Dairy Farm Start Up - 5 Years Time

TheClubMan

Well folks, not looking for advice exactly but looking to see whether an idea for the future may be feasible. Myself and a neighbouring friend (mid 20's) were chatting last night about options for our farms in the future (5 years +). Our 80 acres is currently used for dairy and his 130 acres is used for sheep/sucklers. Both are within a mile or two of each other. Our father's will be looking to take a step back in a few years. Obviously it's hard to see how things will be 5 years from now but if we were to really make a go of our farms it's hard to see any other enterprise working but dairy. We were thinking of going into partnership and adopting a continental style system i.e zero grazing with milking robots as our land would be fragmented. Our yard has more sheds and facilities for dairy and could cater for 150 to 200 cows in an indoor system with shed conversions which would all be under one roof with existing cubicles and easy access for milk lorry. My land could be used for grazing while his could be used for grazing/silage/heifer rearing. Both would need some reseeding. We both have our green cert, will be under 35 so should be able to avail of 60% grant aid for investment projects and the young farmers scheme. We're on good terms with the bank and save regularly so we would be hopeful of getting finance for zero grazer, stock, robots etc. if our plan was a runner. We wouldnt be going in with serious borrowings hanging over us but build the business up over time. Could this work or would we be better off at something else? Obviously nobody can predict what milk prices or the industry will be like down the line but even people's opinions on the indoors/zero grazing/robot system would be interesting.

kevthegaff

TheClubMan wrote: »

Well folks, not looking for advice exactly but looking to see whether an idea for the future may be feasible. Myself and a neighbouring friend (mid 20's) were chatting last night about options for our farms in the future (5 years +). Our 80 acres is currently used for dairy and his 130 acres is used for sheep/sucklers. Both are within a mile or two of each other. Our father's will be looking to take a step back in a few years. Obviously it's hard to see how things will be 5 years from now but if we were to really make a go of our farms it's hard to see any other enterprise working but dairy. We were thinking of going into partnership and adopting a continental style system i.e zero grazing with milking robots as our land would be fragmented. Our yard has more sheds and facilities for dairy and could cater for 150 to 200 cows in an indoor system with shed conversions which would all be under one roof with existing cubicles and easy access for milk lorry. My land could be used for grazing while his could be used for grazing/silage/heifer rearing. Both would need some reseeding. We both have our green cert, will be under 35 so should be able to avail of 60% grant aid for investment projects and the young farmers scheme. We're on good terms with the bank and save regularly so we would be hopeful of getting finance for zero grazer, stock, robots etc. if our plan was a runner. We wouldnt be going in with serious borrowings hanging over us but build the business up over time. Could this work or would we be better off at something else? Obviously nobody can predict what milk prices or the industry will be like down the line but even people's opinions on the indoors/zero grazing/robot system would be interesting.

would u not be better off milking on the 130 acre block, with bales / z grazing 20unit parlour with 2 of ye lots of help

TheClubMan

kevthegaff wrote: »

would u not be better off milking on the 130 acre block, with bales / z grazing 20unit parlour with 2 of ye lots of help

His land is more fragmented than mine and is in separate blocks. Both our farms are off two busy roads as well thus the idea of zero grazing instead. We'd be practically building on a greenfield site as well as his yard is very basic and doesn't have much to go on.

Mooooo

If two of ye there knock the idea of robots anyway, put up decent size parlour with draftinh for half the cost of robots, milk on alternate wkends, and be done in the evening robots will need lads on call. After that all I can see is get on to teagasc and see existing farms with similar layouts and see how they are doing it

TheClubMan

Mooooo wrote: »

If two of ye there knock the idea of robots anyway, put up decent size parlour with draftinh for half the cost of robots, milk on alternate wkends, and be done in the evening robots will need lads on call. After that all I can see is get on to teagasc and see existing farms with similar layouts and see how they are

A parlour would work well between the two of us alright and would probably be cheaper but my friend has very little dairy experience and I think the robots would be more suited to an indoor system with cows being milked 3+ times a day as well as the wealth of information we'd get from the machines. The otherside was that if one of us wanted to head away for a weekend the robots might lighten the workload if we were zero grazing and there would still be someone on call if there was something went wrong. Yes we would definitely have to see similar farms in operation before we do anything. Seems to becoming popular in northern parts of the country where the land is heavy.

