profit for dairy leased land

Looney1 · 21-09-2020 11:02am #1

If anyone had 10 mins could they give me an idea of fixed costs and variable costs associated with running 90 crossbred cows on 120 acres of good/ middling land. facilities very good. aiming for 450kgms per cow per year . estimating gross output of 180 thousand. im trying to work out if a lease is viable. Really appreciate help

simx · 21-09-2020 2:41pm

Looney1 wrote: »

If anyone had 10 mins could they give me an idea of fixed costs and variable costs associated with running 90 crossbred cows on 120 acres of good/ middling land. facilities very good. aiming for 450kgms per cow per year . estimating gross output of 180 thousand. im trying to work out if a lease is viable. Really appreciate help

The price of the rent will be a big pinpoint imo, the land is good/middling? Will it be ok for early/late grazing? Will you need to upgrade water/fencing? Indexes for ps and ks and lime requirements? A lot of scrutiny to be done on. Plan like such imo

Looney1 · 21-09-2020 2:56pm

I agree. average turnout is 10th of march with on off before that. p and k are index 2. ph ok. needs about 40 acres reseeded. roadways good. im thinking around 230- 240 an acre. forgot to say doesnt have a bulk tank

K.G. · 22-09-2020 9:27am

Fert,ration 55k
Contract,machinery25k
Rent 28k
Vets meds ai 20k
Sundries maintenance 20k
Repayments on stock,start up cost s loan
200 k over 10 years at 6 %?27k
That's 155 k a.year
People will argue about some costs here and there but the key thing here is @450 you will have a profit of 25 to 30 k a year but at 400 kilos you have only maybe 5 or 10k a year.performance on tight money management is where its at and very difficult to achieve. Unless you are 100 %sure you can do it and have done it already forget about it

GrasstoMilk · 22-09-2020 9:55am

Also if planning to start out with heifers you wouldnt want to budget more than 380 kgs ms in year one if going for crossbreds

Would you consider buying a herd from a dispersal sale?
I saw 2 very large crossbred herds in England for sale lately
You'd get a good pick out if them to make up the 90 you need

Also important to start with as many as you can day one.
Itll help you get as much milk out the gate as quickly as possible

Timmaay · 22-09-2020 12:10pm

K.G. wrote: »

Fert,ration 55k
Contract,machinery25k
Rent 28k
Vets meds ai 20k
Sundries maintenance 20k
Repayments on stock,start up cost s loan
200 k over 10 years at 6 %?27k
That's 155 k a.year
People will argue about some costs here and there but the key thing here is @450 you will have a profit of 25 to 30 k a year but at 400 kilos you have only maybe 5 or 10k a year.performance on tight money management is where its at and very difficult to achieve. Unless you are 100 %sure you can do it and have done it already forget about it

I'm already arguing with some of your costs but feed and fert combined costs usually something like 35k here, for 160ac, 120cows and whatever youngstock.

Bass Reeves · 22-09-2020 12:45pm

K.G. wrote: »

Fert,ration 55k
Contract,machinery25k
Rent 28k
Vets meds ai 20k
Sundries maintenance 20k
Repayments on stock,start up cost s loan
200 k over 10 years at 6 %?27k
That's 155 k a.year
People will argue about some costs here and there but the key thing here is @450 you will have a profit of 25 to 30 k a year but at 400 kilos you have only maybe 5 or 10k a year.performance on tight money management is where its at and very difficult to achieve. Unless you are 100 %sure you can do it and have done it already forget about it

Is that the same place you want to lease KG

Injuryprone · 22-09-2020 1:05pm

Timmaay wrote: »

I'm already arguing with some of your costs but feed and fert combined costs usually something like 35k here, for 160ac, 120cows and whatever youngstock.

Your maize included in that figure? As it's a substitute on your farm for nuts on other farms

Mooooo · 22-09-2020 1:26pm

Timmaay wrote: »

I'm already arguing with some of your costs but feed and fert combined costs usually something like 35k here, for 160ac, 120cows and whatever youngstock.

