Dairying 2019

Icelandicseige

I'm going to keep it simple. 100 cows on 100 acres. Grass based system on own land. All replacements bought in from rep breeder. One experienced operater. All machinery contracted out except for feeding.. 120000 investment needed. Only constructive opinions need post. What do yous think?

kevthegaff

What's the 120 needed for?

Say my name

Are you 100% sure of your supply of heifers?

Always had heifers to sell myself these last few years.
But with nitrates (stocking rate) and this bad winter and lower bull calf prices this year I'll just try and breed the bare minimum for myself and have the rest calving to a beef bull.

Icelandicseige

Both good questions. The 120,000 is needed in order to have the place set up in a way to run a grassbased system. Fairly sure of replacements going forward. But if it becomes a problem, Could look into doing as you say on a bit of rented land from the grazing block.

jaymla627

Icelandicseige wrote: »

Both good questions. The 120,000 is needed in order to have the place set up in a way to run a grassbased system. Fairly sure of replacements going forward. But if it becomes a problem, Could look into doing as you say on a bit of rented land from the grazing block.

What's in place already on-farm, where's the rest of the finance coming from on top of 120k, at a bare minimum you'd have to be budgeting 2k a cow to get set up, and then actually have to buy the cow

Icelandicseige

jaymla627 wrote: »

What's in place already on-farm, where's the rest of the finance coming from on top of 120k, at a bare minimum you'd have to be budgeting 2k a cow to get set up, and then actually have to buy the cow

I suppose what I'm really wondering is how profitable do you think Dairying will be going forward the next 5 -10 years.. in order to pay for 1 full time labour and make repayments of 120000 on such a venture while keeping up with reinvestments and paying contractors and making a profit? I suppose thats what im asking. Without sounding too ignorant im not wondering if I have budgeted enough. Some things are in place like grassland, fencing and some livestock. The rest will be borrowed for.

Gawddawggonnit

Icelandicseige wrote: »

I suppose what I'm really wondering is how profitable do you think Dairying will be going forward the next 5 -10 years.. in order to pay for 1 full time labour and make repayments of 120000 on such a venture while keeping up with reinvestments and paying contractors and making a profit? I suppose thats what im asking. Without sounding too ignorant im not wondering if I have budgeted enough. Some things are in place like grassland, fencing and some livestock. The rest will be borrowed for.

I’d put you into a 1.5mln litre farm without you spending a penny...then again, you’d want to like making a few quid...

yewtree

Icelandicseige wrote: »

I'm going to keep it simple. 100 cows on 100 acres. Grass based system on own land. All replacements bought in from rep breeder. One experienced operater. All machinery contracted out except for feeding.. 120000 investment needed. Only constructive opinions need post. What do yous think?

Best of luck with it.
Level of investment seems very manageable as well.
I think there will be plenty of good quality heifers around. Lots of heifers been soaked up by expansion at the moment don't see any massive swing back to beef bulls in my discussion group anyway

farisfat

Icelandicseige wrote: »

I suppose what I'm really wondering is how profitable do you think Dairying will be going forward the next 5 -10 years.. in order to pay for 1 full time labour and make repayments of 120000 on such a venture while keeping up with reinvestments and paying contractors and making a profit? I suppose thats what im asking. Without sounding too ignorant im not wondering if I have budgeted enough. Some things are in place like grassland, fencing and some livestock. The rest will be borrowed for.

I think we're getting a taste of where dairy farming is going.from the low 20cl to the mid 30cl....it's crystal ball stuff.

I don't think 100 cows will pay a full time labour unit.

Timmaay

yewtree wrote: »

Best of luck with it.
Level of investment seems very manageable as well.
I think there will be plenty of good quality heifers around. Lots of heifers been soaked up by expansion at the moment don't see any massive swing back to beef bulls in my discussion group anyway

I've bought in replacements the last few yrs here, last year was the 1st time we ever had a dairy stock bull, for the heifers, a pure br fr. Have got on great with him, very good hardy calves, bulls making 100 to 150e and heifers should be worth 250e+. Given I can pickup another br fr bull for 1500e, against 2/2500 for any sort of decent AA/He, I'm seriously tempted to just go with the fr for the cows also this yr.

darragh_haven

farisfat wrote: »

I think we're getting a taste of where dairy farming is going.from the low 20cl to the mid 30cl....it's crystal ball stuff.

I don't think 100 cows will pay a full time labour unit.

A 100 cows fully own land wouldnt pay? Surely you'd average 50k to 60k a year. It might be 20k on a bad year but could be 100k on a very good year.

Or am i in cloud cuckoo land?

