Thinking of Dairying

kowtow

Username John wrote: »

Why would you include a land charge on owned land?
I would have thought this would be an opportunity cost, and not something that would be included in accounts?

(Conscious that asking questions in a dairy thread like this, is dangerous for a lad like me, so I won't ask any more now)

I think if you are comparing systems .. essentially bought in feed versus grown and grazed, then things only make real sense if you do. I don't think it matters a whole lot what the charge is, 200 bucks or 250 an acre I suppose would be somewhere to start.

If you don't, the inherited land looks over profitable in a system which maximises grazed grass - it may well be the most profitable (and in cash terms it almost certainly would be) but I'm not comfortable that how you got the land should make any difference at all in what is supposed to be an objective view of various farming systems. I know all farms are different - and they are - but in this case a private farmer owned ltd company farming the same farm (and renting the land) would appear less profitable even on an EBIT basis than the farmer doing so himself and that can't be right.

I know others will disagree, but for this particular purpose that would be my view.

The other approach might be to leave out land charges altogether (including rented land) and be aware of that when it comes to reading the ebit / ha in the same way as one might with labour, relying on a careful reading of EBIT / ha and EBIT / FTE but I think that is more complex.

mf240

Username John wrote: »

Why would you include a land charge on owned land?
I would have thought this would be an opportunity cost, and not something that would be included in accounts?

(Conscious that asking questions in a dairy thread like this, is dangerous for a lad like me, so I won't ask any more now)

If you don't include a land charge your basically giving the use of your land for free to Larry or Sinead or whomever your supplying the raw material to.

It would be a bit like a b and b owner only charging for the sausages and rashers as he has the house paid for, and sure he had to get up anyway to feed his hens (which is how he was able to throw in the poached egg for free.)

Keepgrowing

kowtow wrote: »

I think if you are comparing systems .. essentially bought in feed versus grown and grazed, then things only make real sense if you do. I don't think it matters a whole lot what the charge is, 200 bucks or 250 an acre I suppose would be somewhere to start.

If you don't, the inherited land looks over profitable in a system which maximises grazed grass - it may well be the most profitable (and in cash terms it almost certainly would be) but I'm not comfortable that how you got the land should make any difference at all in what is supposed to be an objective view of various farming systems. I know all farms are different - and they are - but in this case a private farmer owned ltd company farming the same farm (and renting the land) would appear less profitable even on an EBIT basis than the farmer doing so himself and that can't be right.

I know others will disagree, but for this particular purpose that would be my view.

The other approach might be to leave out land charges altogether (including rented land) and be aware of that when it comes to reading the ebit / ha in the same way as one might with labour, relying on a careful reading of EBIT / ha and EBIT / FTE but I think that is more complex.

PM leaves it out and uses common costs for comparison

Is my feed costed with fertiliser contractor pit etc?

If land was purchased and paid for, how should it be treated?

Username John

Yeah, I kinda understand what yer saying... I understand it has to be included somehow, I suppose I just don't know enough about the accounts / calculations to work it out is the honest answer...

I would have thought it was something that would be used after calculation costs, to compare against other options...

Something similar to a lad having another qualification outside of farming. It wouldn't make sense to include this in the figures - but there is an opportunity cost here too (of going farming against pursuing another career?)

But again, tis more I am not familiar with the calculations I think...

davidk1394

After reading all of the comments . I think it would make sense to knock the indoor operation on the head for a while and get started at a lower cost set up. We have two 6 span sheds that are roughly 60ft in width and a feed passage between them. The silage pit is at the top of them and a wide open yard beside them and a 12 tonne meal bin beside them as well. If i put in cubicles and an L shaped tank where they eat would be the most straight forward option. Put in a second hand 18 - 20 unit parlor. I was estimating it would cost roughly €180k to set it up (digging, stone and concrete work can be done by ourselves). Selling the ewes would allow me to purchase around 80 cows/heifers for the first year.

kowtow

Keepgrowing wrote: »

PM leaves it out and uses common costs for comparison

Is my feed costed with fertiliser contractor pit etc?