Good to middling land Tim, dunno where this lads location is but I'd often wonder what twud be like to farm with the winters ye have up there compared to what comes down here! Can increase the feed cost a lot

Bass Reeves · 22-09-2020 1:54pm

K.G. wrote: »

Fert,ration 55k
Contract,machinery25k
Rent 28k
Vets meds ai 20k
Sundries maintenance 20k
Repayments on stock,start up cost s loan
200 k over 10 years at 6 %?27k
That's 155 k a.year
People will argue about some costs here and there but the key thing here is @450 you will have a profit of 25 to 30 k a year but at 400 kilos you have only maybe 5 or 10k a year.performance on tight money management is where its at and very difficult to achieve. Unless you are 100 %sure you can do it and have done it already forget about it

I know nothing about milking it costs involved. But working back on a per head basis and it is cross bred cows OP is using. In your costs
Feet and ration is 610/ cow
Contracting/ machinery is 270/ cow
Vet&meds 220/ cow
Sundries&maintenance 220/ cow
Borrowings just saw recently CU are now giving loans of over 40 k for 4.5%. so for that amount of money you should now be able to shave a bit off 25k/year.
Rent is 233 net/ acre probably allowing for ANC and BPS.
It costs me 350/year to finish bullocks, a n general the ration bill is low on crossbred cows often sub 500kg/year. But If could not keep CB cows for 6-700/year net cost I would give up. TBH I expect that a tight run ship could even squeeze on that for CB cows

alps · 22-09-2020 2:07pm

Bass Reeves wrote: »

But If could not keep CB cows for 6-700/year net cost I would give up.

You can't...you just cant..

Cow will consume 4 tonnes of grass (if you're really good) 1 tonne of silage and 500kg of ration..

No chance of delivering this feed for 600€...

No chance..

J.O. Farmer · 22-09-2020 2:25pm

alps wrote: »

You can't...you just cant..

Cow will consume 4 tonnes of grass (if you're really good) 1 tonne of silage and 500kg of ration..

No chance of delivering this feed for 600€...

No chance..

You sure €600 to provide feed alone is unrealistic.

Half tonne of ration €175
Make 2 bales of silage @ €20 each for contractor + plastic

€385 left for a tonne of 10:10:20 to grow 5 tonne of grass.

Looney1 · 22-09-2020 2:38pm

900 per cow costs , 300 per cow lease. total 1200 per cow. is that realistic or am i missing something

jaymla627 · 22-09-2020 2:39pm

Bass Reeves wrote: »

I know nothing about milking it costs involved. But working back on a per head basis and it is cross bred cows OP is using. In your costs
Feet and ration is 610/ cow
Contracting/ machinery is 270/ cow
Vet&meds 220/ cow
Sundries&maintenance 220/ cow
Borrowings just saw recently CU are now giving loans of over 40 k for 4.5%. so for that amount of money you should now be able to shave a bit off 25k/year.
Rent is 233 net/ acre probably allowing for ANC and BPS.
It costs me 350/year to finish bullocks, a n general the ration bill is low on crossbred cows often sub 500kg/year. But If could not keep CB cows for 6-700/year net cost I would give up. TBH I expect that a tight run ship could even squeeze on that for CB cows

Teagasc/Glanbia had the exact same train of thought as the above when they set up Greenfields and look at the sh**show that turned out to be

Bass Reeves · 22-09-2020 2:55pm

J.O. Farmer wrote: »

You sure €600 to provide feed alone is unrealistic.

Half tonne of ration €175
Make 2 bales of silage @ €20 each for contractor + plastic

€385 left for a tonne of 10:10:20 to grow 5 tonne of grass.

I presume when Alps stated a ton of silage it was a ton of DM. Now Teagasc quite 175/ton DM for silage inc a land charge. At present using bale it costing me about 80-90/ton of DM. The cost to a dairy farmer is in between and as Op is using a separate rental charge a cost in the 120-130/ton charge would be a good ball park figure.

Rations for cows on grass can vary a lot but I expect buying in bulk you should get an adequate ration for 275 ton.

Grass is not cheap neither us it dear, usually the costing are calculated at 6-8cc/kg of DM so 4tons of grass but again a land charge us Inc on costings so say 5c/kg or 200/cow/year.
So
Grass...200eiro
Ration 500kgs.....135 euro
Silage.......130

Total.....485/cow

Bass Reeves · 22-09-2020 3:22pm

"jaymla627 wrote:

Teagasc/Glanbia had the exact same train of thought as the above when they set up Greenfields and look at the sh**show that turned out to be

Teagasc/Glanbia/Farmers Journal error o Greenfield was more to do with set up costs rather than feed costs. There assumptions on woodchip pads, lagoons,outside cubicles, milking facilities, not putting in parlour feeders, no meal feeding at the start etc etc was where the main flaw in the system was. As well that a set up was possible with minimum capital input.

