Thinking of Dairying

FarmerDougal

Good articles in today's independent, starting from scratch and moving to 50 cows and scratch to 120 both in 5 years.

Option 1 work for nothing for 5 years and then a miserable 20-30k for work involved

Option two mainly one man operation netting 60k after tax including 20k sfp

Don't honestly see the attraction there,
Are these figures very conservative
Would a 60ha dairy farm not net 2000/ha?

kevthegaff

Yep

kowtow

Keepgrowing wrote:

Rental included

Now I'm confused.

I'd assumed 2600 was the additional capital cost per cow?

If it wasn't surely the 5000 quoted above is capital.

My guess would be that even a bare bones high input system would be 5k per cow excluding land, at a minimum, and even then based on doing it cheaply and in one or two big hits. I'm including the cost of the cow herself BTW.

If it were me I'd be looking at organic. The farming is harder (to my mind) but it cant be harder than taking on 300 cows in one hit. There's always a premium for milk which goes as organic presuming you can find a processor. It takes no longer to milk an organic cow than a conventional one.

It's worth noting that a lot of UK organic cows do 7500 litres which would be on the high side of Irish yields... have always thought there's a sweet spot worth investigating there.

Having said that I don't think it's to be undertaken lightly, or perhaps at all unless you have a real passion for it. It's not a simple choice of one farm enterprise vs another. I'd also share others concern about purchased feed.

Water John

It's one choice I think OP should seriously consider. He seems to have good land capable of growing arable and protein crops.

Milking 100 cow with a serious premium would be my much preferred rather than 'running with the herd'.
I think Arrabawn take organic, Strathroy another consideration.
Really should be one of his models.

davidk1394

Looking at the organic route alright. Uncle had organic cows but i was wondering if i bought normal dairy heifers and then went through the conversion period would it work ?? There's one co-op set up called the Little Milk company and they'd be interested in taking the milk if i do decide to go down that route. If it's done right it'd be a good money turner as i'd have a premium product but i don't think i could run 100 cows on the block of ground around the house

yosemitesam1

davidk1394 wrote: »

Looking at the organic route alright. Uncle had organic cows but i was wondering if i bought normal dairy heifers and then went through the conversion period would it work ?? There's one co-op set up called the Little Milk company and they'd be interested in taking the milk if i do decide to go down that route. If it's done right it'd be a good money turner as i'd have a premium product but i don't think i could run 100 cows on the block of ground around the house

If you do go organic make sure you have multi species swards, cockfoot, fescues , clovers and herbs. Switching from a straight ryegrass or +clover will be a disaster yields wise compared to what is possible...

carrollsno1

Afaik you can buy heifer calves from a dairy herd once there under 6 months and get them certified organic says a lot really given the fact they could be fed antibiotic rich milk in the fire few days of life

tractorporn

carrollsno1 wrote:

Afaik you can buy heifer calves from a dairy herd once there under 6 months and get them certified organic says a lot really given the fact they could be fed antibiotic rich milk in the fire few days of life

If your setting up a dairy herd for the first time you can get a derogation to buy non organic heifers under 6 months old but that's a once off. I don't get what you mean with the antibiotic milk?? Antibiotics are allowed in organics the withdrawls are just a lot longer.

davidk1394

Just thought i'd update ye. went to visit the man near Birr who has the indoor operation. I was very impressed with his set up and the simplicity of it. He said it won't be all plain sailing and there will be some tough days involved. The only difference is his making money during the tough days compared to us with sheep

GrasstoMilk

davidk1394 wrote: »

Just thought i'd update ye. went to visit the man near Birr who has the indoor operation. I was very impressed with his set up and the simplicity of it. He said it won't be all plain sailing and there will be some tough days involved. The only difference is his making money during the tough days compared to us with sheep

Did you see the profit monitor ?
I'd strongly urge not to go high input all indoor. Grass based can be done with high yields

I get the feeling the love of machinery is drawing you to high input

Timmaay

GrasstoMilk wrote: »

Did you see the profit monitor ?
I'd strongly urge not to go high input all indoor. Grass based can be done with high yields

I get the feeling the love of machinery is drawing you to high input

I equally so wouldn't advise anyone to go into a grass based dairy system if they have no interest in letting the cows out to grass either ha. A grass based spring system will blow the back doors off almost any fully indoor system almost every day of the week bar your in a total bog, but if the manager over the whole system doesn't want to graze cows on grass then simple as is they gotta look at the next best thing ha. Is that going with an indoor system is the next question, I'd echo the question above, what were the PM figures for the birr system, and what sort of capital investment??? It doesn't matter how simple a system it is, if it's hemorrhaging cash during a low milk price period and you run outa cash etc then the whole thing will implode fast (can happen with a grass based system also), but my main point is do not make a decision on just simplicity, that's only one element.

davidk1394

Now I was only looking. His cost of production is 24.5 cent and is getting 8,000L per cow. A fella I'm working for part time who's grazing cows is 16.5. Like I said before our farm is fragmented. His set up in birr is the highest cost you could imagine as everything is bought in for the cows. What is ye're biggest turn off's for the system?

dar31

davidk1394 wrote: »

Now I was only looking. His cost of production is 24.5 cent and is getting 8,000L per cow. A fella I'm working for part time who's grazing cows is 16.5. Like I said before our farm is fragmented. His set up in birr is the highest cost you could imagine as everything is bought in for the cows. What is ye're biggest turn off's for the system?

Someone is telling you porkies.

rangler1

dar31 wrote: »

Someone is telling you porkies.