Timmaay

farisfat wrote: »

I think we're getting a taste of where dairy farming is going.from the low 20cl to the mid 30cl....it's crystal ball stuff.

I don't think 100 cows will pay a full time labour unit.

Yeh there is a huge difference between expecting 100 cows to pay just the farmer/owner, who can afford to tighten the belt when the price drops, and has an active interest in keeping the show on the road, against a setup where the farm owner has employed a fulltime labourer, who will put a consist 30/40/50k drain on the farm, and also hope to get a return on his investment.

whelan2

Does the €120k include milking facilities and housing?

Morris Moss

farisfat wrote: »

I think we're getting a taste of where dairy farming is going.from the low 20cl to the mid 30cl....it's crystal ball stuff.

I don't think 100 cows will pay a full time labour unit.

I assume he is the labour unit?

mahoney_j

farisfat wrote: »

I think we're getting a taste of where dairy farming is going.from the low 20cl to the mid 30cl....it's crystal ball stuff.

I don't think 100 cows will pay a full time labour unit.

It won’t and I’m still firmly of the opinion that 80/120’cow one and a bit man efficient unit will always be there and will survive .im in that bracket and have zero ambition to milk 200 plus cows and manage staff on top lads totally (some) loosing the run of themselves expanding just for the sake of bragging about how many he’s milking or how much he’s giving for leasing land I know of one local lease that closed at 400 per acre for land that’ll be z grazed and silage

Timmaay

mahoney_j wrote: »

It won’t and I’m still firmly of the opinion that 80/120’cow one and a bit man efficient unit will always be there and will survive .im in that bracket and have zero ambition to milk 200 plus cows and manage staff on top lads totally (some) loosing the run of themselves expanding just for the sake of bragging about how many he’s milking or how much he’s giving for leasing land I know of one local lease that closed at 400 per acre for land that’ll be z grazed and silage

Agreed about the 120 one man show which I'm at at the minute, however I've 145ac that I can milk off (38 of that on a longterm lease for sub200), another 10ac silage ground also. What would you do in my case lol?

alps

mahoney_j wrote: »

It won’t and I’m still firmly of the opinion that 80/120’cow one and a bit man efficient unit will always be there and will survive .im in that bracket and have zero ambition to milk 200 plus cows and manage staff on top lads totally (some) loosing the run of themselves expanding just for the sake of bragging about how many he’s milking or how much he’s giving for leasing land I know of one local lease that closed at 400 per acre for land that’ll be z grazed and silage

€1000 per ha land rent...

€100 per tonne DM for the rent of the ground to grow the grass

Seed,fertilize,cut,haul,store,feed after that...

No possible way in hell it will be cheaper than grains..

Don't mind what this guy is doing to himself, but the damage he is doing to the rest of us is alarming....

Cigeratte box figures

Cow eats 6 tonnes DM @200/tonne= 1200
Cow sells 5000lit @ 30c = 1500

Balance for economic genius to run farm €300

Buford T. Justice XIX

Icelandicseige wrote: »

I suppose what I'm really wondering is how profitable do you think Dairying will be going forward the next 5 -10 years.. in order to pay for 1 full time labour and make repayments of 120000 on such a venture while keeping up with reinvestments and paying contractors and making a profit? I suppose thats what im asking. Without sounding too ignorant im not wondering if I have budgeted enough. Some things are in place like grassland, fencing and some livestock. The rest will be borrowed for.

What kind of length of time will you be borrowing that 120k for? The term will have a huge bearing on how much surplus you will have in a poor milk price year

Over 5 or 6 years would be mental, I'd be looking at a minimum of 10 years and you'd still be looking at in excess of 15k a year in repayments.

GrasstoMilk

Buford T. Justice V wrote: »

What kind of length of time will you be borrowing that 120k for? The term will have a huge bearing on how much surplus you will have in a poor milk price year

Over 5 or 6 years would be mental, I'd be looking at a minimum of 10 years and you'd still be looking at in excess of 15k a year in repayments.

120k over 6 years wouldn't be that hard. Agree if you can get it over longer do but that shouldn't be too hard to repay with 100 cows.

OP have you enough stock to turn them into 100 cows?
Greenfield site for 16 unit parlour and 10k litre tank and cow handling set up will swallow up your 120k fairly handy

Gawddawggonnit

alps wrote: »

€1000 per ha land rent...

€100 per tonne DM for the rent of the ground to grow the grass

Seed,fertilize,cut,haul,store,feed after that...

No possible way in hell it will be cheaper than grains..

Don't mind what this guy is doing to himself, but the damage he is doing to the rest of us is alarming....