People have to factor in OP'S details on housing and roadways already Insitu.

Mooooo · 22-09-2020 3:23pm

Need to know more tbh. Land type, if drainage is required on parts of it could be circa 1500/ acre. Is water supply adequate for 90 cows plus followers on a hot day in the summer at peak milk? Existing infrastructure and changes to be made, roadways, parlour etc. You say a bulk tank needs to be bought. Hot water will be very important with chlorine free so investment may be required there from the get go.
Stock, will you be buying in and if so buying heifers will hopefully keep replacement rate low in years 2 to 5 but it will be year 3 or 4 before seeing yields of 450kgs solids. In year 1 you may need to allow for a 25% replacement rate due any number of issues, as nobody sells their best stock.
Replacements assuming at the 90 cows on 120 acres you will be rearing on farm, the cow's will obviously have to pay for them as well so don't forget those costs.
Indexes will have to be built and maintained, in a one man operation use of contractors will be higher as well so find out the rates for slurry, silage etc in the locality.
It can be done but go and see other farms, join a discussion group, have a look at the notes from the Greenfield farm, I know it ended a mess but see what they did anyway. can do your plans at a 5 yr average of 30c, but put a figure of 25 cent in and see how you will do as rent, banks and other bills will have to be paid.

What do you need yourself and work back from there

K.G. · 22-09-2020 3:30pm

To be fair i through those costs up to get things going but its very easy to spend money.please dont compare a start up operation to a humming business and you have to allow for bad years due to weather or herd health or other reasons.while im all for start ups you got to know what you are doing1

cute geoge · 22-09-2020 3:39pm

Imo at an average milk price of 30 cent and costs north of 25 cent ,I find it hard to understand the stampede to milking cows from other enterprises .I wonder are many of the new entrants scratching their heads ,surely anyone with any sort of a job and tipping away with a few cattle or a bit of tillage are better off then enslaved to milking cows

Grueller · 22-09-2020 3:45pm

cute geoge wrote: »

Imo at an average milk price of 30 cent and costs north of 25 cent ,I find it hard to understand the stampede to milking cows from other enterprises .I wonder are many of the new entrants scratching their heads ,surely anyone with any sort of a job and tipping away with a few cattle or a bit of tillage are better off then enslaved to milking cows

Loads of lads may be seeing the green grass of milking cows from other enterprises, but in fairness loads of dairy farmers see the green grass of off farm employment.

jaymla627 · 22-09-2020 3:45pm

cute geoge wrote: »

Imo at an average milk price of 30 cent and costs north of 25 cent ,I find it hard to understand the stampede to milking cows from other enterprises .I wonder are many of the new entrants scratching their heads ,surely anyone with any sort of a job and tipping away with a few cattle or a bit of tillage are better off then enslaved to milking cows

Alot of robots going in to get around the milking cows part by new entrants, and then you have alot of partnerships where milking is shared around, but if operating as a one women/man band unless you have a genuine love for dairy farming and a understanding family re hours worked and the cows coming first you wont stick at it

tanko · 22-09-2020 4:18pm

Grueller wrote: »

Loads of lads may be seeing the green grass of milking cows from other enterprises, but in fairness loads of dairy farmers see the green grass of off farm employment.

Where are the loads of dairy farmers who are seeing the green grass of off farm employment?

The only dairy farmers I see quitting are old and are retiring or keep taking few dry stock.
I don’t see any young or middle aged dairy farmers quitting milking.
Plenty of existing dairy farmers piling on more cows and new entrants starting tho.

Grueller · 22-09-2020 4:21pm

tanko wrote: »

Where are the loads of dairy farmers who are seeing the green grass of off farm employment?

The only dairy farmers I see quitting are old and are retiring or keep taking few dry stock.
I don’t see any young or middle aged dairy farmers quitting milking.
Plenty of existing dairy farmers piling on more cows and new entrants starting tho.

None leaving but a lot of them about my area here always tell everyone how well the paye employee has it compared to them. Then the paye employees tell me that the dairy farmers have it cushy,time to drop and collect kids etc.
I was just making the point that every sector thinks the other is better.

trixi2011 · 22-09-2020 6:09pm

Have been looking for a lease far. Myself this year from budgets I have done and talking to farms with second units real cost of production is sitting at about 28-30 cents l including a small wage . All heifers will be closer to 30c costs and high producing herd can be 28 and under.The extra litres in the mature herd are diluting costs. These crossbreed herds are getting AVE milk price including stock sales of 36c . So that 6c over what ever litres you produce this is assuming are farming in the top 10%. 90 heifers @4500l would leave around 24000 for repayments on stock. I have never come across a genuine turn key farm for lease and extra costs will be there from the off .

