Cost of starting a dairy unit on a greenfield site

[BELOWAVERAGE]

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

The investment wouldn't be a waste, providing you were sensible and didn't throw money around unnecessary.

 

[ollie989898]

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)

A bank nor any other lender is not going to lend you so much as a quid unless you have a sound business plan and some security. I assume this young chap has access to both or it's a non-starter.

Go and try any new dairy venture (60K is peanuts, I know people who went away and borrowed 2 million) when the interest rates are 10% and suddenly the feasibility of it drys up.

If everyone only ever thought like you the entire industry would still be milking 30 cows each in their spare time.

 

[blacksheepcontracting]

The investment wouldn't be a waste, providing you were sensible and didn't throw money around unnecessary.

You are right but for my current situation I would be better off rearing calves for others, dabbling in a bit of sheep and contracting until I’m ready for the next property. Decent margin with small capital outlay leaving the servicing of debt controllable whilst building some equity but if I splash out now than there’s a gamble of going backwards. Unless of course I decided to be here for the next 30 years in which case I would make it work.

 

[Agrispeed]

I converted from beef to dairy, including buying 2/3 of the cows, building all tracks, parlour, dirty water system and fencing for under £1200 per place. The advantage of buying kit when dairy is on its arse.

Building a parlour would add a significant amount to a farms value. It might even pay for itself without even converting to dairy if you are planning on selling in the future

 

[Happy at it]

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'd say it's because there's people who've earned their stripes at it, and don't buy into the 'dream ' that the industry is based on. Sometimes it's good to do without, and build a thing over a period of time rather than chalk up debt that will take a lifetime or two to pay back. I can't understand why everyone is so keen to follow other countries like Holland etc with massive and unsustainable debt per cow...

 

[kill]

You are right but for my current situation I would be better off rearing calves for others, dabbling in a bit of sheep and contracting until I’m ready for the next property. Decent margin with small capital outlay leaving the servicing of debt controllable whilst building some equity but if I splash out now than there’s a gamble of going backwards. Unless of course I decided to be here for the next 30 years in which case I would make it work.

Every gamble is a gamble and some win. Some people are proactive and others are life long doubters so when you lying on your death bed reminiscing about your life would you rather have given a project ago or been a life long spectator like @BELOWAVERAGE

 

[kill]

Building a parlour would add a significant amount to a farms value. It might even pay for itself without even converting to dairy if you are planning on selling in the future

This point has definitely crossed my mind as well

 

[blacksheepcontracting]

Every gamble is a gamble and some win. Some people are proactive and others are life long doubters so when you lying on your death bed reminiscing about your life would you rather have given a project ago or been a life long spectator like @BELOWAVERAGE

I’d need to be able to have enough of a margin to get married and start a family at the same time which would really ramp up the pressure!

 

[kill]

I’d need to be able to have enough of a margin to get married and start a family at the same time which would really ramp up the pressure!

Put feelers out for extra land to rent and see if any available?

 

[blacksheepcontracting]

Put feelers out for extra land to rent and see if any available?

The poor availability of land and the ridiculously high rent and purchase prices in my area are part of my flexibility with regards to moving in the future. Of course that could change in the not too distant future

 

[Sid]

entire industry would still be milking 30 cows each in their spare time.

If your making a healthy profit why bother with a 1000 when 30 gives a good return?
Some people like hard work

 

[BELOWAVERAGE]

A bank nor any other lender is not going to lend you so much as a quid unless you have a sound business plan and some security. I assume this young chap has access to both or it's a non-starter.

Go and try any new dairy venture (60K is peanuts, I know people who went away and borrowed 2 million) when the interest rates are 10% and suddenly the feasibility of it drys up.

If everyone only ever thought like you the entire industry would still be milking 30 cows each in their spare time.

