idea?

Firstly I'd invest in your roadways ,paddocks ,water and grassland .these will be the basis of your operation obviously with the cows .how flexible is your job ,can your dad still do any herding feed calves etc ??.your sheds don't need to be anything fancy ,a good yard layout with covered calving shed and calf pens with outside cubicles will suffice .hanging gates ,holding yard crush laid in simple design that make moving and seperating stock easy on your own a must .and finally the milking parlour or system ,I'd strongly consider a robot which can milk 60/70 cows and try hold your job .the 80 k wouldn't cover it but with off farm income it would be very viable proposition .

yewtree

A few posters have said keep the off farm job. I wouldn't agree for a few reasons.
OP has a decent block of good land and isn't starting from scratch so has the potential to milk 90-100 cows with realativly low level of borrowings, run efficiently this can provide a good income.
If the farm turns a reasonable profit it will be very tax inefficient, op could find himself very quickly in the high tax band. Finally It wouldn't be very appealing lifestyle. Working a milking full time is hardship especially if you have a young family.

Mulumpy

yewtree wrote:

A few posters have said keep the off farm job. I wouldn't agree for a few reasons. OP has a decent block of good land and isn't starting from scratch so has the potential to milk 90-100 cows with realativly low level of borrowings, run efficiently this can provide a good income. If the farm turns a reasonable profit it will be very tax inefficient, op could find himself very quickly in the high tax band. Finally It wouldn't be very appealing lifestyle. Working a milking full time is hardship especially if you have a young family.

Having been down the milking with job route I swopped cows for drystock this year. I never had a deep passion for cows so delighted with my decision so far. Family time far more important than tied to the parlour 24/7

Icelandicseige

What are people's opinions on paying a wage to yourself?
Do people do it?

mahoney_j

Icelandicseige wrote: »

What are people's opinions on paying a wage to yourself?
Do people do it?

Well I ain't putting in 50/80 hours a week for nothing ,Tegasc pm implies we all do (work for nothing)as it ain't.a cost of production .......dd set up at end of every month .im most important asset on my farm so I'm first to get paid !!!!.lots appear happy to work for nothing for the love of the farm I ain't one .i love farming and working with cows but not enough to do it for nothing

yewtree

Icelandicseige wrote: »

What are people's opinions on paying a wage to yourself?
Do people do it?

Direct debit taken out of every month, house account and farm account separate.
Everyone's requirements for cash are different. Decide on that figure and take it out. If the farm can't return that you don't have a viable business

mahoney_j

yewtree wrote: »

Direct debit taken out of every month, house account and farm account separate.
Everyone's requirements for cash are different. Decide on that figure and take it out. If the farm can't return that you don't have a viable business

Harsh and true reality

theaceofspies

Agreed. 12 months is a long time though - remember all the PR crap from the powers that be (that would be the 'plc' co-ops and teagasc et al' about the end of qoutas and the 'need' to expand. The Irish Dairy Industry is proof that the chickens come home to roost in record time.
The sooner Irish farmers start listening to themselves and not men in suits the better before it is too late.

Timmaay

mahoney_j wrote: »

Well I ain't putting in 50/80 hours a week for nothing ,Tegasc pm implies we all do (work for nothing)as it ain't.a cost of production .......dd set up at end of every month .im most important asset on my farm so I'm first to get paid !!!!.lots appear happy to work for nothing for the love of the farm I ain't one .i love farming and working with cows but not enough to do it for nothing

I spend my 1st 3yrs back here fulltime barely drawing anything, instead putting it back into the farm because the farm needed it simple as is! I don't regret doing that as it was a decent investment in stock, grass and a milking parlour, however I should have had more rigorous a timeframe that I did that for, ie the 3yrs max, instead of being quite ad hoc about it, ie until the farm got back in its feet, mentally that takes its toil defo, as you said how many love farming enough to do it for free, certainly not me either.

Nowadays, the direct debit goes straight into my personal account regardless of the farm, the price of milk etc. As a result of this larger drawings and the low price if milk I'm juggling cashflow more this year, however I've had zero problems cutting costs where needed be, less reseeding, zero machinary or capital expenditure, less winter fodder reserve. In fairness also only fairly marginal expansion in cow numbers this year which eats cash normally. Doesn't mean I've totally shelved spending either, I've spread more p&k this year to grow more grass, used contractor more and hired more labour in the spring etc.

