Dairying

Dairypro

Hi all, first time poster on this, just looking for your opinions?
I’m currently working full time in a good enough job but I have been thinking leaving to go milk cows at home. It’s something I’ve been seriously thinking about for a while now.
Dads milking 55 cows (spring calving) not making a profit due to poor grass utilization, breeding etc. basically poor management, he’s pushing on in years and he’s health isnt great.
I was thinking of applying for a loan to pay off current loans and debt he’s carrying and for 15-20 in calf heifers. 280,000 would be the cost of the loan. He’s willing to sign over the farm.
There’s a 90 acre block of good land all around the yard, 10 unit parlor, slat unit for 70 cows and another smaller shed for 10-12 cows/heifers.
I would be trying to shorten the calving season so they’ll be all calved for the end of March, increase milk solids and the breeding. I qualify as a young trained farmer.
What ye think, any opinions?

visatorro

I'd be afraid of a loan that big, but then again I'm a windy bastard

Dairypro

visatorro wrote: »

I'd be afraid of a loan that big, but then again I'm a windy bastard

Yeah I know but I’ve been doing the calculations at @ 75 cows yielding 4500 liters @ say 28 cpl is €94500 in milk sales.
Then there’s calf sales, cull cow sales, sfp of €9000 etc.

Mooooo

Start at the end and work back in your calculations. See what needs to come out, for yourself and the parents, and then see how it looks. Join a local discussion group if you can.

Turbohymac

Day job will always pay better and it probably starts and ends at designated times..otherwise take on a large loan and work 24x7 365.. not too glamorous a life..I currently work a day job and looks after the brothers outside farm so takes lots time evening's and weekends. It can seriously conflict with my family life ..and financially I personally wouldn't dream of giving up my day job ..too much uncertainty ..poor prices for produce and animals at the mart compared to fodder shortages. Lack of labour. Machinery and tractors ever increasing in cost. Insurance. The Hope's of more Grant's and subsitities etc which farmers would simply be better off without ..if there was proper pay for produce etc.lots agri redtape..quite frankly the modern farmer today needs to fulfill many roles..and spend lots office time also.
Everyone has different options but part time looking after beef cattle is enough for me but wouldn't make ends meet ..
Oh and the never ending farmers saying.
...we'll wait and see... total uncertainty
In a nutshell..oh and the regular Hope's for a good spring. Weatherwise..
Best of luck deciding ..
I've certainly decided

Dairypro

Mooooo wrote: »

Start at the end and work back in your calculations. See what needs to come out, for yourself and the parents, and then see how it looks. Join a local discussion group if you can.

Thanks for the reply’s guys.
Parents are both getting pensions, they live a really modest lifestyle. I would be moving back in with them so we would be sharing the bills. My partner would aswell shes fairly on board with the whole idea.

simx

Dairypro wrote: »

Hi all, first time poster on this, just looking for your opinions?
I’m currently working full time in a good enough job but I have been thinking leaving to go milk cows at home. It’s something I’ve been seriously thinking about for a while now.
Dads milking 55 cows (spring calving) not making a profit due to poor grass utilization, breeding etc. basically poor management, he’s pushing on in years and he’s health isnt great.
I was thinking of applying for a loan to pay off current loans and debt he’s carrying and for 15-20 in calf heifers. 280,000 would be the cost of the loan. He’s willing to sign over the farm.
There’s a 90 acre block of good land all around the yard, 10 unit parlor, slat unit for 70 cows and another smaller shed for 10-12 cows/heifers.
I would be trying to shorten the calving season so they’ll be all calved for the end of March, increase milk solids and the breeding. I qualify as a young trained farmer.
What ye think, any opinions?

Seems a hefty loan? What level of debt is on farm at present? What’s the calving spread at present?

Dairypro

Turbohymac wrote: »

Day job will always pay better and it probably starts and ends at designated times..otherwise take on a large loan and work 24x7 365.. not too glamorous a life..I currently work a day job and looks after the brothers outside farm so takes lots time evening's and weekends. It can seriously conflict with my family life ..and financially I personally wouldn't dream of giving up my day job ..too much uncertainty ..poor prices for produce and animals at the mart compared to fodder shortages. Lack of labour. Machinery and tractors ever increasing in cost. Insurance. The Hope's of more Grant's and subsitities etc which farmers would simply be better off without ..if there was proper pay for produce etc.lots agri redtape..quite frankly the modern farmer today needs to fulfill many roles..and spend lots office time also.
Everyone has different options but part time looking after beef cattle is enough for me but wouldn't make ends meet ..
Oh and the never ending farmers saying.
...we'll wait and see... total uncertainty
In a nutshell..oh and the regular Hope's for a good spring. Weatherwise..
Best of luck deciding ..
I've certainly decided

You make fair points there. I really like dairy farming. A few years ago I was working on a 250 cow spring/autumn farm and loved the work. Hardship I know calving a cow at 3 in the morning to find out the calf isn’t worth €50. But still I’m drawn to it.