You know nothing about me, but what I will say is, we've been farming in our own right for 15 years on a rented farm, our first parlour cost £10 from a farm sale, we took it out ourselves and put it in ourselves, it lasted 11 years, at peak over 220 cows were going through twice a day.
Anyone can have a business plan drawn up, there's a fair few who have been born into family's with a bit of security, that doesn't mean its going to work, the very fact he's come on here and asked rings alarm bells, and to me means he's not a lot of experience, as if he had the knowledge he'd be doing not asking.

 

[BELOWAVERAGE]

Every gamble is a gamble and some win. Some people are proactive and others are life long doubters so when you lying on your death bed reminiscing about your life would you rather have given a project ago or been a life long spectator like @BELOWAVERAGE [/QUOT
Trust me I'm not a spectator,(but I am belowaverage so don't expect too much) and don't get shouting too loud, YOU'VE not milked a cow YET, couple of these summers and a few long winters, the @rse dropping out the organic milk price and lets see if your still as keen on spending.

 

[james ds]

If your making a healthy profit why bother with a 1000 when 30 gives a good return?
Some people like hard work

I had a man in the yard recently who made a good living from 26 cows lastyear , he pays all his bills on time . I have another customer with 200 cows and he can pay nothing off his bill at the minute , so which is making money and which has the better life style , sometimes less is more.

 

[ollie989898]

You know nothing about me, but what I will say is, we've been farming in our own right for 15 years on a rented farm, our first parlour cost £10 from a farm sale, we took it out ourselves and put it in ourselves, it lasted 11 years, at peak over 220 cows were going through twice a day.
Anyone can have a business plan drawn up, there's a fair few who have been born into family's with a bit of security, that doesn't mean its going to work, the very fact he's come on here and asked rings alarm bells, and to me means he's not a lot of experience, as if he had the knowledge he'd be doing not asking.

I don't know anything about you, and nor do you know anything about the OP. Inferring anything from what people post or do not post is best avoided.

 

[Agrispeed]

I reckon someone coming on here for advice signals that they are more sensible than those that don't. Where else can you get hundreds of opinions and personal experiences so easily?

 

[BELOWAVERAGE]

I reckon someone coming on here for advice signals that they are more sensible than those that don't. Where else can you get hundreds of opinions and personal experiences so easily?

Well we've only the two extremes so far really, pitty a few more don't come out the woodwork and pass an opinion, lets face it there are some very competent and successful dairy farmers on here, and so far we've the opinion of a chap who's never milked a cow, and a no hope'r who says he can achieve it by spending peanuts, where are these hundreds you talk of ?

 

[BELOWAVERAGE]

I don't know anything about you, and nor do you know anything about the OP. Inferring anything from what people post or do not post is best avoided.

If you ignore what people post, what's the point of responding

 

[james ds]

I don't milk cows but I run a 160 acre dry stock farm along with a contracting business and a retail business , so I deal with every type of farmer going . Dairy farmers on average make good money, more than most other enterprises. But this year is testing a lot of them . I think some young dairy farmers put too much emphasis on cow numbers , the more the better is the way they think , if I make 50 k out of 50 cows then I'll make 150 k out of 150 cows , but unfortunately that's not the way I see it working , from what I see the highest yielding herds are the smaller 50-100 cow herds , these are generally the farms with no employed staff and no rented land . They have improved breeding and management of these cows . And they are getting top yields and few casualties and losses. This is hard achieved on a bigger scale and in most cases is not achieved . When the numbers go up the expences go through the roof , the average yield goes down , basically there's no time to do the job right , not in all cases but in most. I'd say 20% less cows could reduce the pressure by 50%. All I can say is that collecting money from farmers of all enterprises , the slowest payers are the bigger dairy men , what does this mean , in my opinion it means the bigger dairy man is working harder and has less money. Take my advice if you are starting out milking cows don't bite off more than you can chew, sometimes less is more.

 

[applejack]

Not many will agree with you @james ds on that one but I think you make a good point, the numbers game is almost like an obsession these days.