Mooooo

If the 80 acre block is to be used as the milking area, I'd stock it at 140/150 cows you could milk off that for the summer and then buffer with bales/ good pit silage in the spring and autumn. Use other farm for silage/ heifers or possibly grow a bit of wholecrop to buffer with. Cut silage every 6 weeks and keep aftergrass for young stock as much as possible. Ypu could stock higher but woukd have to buffer thru the summer then as well. Alternatively look at underpasses/ landswaps to make the 130 acre block grazeable. Indoor cows /zerograzing / robots all adds costs and time constraints that can be avoided tbh imo.

TheClubMan

Mooooo wrote: »

If the 80 acre block is to be used as the milking area, I'd stock it at 140/150 cows you could milk off that for the summer and then buffer with bales/ good pit silage in the spring and autumn. Use other farm for silage/ heifers or possibly grow a bit of wholecrop to buffer with. Cut silage every 6 weeks and keep aftergrass for young stock as much as possible. Ypu could stock higher but woukd have to buffer thru the summer then as well. Alternatively look at underpasses/ landswaps to make the 130 acre block grazeable. Indoor cows /zerograzing / robots all adds costs and time constraints that can be avoided tbh imo.

Our farm consists of 80 acres in total but there's only 50 acres accessible from the yard which is currently used for grazing. There is 20 acres beside the grazing ground we could swap with a neighbour if he agreed. The other 30 is a mile down the road and is used for silage so an underpass wouldn't work. My friends in a similar situation. That's why I think going into partnership and zero grazing would be our best option if we were to go down the dairy route. High input- high output system - year round milking. I'd much prefer to go the traditional route with spring calving/grazing system but unfortunately it wouldn't work. As regards time would the indoor system not be similar to walking and milking cows twice a day, moving strip wires etc.?

Mooooo

This is my last year milking thru the winter, hopefully anyway, but as soon as the cows go in your hoping for spring again. Cleaning cubicles, scrapers stopping up, cows bulling inside with inevitable injuries, different groups, different diets thru the wagon, different groups of calves/ yearlings and incalf heifers not a mind the ****storm If you get locked up and have to keep the bull calves. Shifting a few wires and letting the cows off is a lot handler.
With the 50 acres ye are limited but if ye are going for milking Ayr have 2 distinct calving seasons breed for 4/5 weeks in autumn and 9 weeks in spring and stick to it. Also with regard to winter milk unless he can get a contract for it ibwoukdnt go nesr it.
What ye have to work out is can 2 people make a living off it the year when milk price hits 23 cent and it's survival mode, Will yer respective parents need an income from it as well??

TheClubMan

Mooooo wrote: »

This is my last year milking thru the winter, hopefully anyway, but as soon as the cows go in your hoping for spring again. Cleaning cubicles, scrapers stopping up, cows bulling inside with inevitable injuries, different groups, different diets thru the wagon, different groups of calves/ yearlings and incalf heifers not a mind the ****storm If you get locked up and have to keep the bull calves. Shifting a few wires and letting the cows off is a lot handler.
With the 50 acres ye are limited but if ye are going for milking Ayr have 2 distinct calving seasons breed for 4/5 weeks in autumn and 9 weeks in spring and stick to it. Also with regard to winter milk unless he can get a contract for it ibwoukdnt go nesr it.
What ye have to work out is can 2 people make a living off it the year when milk price hits 23 cent and it's survival mode, Will yer respective parents need an income from it as well??

Winter milk is certainly not paying in the current climate anyway and the workload is fairly strenuous alright. My thinking on it would be that if we were to go down the robot route I think it would make sense to be milking AYR to get the most from it. All depends on the milk price at the time though. I understand we would have to be very efficient as well. TB has become a bit of a problem around us in recent years now that you mention it. That is the bottom line at the end of the day. I haven't looked at figures yet but my thinking was that although the investment would be higher for an indoor system with zero grazing the returns would be higher. Presuming we work off a realistic milk price to meet bank repayments etc. and not be slaves to the milk processor.

Mooooo

30 cent is generally the average figure over 5 years but you still have to pay the bank and put food on the table the year it is low 20's, basically do figures for when milk price hits the floor as well. With regards the higher output you will also have to feed more to get it, 1.5 to 2 tonne of meal and getting those type cows back in calf ain't easy either. I don't mean to sound negative and tbh the fact you're willing to work with your neighbour prob puts you ahead of most going forward but you need eyes open and serious attention to detail for indoor herds. Ireland doesn't have the cheap meal and bi-products other countries have.
Look at other systems, contact teagasc, go see farms here and in England etc. Work out how much ye need coming out for yerselves and work back from there even.

carrollsno1

Woukd ye consider topless cubicles and a zero grazer? A 24 unit well set up parlour and seasonal production with 2 lads would be better than a robot IMO.
You say your neighbour has little experience milking cows, it isnt rocket science.