Dairypro

simx wrote: »

Seems a hefty loan? What level of debt is on farm at present? What’s the calving spread at present?

Farm owes 255,000. Cows could calve from mid Jan to end of April

Turbohymac

Best of luck.. but it's fine to factor in what 80 or 90 cows will bring in financially..BUT please be realistic with the outgoings.. I even forgot to mention the monthly repayments on the 280k loan and will any other large outlays need to be made in the next 5 to 10 years..ie replace a tractor. That's would call for another 80k ??? And any tractor now over 15 years is fairly worthless in value.. milk prices and payments can and definitely will vary ..one thing's certain the bank will get their money back with interest one way or another..
And what if you need to build your own house/ family etc. Your scenario needs long term consideration.. with existing large debt and your plan of a further 280. That even makes me fair windy with my balls of steel
Best regards 😀

Mooooo

Dairypro wrote: »

Thanks for the reply’s guys.
Parents are both getting pensions, they live a really modest lifestyle. I would be moving back in with them so we would be sharing the bills. My partner would aswell shes fairly on board with the whole idea.

That's fair enough bit in order for it to be sustainable you need to be planning ahead, living at home is fine initially but at some stage that will change etc. Not saying not to go ahead with it but no point fooling yourself either. If you go fulltime at it you'll need a proper wage out of it. Even if you put a figure of 30 or 40 k for yourself while doing out the calculations on paper. When you go looking for a loan the banks will want to see a drawing figure for yourself anyway

Timmaay

Dairypro wrote: »

Yeah I know but I’ve been doing the calculations at @ 75 cows yielding 4500 liters @ say 28 cpl is €94500 in milk sales.
Then there’s calf sales, cull cow sales, sfp of €9000 etc.

That's what they are yielding now? 5500 is very doable, and with high solids you'd hope to be cleaning 5c over the base price. Would bring up the milk sales to 136k. Anything less than this and your largely at nothing I would say 2bh, especially with that loan.

Any land outside the 90ac? Them 90ac would support 100cows without too much sweat (in a normal yr ha), that would drive up your milksales to 181k, would make the whole plan a hell of alot more feasible in my view. Incalf heifers are very cheap at the minute, 50k would get you at least 45 of them at the minute, lob in another cubicle shed, and invest in grass, grazing infrastructure, lime, p and k.

Dairypro

Turbohymac wrote: »

Best of luck.. but it's fine to factor in what 80 or 90 cows will bring in financially..BUT please be realistic with the outgoings.. I even forgot to mention the monthly repayments on the 280k loan and will any other large outlays need to be made in the next 5 to 10 years..ie replace a tractor. That's would call for another 80k ??? And any tractor now over 15 years is fairly worthless in value.. milk prices and payments can and definitely will vary ..one thing's certain the bank will get their money back with interest one way or another..
And what if you need to build your own house/ family etc. Your scenario needs long term consideration.. with existing large debt and your plan of a further 280. That even makes me fair windy with my balls of steel
Best regards 😀

Thanks. Yeah I’ve taught about that, herself is working full time as well. So that would go towards our expenses.

dar31

Might be out of line here, but is there other siblings, and are they due an inheritance

Sugarbowl

Dairypro wrote: »

Farm owes 255,000. Cows could calve from mid Jan to end of April

How did the farm rack up such as big debt? Is it due to new farm buildings or something like that?

visatorro

Actually you've a roof over your head and a very quiet woman so that's two big positives you have.
What's the off farm job?

Dairypro

Timmaay wrote: »

That's what they are yielding now? 5500 is very doable, and with high solids you'd hope to be cleaning 5c over the base price. Would bring up the milk sales to 136k. Anything less than this and your largely at nothing I would say 2bh, especially with that loan.

No there yielding 4900 ish but I just wanted to low ball it because that’s what the banks would do. I also think 5500 is very doable with good grass land management and the right cow.

