To dairy farm or not

Hyland17

Hi all. Long time lurker first time poster. Let me start by saying I'm a young trained farmer farming on fathers land. Land contains 40acres and we farm suckers and sheep. Sheep is my enterprise. Have been looking for land to rent so I could get herd number and be farming in my own right. Rang all auctioneers to no avail. Got a call from a dairy farmer looking to step down from dairying and lease the land. Land not fenced for sheep just electric fence. He asked if I was interested in dairying and planted the seed.i must mention I've no experience in dairying. Is it hard to learn the trade? It's 70 acres.i its about 20miles away from where I'm living. 56 good quality acres 14 marginal. All roadways and parlour. Question is how viable is it? Could i farm fulltime and make a living from it?He's hoping to rent it without entitlements. I know its a broad question and will try to answer questions as good as I can. All advice appreciated

Snowfire

Set your own land for €500/ac...

carrollsno1

Hyland17 wrote: »

Hi all. Long time lurker first time poster. Let me start by saying I'm a young trained farmer farming on fathers land. Land contains 40acres and we farm suckers and sheep. Sheep is my enterprise. Have been looking for land to rent so I could get herd number and be farming in my own right. Rang all auctioneers to no avail. Got a call from a dairy farmer looking to step down from dairying and lease the land. Land not fenced for sheep just electric fence. He asked if I was interested in dairying and planted the seed.i must mention I've no experience in dairying. Is it hard to learn the trade? It's 70 acres.i its about 20miles away from where I'm living. 56 good quality acres 14 marginal. All roadways and parlour. Question is how viable is it? Could i farm fulltime and make a living from it?He's hoping to rent it without entitlements. I know its a broad question and will try to answer questions as good as I can. All advice appreciated

Would he be open to paying you to work it for a year so you get a feel for it?

Gawddawggonnit

Hyland17 wrote: »

Hi all. Long time lurker first time poster. Let me start by saying I'm a young trained farmer farming on fathers land. Land contains 40acres and we farm suckers and sheep. Sheep is my enterprise. Have been looking for land to rent so I could get herd number and be farming in my own right. Rang all auctioneers to no avail. Got a call from a dairy farmer looking to step down from dairying and lease the land. Land not fenced for sheep just electric fence. He asked if I was interested in dairying and planted the seed.i must mention I've no experience in dairying. Is it hard to learn the trade? It's 70 acres.i its about 20miles away from where I'm living. 56 good quality acres 14 marginal. All roadways and parlour. Question is how viable is it? Could i farm fulltime and make a living from it?He's hoping to rent it without entitlements. I know its a broad question and will try to answer questions as good as I can. All advice appreciated

Going forward 70ac dairy is way too small. It would be a good start though.

Mulumpy

Everyone else is running into dairy. Run the other way. Get yourself a job and hobby farm with what you have with drystock. Best move I ever made.

adam14

Mulumpy wrote: »

Everyone else is running into dairy. Run the other way. Get yourself a job and hobby farm with what you have with drystock. Best move I ever made.

Excellent advice. Dairy is a bubble with too high a risk for new entrants. I have a fulltime job and dry stock on the side and it's a good life not worrying about loans etc

K.G.

carrollsno1 wrote: »

Hyland17 wrote: »

Hi all. Long time lurker first time poster. Let me start by saying I'm a young trained farmer farming on fathers land. Land contains 40acres and we farm suckers and sheep. Sheep is my enterprise. Have been looking for land to rent so I could get herd number and be farming in my own right. Rang all auctioneers to no avail. Got a call from a dairy farmer looking to step down from dairying and lease the land. Land not fenced for sheep just electric fence. He asked if I was interested in dairying and planted the seed.i must mention I've no experience in dairying. Is it hard to learn the trade? It's 70 acres.i its about 20miles away from where I'm living. 56 good quality acres 14 marginal. All roadways and parlour. Question is how viable is it? Could i farm fulltime and make a living from it?He's hoping to rent it without entitlements. I know its a broad question and will try to answer questions as good as I can. All advice appreciated

Would he be open to paying you to work it for a year so you get a feel for it?

Given the fact you know nothing about dairyits not on to dive straight into a leasing arrangement and it would be the same fir the fella leasing it.some sort of a short term arrangement for 12 months would be more suitable.without asking your business is there some connection with the man a lready

Hyland17

I know 70 acres is small and a starting point. There is an option of another 50 coming up close to the parlour. I worked around the area for a few years and no of a few that are looking to get out. No one to take over the reins. Land would be fragmented tho. I have to add that I'm in mayo. Mayo for Sam 18...... I work in construction. My hours are consisting of 12-14 hour days. Looking to step back and farm full time. I have no connection to the farmer.