Timmaay

2bh I would be fairly cautious of this whole idea, fully indoor zg ayr calving system is a million miles away from your current spring calving system, hell of alot more work, and not nearly the same profit per litre of milk, and you need this to all pay 2 full salaries, while also covering the heavy capital investment (indoor accommodation, zg machinery, extra slurry etc etc).

However have you looked at any options to approach neighbouring farmers on either of the blocks, to try swap land so as you would get a bigger milking block? Alternatively would the 2 of yous considering leasing out your current lands, and up ship to a larger single block?

TheClubMan

carrollsno1 wrote: »

Woukd ye consider topless cubicles and a zero grazer? A 24 unit well set up parlour and seasonal production with 2 lads would be better than a robot IMO.
You say your neighbour has little experience milking cows, it isnt rocket science.

We currently have 55 cubicle spaces in our slatted shed and have two sheds running along side it which could be converted into extra cubicle housing with slats. So, do you think it could be a runner if we opted for a well set up parlour in a spring calving system with zero grazing? He has very little dairy experience in general but the interest is there.

TheClubMan

Timmaay wrote: »

2bh I would be fairly cautious of this whole idea, fully indoor zg ayr calving system is a million miles away from your current spring calving system, hell of alot more work, and not nearly the same profit per litre of milk, and you need this to all pay 2 full salaries, while also covering the heavy capital investment (indoor accommodation, zg machinery, extra slurry etc etc).

However have you looked at any options to approach neighbouring farmers on either of the blocks, to try swap land so as you would get a bigger milking block? Alternatively would the 2 of yous considering leasing out your current lands, and up ship to a larger single block?

What about a less intensive spring calving system indoors with access to an exercise paddock during the dry months plus zero grazing and milk through a 24 unit parlour or would the costs still be too high roughly speaking? Maybe things would be different in a few years but it would be difficult for my friend swap land as they don't get on with their neighbour. Never thought about leasing our land out and moving somewhere else but it would be difficult to find somewhere suitable in our locality. At the moment anyway.

TheClubMan

Mooooo wrote: »

30 cent is generally the average figure over 5 years but you still have to pay the bank and put food on the table the year it is low 20's, basically do figures for when milk price hits the floor as well. With regards the higher output you will also have to feed more to get it, 1.5 to 2 tonne of meal and getting those type cows back in calf ain't easy either. I don't mean to sound negative and tbh the fact you're willing to work with your neighbour prob puts you ahead of most going forward but you need eyes open and serious attention to detail for indoor herds. Ireland doesn't have the cheap meal and bi-products other countries have.
Look at other systems, contact teagasc, go see farms here and in England etc. Work out how much ye need coming out for yerselves and work back from there even.

Not at all negative. I'm just throwing ideas around and appreciate your input as I'm probably being a bit too naive. When you put it like that we could be putting ourselves in a very stressful situation. It's hard to see what we could work apart from dairy though. We will have 200 odd fragmented acres within a few miles of each other but what else do we do with them? Even part time?

K.G.

Why are you going into partnership.your friend is bring nothing valuable to the table

Gawddawggonnit

Keep your eye on the dairy sector for the next five years, then have a close look at how it’s evolving and make a mature decision on the direction you want to take.

Many changes could be coming down the line...

visatorro

K.G. wrote: »

Why are you going into partnership.your friend is bring nothing valuable to the table

A labour unit, sfp, ground for heifers and silage making. All valuable imv

K.G.

visatorro wrote: »

A labour unit, sfp, ground for heifers and silage making. All valuable imv

as expensive as renting is renting for those purposes is still a better option than entering a partnership.the question is does entering a partnership increase efficencey to deliver a premium over operating separately.cant see how it does in this case

K.G.

Gawddawggonnit wrote: »

Keep your eye on the dairy sector for the next five years, then have a close look at how it’s evolving and make a mature decision on the direction you want to take.

Many changes could be coming down the line...

is there something new or is it the same old ground,gm,nitrates,etc.only thing i can see is the continuing decline in margin but thats been the same with 100 years.thats why i have huge reservations about stuff like zero grazing and second milking platfoms.

