Medium dairy herd

jocksie

Hi lads what do people think about the average dairy herd these days,are the days of a one man operation with say a 60 cow dairy herd coming to an end or are these size herds still sustainable

simx

jocksie wrote: »

Hi lads what do people think about the average dairy herd these days,are the days of a one man operation with say a 60 cow dairy herd coming to an end or are these size herds still sustainable

Lots of ifs and buts there say debt level would be one of the biggest factors

Timmaay

Depends what you call one man show, will 60 cows provide an income for a family with two kids and stay at home mum etc, extremely unlikely moving forward, however if your tipping away with 60 cows all paid for, and reasonably low drawings, then it's far from the worst lifestyle choice to make. Moving forward the likes of 90 cows will provide alot more breathing room, not much more labour than the 60 assuming they are all still compact calved etc, but 50% increase in output against the 60 cows.

jaymla627

Timmaay wrote: »

Depends what you call one man show, will 60 cows provide an income for a family with two kids and stay at home mum etc, extremely unlikely moving forward, however if your tipping away with 60 cows all paid for, and reasonably low drawings, then it's far from the worst lifestyle choice to make. Moving forward the likes of 90 cows will provide alot more breathing room, not much more labour than the 60 assuming they are all still compact calved etc, but 50% increase in output against the 60 cows.

Most profitable dairy farmer I know is milking 35-40 cows has well north of a 100 k of machinery in the yard stay at home wife and two nice fresh 07 jeeps and a heap of kids...
The farm assist is a great job once you work the system, know for a fact in a good year on this farm if 200k litres was sent in he would be going well, would be putting in three times that here and a lot worse off financially

J.O. Farmer

jaymla627 wrote: »

The farm assist is a great job once you work the system, know for a fact in a good year on this farm if 200k litres was sent in he would be going well, would be putting in three times that here and a lot worse off financially

I think you can replace farm assist with any social welfare payment and replace milk produced with hours worked and the statement would still be accurate.

jaymla627

J.O. Farmer wrote: »

I think you can replace farm assist with any social welfare payment and replace milk produced with hours worked and the statement would still be accurate.

Pretty accurate summary to be fair, only for fact I'm maxing out my stock relief here the past 4 years I'd be on a hiding to noting, haven't a euro to my name but have lots of cows, and it actually looks like they might leave us a few euro next year the way dairy markets are looking

Timmaay

Jay we might get afew postive posts outa ya yet so??

jaymla627

Timmaay wrote: »

Jay we might get afew postive posts outa ya yet so??

Sure I'll be on easy Street , only spanner in the works is i told the missus she'd get a big engagement ring when milk hit 30 cent again haha

Keepgrowing

jocksie wrote: »

Hi lads what do people think about the average dairy herd these days,are the days of a one man operation with say a 60 cow dairy herd coming to an end or are these size herds still sustainable

€142.000 would be your sales at most
6000 litres @ .32c
30 calves. @ €200
10 culls @ €500
15 bulling heifers @ €800.

If you can take your costs of .25c off that and live on €52,000 after tax, it's viable. If you've higher drawings, it's not.

OverRide

Keep going until you're 55,then retire selling 750k of land tax free if on 150 acres plus and hand over the remaining enterprise unencumbered with good stock,sheds and facilitates to a grown up son or daughter
Retain your rights of residence and of course your other halves nicely paid public service job

Introduce son or daughter to good looking easy going laying hen
Rinse and repeat

Sam Kade

jaymla627 wrote: »

Most profitable dairy farmer I know is milking 35-40 cows has well north of a 100 k of machinery in the yard stay at home wife and two nice fresh 07 jeeps and a heap of kids...
The farm assist is a great job once you work the system, know for a fact in a good year on this farm if 200k litres was sent in he would be going well, would be putting in three times that here and a lot worse off financially

How do you know so much about his financial situation? The farm assist is only to keep food on the table and if he is making 15k profit or more he won't be entitled to it. Maybe you can explain how he works the system?

kowtow

jaymla627 wrote:

Sure I'll be on easy Street , only spanner in the works is i told the missus she'd get a big engagement ring when milk hit 30 cent again haha

You'd better hope the euro picks up faster than the milk price then..

RightTurnClyde

Keepgrowing wrote: »

€142.000 would be your sales at most
6000 litres @ .32c
30 calves. @ €200
10 culls @ €500
15 bulling heifers @ €800.