Icelandicseige

yewtree wrote: »

Direct debit taken out of every month, house account and farm account separate.
Everyone's requirements for cash are different. Decide on that figure and take it out. If the farm can't return that you don't have a viable business

I like the way you think. My father would be the complete opposite and would run the show weather it's s viable business or not unfortunately. Like many other farmers!!

jaymla627

yewtree wrote: »

Direct debit taken out of every month, house account and farm account separate.
Everyone's requirements for cash are different. Decide on that figure and take it out. If the farm can't return that you don't have a viable business

90% of dairy business's arent viable at present, few costs here per litre would be fert and lime 4c/l feed 5c/l contractor 3c/l vetinary 1.5 c/l loan repayments 4c/l diseal/machinery costs 1.5 c/l insurance 1 c/l rent 1c/l electricity/parlour maintained 1c/l, superlevy/share repayments 1 c/l this comes to 23 c/l and theirs probably another few cent for things like maintaince/reseeding capital investments where's the money for the 4-5 cent drawings I should be taking our do I simply do not pay the bank/suppliers and run up massive debts

Icelandicseige

jaymla627 wrote: »

90% of dairy business's arent viable at present, few costs here per litre would be fert and lime 4c/l feed 5c/l contractor 3c/l vetinary 1.5 c/l loan repayments 4c/l diseal/machinery costs 1.5 c/l insurance 1 c/l rent 1c/l electricity/parlour maintained 1c/l, superlevy/share repayments 1 c/l this comes to 23 c/l and theirs probably another few cent for things like maintaince/reseeding capital investments where's the money for the 4-5 cent drawings I should be taking our do I simply do not pay the bank/suppliers and run up massive debts

What size of a operation do you run jaymala? You have your figures down to a tee...

Timmaay

Icelandicseige wrote: »

What size of a operation do you run jaymala? You have your figures down to a tee...

Figures like that fall outa your profit monitor (or sorry that should be loss monitor this year lol), doing out a PM is an utter no brainer for every single dairyfarmer every year, the 1st year you do one it will take abit of hassle, but very quickly you'll learn how to organise yourself so as you'll have the main figures you need for it, you'll get 90% of the info from your bank account, milk and stock sales receipts, and then main feed and fert statements. A PM doesn't need to be 100% accurate either, getting it to the likes of 97% is good enough, you'd spend the same time again trying to get the last 3% lol.

yewtree

jaymla627 wrote: »

90% of dairy business's arent viable at present, few costs here per litre would be fert and lime 4c/l feed 5c/l contractor 3c/l vetinary 1.5 c/l loan repayments 4c/l diseal/machinery costs 1.5 c/l insurance 1 c/l rent 1c/l electricity/parlour maintained 1c/l, superlevy/share repayments 1 c/l this comes to 23 c/l and theirs probably another few cent for things like maintaince/reseeding capital investments where's the money for the 4-5 cent drawings I should be taking our do I simply do not pay the bank/suppliers and run up massive debts

I am not taking any less out of the farm this year. i haven't changed anything drastically, try and keep production costs as cost to 20 cent as possible. I would consider feed costs of 5 cent too high
Did cash flow at start of year postponed any unnecessary capital expenditure& targeted saving of 1-2 cent from last years costs through a lot of small saving, time will tell weather I achieve this.
Total output on farm should be close to 30 cent using a base of 23 cent including livestock sales (worth 4cent on most farms) but excluding direct payments.

The business will pay all production costs/repayments/labour this year but there won't be much of a surplus.
Also should say Farm isn't expanding so have mature herd and keeping minimum number of replacements.

Icelandicseige

Would you be putting your SFP, and Calf sales in the PM and would you take your wages out of the PM ?

visatorro

Icelandicseige wrote: »

Would you be putting your SFP, and Calf sales in the PM and would you take your wages out of the PM ?

Calves sales are beer money and we don't mention the other elephant in the room.!!!

yewtree

Icelandicseige wrote: »

Would you be putting your SFP, and Calf sales in the PM and would you take your wages out of the PM ?

