Cost of starting a dairy unit on a greenfield site

[muleman]

What and livestock farmers don’t earn theirs?

yes anything we make we certainly earn,what i meant was the dairy men will be up at 4.30 every morning and still be milking at 9pm and they are tied to it every day of the year,cant go to an auction or show at dinnertime and stay till after supper....but i suppose they can afford to hire men and delegate which we cant!

 

[unlacedgecko]

i dont begrudge them it cos they earn it but it is hard to get your head round the fact that there is good money to be made in farming!

I ran some figures recently. There is similar profits to be made multi suckling bought in beef calves, as long as TB doesn't stop you trading.

And no big investment in a parlour either, but a feeding race.

 

[unlacedgecko]

What and livestock farmers don’t earn theirs?

Why don't you convert to dairy then?

 

[Northeastfarmer]

Why don't you convert to dairy then?

I wouldn’t milk cows for 60k a year

 

[Tarw Coch]

These figures are mind blowing for a simple suckler and sheep man like me, there must be some money in the milk job, the other day i saw 26 acres of wholecrop advertised off the field at £600 per acre,could this be right,mind blowing!

Sounds cheap, some locally has sold for £800/acre, which is still cheaper than the purchasing farmers 3rd cut which was estimated to cost £1000 per trailer load, which is why he was buying in whole crop.

 

[james ds]

A big farm near me which is owned by a business man considered dairying lastyear, out came the dairy expert who was delighted with the farm layout , 400 cows was the way to go , a total set up cost of €2,000,000. Pay two extra men to work on it and it would leave €200,000 profit , all looked great on paper , the adviser thought the owner would jump at it. The owner laughed at it and said for €2 million I can buy commercial property and rent it out for 300 k / year and no work. He said he would need to me a fool to go with that plan , he didn't but thousands have gone with plans like that and today they are in serious trouble.

 

[Agrispeed]

Concrete pad for silage, parlour with no walls, simple as possible, second hand bulk tank and loose house the milkers. Dig a hole for slurry, spread the dirty water.

Reckon you could do it for £1000 a head inc. a new parlour...

 

[muleman]

A big farm near me which is owned by a business man considered dairying lastyear, out came the dairy expert who was delighted with the farm layout , 400 cows was the way to go , a total set up cost of €2,000,000. Pay two extra men to work on it and it would leave €200,000 profit , all looked great on paper , the adviser thought the owner would jump at it. The owner laughed at it and said for €2 million I can buy commercial property and rent it out for 300 k / year and no work. He said he would need to me a fool to go with that plan , he didn't but thousands have gone with plans like that and today they are in serious trouble.

the figures you do on paper are never ever what happens in real life!

 

[YELROM]

the figures you do on paper are never ever what happens in real life!

You mean the advisers wouldn't have know about this drought when they did there figures

 

[muleman]

You mean the advisers wouldn't have know about this drought when they did there figures

exactly,figures go out of the window,could be in survival mode before long,never mind profit!

 

[muleman]

Sounds cheap, some locally has sold for £800/acre, which is still cheaper than the purchasing farmers 3rd cut which was estimated to cost £1000 per trailer load, which is why he was buying in whole crop.

so its just a freak price this year cos of the drought?

 

[ollie989898]

I appreciate that but, if you click on the tab of the chap who started this thread he's 19, and people are advising him to borrow £500,000, have they no sense ?

It's the cheapest he will ever borrow money in his lifetime- today.

 

[Tarw Coch]

so its just a freak price this year cos of the drought?

Yes, absolutely no grass regrowth around here, rumours of several large housed herds having already fed their first cuts, half way through second cuts, very small third cuts and no prospect of any more if it stays like this. They really are between a rock and a hard place.
Maize will be far from a bumper crop, it’s suffering too as is fodder beet, there’s limited options and nothing going spare when you’ve got stock to feed, either pay up or sell up as hungry mouths have to be fed.

 

[Tarw Coch]

It's the cheapest he will ever borrow money in his lifetime- today.

Ability to repay is more important than cost to borrow.

 

[ollie989898]

Ability to repay is more important than cost to borrow.

Look at all the other costs involved with dairying- all only ever going to go one way. At least money is cheap to borrow at the moment. 100K borrowed and spent on infrastructure or buildings etc today may well save a lot of money that otherwise might have been spent on labour in/for years to come.

 

[Tarw Coch]

Look at all the other costs involved with dairying- all only ever going to go one way. At least money is cheap to borrow at the moment. 100K borrowed and spent on infrastructure or buildings etc today may well save a lot of money that otherwise might have been spent on labour in/for years to come.

Yes, if additional expenditure means less paid labour is needed it may well make it easier to repay.

 

[BELOWAVERAGE]

It's the cheapest he will ever borrow money in his lifetime- today.

Fat lot of good that will do him if he makes a few mistakes.

 

[ollie989898]

Fat lot of good that will do him if he makes a few mistakes.

If the interest rates were 10% he might not even get the shot at his venture whatsoever.

Why is everyone so pervasively negative on this forum?

 

[blacksheepcontracting]

It’s a very interesting thread that I’ve been following closely. I agree that it has been unduly negative.

I have been considering doing the same thing on my small farm (68 acres) but the investment for me would be a waste as my plan would be to move to a bigger place in the next 10years. Otherwise I almost certainly would. A good grazing platform and some good business sense re capital expenditure and I don’t see why it would not be a perfectly viable opportunity

 

[BELOWAVERAGE]

If the interest rates were 10% he might not even get the shot at his venture whatsoever.

Why is everyone so pervasively negative on this forum?

I'm not with you, he'd be better off without it no matter what the interest, I'm not being negative, I'd call it realistic, are you or have you been a consultant ? as some of your comments come across as naive (you've never experienced sh1t)