How much money is there in dairy farming?

[WelshSmallholder1404]

I'm not looking for "nothing", "no money whatsoever" or what have you. If that was truly the case, no one would milk at all.

Particularly interested in all aspects of farming and wondered if anyone could explain the profit margins and expected income on approx 70 milking cows. YES, i know there are a million variables but this is a discussion not a forum to ask questions and get shot down, I'm genuinely just interested and would love to talk rough numbers.

Thanks in advance.

 

[Beef farmer]

Loads.

 

[WelshSmallholder1404]

Loads.

Good one- got me there

 

[Beef farmer]

Good one- got me there

I wasn't joking.
Loads of money, loads of work, loads of investment, even more loads of regulation.

At plus 30p its a very profitable job.

I'm not sure with the way of inflation that we would want to see 24p for a while unless inflation reversed. At 24p then there is no money in it, but still loads of work, loads of......

 

[Sid]

Made more "profit" with 70 cows.
Increasing net worth more with 160 cows

 

[WelshSmallholder1404]

Made more "profit" with 70 cows.
Increasing net worth more with 160 cows

Really? So costs eat into profit the more you go up in size? 70 is a good sweetspot for lower cost and maintained profit?

 

[Beef farmer]

Made more "profit" with 70 cows.
Increasing net worth more with 160 cows

We made more cash with less cows. ²

 

[Sid]

Really? So costs eat into profit the more you go up in size? 70 is a good sweetspot for lower cost and maintained profit?

You need to understand the difference between profit and net worth.

Profit is cash.

Net worth is asset value.

 

[WelshSmallholder1404]

You need to understand the difference between profit and net worth.

Profit is cash.

Net worth is asset value.

Lol I think you misunderstood my question. I was hoping that you’d elaborate on why you made less “profit” on 160 cows compared to 70, seems counterintuitive.

I kind of ignored the part on increasing net worth with more cows- I thought you meant something else other than the fact that more cows = more value.

 

[som farmer]

our accountants would tell you, 120 cows, 7500 litres, and family labour, are the most profitable herds, on their books, High imput/output, they don't reckon many make to much at all. But it's all about keeping costs under control, very easy to get 'carried away'. The bigger the herd, the bigger investment, then labour costs/hassle creep in.
There are so many systems, breeds and crosses, it's hard to pin one system down, as long as you keep costs under control, there are good profits there, but it's not 'easy' money. @Beef farmer missed one 'loads' out, sh1t.. Block calving is a great help, and produce what your buyer wants, not what you think they want, is sound advice, our cheese maker, has white water dairies in their milk field, and they tell those, we pay on fat/protien.

 

[WelshSmallholder1404]

our accountants would tell you, 120 cows, 7500 litres, and family labour, are the most profitable herds, on their books, High imput/output, they don't reckon many make to much at all. But it's all about keeping costs under control, very easy to get 'carried away'. The bigger the herd, the bigger investment, then labour costs/hassle creep in.
There are so many systems, breeds and crosses, it's hard to pin one system down, as long as you keep costs under control, there are good profits there, but it's not 'easy' money. @Beef farmer missed one 'loads' out, sh1t.. Block calving is a great help, and produce what your buyer wants, not what you think they want, is sound advice, our cheese maker, has white water dairies in their milk field, and they tell those, we pay on fat/protien.

Thanks for that- really informative.

 

[rusty]

What ever system you run the key points I think for profitability are getting as much high quality forage in front of the cows as possible because it's usually a lot cheaper than concentrates and alternative feeds. Don't get side tracked by lots of the crap that salesmen try and flog you. If you flick through Dairy Farmer or British Dairying magazine they are full of adverts and paid for articles trying to sell you stuff you don't really need, even on high input systems.
I visited Grosvenor farms last month where they do 12,500 litres a cow with no soya, yeast, or protected fat in the diet or use any silage additives. If you read many of the Farming press articles you would believe you couldn't do 7500 litres without all this stuff!

 

[Jamer]

As mentioned above, it’s finding the sweet spot for your contract, your farm and your “interest” in cows but at the end of the day, cows have to pay a tidy profit because if not wheat/beef/caravans/whatever will be an easier life to not make the cash.

 

[Scholsey]

Don’t all serious money people work on a 10% return on investment?

paying a sizeable mortgage with 200 acres ‘owned’ 100 acres rented ,170 cows + youngstock but it’s hard work and I wouldn’t want to nor think we will be allowed to due to slurry regs etc stay at the level of intensity we are currently.

 

[som farmer]

Don’t all serious money people work on a 10% return on investment?

paying a sizeable mortgage with 200 acres ‘owned’ 100 acres rented ,170 cows + youngstock but it’s hard work and I wouldn’t want to nor think we will be allowed to due to slurry regs etc stay at the level of intensity we are currently.

l was very suprised to hear, 'big' industry works on a 5% profit margin, and that info came from the CEO of a very large global business. The reverse side of that, he couldn't believe the paperwork, we have to do, to claim our subsidies etc. His comment, '' l can sell helicopters, all over the world, with a fraction of that crap'', rather sums it up.
Dairy farming is hard work, and a min of 10% is required, but it is the 'best' paying part of ag, we are looking at a sizable mortgage, and it wouldn't stack up, if we were not milking.
We have 2 profit figures, total profit, and the important one, profit before SFP.

 

[endeavour]

It is all down to detail primarily how good a manager you are?? This includes the basic how much are you borrowed and can you stand the hassle from the bank when times are lean, the ability to manage men who have never risked their own money is essential, and takes serious effort.

 

[som farmer]

It is all down to detail primarily how good a manager you are?? This includes the basic how much are you borrowed and can you stand the hassle from the bank when times are lean, the ability to manage men who have never risked their own money is essential, and takes serious effort.

perhaps one of the reasons, our accountants say family worked dairy farms, are the most profitable, we are 'careful' with our own, (or banks) money, and have the ability to tighten our belts, during the lean times, neither of which usually applies to staff.

 

[More to life]

It's a great as an agricultural enterprise but in real terms it's crap don't confuse it with the real world.

 

[coomoo]

What ever system you run the key points I think for profitability are getting as much high quality forage in front of the cows as possible because it's usually a lot cheaper than concentrates and alternative feeds. Don't get side tracked by lots of the crap that salesmen try and flog you. If you flick through Dairy Farmer or British Dairying magazine they are full of adverts and paid for articles trying to sell you stuff you don't really need, even on high input systems.
I visited Grosvenor farms last month where they do 12,500 litres a cow with no soya, yeast, or protected fat in the diet or use any silage additives. If you read many of the Farming press articles you would believe you couldn't do 7500 litres without all this stuff!

Plus Grosvenor have cows with the sun shining out there arse steady away at the job like most of the advice and don’t for a second listen to anyone who says they’ve cracked dairy farming.

 

[In the pit]

perhaps one of the reasons, our accountants say family worked dairy farms, are the most profitable, we are 'careful' with our own, (or banks) money, and have the ability to tighten our belts, during the lean times, neither of which usually applies to staff.

And mostly that means they will do all the hours under the sun without taking a proper wage
Grandfather. ,father and kids combined