SFP is put into PM but most lads quote net profit excluding SFP. all livestock sales are included, wouldnt agree that its only beer money, livestock sales make an important contribution to farm income. Labour is included as hired labour if you have any, but own labour isn't added to most PMs. its been said here many times this is a major weakness of the PM

Dawggone

Icelandicseige wrote: »

Hi lads,
My dad is only 5 years from retirement and has asked me to take over the running of the farm. I am happy too. I enjoy it but the farm needs serious investment in parlour, Housing, Cubicles, Newish tractor.
For me to be happy running it. There is no debt on farm at present but as I said it needs serious investment. All land farmed is owned.
There might be a possibility of extending grazing block in the near future probably a 50/50 chance of adding another 40 acres if the opportunity came.

50 milking Cows at the minute on 80acres. Good free draining land. I reckon with good grass management I could milk more Cows maybe 80 or 90. I would get really tough on growing grass and measuring.

I done up figures and reckon a Investment of around 80,000 is needed. Milking 50 Cows is it achievable to pay back 80,000 over say 10 years? I can apply for 60% grant also for the housing.

There is no question weather the money is needed or not. I have told dad if the facilities can't be upgraded and paid for out of the milk check I have no interest in taking it over, to which he agrees with me.
What do you lads think of my situation? Is it worth moving forward with this or should I pull the plug on the idea?

Pull the plug on the idea OP.

You're on a hiding to nothing. Posters here are saying that you'll survive if you have no borrowings...that means that the business will have no repayment capacity...the reality is that dairy is no different now to any other farming enterprise. Think outside the box...organic....snails...rare breeds etc, but don't think that you'll have a comfy living out of less than 200(?) cows.


Just saying.

jaymla627

yewtree wrote: »

I am not taking any less out of the farm this year. i haven't changed anything drastically, try and keep production costs as cost to 20 cent as possible. I would consider feed costs of 5 cent too high
Did cash flow at start of year postponed any unnecessary capital expenditure& targeted saving of 1-2 cent from last years costs through a lot of small saving, time will tell weather I achieve this.
Total output on farm should be close to 30 cent using a base of 23 cent including livestock sales (worth 4cent on most farms) but excluding direct payments.

The business will pay all production costs/repayments/labour this year but there won't be much of a surplus.
Also should say Farm isn't expanding so have mature herd and keeping minimum number of replacements.

Expanding herd here so livestock sales are almost non-existance maybe 1.5 c/l including calf sales, would estimate carrying extra heifers here is tagging on easily 5-6c/l to my costs over a mature herd like yours through the costs of keeping them/plus opertiunity cost of not been able to put half the herd to beef to boost calf sales income also would be sending in less litres over a mature settled herd....
On feed costs should send in over 7000 litres delivered this year of about 1.4 ton of meal, given 60% of herd is 1st/2nd lactation I'm happy that once herd settles and I'm only replacing 20% of herd a year this figure should go down

Icelandicseige

Dawggone wrote: »

Pull the plug on the idea OP.

You're on a hiding to nothing. Posters here are saying that you'll survive if you have no borrowings...that means that the business will have no repayment capacity...the reality is that dairy is no different now to any other farming enterprise. Think outside the box...organic....snails...rare breeds etc, but don't think that you'll have a comfy living out of less than 200(?) cows.


Just saying.

I would hate to see the farm going to waste. People say sucklers and drystock your at noting.
What about the people here that have said there is new entrants on similar block of land to myself doing well??

If I done Sucklers or drystock I definitely need to keep working off farm. So I be basically working two jobs? Meaning less time with family..
Do the farm well milking and I'm sure I would have more time to myself and the family...
The farmers doing well milking have only one job to focus on.
That's kind of why I'm leading towards staying milking...
And if you need 200 cows to live comfortably going forward. There is a lot of farmers up **** creek without a paddle!

yewtree

jaymla627 wrote: »

Expanding herd here so livestock sales are almost non-existance maybe 1.5 c/l including calf sales, would estimate carrying extra heifers here is tagging on easily 5-6c/l to my costs over a mature herd like yours through the costs of keeping them/plus opertiunity cost of not been able to put half the herd to beef to boost calf sales income also would be sending in less litres over a mature settled herd....
On feed costs should send in over 7000 litres delivered this year of about 1.4 ton of meal, given 60% of herd is 1st/2nd lactation I'm happy that once herd settles and I'm only replacing 20% of herd a year this figure should go down

Agree on replacements it's a massive drag on the business at any time put particularly at current prices. The extra production from mature herd is a massive help to dilute costs. I have seen that here that last two years.
There is a bit of luck aswell our period of expansion 2010-2014 coincided with a period of good prices which was a massive help to cash flow.

yewtree

Dawggone wrote: »

Pull the plug on the idea OP.