If land was purchased and paid for, how should it be treated?

I'd put in a land charge for it if it were me.

Apart from anything else, it will allow me to expand the model on paper and get sensible answers - if you didn't, the first 100 cows would look cheap (owned land) the next hundred unduly expensive (rented / purchased land) and you might miss the fact that the third hundred were the ones that made you or bankrupted you depending on whether there were three of you full time, or two with a robot and a big shed and less land, or whatever.

I'm being a bit facetious but you see what I am getting at, also I'm not necessarily disagreeing with leaving out of the PM if everyone is on the same page - but this is a thread about the relative merits of dairy farming systems, rather than actual dairy farms, and there I think it is important if still a difficult issue.

If I inherit the keys to a ration mill instead of a farm, a high input indoor system will beat everything for a while, grass included.

Until the ration runs out.

whelan2

davidk1394 wrote: »

After reading all of the comments . I think it would make sense to knock the indoor operation on the head for a while and get started at a lower cost set up. We have two 6 span sheds that are roughly 60ft in width and a feed passage between them. The silage pit is at the top of them and a wide open yard beside them and a 12 tonne meal bin beside them as well. If i put in cubicles and an L shaped tank where they eat would be the most straight forward option. Put in a second hand 18 - 20 unit parlor. I was estimating it would cost roughly €180k to set it up (digging, stone and concrete work can be done by ourselves). Selling the ewes would allow me to purchase around 80 cows/heifers for the first year.

I have a big job to do here soon. New cubicle shed and new parlour. So far I have had teagasc lad. Milking parlour man , builder and shed man out. All of them have different opinions on what we should do. My plan was to knock exsisting shed and build there but Greenfield site is looking likely now. How about getting someone from outside to have a look? How are you for slurry storage?

Buford T. Justice XIX

Username John wrote: »

Why would you include a land charge on owned land?
I would have thought this would be an opportunity cost, and not something that would be included in accounts?

(Conscious that asking questions in a dairy thread like this, is dangerous for a lad like me, so I won't ask any more now)

It hasn't stopped the rest of us, John:pac:

kowtow

davidk1394 wrote: »

After reading all of the comments . I think it would make sense to knock the indoor operation on the head for a while and get started at a lower cost set up. We have two 6 span sheds that are roughly 60ft in width and a feed passage between them. The silage pit is at the top of them and a wide open yard beside them and a 12 tonne meal bin beside them as well. If i put in cubicles and an L shaped tank where they eat would be the most straight forward option. Put in a second hand 18 - 20 unit parlor. I was estimating it would cost roughly €180k to set it up (digging, stone and concrete work can be done by ourselves). Selling the ewes would allow me to purchase around 80 cows/heifers for the first year.

For 80 cows, if you are keeping the two sheds up (did I get that wrong?) I would have thought you'd get a good long way for that budget, you might even be able to cut the budget down if you need to.

There are a good few 2nd hand parlours around at the moment, and plenty more in the UK.

Whelan is right it is well worth getting outside opinions on yard layout, even if they are all different. You don't want to end up walking into the parlour every day wondering if it wouldn't have been better the other way around.

Effective cow flow - being able to move any animal or group of animals to and from wherever they may need to be, preferably with one man, and hopefully flexible enough to cope with unforced error (ie. gate left open) is beyond price in my opinion. I'm hoping to achieve it in the afterlife.

freedominacup

davidk1394 wrote: »

After reading all of the comments . I think it would make sense to knock the indoor operation on the head for a while and get started at a lower cost set up. We have two 6 span sheds that are roughly 60ft in width and a feed passage between them. The silage pit is at the top of them and a wide open yard beside them and a 12 tonne meal bin beside them as well. If i put in cubicles and an L shaped tank where they eat would be the most straight forward option. Put in a second hand 18 - 20 unit parlor. I was estimating it would cost roughly €180k to set it up (digging, stone and concrete work can be done by ourselves). Selling the ewes would allow me to purchase around 80 cows/heifers for the first year.