If you can take your costs of .25c off that and live on €52,000 after tax, it's viable. If you've higher drawings, it's not.

KG, just looking at those figures and sales come to €138,000 there so profit is €48k. Leave out heifer sales, and sell them as calves, he down to €39k. Assume cows had to be bought or €1500/cow has to be spent for their purchase and/or setup, that €10k a year for say the next 10 years so he's 39€ is down to €29.
You'd have to wonder, why bother

Sam Kade

jaymla627 wrote: »

Sure I'll be on easy Street , only spanner in the works is i told the missus she'd get a big engagement ring when milk hit 30 cent again haha

You seem to be doing it arseways, you get the engagement ring first before she becomes your missus.

Wildsurfer

jaymla627 wrote: »

Most profitable dairy farmer I know is milking 35-40 cows has well north of a 100 k of machinery in the yard stay at home wife and two nice fresh 07 jeeps and a heap of kids...
The farm assist is a great job once you work the system, know for a fact in a good year on this farm if 200k litres was sent in he would be going well, would be putting in three times that here and a lot worse off financially

Well he either has 'old' money or a big sfp but otherwise don't buy this story. Now I do agree lots of guys with larger herds have lots of debt and we are all waiting for the perfect year ie weather, price, herd health for the payback. Just don't see anything less than 80-100 cows is worth the effort going forward unless you have another job or working wife

Timmaay

RightTurnClyde wrote: »

KG, just looking at those figures and sales come to €138,000 there so profit is €48k. Leave out heifer sales, and sell them as calves, he down to €39k. Assume cows had to be bought or €1500/cow has to be spent for their purchase and/or setup, that €10k a year for say the next 10 years so he's 39€ is down to €29.
You'd have to wonder, why bother

+1, KGs sums might be doable for setting up a 2nd herd where you have the heifers ready on the ground, and expertise to step in at full efficency etc, that's about it in my opinion tho.

Mooooo

It's all relative to ones own circumstances. If converting from sucklers you could be stocked with a bit extra towards it for a parlour. Whether or not housing roadways are in situ or whatever. Starting from fresh I don't know, land costs on top of development would be a bit much and ones own drawings requirement can change fast as well. Keeping debt down is obviously important but you'll have to be able to reinvest as well.

Willfarman

In my opinion 60 cows with no debt would be a happy place in comparison to 120 cows with 1000 euro debt a cow accruing interest and most likely a workman with his hand out every Friday. Isn't 60 the national average?

Keepgrowing

Willfarman wrote: »

In my opinion 60 cows with no debt would be a happy place in comparison to 120 cows with 1000 euro debt a cow accruing interest and most likely a workman with his hand out every Friday. Isn't 60 the national average?

100 cows and a full time man, hardly

whelan2

Keepgrowing wrote: »

100 cows and a full time man, hardly

Every farm is different

jocksie

Would imagine a 60 cow herd would need to be a "flying herd" with all calves sold.thats assuming that it's a 60 cow herd because land is tight and 60 is the maximum you could go to

Willfarman

jocksie wrote: »

Would imagine a 60 cow herd would need to be a "flying herd" with all calves sold.thats assuming that it's a 60 cow herd because land is tight and 60 is the maximum you could go to

In these parts there would be a beef enterprise run along side if there was more land.

Wildsurfer

Willfarman wrote: »

In my opinion 60 cows with no debt would be a happy place in comparison to 120 cows with 1000 euro debt a cow accruing interest and most likely a workman with his hand out every Friday. Isn't 60 the national average?

The days of hiring a fulltime man with just 120 cows are well and truly gone for the next generation. I think you'd be nearer to 220 before you could justify it

Willfarman

Wildsurfer wrote: »

The days of hiring a fulltime man with just 120 cows are well and truly gone for the next generation. I think you'd be nearer to 220 before you could justify it

I really must be living in a parallel universe then! Unless it's a father son or even sons that's how things roll around here.

Mooooo

Willfarman wrote: »

In my opinion 60 cows with no debt would be a happy place in comparison to 120 cows with 1000 euro debt a cow accruing interest and most likely a workman with his hand out every Friday. Isn't 60 the national average?