Panch18 · 22-09-2020 6:19pm

trixi2011 wrote: »

Have been looking for a lease far. Myself this year from budgets I have done and talking to farms with second units real cost of production is sitting at about 28-30 cents l including a small wage . All heifers will be closer to 30c costs and high producing herd can be 28 and under.The extra litres in the mature herd are diluting costs. These crossbreed herds are getting AVE milk price including stock sales of 36c . So that 6c over what ever litres you produce this is assuming are farming in the top 10%. 90 heifers @4500l would leave around 24000 for repayments on stock. I have never come across a genuine turn key farm for lease and extra costs will be there from the off .

Amazing place came up near us at turn of the year - 110 acres of the best of land with amazing facilities.

Hard to know what it made but it was in the 250-275 bracket

Tonynewholland · 22-09-2020 6:51pm

trixi2011 wrote: »

Have been looking for a lease far. Myself this year from budgets I have done and talking to farms with second units real cost of production is sitting at about 28-30 cents l including a small wage . All heifers will be closer to 30c costs and high producing herd can be 28 and under.The extra litres in the mature herd are diluting costs. These crossbreed herds are getting AVE milk price including stock sales of 36c . So that 6c over what ever litres you produce this is assuming are farming in the top 10%. 90 heifers @4500l would leave around 24000 for repayments on stock. I have never come across a genuine turn key farm for lease and extra costs will be there from the off .

Did you look at the land mobility There is usually a few dairy farms around the 100/150 acres on it

trixi2011 · 22-09-2020 6:53pm

Panch18 wrote: »

Amazing place came up near us at turn of the year - 110 acres of the best of land with amazing facilities.

Hard to know what it made but it was in the 250-275 bracket

Alot of farms that are leased go by word of mouth or to a close nabouring farmer if your not in the area hard to hear of them . Walked quite a few farms in the last few years some crazy lease price per acre been asked. Irish farmers by nature seem to be quite concerveitive if they don't know you if your from outside the area or they don't have some sort of personal connection with someone who does know you chances are you will be up against it

Cavanjack · 22-09-2020 7:07pm

trixi2011 wrote: »

Have been looking for a lease far. Myself this year from budgets I have done and talking to farms with second units real cost of production is sitting at about 28-30 cents l including a small wage . All heifers will be closer to 30c costs and high producing herd can be 28 and under.The extra litres in the mature herd are diluting costs. These crossbreed herds are getting AVE milk price including stock sales of 36c . So that 6c over what ever litres you produce this is assuming are farming in the top 10%. 90 heifers @4500l would leave around 24000 for repayments on stock. I have never come across a genuine turn key farm for lease and extra costs will be there from the off .

I’m surprised reading this thread. I thought a dairy cow was leaving €800 + profit a year.

Grueller · 22-09-2020 7:13pm

trixi2011 wrote: »

Have been looking for a lease far. Myself this year from budgets I have done and talking to farms with second units real cost of production is sitting at about 28-30 cents l including a small wage . All heifers will be closer to 30c costs and high producing herd can be 28 and under.The extra litres in the mature herd are diluting costs. These crossbreed herds are getting AVE milk price including stock sales of 36c . So that 6c over what ever litres you produce this is assuming are farming in the top 10%. 90 heifers @4500l would leave around 24000 for repayments on stock. I have never come across a genuine turn key farm for lease and extra costs will be there from the off .

Are you starting a second unit Trixi? If I ever get the first one running properly I have an outfarm that I would consider it on too.

trixi2011 · 22-09-2020 7:14pm

Cavanjack wrote: »

I’m surprised reading this thread. I thought a dairy cow was leaving €800 + profit a year.

Owned land and a mature herd with family labour I'm sure there's plenty doing it .first year in a leased farm with all heifers and a wage coming out of the farm is a different story .

trixi2011 · 22-09-2020 7:17pm

Grueller wrote: »

Are you starting a second unit Trixi? If I ever get the first one running properly I have an outfarm that I would consider it on too.

No trying to get my feet on the ladder in Ireland . Have been sharefarming abroad for the last few years. Young family now so trying to be closer to family etc

profit for dairy leased land

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