Dairypro

Sugarbowl wrote: »

How did the farm rack up such as big debt? Is it due to new farm buildings or something like that?

Father bought land few years ago over the ditch that he just had to buy ( bull Mcabe kinda stuff)

Dairypro

visatorro wrote: »

Actually you've a roof over your head and a very quiet woman so that's two big positives you have.
What's the off farm job?

She is indeed! Im an electrician working for a medium size company.

Timmaay

Dairypro wrote: »

She is indeed! Im an electrician working for a medium size company.

Once you get the compact calving sorted you would definitely be able to keep the electrical work going on the side, likes of 20hrs a week outside of the spring and likes of Nov, keep it local to avoid traveling obviously tho. Having said that tho how much a day can you earn now as a sparky? 250? Be hard for dairying to match that.

Mf310

Dairypro wrote:

She is indeed! Im an electrician working for a medium size company.

Your a man in demand at the moment and I would say your job is enjoyable enough as in you are not doing the same stuff everyday not stuck in an office and not really getting hardship. If you could keep the day job going youd be on the pigs back just make the dairy set up as simple as you can 60 cows on the farm 1 group of stock being the cows ..All calves gone asap ..3000€ would go a long ways towards fencing paddocks and small roadways to make everything more efficient .. Facilities is everything .. simple things like all gates hanging and gates where you need them and having every shed set up before you begin calving.
If you were able to upgrade the parlour then in time up to a 20 unit or so you would be flying no point spending all day in a parlour when you have a day job ... just a thought especially as your father is still farming at the moment he would be able to and would most likely be delighted to do the day to day jobs as in machinery work and feeding and the odd milking

GrasstoMilk

Dairypro wrote: »

Thanks for the reply’s guys.
Parents are both getting pensions, they live a really modest lifestyle. I would be moving back in with them so we would be sharing the bills. My partner would aswell shes fairly on board with the whole idea.

2 women should never live in a house together.
We did it for a few weeks and it should never be done.
On the loan, it can be done but you need it over a long period. Otherwise it Won't be viable at 90 cows if you want a decent wage and more investment is needed tp improve wgat yiu have. Came from a similar situation and still am with more borrowings but we had to get up over 100 cows asap and that ment me not taking out a proper wage for a few years. Grand for me because I was young and was happy to do so but if I was to leave a job with a wage it would be tough to be heading into it

jaymla627

Dairypro wrote: »

Hi all, first time poster on this, just looking for your opinions?
I’m currently working full time in a good enough job but I have been thinking leaving to go milk cows at home. It’s something I’ve been seriously thinking about for a while now.
Dads milking 55 cows (spring calving) not making a profit due to poor grass utilization, breeding etc. basically poor management, he’s pushing on in years and he’s health isnt great.
I was thinking of applying for a loan to pay off current loans and debt he’s carrying and for 15-20 in calf heifers. 280,000 would be the cost of the loan. He’s willing to sign over the farm.
There’s a 90 acre block of good land all around the yard, 10 unit parlor, slat unit for 70 cows and another smaller shed for 10-12 cows/heifers.
I would be trying to shorten the calving season so they’ll be all calved for the end of March, increase milk solids and the breeding. I qualify as a young trained farmer.
What ye think, any opinions?

280k borrowed at 4.5% over 15 years you’ll be looking at having to find nearly 30k a year for debt repayments, any blip re milk price/bad year weatherwise you’d basically have to go back to full time employment off-farm to keep the show on the road, it’s doable of course but it would be a massive undertaking

dar31

GrasstoMilk wrote: »

2 women should never live in a house together.
We did it for a few weeks and it should never be done.
On the loan, it can be done but you need it over a long period. Otherwise it Won't be viable at 90 cows if you want a decent wage and more investment is needed tp improve wgat yiu have. Came from a similar situation and still am with more borrowings but we had to get up over 100 cows asap and that ment me not taking out a proper wage for a few years. Grand for me because I was young and was happy to do so but if I was to leave a job with a wage it would be tough to be heading into it

I'll second that.
The woman of the house and the future woman of the house should be separated by at least a mass concrete wall. It's just not worth it.

pms7

I agree with whats said re living arrangements, you don't want any problems starting there as they can linger.
I would go so far as to say it's the most important issue.