No debt isn't realistic imv, even 1k per cow is 60 grand, not an unrealistic amount

Willfarman

Mooooo wrote: »

No debt isn't realistic imv, even 1k per cow is 60 grand, not an unrealistic amount

It's very realistic? I have several local here enterprises in mind. There's plenty medium dairy farmers around that improve things as they go along.

Mooooo

Willfarman wrote: »

It's very realistic? I have several local here enterprises in mind. There's plenty medium dairy farmers around that improve things as they go along.

Fair enough, wouldn't know too many down here with no debt. Be it for machinery, parlours, land or whatever.

GrasstoMilk

Mooooo wrote: »

Fair enough, wouldn't know too many down here with no debt. Be it for machinery, parlours, land or whatever.

Don't see what's so bad about having debt.
It keeps you on your toes imo. Many a man said to me there business went stale when they had none

mahoney_j

GrasstoMilk wrote: »

Don't see what's so bad about having debt.
It keeps you on your toes imo. Many a man said to me there business went stale when they had none

+1 ,someone mentioned back a bit about a 60 cow man with no debt been. Better off than a 120 cow man with 1 k per cow borrowed ,1 k per cow at 120 cows is small .i know a guy with 5 k per cow borrowed ,he's kept on his toes but flying and not under pressure ,2/3 bad years could change that tho .back to original question 60/70 cows is profitable and sustainable with little or no borrowings and no family to sustain or put through college

Panch18

mahoney_j wrote: »

GrasstoMilk wrote: »

Don't see what's so bad about having debt.
It keeps you on your toes imo. Many a man said to me there business went stale when they had none

+1 ,someone mentioned back a bit about a 60 cow man with no debt been. Better off than a 120 cow man with 1 k per cow borrowed ,1 k per cow at 120 cows is small .i know a guy with 5 k per cow borrowed ,he's kept on his toes but flying and not under pressure ,2/3 bad years could change that tho .back to original question 60/70 cows is profitable and sustainable with little or no borrowings and no family to sustain or put through college

You're friend with borrowings of 5k a cow is under pressure this year and there's no 2 ways about it

I would say there's a lot of lads under pressure this year, whether they'd admit it or not is another thing.

half the dairy farmers in the country are borrowing to pay their tax bills, our accountant is seeing it first hand

mahoney_j

Panch18 wrote: »

You're friend with borrowings of 5k a cow is under pressure this year and there's no 2 ways about it

I would say there's a lot of lads under pressure this year, whether they'd admit it or not is another thing.

half the dairy farmers in the country are borrowing to pay their tax bills, our accountant is seeing it first hand

I know this guy quite well ,been on his farm few times debt well structured ,no tax issues as capital allowances generous ,and a guy who doesn't go half brained into things

Panch18

what are the repayments on 5k a cow over 15 years?

It must be 400 per cow per annum, or more?

Mooooo

Panch18 wrote: »

what are the repayments on 5k a cow over 15 years?

It must be 400 per cow per annum, or more?

About that depends really if it's land could be over 20 years and land and development some could be 20 more could be over 10 or 15. HAVE it structured right first is important. Go too fast and your under pressure. We put existing loans out over 10 years even tho they would have been finished in 5 when we took on another loan. If we didn't this year would have been tougher than what it is

Keepgrowing

Panch18 wrote: »

what are the repayments on 5k a cow over 15 years?

It must be 400 per cow per annum, or more?

€460/mth over 15 yrs

Keepgrowing

Panch18 wrote: »

You're friend with borrowings of 5k a cow is under pressure this year and there's no 2 ways about it

I would say there's a lot of lads under pressure this year, whether they'd admit it or not is another thing.

half the dairy farmers in the country are borrowing to pay their tax bills, our accountant is seeing it first hand

I've never paid my tax bill any other way, have always borrowed for it regardless of debt.

Jexbullcalf

Keepgrowing wrote: »

I've never paid my tax bill any other way, have always borrowed for it regardless of debt.

Wouldn't you be better off putting a bit aside every month and paying it that way rather then taking a loan and paying interest with it

Panch18

Keepgrowing wrote: »

I've never paid my tax bill any other way, have always borrowed for it regardless of debt.

Do you mind me asking why? And not from cash flow?