Who2

While it’s grand to say to twenty odd year olds go together I can’t see it working. Fragmented ground, two friends going to farm with ground they haven’t got yet, with a highly intensive system fresh of the mark with their two old men looking in with their opinions. It’s a pure recipe for a disaster.

darragh_haven

TheClubMan wrote: »

Not at all negative. I'm just throwing ideas around and appreciate your input as I'm probably being a bit too naive. When you put it like that we could be putting ourselves in a very stressful situation. It's hard to see what we could work apart from dairy though. We will have 200 odd fragmented acres within a few miles of each other but what else do we do with them? Even part time?

This is the main thing. What do you do with it otherwise.
Part time farm the home block while renting out the outside block, and have a full-time / part-time off farm job. You get 200+/acre for 30acres, so thats 6000 tax free. Plus on and off farm income. Plus SFP
If you don't like that idea, and want to go full time farming, the way you going with the partnership is probably as good idea as any

jaymla627

TheClubMan wrote: »

Not at all negative. I'm just throwing ideas around and appreciate your input as I'm probably being a bit too naive. When you put it like that we could be putting ourselves in a very stressful situation. It's hard to see what we could work apart from dairy though. We will have 200 odd fragmented acres within a few miles of each other but what else do we do with them? Even part time?

I'd scrap the zero-grazer idea to start of, it's basically like tying yourself to milking twice a day along with having to milk plus with a indoor system the slurry created means your going to have a tractor going 8 hours plus a day, looking at lads running them constantly they start to fall apart after 2-3 years on top of this, a good tractor and zero-grazer would be the guts of 120k of the bat, add in running costs and depreciation if you had robots in the mix aswell your running costs would be eye-watering
Much simpler system to focus on making 3-4 cuts of top quality bales off the outside blocks along with grazing the milking platform, ideal system would be cows in at night for a buffer of bales and out during the day, less feedspace needed aswell as with zero-grazed grass all cows need to be eating at the same time

blackdog1

TheClubMan wrote:

We currently have 55 cubicle spaces in our slatted shed and have two sheds running along side it which could be converted into extra cubicle housing with slats. So, do you think it could be a runner if we opted for a well set up parlour in a spring calving system with zero grazing? He has very little dairy experience in general but the interest is there.

I think you 2 lads due to your lack of experience should go away and work for some top class spring/winter herds for a year. 6 months with a spring fella from January on and 6 months with a winter lad from September on. You'd get great experience, see which system you prefer and have a better idea on what works and what doesn't. Try and look for a farm that is fragmented like yours and see how the farmer works around it. Plenty of labour shortages atm so you 2 could pick any farm you want atm.

visatorro

K.G. wrote: »

as expensive as renting is renting for those purposes is still a better option than entering a partnership.the question is does entering a partnership increase efficencey to deliver a premium over operating separately.cant see how it does in this case

Yeah I do take your point. But at least they are looking at something. Plenty of young lads still happy enough to follow daddy around and it's too late when they take over. This might not be viable but at least there is show ambition which will stand to them.

kevthegaff

What about long term lease on a 200+ acre farm and use yer own blocks as our farms, 24 unit parlour milking ten rows

Gawddawggonnit

K.G. wrote: »

is there something new or is it the same old ground,gm,nitrates,etc.only thing i can see is the continuing decline in margin but thats been the same with 100 years.thats why i have huge reservations about stuff like zero grazing and second milking platfoms.

I cant see beyond my nose KG.

I was speaking to my brother last night about how unpredictable things can be. We, many moons ago, negotiated an iron clad contract with an American company. There was no way that they could/would break the contract because the buy out was severe...they did, and paid... so you never know.
I got clocked by a ratchet a few days ago and was hospitalized. At the time I was p!ssed. Turns out it was a massive stroke of luck, so you never know...

K.G.

Gawddawggonnit wrote: »

K.G. wrote: »

is there something new or is it the same old ground,gm,nitrates,etc.only thing i can see is the continuing decline in margin but thats been the same with 100 years.thats why i have huge reservations about stuff like zero grazing and second milking platfoms.

I cant see beyond my nose KG.

I was speaking to my brother last night about how unpredictable things can be. We, many moons ago, negotiated an iron clad contract with an American company. There was no way that they could/would break the contract because the buy out was severe...they did, and paid... so you never know.
I got clocked by a ratchet a few days ago and was hospitalized. At the time I was p!ssed. Turns out it was a massive stroke of luck, so you never know...