Both of the shed are 60ft wide each or combined? 80 cows is a good start. Enough earning power to make it worth your while investing and committing to the enterprise but small enough for you to have a bit of leeway to make a few mistakes without the whole system collapsing in on top of itself. You will need more replacements than you might think. By year three you'll have most of your own. Buy in calf stock if you can. You'll be at 120 in short order and go from there.

Growing into filling your acres with stock will allow you to find which combination of forage provision and summer grazing for youngstock suits you best. I wouldn't fear 5 cows/ha on the home block if I could grow the balance of forage required elsewhere. I'd still be aiming for a long grazing season. Most dairy farms have their grazing platforms stocked at a high level until Aug most years with ground out for silage so not as mad as it might appear at first glance. Best of luck to you.

All the new entrants in my dg are going well 5-6 years on. Next door neighbour going well too on a fragmented farm with a relatively small run of ground around the yard. These lads came from suckling mainly and were good grass managers before they changed over.

davidk1394

Both sheds are 60ft wide and have good air flow. Both have stone floor so digging isn't an issue. Have 3 phase power in the yard. Have 60ac outside block for silage and replacements. This would be the first tank as it is all straw bedding. I'll finish out this final year in college and go off for a year then. Father seems to be mad for indoors and big numbers. So I have to try and deal with him

cjpm

whelan2 wrote: »

I have a big job to do here soon. New cubicle shed and new parlour. So far I have had teagasc lad. Milking parlour man , builder and shed man out. All of them have different opinions on what we should do. My plan was to knock exsisting shed and build there but Greenfield site is looking likely now. How about getting someone from outside to have a look? How are you for slurry storage?

Knocking a shed would be a last resort for me. You'll always find use for an old shed - straw, machinery, a few extra calf pens

whelan2

cjpm wrote: »

Knocking a shed would be a last resort for me. You'll always find use for an old shed - straw, machinery, a few extra calf pens

The sheds are 60 year old, newton rigg cubicles in some of them. One of them is a round roof haybarn type shed roof , Milking parlour shed is a 120 year old stable / stone wall/ slatted roof building . This will not be acceptable in years to come , although all milk quality measure are being met. Eldest lad has a good interest in farming so I am thinking down the line. Old sheds might be used as calving youngstock sheds

Keepgrowing

whelan2 wrote: »

The sheds are 60 year old, newton rigg cubicles in some of them. One of them is a round roof haybarn type shed roof , Milking parlour shed is a 120 year old stable / stone wall/ slatted roof building . This will not be acceptable in years to come , although all milk quality measure are being met. Eldest lad has a good interest in farming so I am thinking down the line. Old sheds might be used as calving youngstock sheds

200 OCs with a 1m gallon lagoon c€500 per cubicle

whelan2

Keepgrowing wrote: »

200 OCs with a 1m gallon lagoon c€500 per cubicle

Have enough slurry storage, I want to try and have everything under 1 roof. Do you milk your winter milkers off the outdoor cubicles? I will have to get planning too

cjpm

whelan2 wrote: »

The sheds are 60 year old, newton rigg cubicles in some of them. One of them is a round roof haybarn type shed roof , Milking parlour shed is a 120 year old stable / stone wall/ slatted roof building . This will not be acceptable in years to come , although all milk quality measure are being met. Eldest lad has a good interest in farming so I am thinking down the line. Old sheds might be used as calving youngstock sheds

Personally would go green field, adjacent to existing although I clearly have no clue of your setup!

Cheaper to dig out rather than rock breaking and you'll still have the old ones.

freedominacup

Keepgrowing wrote: »

That's what the ePM is except for the depreciation, kinda EBIT'
There's not a thing wrong with PM it's the ePM and the fact that once you press enter its no longer your info.