Cigeratte box figures

Cow eats 6 tonnes DM @200/tonne= 1200
Cow sells 5000lit @ 30c = 1500

Balance for economic genius to run farm €300

That’s expensive dm @ €200/t Alps.

Just saying.

jaymla627

Icelandicseige wrote: »

I suppose what I'm really wondering is how profitable do you think Dairying will be going forward the next 5 -10 years.. in order to pay for 1 full time labour and make repayments of 120000 on such a venture while keeping up with reinvestments and paying contractors and making a profit? I suppose thats what im asking. Without sounding too ignorant im not wondering if I have budgeted enough. Some things are in place like grassland, fencing and some livestock. The rest will be borrowed for.

What slurry storage is on-farm at present, you'll need 300k gallons I'd reckon to cover going into derogation could be a big unforeseen cost if you have to put in a good bit of extra storage

Mooooo

What do you need /want in the bank for yourself? Start there and work back from that allowing x amount of time to get there.

Icelandicseige

jaymla627 wrote: »

What slurry storage is on-farm at present, you'll need 300k gallons I'd reckon to cover going into derogation could be a big unforeseen cost if you have to put in a good bit of extra storage

There is storage on farm at present. There would be a tank going in beside parlour where cows be going in. Had an advisor out and was calculated that we be ok that way, but if wanted to increase we would need more storage alright.

mahoney_j

GrasstoMilk wrote: »

120k over 6 years wouldn't be that hard. Agree if you can get it over longer do but that shouldn't be too hard to repay with 100 cows.

OP have you enough stock to turn them into 100 cows?
Greenfield site for 16 unit parlour and 10k litre tank and cow handling set up will swallow up your 120k fairly handy

120 k over 6 years not that hard ????,for real??.how about living outside of that paying a mortgage ,family to support and day to day expenses etc .u using jack Kennedy’s calculator !!!!

Buford T. Justice XIX

mahoney_j wrote: »

120 k over 6 years not that hard ????,for real??.how about living outside of that paying a mortgage ,family to support and day to day expenses etc .u using jack Kennedy’s calculator !!!!

Jacks calculator is beginning to become a star in its own right:D

yewtree

mahoney_j wrote: »

120 k over 6 years not that hard ????,for real??.how about living outside of that paying a mortgage ,family to support and day to day expenses etc .u using jack Kennedy’s calculator !!!!

It's a repayment of 25k a year. With all due respect if 100 cows can't be profitable enough to pay a living wage and repayments on that level of investment we are at nothing.
Good operator should be easily able to average 700/cow net profit excluding sfp. That's 70 k off 100 cows, that 70 k needs to look after your drawing/tax and capital repayments. You also have your sfp. Small bit of tax planning and you can have a very comfortable living

mahoney_j

Timmaay wrote: »

Agreed about the 120 one man show which I'm at at the minute, however I've 145ac that I can milk off (38 of that on a longterm lease for sub200), another 10ac silage ground also. What would you do in my case lol?

Great question ,unlike me u have the landbase in one block and at reasonable rent ,little to no chance of getting land adjacent to milk block here anyone near u interested in a partnership ??

mahoney_j

yewtree wrote: »

It's a repayment of 25k a year. With all due respect if 100 cows can't be profitable enough to pay a living wage and repayments on that level of investment we are at nothing.
Good operator should be easily able to average 700/cow net profit excluding sfp. That's 70 k off 100 cows, that 70 k needs to look after your drawing/tax and capital repayments. You also have your sfp. Small bit of tax planning and you can have a very comfortable living

Once the 120 k is paid and after tax allowances have run out yes .......but then there’s a big yearly tax problem if farm is very efficient and making good profit .ltd company an option but pitfalls there too .your forgetting the many other fixed and variable costs incurred

Timmaay

mahoney_j wrote: »

Great question ,unlike me u have the landbase in one block and at reasonable rent ,little to no chance of getting land adjacent to milk block here anyone near u interested in a partnership ??

Looked into it alright, had one interesting offer before Xmas with a good friend of mine, however the circumstances were not right for it. Also it would have to be a 3way partnership, because I'm currently in one with my dad, and trust me that complicates matters ha. Made good progress on hired labour this spring (to the point that I honestly don't know what I would do if I didn't have regular help in the spring moving forward)

In any case inching towards 140cows (10rows) is the medium term plan, with relief milk at least one milking/day during spring, and 4milkings/week outside of the spring (working so far this year). And for that I'm aiming to have at least 3 of my student/part time milkers on the roster to be sure I'll be covered (they come and go regularly enough here).