It's not that long ago that I put up a post about a friend who was telling me his cost of production was under 20c/ltr and the general reply from the boardsies was ''i should hope so''......
He was a new entrant but his sfp before changeover was 100000 so he was well set up very quick

davidk1394

dar31 wrote: »

Someone is telling you porkies.

We worked it out here for our own place. To set up everything for the cows and feeding and repayments it'd be €1,600 a cow per year

Mooooo

davidk1394 wrote: »

We worked it out here for our own place. To set up everything for the cows and feeding and repayments it'd be €1,600 a cow per year

It's the production costs he means by porkies. I'd agree mine are around 30c roughly

Sam Kade

Mooooo wrote: »

It's the production costs he means by porkies. I'd agree mine are around 30c roughly

I presume the 30c includes labour.

davidk1394

Sam Kade wrote: »

I presume the 30c includes labour.

I hope so. The way I'm looking at it is... I'm not going sheep farming for the rest of my life as it's only misery and no money. The only option i see is milking or forestry. And i'd much prefer the milking route

Mooooo

Sam Kade wrote: »

I presume the 30c includes labour.

Essential drawings as opposed to labour I guess all house bills paid etc but not much extra beyond it. Have repayments of 6c as well. Now I have a lot to improve on alright so hoping this will improve but I hope to take more out for myself as well. I think it was 31 actually.
To the op just have eyes wide open and work out contingency for poor/expensive fodder, bad weather etc in a poor price year. Your on the right track going to see places but go to as many as you can

mahoney_j

dar31 wrote: »

Someone is telling you porkies.

Harsh when u know nothing of system ,there is no reason that can't be profitable ,I find it crazy that some find anything outside of your typical low cost grass based tegasc preached system unprofitable and unsustainable

mahoney_j

Sam Kade wrote: »

I presume the 30c includes labour.

Yes because without it and capital repayments ,drawings etc included pm cop mean nothing .someone mentioned 16 cent cop ,not a snow balls chance in hell ,lads quoting those figures need a big reality check

PMU

the PM is about costs of production, not drawings or loan intrest or labour. maybe we should just talk about variable costs and gross margin per cow (or per lt).

mahoney_j

PMU wrote: »

the PM is about costs of production, not drawings or loan intrest or labour. maybe we should just talk about variable costs and gross margin per cow (or per lt).

So will your farm survive without labour or making capital repayments on loans etc etc .they are all costs of production no matter what way we dress it up

PMU

not when you are trying to compare types of production. a married farmer with kids in college will have higher drawings than a single person. Paying interest on a land purchase has no effect on production costs.

mahoney_j

PMU wrote: »

not when you are trying to compare types of production. a married farmer with kids in college will have higher drawings than a single person. Paying interest on a land purchase has no effect on production costs.

Well by your point so it isn't a cop and this should be made plain obvious when these Mickey Mouse figures are posted .to me a. Cop is a full cost with labour ,reoayements ,land charge ,drawings included .wuoting figures without is false info .i accept we all don't want certain figures openly known and that's understandable .im not bothered what anyone else's cop is only my own ,I'm more interested in how he grows more grass ,supplied more milk and sokids ,pushes stocking rates ,etc etc I think too many are getting too hung up on the poster boys in journo etc and comparing costs with them when there is so many different variables at play on different farms
Ohh and if the farm can't pay capital and interest on land purchase ,who or what will????

kowtow

PMU wrote: »

not when you are trying to compare types of production. a married farmer with kids in college will have higher drawings than a single person. Paying interest on a land purchase has no effect on production costs.

It does if the alternative to an acre of land is a lorry load of maize.

You can't do variable costs without allowing a land charge, at least not when comparing systems.

I agree that you can set aside drawings, as long as you are clear about it, simply to compare systems.

Then all you have to do is figure whether the margin per litre is enough for the labour units.

alps

PMU wrote: »

not when you are trying to compare types of production. a married farmer with kids in college will have higher drawings than a single person. Paying interest on a land purchase has no effect on production costs.

What you refer to is a Cost Comparison. Please do not confuse this with Cost of Production. The great tragedy is that we have not defined the difference.

We can only compare certain costs. Some are included, some are excluded. We have confused ourselves and the industry into believing that our Cost Comparison is actually our Cost of Production.

We've been very foolish and naive to have let this happen...

davidk1394

For a potential new entrant into dairying. What factors do i need to take into account in terms of costs ?? realistic costs. I think teagasc are way off the mark in terms of costs. I know its a simple question but it's an important one for me

Buford T. Justice XIX

alps wrote: »

What you refer to is a Cost Comparison. Please do not confuse this with Cost of Production. The great tragedy is that we have not defined the difference.

We can only compare certain costs. Some are included, some are excluded. We have confused ourselves and the industry into believing that our Cost Comparison is actually our Cost of Production.

We've been very foolish and naive to have let this happen...

+1

For all we give out about the Profit Monitor, it's use in comparing common costs on farms is a fantastic tool to drill down into where we could cut costs on our own farms.

Keepgrowing

davidk1394 wrote: »

Now I was only looking. His cost of production is 24.5 cent and is getting 8,000L per cow. A fella I'm working for part time who's grazing cows is 16.5. Like I said before our farm is fragmented. His set up in birr is the highest cost you could imagine as everything is bought in for the cows. What is ye're biggest turn off's for the system?

They are both telling lies. Low cost grass based would be in the region of 24/25c and high input 30c+. Their break even that's all paid inc themselves would be c30 with high cost at c40c.