So true.caught up with someone last night who also is involved with company who are unlikely to survive.all along he had security on his investement on an asset whereas i had nothing other than shares so i always felt he was in a better position.turns out this "asset" is going to end up costing him money so it goes to show you never can tell whats going to happen and you can do your business clever and still things go wrong

Keepgrowing

K.G. wrote: »

Why are you going into partnership.your friend is bring nothing valuable to the table

That's what I'm wondering also

Buford T. Justice XIX

TheClubMan wrote: »

Winter milk is certainly not paying in the current climate anyway and the workload is fairly strenuous alright. My thinking on it would be that if we were to go down the robot route I think it would make sense to be milking AYR to get the most from it. All depends on the milk price at the time though. I understand we would have to be very efficient as well. TB has become a bit of a problem around us in recent years now that you mention it. That is the bottom line at the end of the day. I haven't looked at figures yet but my thinking was that although the investment would be higher for an indoor system with zero grazing the returns would be higher. Presuming we work off a realistic milk price to meet bank repayments etc. and not be slaves to the milk processor.

To say the investment would be higher with an indoor system would be abit of an understatement. Even if you already had the housing for 200+ cows on the farm, you would be looking at 330k minimum for the robots (3x110k each). Then you have to upgrade to probably 2 good tractors or 1 good tractor and a loading shovel along with a diet feeder, zero grazer and slurry tanker.

Tbh, I don't see much change from a half a million just for the equipment alone, again assuming that you already have the housing and storage already in place for the cows. That's a fair big chunk of repayments before you even start to pay for the inputs and upgrading of land, roads and fencing needed.

Fair play to both of you for looking at an alternative option but my advice would be to maximise what is already in your possession, labour, land and basic enough housing. When you get close to maximising what you have already, that would be a better time to look at investment when banks have already seen what your ability to work, grow and build your business is.

TheClubMan

blackdog1 wrote: »

I think you 2 lads due to your lack of experience should go away and work for some top class spring/winter herds for a year. 6 months with a spring fella from January on and 6 months with a winter lad from September on. You'd get great experience, see which system you prefer and have a better idea on what works and what doesn't. Try and look for a farm that is fragmented like yours and see how the farmer works around it. Plenty of labour shortages atm so you 2 could pick any farm you want atm.

I've pretty much been involved in farming since I left school. Did my green cert in Kildalton and went working for numerous different farmers in my area, both winter and spring milk producers. Been with the same one for the last 3 years now and would consider him very knowledgeable and a good operator. Would like to go to New Zealand for a season before I settle down too.

TheClubMan

visatorro wrote: »

A labour unit, sfp, ground for heifers and silage making. All valuable imv

Exactly my thinking behind it too. Land coming to the market for rent is non existent around here also.

mahoney_j

No offense lads but implementing a hi input hi cost system like that with limited experience is utter madness huge investment in sheds ,machinery,feed and Labour will be needed

kowtow

I'm a fan of considering intensive systems, but in this case the rationale for an intensive system isn't clear at all (reasonable amount of land, two labour units..) and the OP doesn't appear to have taken into account that the primary effect of intensifying a system to is add leverage, in other words to multiply the risks.

Multiplying the risks in a startup with two young operators (risk enough in itself) doesn't make sense to me especially if, as suggested, the capital is to be borrowed.

I'd be generating a cash-flow first and then gearing up as and when.

TheClubMan

Thanks for everyone's input. Judging from the comments I may go back to the drawing board. We are years away from taking over our farms but I still like to think we can make a go of whatever enterprise we decide to farm. Suppose I may keep the head down and keep learning!

Panch18

Best thing you could do is do a calf to year and half system on your 80 acres and go working for a dairy farmer

Still farming, security of a weekly wage - best of both worlds

And none of your own money spent

trg

kevthegaff wrote: »

What about long term lease on a 200+ acre farm and use yer own blocks as our farms, 24 unit parlour milking ten rows

Interesting idea. How long would the lease need to be in your view? Who pays for the parlour??

trg

I admire the willingness to look and to try but I most definitely do not see a partnership working in this case.

It'll be fine starting off but natural life events will occur at a different pace meaning farm will not always be equal priorities at equal times.

Financial situations will differ based on personal circumstances meaning that each will have different attitude to risk.

I would avoid it.

trg

trg wrote: »

kevthegaff wrote: »

What about long term lease on a 200+ acre farm and use yer own blocks as our farms, 24 unit parlour milking ten rows

Interesting idea. How long would the lease need to be in your view? Who pays for the parlour??

Anyone with any views on this?

Buford T. Justice XIX

trg wrote: »

Anyone with any views on this?

According to the lads on the Grassland walk last year, you would want to be looking at 15 years minimum to get an adequate return on the capital spent to get the farm up to growing 15t/ha, roads, fences, water, housing etc