GrasstoMilk

mahoney_j wrote: »

120 k over 6 years not that hard ????,for real??.how about living outside of that paying a mortgage ,family to support and day to day expenses etc .u using jack Kennedy’s calculator !!!!

From someone who is doing it yes, it's not that hard. And it was done with a lot less cows once apon a time too.

mahoney_j

GrasstoMilk wrote: »

From someone who is doing it yes, it's not that hard. And it was done with a lot less cows once apon a time too.

Doing /done it myself with mortgage on top ,childcare etc etc no where near as easy as u think .servicing the debt on its own probably manageable but add in all the extras required to live and run a farm paying that amount of debt with that no of cows in 6 years pretty hefty

einn32

Icelandicseige wrote: »

I'm going to keep it simple. 100 cows on 100 acres. Grass based system on own land. All replacements bought in from rep breeder. One experienced operater. All machinery contracted out except for feeding.. 120000 investment needed. Only constructive opinions need post. What do yous think?

You're better off going working for a big operation I think. Make your way into a management position if you want it.You already have an offer from Dawg! 100 cows going forward won't cut it in my opinion.

mahoney_j

einn32 wrote: »

You're better off going working for a big operation I think. Make your way into a management position if you want it.You already have an offer from Dawg! 100 cows going forward won't cut it in my opinion.

Yes it will in the right hands

jaymla627

einn32 wrote: »

Icelandicseige wrote: »

I'm going to keep it simple. 100 cows on 100 acres. Grass based system on own land. All replacements bought in from rep breeder. One experienced operater. All machinery contracted out except for feeding.. 120000 investment needed. Only constructive opinions need post. What do yous think?

You're better off going working for a big operation I think. Make your way into a management position if you want it.You already have an offer from Dawg! 100 cows going forward won't cut it in my opinion.

Never understood the number of cows milked as being a kpi, johnny down the road might have the place stocked to the hilt with 250 cows doing 380 kgs ms cow and the neighbour might have 150 cows doing 620kgs ms cow, but have nearly the exact same level of ms produced per year but one lads having to run a extra 100 cows to achieve it, who's better off farmer A our farmer B....
In a situation like this spring been stocked to the hilt with 100's of cows isn't working out to well

GrasstoMilk

einn32 wrote: »

You're better off going working for a big operation I think. Make your way into a management position if you want it.You already have an offer from Dawg! 100 cows going forward won't cut it in my opinion.

Why do you think that? 100 cows done well will give a very good living.

whelan2

GrasstoMilk wrote: »

Why do you think that? 100 cows done well will give a very good living.

Yes but it also depends how many hands are pulling out of the pot

GrasstoMilk

whelan2 wrote: »

Yes but it also depends how many hands are pulling out of the pot

That's all down to the farmer.

Mooooo

It's going to be individual to every farm, from set up costs to running costs. OP will just have to do his own costings. If wondering on price work on an average 5 year of 30c and then stress test it at 25 or below and see how you will get on.

darragh_haven

GrasstoMilk wrote: »

Why do you think that? 100 cows done well will give a very good living.

Ill play devils advocate here! Why is everyone giving out about cuts to milk price when the processor know that 100 cow farmers are making a very good living (too good a living in their eyes)
.
.
Please note this is not my view, but it could be the view of more scrupulous guys on the big bucks

mahoney_j

whelan2 wrote: »

Yes but it also depends how many hands are pulling out of the pot

100% agree ,u won’t live like a king or anywhere near it with 100 unless debt and wife /family free

mahoney_j

GrasstoMilk wrote: »

That's all down to the farmer.

Farmer could be a pure slave and just living to work and wave his todjer as to how much land and cows he is farming .wheres the fun in that ,life is for living not been married to a farm and cows

GrasstoMilk

mahoney_j wrote: »

Farmer could be a pure slave and just living to work and wave his todjer as to how much land and cows he is farming .wheres the fun in that ,life is for living not been married to a farm and cows

We're both saying the same thing Mj
It all depends on a number of factors ( dept/spouse working or not/ children) but the 100 cow herd and less are still going to make up the majority of the Irish dairy herd.
Milk price has gotten more volatile but it's 5/10 year average is no different than what it was prequota removal

yosemitesam1

GrasstoMilk wrote: »

Milk price has gotten more volatile but it's 5/10 year average is no different than what it was prequota removal

It might be a bit early to say that.

tanko

What was the average milk price over the last ten quota years?

Water John

Wolfe CEO DG, used to say for years, around 31c. That was prior to the last, big dip.

alps

Water John wrote: »

Wolfe CEO DG, used to say for years, around 31c. That was prior to the last, big dip.

I thought you were going to quote someone we could believe..