RightTurnClyde

Keepgrowing wrote: »

€460/mth over 15 yrs

Ya, and over 20 yrs it's 360.
That's grand during the years while there capital and interest relief.
If he's not incorporated, near the end of the 20 yrs he'll have to come up with close to €360+€180=€540/cow to service that debt and tax.
Even if incorporated he'll have to produce over €400 to service it.
Sore ar*e time.

We peaked here at €4500/cow nearly 10 years ago and it was very do able in the first 5 years with write offs and a big % being interest. It's down now to €2000 per cow and dropping fast (every extra cow helps!), but it's the tax and not the repayments that cause the real pain. Incorporation helps but it's still sore.

the_blue_oval

Is the 32c/l mentioned above a realistic figure to be basing things on do ye reckon? Any sums I've been doing I base them on 28c/l...

Jexbullcalf

jaymla627 wrote: »

Pretty accurate summary to be fair, only for fact I'm maxing out my stock relief here the past 4 years I'd be on a hiding to noting, haven't a euro to my name but have lots of cows, and it actually looks like they might leave us a few euro next year the way dairy markets are looking

How many years will lads be content to go without putting a penny away for yourself? If it's only 1yr in 3 or 4 you can make a living it's hardly worth it. It's when your married and have kids that it really hits home.

mf240

I wouldn't be comfortable with high borrowings. I'm inclined to be always keeping one eye on the worst case scenario. (Depopulation ect.) Some people don't mind an can see there way to paying back big debt and do so.

60 cows probably won't be enough to live and pay back debts unfortunately. Unless your cashing in a suckler hard or have some other plan.

mf240

Keepgrowing wrote: »

I've never paid my tax bill any other way, have always borrowed for it regardless of debt.

Why?

jaymla627

Jexbullcalf wrote: »

How many years will lads be content to go without putting a penny away for yourself? If it's only 1yr in 3 or 4 you can make a living it's hardly worth it. It's when your married and have kids that it really hits home.

Started in 2013 here with no stock, will have 115 cows calving next spring and 40 maiden heifers, all loans got at the start for buying them end in 2017....
Was always prepared at the start here to not make a penny for a couple of years when I was building up my herd/infrastructure steeped here to that i have a house paid for and mortgage free too which is also a massive help

kevthegaff

1000 euro per cow for 120 cows is low imo, only guys I know employing full time labour at 100 cows have big sfp, single or dry stock operation also

jocksie

mahoney_j wrote: »

+1 ,someone mentioned back a bit about a 60 cow man with no debt been. Better off than a 120 cow man with 1 k per cow borrowed ,1 k per cow at 120 cows is small .i know a guy with 5 k per cow borrowed ,he's kept on his toes but flying and not under pressure ,2/3 bad years could change that tho .back to original question 60/70 cows is profitable and sustainable with little or no borrowings and no family to sustain or put through college

Really do you think 60 cows with no debts wouldn't sustain a small family I would have thought it would maybe I'm wrong

Muckit

mf240 wrote: »

Why?

Offset the loan interest against tax!!;)

Icelandicseige

My dad brought me with this year to the accountant. He handed over his stuff and the accountant went through it and said, right Mr siege you owe a tax bill of ..... We left as we were walking out he turned to me and said them accountants are pure bollixs didn't I tell ye that before we went down. I havint a penny in my pocket and yet I owe ... in tax. Pure bollixs is all they are ha. He's never happy one way or the other though.

Willfarman

kevthegaff wrote: »

1000 euro per cow for 120 cows is low imo, only guys I know employing full time labour at 100 cows have big sfp, single or dry stock operation also

What's the repayments on 120k per annum and how many cows is it going to take to service it?

jocksie

I'd have thought a 60/70 herd selling all the calves nd buying in the occasional replacement when needed and no real major debts(nothing above 20k)would have been a nice sized system and would sustain a nice tidy income if done right

Buford T. Justice XIX

Willfarman wrote: »

What's the repayments on 120k per annum and how many cows is it going to take to service it?

Repayments of around 10k/year and possibly 53% tax extra on top of that if capital allowances are used up after 7-8 years.

kevthegaff

Buford T. Justice V wrote:

Repayments of around 10k/year and possibly 53% tax extra on top of that if capital allowances are used up after 7-8 years.

All building loans here are 7 years less as cap ex are finished, would this be the best policy going forward. Butford I'd kill for 10k year repayments, at near 40 here:-(