You are not paid on litres, what milk solids are cows doing, more to the point, MS/hectare. You mightn't think it but there is huge variation between farmers, include difference in amount of grass grown and 6wk calving rate and you are looking at massive difference between very profitable farmers and low profit farmers. €2500/H for top guys, maybe 500 for other end. Get involved in local discussion group and Teagasc and educate your self on grass based profitable farming.

I would be concerned at the current level of debt, before you start investing on farm and possible house.

Turbohymac

Jesus its very positive to read back through the replies of some very knowledgeable individuals.. I think the single biggest failure of emerging farmers these days is to simply look at what absolute max income they hope to achieve when in reality they should be basing their overall income at a much lower level and take any increased payments etc as a one off bonus.and failure to take into account all the ongoing regular expenses and the ongoing depreciation of machinery and assets.. even milking 20 extra cows will cost more in feeds.grass. veterinary expenses and a larger milking system.
Also you shouldn't be using your partners take home pay as a split wage for both of ye..that's very false accounting as poster mooo quite correctly highlighted you should be setting aside at least 35k of an annual wage from the farm for yourself otherwise your very understanding and quiet partner will get very pissed off short term..and yes 2 women of different generations living under the same roof another Chernobyl waiting to happen.. I was in that situation for a year while we were finishing our own house ...definitely a disaster couple's need their own space and even more so if kids come along.. think of your partners wellbeing and sanity as well.
Sit down together and put Actual realistic figures of income and expenditure on a large page and include an actual wage for yourself and the realistic bank repayments which will be High..
Don't fool yourself would you work for your current employer if he was throwing you 700 one week and only 250 for the same hours the next week..cos there was some unforeseen breakdown or expense he has to cover..

And very last line ..I honestly couldn't see you successfully working that farm re milking 80 to 100 cows and holding down a day job.. with that much labour on the farm of you needed a day job to pay the Bill's then that's totally a non viable plan..theres easier ways to get old fast..

Injuryprone

Dairypro wrote: »

Father bought land few years ago over the ditch that he just had to buy ( bull Mcabe kinda stuff)

Worse again, as it was for a land purchase, you won't even have the associated capital allowances to write off against your tax bill over the next few years. Tbh I don't know what I'd do it I was in your shoes, it'll be a fair drag on your finances over a good number of years given the other things you're going to have to add on top of it.

How do they feel about selling the cows and leasing for 10 years or so? At least then that loan would be gone and by then you might be settled a bit more and maybe in a better situation to make the jump

yewtree

If you really want to do it, go for it. Keep it simple though so your can top up income with a bit of outside work if you need to. 1st couple of years are always the hardest.
When I came home I had to finish paying a loan my father had for purchased land. The purchased land put us under pressure but in the long term the farm is more viable because we have it.

K.G.

this all comes down to what your partner and you want out.of life.if ye like nice cars a fancy house,expensive holidays and nights out probaly stick.at what your are at.if on the other hand ye like the area and maybe a family down the line theres alot to be said for one person working and other running a farm.two fulltime jobs are tough going in a family set up.the loan is a big issue but at least that land give s you a reasonable platform on which to base a business.if it was me id go part time for a couple of years and not buy in more heifers and see what you think in 2 years.plans are great but theres nothing like doing to learn your business

Dairypro

Thanks for reply’s, a lot of food for taught. As for the 2 women in my life they get on rely well with each other, she wouldn’t be prepared to move in with them if they didn’t get on.

I think after 5 years building the herd to 90-100 head and concentrating on milk solids, fertility, compact calving, i could be running a successful dairy farm. Extend the loan to 20 years to reduce monthly repayments.

Am I right in saying that if we set up a successor partnership we would get an income tax credit??

I’m going to do up a proper 5 year business plan, see how the figures stack up and talk to my Teagasc advisor.

Thanks again for reply’s.

kk.man

A friend of mine works as an adviser with teagasc and his clients are making profits of between 1k and 1.3k per cow. That's some money but ya will work for it.

jaymla627

kk.man wrote: »

A friend of mine works as an adviser with teagasc and his clients are making profits of between 1k and 1.3k per cow. That's some money but ya will work for it.

Does he sell magic beans aswell

visatorro

Don't mean to get into your personal business but what if you start a family? Sometimes these blessings aren't planned. That's your two wages gone.

You said your father suffers from Ill health, what if he needs care, medical bills etc. I'm not putting a dampener on your plans just pointing out a couple of slightly less rosey possibilities.
if you rented out for five years and kept the job you would be further on but still have an income from the farm and have it there for five years down the line.