Dakota Dan

You'll be still working long days with dairying and also on Sundays for a lot less money than what you have in construction.

jntsnk

You have a passion for farming, which is great to see but just don't rush into things. Can you get an experience anywhere?
I know some lads that got into dairying and didn't realise the workload involved. It's different if you grew up in dairying.
On the financial side it might not be a runner any info?

Hyland17

I realise that it's going to take up as much time as work only difference is I'll be located in the one area. My line of work takes me all over the country so hoping to stay put. Im hoping to start a family and want an income and stay close to home.The dairy farmer in question is willing to help and train me as such. He knows I'm clueless when it comes to it. On the financial side it's ok. Was talking about leaseing cows and entitlements of himq to try and get off the ground. The rent of the land is not steep would give it anyway for sheep. Just trying to see about the dairy option.

Siamsa Sessions

A few questions to ask yourself here: http://www.thatsfarming.com/news/opinion-dairy-expansion

yewtree

Mulumpy wrote: »

Everyone else is running into dairy. Run the other way. Get yourself a job and hobby farm with what you have with drystock. Best move I ever made.

I am not trying to be smart but that doesnt mean it is the right thing for the op. I couldnt work and farm, i would spend the whole day thinking about the farm. There is a lot to be said for farming full time.
i would agree with KG you prob need to get a bit more expierence. Do you know any dairy farmers you could lean on for advice.
I know lads that have started with less and have great buisnesses now.

K.G.

Dakota Dan wrote: »

You'll be still working long days with dairying and also on Sundays for a lot less money than what you have in construction.

I worked in construction and have alot if connections in it and i dont see all this great money your on about and i suspect construction in mayo is a very tight game.there is good money in dublin but the rest of the country is only picking along but most lads say they have a nice run of work but rates are still at day to day living rather than booming prices.btw 200 a day for any fella dosent make you rich by the time you subtract, tax ,insurance, various certs, van and tools.and the odd prick that wont pay

davidk1394

I'm in the same boat as yourself, all drystock here. If you could gain some experience or get him to hire you as a farm hand to learn about dairying. Have you any interest in travelling first ? If you get heavily involved in dairy farming you can forget about going off seeing the world for a few years until you get established. Also once you don't mind getting up after a night out on the town you'll be fine.
There is a good living to be made out of dairying compared to other farming enterprises once your operating costs aren't too high. Some fellas are saying 70 cows is too small. Its a good start and a solid foundation to start on.

Hyland17

There is a well known dairy farmer not far from me. He could be a lot of help. Nice fella only problem is he's in the middle of expansion and don't know if he would have the time. As the OP said there is limited jobs around here that doesn't require traveling. And I have yet to see e200 a day jobs locally. I don't have any qualifications as I have always been able to turn my hand to most things and never been out of work. I love farming but as a lad who's thinking of expanding the family name, part time farming is not looking like an option. I don't want to be a busy fool and miss out on the young ones. I see it at home my father works on a big farm and between his job and part time farming jobs at home are neglected, he's tired and worn out. I don't want to follow those lines that's why I'm trying to see is dairying worth it?

Bass Reeves

First off I do not think dairying is a bubble. Rapid expansion is very risky. just last week we had a report on sucklers from the EU that foresaw a reduction in dairy cows on mainland Europe. That can only be good for dairying in Ireland. Having said that there are health warnings.

If the existing set up is fairly good and requires little investment you have a good chance. As you said there is another 50 acres That may give you a chance for expansion. I am one of those that thing the 70-100 cow man will remain in operation for a good while yet. Labour will be the big issue facing dairy farms. Do a budget on labour costing 22/hour(15/hour worked add in bank holidays and annual leave as well as employer PRSI and it will cost that) and lots of midsized operations may well struggle.

However you have no experience in milking cows which is a disadvantage and as well it is unlikely you can manage to work and milk even in the medium term. As well if you have to rent and fund a herd and some Machinery it is a fairly onerous investment but a greenfield site would be harder. How come he wishes to rent without entitlements, leasing will be shortterm for him and selling is at a little with par value after national reserve deduction. If you are a young trained farmer you will have access to the NR but otherwise I try to do a deal for entitlements.

What you have to look at is what level of borrowings you require and can you manage that. Can you do a deal for the existing herd paid over 2-5 years. Unless he was a top notch farmer it is unlikely that he was hitting 70 cows on the place so some investment will be required. But 70 cows milking 6K litres should average 140K in milk turnover on a 5-8 year average. Culls and calves another 25K. What portion you manage to hold onto will determine if it is a good option.

