Dairy farmers help me!!

Nice to see someone looking to better themselves and move there business forward @Bossfarmer. Ignore these idiots taking the pee, there dairy farms are probably absolute sh!t holes. First thing you need to do is find yourself a milk buyer. Preferably one you think you can work with. As for how much profit cows can generate, in a 35p milk price year the best gazing based herds will hit £800/cow profit and the best housed units will be heading for £1000/cow because they simply have the yield. And when I say the best I’m talking about guys who achieve lameness and mastitis of lower than 10% and have very good fertility and an eye for attention to detail.

The grazing system has the beauty of being able to still remain profitable in a low milk price year, the smart housed men keep in mind a low milk price every third year so keep cash in reserve to ride out the bad times.

Obviously the system you choose depends on land availability around your buildings and climate. A grazing system has in its favour the ability to be fairly low capital cost from the outset as you have the option to outwinter the cattle but you could argue fencing, tracks and a water system could be better spent on a cubicle shed.

If you’ve the enthusiasm to learn, ability to raise some funds to get started and a realisation that you won’t get it right from day one and build that into some cash flows I’d say go for it!

Dairy farming is a great cash generator when done correctly and as they say cash really is king!
cheers is that gross margin figures your talking or net profit? ive a fair block of ground its all in one area and grows grass well, id prob prefer the indoor system though as ground can get wet at certain times of the year
 

Stinker

Member
cheers is that gross margin figures your talking or net profit? ive a fair block of ground its all in one area and grows grass well, id prob prefer the indoor system though as ground can get wet at certain times of the year
What rainfall and soil type? Can you buy in cheap by products? These sort of things are important in deciding your production system. If your not wanting to be involved with the cows your going to need to go big in my opinion.
 
cheers is that gross margin figures your talking or net profit? ive a fair block of ground its all in one area and grows grass well, id prob prefer the indoor system though as ground can get wet at certain times of the year

Thats net profit I’m talking, you’d be amazed how many dairy farmers don’t have any idea what the top 5% are making. Whichever system you choose you really need to keep things simple, from how the cows flow into and out of the parlour to where for instance you hang gates and how they latch.

All needs to be well thought out from day 1
 

supercow

Member
Location
Dumfriesshire
Obviously starting a dairy from scratch asking advice on here is going to struggle to get into the top 5% in the first 10/15 years unless employing the finest farm managers. And I would say most people would make a margin of 7-800 a cow on 35 pence.
 

Frodo

Member
Location
Scotland (east)
Obviously starting a dairy from scratch asking advice on here is going to struggle to get into the top 5% in the first 10/15 years unless employing the finest farm managers. And I would say most people would make a margin of 7-800 a cow on 35 pence.
I'm not so sure. Everything should be well thought out. Disease low, young grass, low repair costs. hopefully you will buy the correct cows which will be young and have low vet costs. ENTHUSIASM. Less historic overheads.

I know some of boss farmers posts seem a bit fanciful and nieve, but equally some from the dairy industry make it sound such a closed shop.
 

Rossymons

Member
Location
Cornwall
I'm not so sure. Everything should be well thought out. Disease low, young grass, low repair costs. hopefully you will buy the correct cows which will be young and have low vet costs. ENTHUSIASM. Less historic overheads.

I know some of boss farmers posts seem a bit fanciful and nieve, but equally some from the dairy industry make it sound such a closed shop.

Not a closed shop at all but maybe the OPs closed mind.

No idea of a milk contract, doesn't want to manage it himself nor hire someone to do it and expects to buy next door from the income but no idea about generating the profit required. Then mention losing his sucklers subsidy and he's not happy.

What are we to do when asked for advice?
 

Stuart1

Member
Not a closed shop at all but maybe the OPs closed mind.

No idea of a milk contract, doesn't want to manage it himself nor hire someone to do it and expects to buy next door from the income but no idea about generating the profit required. Then mention losing his sucklers subsidy and he's not happy.

What are we to do when asked for advice?

Sir I will buy you a beer! [emoji481]
 

Cowabunga

Member
Location
Ceredigion,Wales
surely not many will be losing 6 figures or they wouldnt last long?

REALITY CHECK!

I've recently had my benchmarking figures from AHBD.
Up till June 16 the 12 monthly profit for one in four all year round dairy farmers with an average of 250 cows was a LOSS of 23ppl

The average of all such farms was 0.1ppl profit.

Things get better in the year up to June 2017.
One in four [25%] made a LOSS of 16.9ppl
Average profit of 3.1ppl

Those are realistic net margins. They explain why so many large and small units are shutting up shop while those with land and enough family labour [unpaid] have and are expanding.

The main difference between my own profit and the top 25% average is purely down to the 3.5 ppl lower milk price we get here in West Wales according to the figures from AHBD

The figures for the North of Scotland will be similarly affected by a low milk price I imagine, partly the result of both distance and buyer competition [lack of].

These figures do not include the Basic Payment Scheme income, which you get regardless of whether you milk or not and which really makes very little difference to the bottom 40%'s viability.

It is not safe to assume that any new enterprise with new staff will be anywhere above average for the first three years in technical performance. Safer to assume around the top end of the bottom 25%

Any profit generated will be taxable BEFORE trying to repay overhead costs such as building loans. Losses will of course not be taxed but neither will they repay debts.
 