Have you much savings? Because cash flow will be tight never mind wages. Again something to consider

poor farmer

If it's something you want to do, then I think that you will make it work.
On the Domestic front ,speaking from experience .Do not move back in with your Parents for everyone's sake.
Get your own place (build,rent,buy)
been there , done that.

Mortelaro

The farm owes 255k and you're going to borrow another 280k total 535k on 90 acres :eek: ? Or are you planning on just borrowing an extra 25k bringing you up to 280 k
535 will cost you 4000 a month over 15 years
You'll go Under at that level,no doubt about it

If you really really want to do this,let me recommend a blended option that will require patience
Assess your facilities and spend as little as possible on them if you can get away with it for now
Organically grow and genetically improve your herd by breeding all Friesan and rear the heifers but don't go mad on the numbers
You go to a 100 cows even with the 280 k borrowings,have a bad weather year,some other bad luck and a price in the mid to low 20s ,You'll Go Under
Patience

Oh and do some electrical work for sure as Timmay said
But remember you'll need a life
Slavery is not to be recommended

Good luck and please Think A lot before you decide

Wildsurfer

The 280k loan is to clear the existing farm loans and the additional spend is for the extra heifers. The loan for the land has to be repaid in any event so may as well have a young enthusiastic man at the helm to drive things on. Nothing like a nice bit of debt to focus the mind!

older by the day

Wildsurfer wrote: »

The 280k loan is to clear the existing farm loans and the additional spend is for the extra heifers. The loan for the land has to be repaid in any event so may as well have a young enthusiastic man at the helm to drive things on. Nothing like a nice bit of debt to focus the mind!

I was thinking, what about once a day milking, a good contractor that knows your place, and it won't be too stressful. Your not meant to become rich overnight when your farming. Stay working away wiring, all the cows will need to do is pay off the debts. Make do with what you have, breed a few Heifers that suit your system and have a look at what others are doing. I worked full time and milked and help was scarce at home, it was a dogs life. So even just for lifestyle don't be too quick to take to much on.

Buford T. Justice XIX

Wildsurfer wrote: »

The 280k loan is to clear the existing farm loans and the additional spend is for the extra heifers. The loan for the land has to be repaid in any event so may as well have a young enthusiastic man at the helm to drive things on. Nothing like a nice bit of debt to focus the mind!

On that 280k over 15 years, it's well manageable up till about year 10, I'd say. After that it becomes a real pain and the allowable interest cost of the loan reduces and the more the capital cost increases, it basically means Dairypro will be drawing two incomes off the farm while having only one.


I've been there and every cent you draw down all year will have to be matched with a cent in tax later in the year. It's fine as a single person or not having kids, you can cut to the bone and live almost on fresh air.



But mortgages, spouse, kids, creche and the possibility of health requirements of parents before the loan is paid off need to be factored in as drawing a lot of cash flow out of the farm as well, I think.

Mooooo

A good accountant is important I think and planning 're investment etc. Bufords point above is very valid

Turbohymac

Well barely surviving on fresh air for 10 years equates to forced labour..with all the above posts having valuable input..it would certainly seem better to lease out for 5 to 10 years and keep the regular day job with a proper income /wage.and revisit your idea only when it comes close to being a viable option with less debt..loans and the farm actually able to pay you a proper 40k wage AFTER all costs are removed..not just dreaming what income the farm could MAX
With many farms it seems theres huge pressure from the older generation for the successor to jump in regardless and keep that farm going with absolutely no concern to income or debts which the older generation didn't worry about as much as they should..
Currently the op will be working for the next 20 years for the banks just to service the loans etc..and as I've said earlier your partner will have to make huge sacrifices as well.. her wage will also be used directly or indirectly to keep the farm going...that's madness..
Holding down a proper day job and milking 100 cows == totally not doable.
And as for those teagasc advisors they go with similar theories as. . A fly can stop a train... yes it's TRUE but they forget to tell you the fly end up in a pile of it's own ****e stuck to the trains windscreen.. you seriously need to step back and think an awful lot. Unfortunately for you ..you actually seem to already have your mind made up. ..and simply hope people here can provide you with magic puffed up formulas to turn this in debt and growing further..into a massive money spinner to keep the older generation happy..what they did during their working lives shouldn't mean that you continue the slavery..live a better life at least and look forward to a happy partner and kids..
Step back think LOTS. (ONLY ONE LIFE LIVE IT)