You're on a hiding to nothing. Posters here are saying that you'll survive if you have no borrowings...that means that the business will have no repayment capacity...the reality is that dairy is no different now to any other farming enterprise. Think outside the box...organic....snails...rare breeds etc, but don't think that you'll have a comfy living out of less than 200(?) cows.


Just saying.

Some posters are saying no borrowing. I wouldn't agree at all loads of effeciet farmers paying down debt and drawing income from the farm.
The success of the op's farm business will come down to how well managed the business is. From reading his posts he seems to be in a relatively good position and provided he has a plan and executes it well I don't see why he can't be successful.

kerry cow

Who's borrowing the money ? and is you father going to continue getting a wage , profit ,rent ??
I think off farm job , spring calving 70 cows with a robot .? And basic housing spend .

yosemitesam1

Dawggone wrote: »

Pull the plug on the idea OP.

You're on a hiding to nothing. Posters here are saying that you'll survive if you have no borrowings...that means that the business will have no repayment capacity...the reality is that dairy is no different now to any other farming enterprise. Think outside the box...organic....snails...rare breeds etc, but don't think that you'll have a comfy living out of less than 200(?) cows.


Just saying.

Is expansion only buying time while at the same time locking us into producing ever greater volumes of lower value products?

Dawggone

yosemitesam1 wrote: »

Is expansion only buying time while at the same time locking us into producing ever greater volumes of lower value products?

Bang on.

Totally new economics in dairy now. If you want/need to produce a bog basic commodity for global consumption then you'll need scale.
Don't be fooled into thinking that when the upturn comes that prices will stay high because they won't. Most mainland EU and US dairy could up production by increasing feed, overnight. My few cows are capable of increasing production more than the average Irish dairy farm, without buying a cow.
All those marginal litres produced in EU and US will go directly into world market...and flood it.

6270red

Don't give up yet. If you can run it right 70 or 80 good cows will give you a living. But it'll have to be bang on management wise.
Look after the cow and she'll look after you! Keep loss of stock to a minimum, 5 dead calves in the spring from calving probs and scour would be the max. Cows that have good longevity are a must.
My old man always said and this I think is key..

"You have to feed them"

And he wasn't talking bout the bare minimum.

Icelandicseige

A lot of people are saying it will succeed if managed right?
How do you mean?

My idea of a good managed farm would be to vaccinate for anything that's needed, when needed.
Keep on top of things also trying to keep ahead of yourself.
Have top producing cows.
grow as much grass that my farm is capable of growing..
Find a comfortable debt repayment for the farm year on year and never go over it. Be in the door at 6 o clock to the family.

And get rid of the ould fella because anything you guys are telling me here he is saying the opposite ha...

6270red

Icelandicseige wrote: »

A lot of people are saying it will succeed if managed right?
How do you mean?

My idea of a good managed farm would be to vaccinate for anything that's needed, when needed.
Keep on top of things also trying to keep ahead of yourself.
Have top producing cows.
grow as much grass that my farm is capable of growing..
Find a comfortable debt repayment for the farm year on year and never go over it. Be in the door at 6 o clock to the family.

And get rid of the ould fella because anything you guys are telling me here he is saying the opposite ha...

You have answered your own questions there. Always be prepared for a bad year every year and you won't be unprepared, if you know what I mean. And by top producing cow don't go for milk only! Fertility and longevity are as important. Less replacements. Only take the good advice from the old lad, it's there alright they just don't know how to tell ya!!!!

simx

6270red wrote: »

You have answered your own questions there. Always be prepared for a bad year every year and you won't be unprepared, if you know what I mean. And by top producing cow don't go for milk only! Fertility and longevity are as important. Less replacements. Only take the good advice from the old lad, it's there alright they just don't know how to tell ya!!!!

Auld lads have an old way of thinking but still wise, I know if my father was around he wouldn't approve of me letting out cows in Feb he'd want to wait till end March or buying cattle today and selling ASAP or fattening cull cows I'd say either but then he thought me most of what I know his biggest flaw was spending money on things, but things to make it easier etc so it's standing a lot to me now tbf