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REALITY CHECK!

I've recently had my benchmarking figures from AHBD.
Up till June 16 the 12 monthly profit for one in four all year round dairy farmers with an average of 250 cows was a LOSS of 23ppl

The average of all such farms was 0.1ppl profit.

Things get better in the year up to June 2017.
One in four [25%] made a LOSS of 16.9ppl
Average profit of 3.1ppl

Those are realistic net margins. They explain why so many large and small units are shutting up shop while those with land and enough family labour [unpaid] have and are expanding.

The main difference between my own profit and the top 25% average is purely down to the 3.5 ppl lower milk price we get here in West Wales according to the figures from AHBD

The figures for the North of Scotland will be similarly affected by a low milk price I imagine, partly the result of both distance and buyer competition [lack of].

These figures do not include the Basic Payment Scheme income, which you get regardless of whether you milk or not and which really makes very little difference to the bottom 40%'s viability.

It is not safe to assume that any new enterprise with new staff will be anywhere above average for the first three years in technical performance. Safer to assume around the top end of the bottom 25%

Any profit generated will be taxable BEFORE trying to repay overhead costs such as building loans. Losses will of course not be taxed but neither will they repay debts.
interesting figures im assuming rent and debt are included in these figures? i agree i may struggle to get the best milk price and having spoken to someone recently told i cold have 1.5ppl haulage charge, i would however have no rent to pay prob until i got over 600 cows and my own straw/feed wheat/barley thats got to count for something? i woldnt have much debt either until i got up to big cow numbers
 
If your going to do it just crack on. When i started from first mutterings and getting some figures done to my first milk collection was 4 months. That was with me erecting the shed and doing everything inside from scratch myself with few mates dragged in too help, getting the robot ordered /fitted, tank in, all the electrics. And sourced the cows.

If your confident in your ability and what your dealing with if it's going too be that good why wait??? Watching others who have done the same and made it work all have one thing in common. Get up and go..... They are naturally not dawdlers......
 
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supercow

Member
Location
Dumfriesshire
REALITY CHECK!

I've recently had my benchmarking figures from AHBD.
Up till June 16 the 12 monthly profit for one in four all year round dairy farmers with an average of 250 cows was a LOSS of 23ppl

The average of all such farms was 0.1ppl profit.

Things get better in the year up to June 2017.
One in four [25%] made a LOSS of 16.9ppl
Average profit of 3.1ppl

Those are realistic net margins. They explain why so many large and small units are shutting up shop while those with land and enough family labour [unpaid] have and are expanding.

The main difference between my own profit and the top 25% average is purely down to the 3.5 ppl lower milk price we get here in West Wales according to the figures from AHBD

The figures for the North of Scotland will be similarly affected by a low milk price I imagine, partly the result of both distance and buyer competition [lack of].

These figures do not include the Basic Payment Scheme income, which you get regardless of whether you milk or not and which really makes very little difference to the bottom 40%'s viability.

It is not safe to assume that any new enterprise with new staff will be anywhere above average for the first three years in technical performance. Safer to assume around the top end of the bottom 25%

Any profit generated will be taxable BEFORE trying to repay overhead costs such as building loans. Losses will of course not be taxed but neither will they repay debts.

Ahdb say 1 in 4 were losing half a million? That's insane I struggle to believe that! Single farm payment, owning your farm doesn't make a difference if your inefficient. Can lose some serious fun coupons if things aren't going well, it's scary. It's also scary that we have stopped our capital holiday and paying the loan and need 30 pence without single farm payment. Makes you think about your system long and hard
 

Happy at it

Member
Location
NI
I know this is all hypothetical but what does your father and brother think of the future boss farmer? Would it not be better working towards a split between yous? and milking a smaller number of cows on your own rather than racing to big numbers and needing the whole farm to drive it?
 

Cowabunga

Member
Location
Ceredigion,Wales
interesting figures im assuming rent and debt are included in these figures? i agree i may struggle to get the best milk price and having spoken to someone recently told i cold have 1.5ppl haulage charge, i would however have no rent to pay prob until i got over 600 cows and my own straw/feed wheat/barley thats got to count for something? i woldnt have much debt either until i got up to big cow numbers

Yes, it means that you offset one enterprise's profit against the other's if that makes you feel better.

I have no earthly idea why a profitable farm with substantial money in the bank would want to get into a capital intensive, labour intensive, 365 day a year volatile business such as dairy at this time rather than keep your money in the bank or convert it into Euros abroad.
 

Cowabunga

Member
Location
Ceredigion,Wales
Ahdb say 1 in 4 were losing half a million? That's insane I struggle to believe that! Single farm payment, owning your farm doesn't make a difference if your inefficient. Can lose some serious fun coupons if things aren't going well, it's scary. It's also scary that we have stopped our capital holiday and paying the loan and need 30 pence without single farm payment. Makes you think about your system long and hard

Those are the figures that the AHBD have come up with for Wales. They did a survey of dairy farmers, funded by the EU through the Welsh Assembly, a couple of months ago. What they don't tell us is the sample size of how many actually responded. It took me four hours of intensive work to complete. I doubt whether anyone without comprehensive enterprise costings could have done it. They even emailed me to double-check whether my fertiliser figures per hectare were accurate. They were/are.
 

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quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

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