Timmaay

darragh_haven wrote: »

Ill play devils advocate here! Why is everyone giving out about cuts to milk price when the processor know that 100 cow farmers are making a very good living (too good a living in their eyes)
.
.
Please note this is not my view, but it could be the view of more scrupulous guys on the big bucks

It's an interesting one, in general the food/agriculture industry is one of constant growth/amalgamation (basically due to technological improvement which fuels the race to the bottom), or face the wrath of standing still, and face getting squeezed out long term. Here in Ireland the current expansion is fueled by a vacuum caused by the lack of growth in the dairy sector the 30years of quotas (alongside a government who has dairy growth on its agenda), the whole industry appears to wants farmers to march forward towards the likes of an average herd of 150+ cows, why, not because it makes the farmer any more money, but because it adds growth to the whole dairy industry which is good for the economy and all that).

The 100cow farmer being frustrated at cuts knows that the only way around cuts is to expand, our tax system is setup in a typical manner to encourage as much growth and reinvestment as is possible (reduce your tax bill this year by growing the business, which will result in an even bigger tax bill next year, but that's next year's issue!). All of this is the system that we are in, you cannot and should not fight growth because of how technological improvement will in theory keep making your life easier (I know for one I do alot less work than my dad did back in the day, despite us knocking out alot more milk nowadays). You could even compare the moaning cushy 100cow farmer to a worker in a union wanting to go on strike ha, at some stage the union worker has to face reality that he has no choice but to take his pay cut/work more hours, but he isn't going to lie down and take it without a fight, same thing with a dairyfarmer. Except the danger with continued growth in farm sizes etc are that 1)It moves us towards factory farming and 2)It reduces the number of farmers/workers which is bad for the local rural economy.

Edit: and in a final remark, the other thing about cuts that really pisses off us dairyfarmers are the nature of Glanbias 3c/l cut this month, we are being marched forward towards the 150 or whatever cow number, being encouraged to expand which as everyone knows sucks money and cash flow, then only to see how easily the rug can be pulled underneath us.

Anyways sorry long winded post, but hopefully makes some sense ha.

Fixture

Timmaay wrote: »

It's an interesting one, in general the food/agriculture industry is one of constant growth/amalgamation (basically due to technological improvement which fuels the race to the bottom), or face the wrath of standing still, and face getting squeezed out long term. Here in Ireland the current expansion is fueled by a vacuum caused by the lack of growth in the dairy sector the 30years of quotas (alongside a government who has dairy growth on its agenda), the whole industry appears to wants farmers to march forward towards the likes of an average herd of 150+ cows, why, not because it makes the farmer any more money, but because it adds growth to the whole dairy industry which is good for the economy and all that).

The 100cow farmer being frustrated at cuts knows that the only way around cuts is to expand, our tax system is setup in a typical manner to encourage as much growth and reinvestment as is possible (reduce your tax bill this year by growing the business, which will result in an even bigger tax bill next year, but that's next year's issue!). All of this is the system that we are in, you cannot and should not fight growth because of how technological improvement will in theory keep making your life easier (I know for one I do alot less work than my dad did back in the day, despite us knocking out alot more milk nowadays). You could even compare the moaning cushy 100cow farmer to a worker in a union wanting to go on strike ha, at some stage the union worker has to face reality that he has no choice but to take his pay cut/work more hours, but he isn't going to lie down and take it without a fight, same thing with a dairyfarmer. Except the danger with continued growth in farm sizes etc are that 1)It moves us towards factory farming and 2)It reduces the number of farmers/workers which is bad for the local rural economy.

Edit: and in a final remark, the other thing about cuts that really pisses off us dairyfarmers are the nature of Glanbias 3c/l cut this month, we are being marched forward towards the 150 or whatever cow number, being encouraged to expand which as everyone knows sucks money and cash flow, then only to see how easily the rug can be pulled underneath us.

Anyways sorry long winded post, but hopefully makes some sense ha.

Who’s doing the encouraging to expand?

Timmaay

Fixture wrote: »

Who’s doing the encouraging to expand?

Food harvest 2020 for one.

einn32

Ah just having a bad day when I posted that. Maybe if you got the farm without purchasing you probably would have a living off 100 cows and your own boss. But it's got to be hard. It's just the cost of inputs are constantly increasing. I wouldn't be too bothered about fellas that tell you they're milking a stack of cows. I'd be more interested in a person showing me the figures from their business and a healthy bottom line along with decent wages for themselves.

I like farming as a job but I'm in to make money too. I'll never be in a situation to run my own farm I think so working on big operations gives me a consistent wage to live off. Just my personal situation.