O

Hyland17

Thanks Bass. The land is good quality. It is a small bit fragmented but it has worked up until now. He is willing to lease it out long term 10-15 years. As for holding on to the entitlements I'm not to sure why either. We just had a brief chat about the whole setup and he was willing to negotiate about everything. Infrastructure is pretty good on the holding maybe a few loads of stone just to level up existing roadways. As for cows he suggested leasing to help get going. Machinery will be on site to help out for little while. Out of curiosity what kind of money would a farm like this be looking for in rent? What would be an expected annual income from this farm provided everything was up to standard? I know these are very broad questions and sorry I can't be more helpful

Timmaay

Hyland17 wrote: »

Thanks Bass. The land is good quality. It is a small bit fragmented but it has worked up until now. He is willing to lease it out long term 10-15 years. As for holding on to the entitlements I'm not to sure why either. We just had a brief chat about the whole setup and he was willing to negotiate about everything. Infrastructure is pretty good on the holding maybe a few loads of stone just to level up existing roadways. As for cows he suggested leasing to help get going. Machinery will be on site to help out for little while. Out of curiosity what kind of money would a farm like this be looking for in rent? What would be an expected annual income from this farm provided everything was up to standard? I know these are very broad questions and sorry I can't be more helpful

On how much the rent should be, it really depends on the demand, I hear of figures from 50e/ac to 300e/ac. And literally the 300e/ac could be better value if it's knocking out say 14ton/ha of grass, against a 50e/ac plot of wet land that needs tons and tons of lime p and k, and full reseeding etc. In terms of expected income, what bass said makes sense, only thing I would add is the milk price volitility will see that milk income swing from the likes of 100k up to say 160k, which will hugely effect cashflow, loan repayment capacity etc etc.

All in all I would usually be negative enough about trying to enter dairying with only 56ac around the milking block, but in this case the whole idea does have some merit however there are a few pitfalls certainly. One being the distance, are you settled down in your house now, 20 miles with a motorway to the farm would be grand, but if it was 40mins of backroads each way then that would be a serious sting in the tail for me. An alternative would be moving closer to the farm, that's obviously a hugely change but one you might be willing to do.

Another key factor for me would be the extra 50ac you said might show up, how sure about this are you, could you approach that person and plant the seed before you commit to any sort of long term lease with the 56ac.

Also the current farmer wanting to hang onto the entitlements would certainly make a difference, will he be still claiming the entitlements on the land or just selling them? If he's still claiming on the land then I would immediately be factoring in a reduction of 100e/ac for what I'd be willing to lease the land for.

Another thing I'd say is go look at the potential relief labour available locally, to say cover you for a milking a week, holidays and ideally help out during calving season. The farmer your taking over from might even be interested here, unless he is in poor health.

Finally finally, 15 yrs in my view is a fair length of time to commit, what others said, try it out for a year as an employee with him would be a very reasonable starting point to see if it all can work for you, 10yrs I think is plenty long enough to be tied in, hell of alot can could change meanwhile in both your life and the economics of milk in Ireland even ha!

yewtree

Hyland17 wrote: »

Thanks Bass. The land is good quality. It is a small bit fragmented but it has worked up until now. He is willing to lease it out long term 10-15 years. As for holding on to the entitlements I'm not to sure why either. We just had a brief chat about the whole setup and he was willing to negotiate about everything. Infrastructure is pretty good on the holding maybe a few loads of stone just to level up existing roadways. As for cows he suggested leasing to help get going. Machinery will be on site to help out for little while. Out of curiosity what kind of money would a farm like this be looking for in rent? What would be an expected annual income from this farm provided everything was up to standard? I know these are very broad questions and sorry I can't be more helpful

You need to go through the figures with someone those questions can be very farm specific.
From your posts you are farming in the same area as myself. There are a couple of good advisors working in the region, if you are interested i can dm their contact info.
if is doesnt work 1st on paper it wont work in practice.

Keepgrowing

yewtree wrote: »

You need to go through the figures with someone those questions can be very farm specific.
From your posts you are farming in the same area as myself. There are a couple of good advisors working in the region, if you are interested i can dm their contact info.
if is doesnt work 1st on paper it wont work in practice.

As we say here "if it doesn't work on an envelope, drop the pen"

Markcheese

Is the land owner talking leasing to you for 10 to 15 years or a farm sharing/ profit sharing scenario?

Hyland17

Thanks yewtree. If you could pm the advisors to me it would be great. At least I could get a right look at it. He just wants to lease it outright. No share farming or anything like that