I was thinking about the epm comment. The recent census had the same problem. One of the terms have them the right to share the info with whomever they chose. This was the main reason I didn't return mine.

GrasstoMilk

freedominacup wrote: »

I was thinking about the epm comment. The recent census had the same problem. One of the terms have them the right to share the info with whomever they chose. This was the main reason I didn't return mine.

I thought you had return the census ?

mf240

GrasstoMilk wrote: »

I thought you had return the census ?

Like fcuk you had. Mine got the fire.

whelan2

I filled it in, didnt fill in what I didnt want to and it was a chance to have my say.

mf240

whelan2 wrote: »

I filled it in, didnt fill in what I didnt want to and it was a chance to have my say.

Was afraid to send in paperwork to them in case there team of solicitors made me carry out any proposed expansion or charged me for reading it.

whelan2

It was a bit airy fairy, no mention of msa or if you had plans to leave them when its up, surely they should take that into consideration when we have to pay for their expansion. Also when they asked what factors would affect your production going forward they never gave an option of milk price.... milk price would be one of the biggest factors for most people

freedominacup

GrasstoMilk wrote: »

I thought you had return the census ?

Or what???

mf240

freedominacup wrote: »

Or what???

Bass Reeves

I came across a Farming Independent fromna a week ago and there was an article about dairy expansion. It was slightly comparing the outcome of expansion by different sizes of farms. It pointed out that while farmers that expanded and were in the 150+ cow range were really under pressure and that labour was an issue.

The really interesting fact was that it pointed out that farmers that were milking 80 cows and expanded to 100 cows were 10k better off last year even with the poor milk price were 10k better off provided they had to employ no extra labour or rent any extra land. This would be quite modest expansion and I imagine that lots of mid and lower sized farmers will expand in this way as long as no extra land or labour required.

http://www.independent.ie/business/farming/dairy/opinion-why-big-is-not-always-beautiful-for-the-300cow-man-35427953.html

There are lots of farms that were caught by quota and unable to expand. Some had small low profit breed operations. As younger farmers take o etc from older farmers over next 10 years will we see expansion to beyond what government and dairy,'s expect

davidk1394

Just thought I'd up date ye. Still dry stock farming. Went looking at a few different milk production systems. Including one that was mentioned on here. Good set up but a lot of work in it. Looked at the real low cost set ups as well and I don't think I'll be going down that route One of the parents is heading out to Holland this week looking at GEA robots, and I'm heading out as part of an ASA trip. Have all the costs done up on how much it would cost to convert to dairying. Have a lot of research carried out on sheds, cubicles and different breeds. Kinda leaning towards fleckvieh or friesan cross cows.
Still have my plan in place for heading off. If this goes ahead it will be a partnership with my parents.

Water John

Yeah, the fleckvieh are interesting. A few herds in Ireland.
Maybe you can check them as your in Holland.

Is it on this thread that some one put that 2nd hand robots were available in Holland.

Mooooo

A few fleikveih herds up north I think. Used a few straws this year, they will be big stock by the looks of the calves anyway. Will keep the heifers and give them an AA first time out and if I don't like them for milking I could sell with the calf at foot

Waffletraktor

Are Fleks not the breed the germans/austrians refuse to sell stock bulls from due to severe temperment issues

visatorro

davidk1394 wrote: »

Just thought I'd up date ye. Still dry stock farming. Went looking at a few different milk production systems. Including one that was mentioned on here. Good set up but a lot of work in it. Looked at the real low cost set ups as well and I don't think I'll be going down that route One of the parents is heading out to Holland this week looking at GEA robots, and I'm heading out as part of an ASA trip. Have all the costs done up on how much it would cost to convert to dairying. Have a lot of research carried out on sheds, cubicles and different breeds. Kinda leaning towards fleckvieh or friesan cross cows.
Still have my plan in place for heading off. If this goes ahead it will be a partnership with my parents.

Why are you excluding low cost route?