New Business Idea Starting A DAIRY FARM Company Production and Marketing with Costs in USD

Introduction - how to start a dairy farm business?

Dairy farming is a class of agricultural, or animal husbandry enterprise, for long-term production of milk, usually from dairy cows but also from goats and sheep, which may be either processed on-site or transported to a dairy factory for processing and eventual retail sale. It is a lucrative business, which can fetch big profits due to the increasing and ready market for dairy products.

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4 Things You Need to Know Before Starting Your Own Dairy Farm

1. Create a Cropping and Feeding Program

Dairy cattle require a certain set of nutrients to support themselves, produce milk, and grow a calf. Work with a nutritionist to develop rations for your lactating cows

2. Create a Waste Management Plan

Dairy cattle produce a lot of manure. While this manure is often referred to as waste, if managed and used properly it can be a great resource on the farm.

3. Build Your Equity/Assets Over Time

Dairy farming requires a large capital investment. Land, buildings, equipment, and cows are expensive and few new dairy farmers will have the capital required to purchase everything when they get started in the business. Many beginning farmers begin by purchasing their cows first and renting the farm and land. These initial animals are your farm's equity.

4. Consult the Experts

Even if you grew up on a dairy and learned how to feed and milk cows from your parents and grandparents it is important to consult experts in the dairy industry as you develop your business plan and design your management system.

Production Capacity - How many cows do you need to start a dairy farm?

The production capacity is based on the quality and number of animals raised on the farm. However, for 5 Friesian Cows, 100ltrs of milk will be produced as each Dairy Animal is capable of producing 20 Litres of milk per day.

Capital Investment Requirements and Equipment - How much money is needed to start a dairy farm?

This project will be operated locally on small scale, i.e. 5 Friesian Cows operated on 5 acres of land. The Fixed capital investment required to start this project is approximately US$ 73,521, generating a revenue potential of USD 374,400 per annum. The net profit margin is 6% with a payback period of 2 years.

Market Analysis
There is a high demand for dairy products in Urban Centers, especially in schools, hospitals, households, and the Dairy processing industry. However, they may also be exported.

Capital Investment in US$ - How much money is needed to start a dairy farm?

Capital Investment Item	Units	Qty	@$	Amount $
Land	Acres	5	12,000	60,000
Cows	No.	5	680	3,400
Field Van	No.	1	8,000	8,000
Milk Cans	No.	5	57	285
Milk Filters	No.	2	12	24
Clamps	No.	2	22	44
Barns & Shelters	No.	2	545	1,090
Spraying Pump	No.	1	30	30
Injectors	No.	2	10	20
Spades & Pangas	No.	4	3	12
Weighing Scale	No.	1	120	120
Water Basins	No.	5	12	60
Harmer	No.	1	5	5
Wheel Barrows	No.	2	35	70
Hand Hoe & Rake	No.	2	3	6
Thermometer	No.	1	12	12
Milk Cups	No.	5	6	30
Water Tanks	No.	2	125	250
Feeding Troughs	No.	5	12.5	62.5
Total Amount				73,521

Production and operation costs in US $

Item	Units	@	Qty/ day	Prod. Cost/ day	Prod. Cost/ month	Prod. Cost/Year
Direct Costs
Feeds	Kgs	0.78	500	390	10,140	121,680
Drugs	M/gs	21.5	5	107.5	2,795	33,540
Calcium/ Salt	Kgs	0.6	10	6	156	1,872
Water	Litres	0.0028	600	1.68	43.7	524
Sub total				505.18	11,746	140,946

General Costs (Over heads)

Labour	300	3,600
Repair & Maintenance	200	2,400
Ropes	10	120
Fuel	400	4,800
Depreciation(Asset write off) Expenses	36	437
Sub – total	946	11,357
Total Operating Costs	12,692	152,303

Project product costs and Price structure in US$

Item	Qty/day	Qty/yr	@$	Pdn Cost/yr$	UPx	Total /rev
Milk	3000	936,000	0.16	152,303	0.4	374,400

How Much Profit Do Dairy Farmers Earn?

Profitability Analysis table - Is dairy farming is profitable?

Profitability Item	Per day	Per Month	Per Year
Revenue	1,200	31,200	374,400
Less: Production & Operating Costs	488	12,692	152,303
Profit	712	18,508	222,097

Choosing Cows

Choose dairy cows and attach importance to quality. A newly built dairy farm must pay attention to purchasing cows from the beginning of the establishment of the farm. In order to ensure the quality of the cows purchased, it is best to go to a large-scale standardized dairy farm, because such a dairy farm has good herd quality, complete records, and a standardized breeding system. 

So what are the construction methods and precautions for dairy farms?

What are the important consideration for setting up a dairy farm?

The selection of the cattle farm site requires careful consideration of the number of cows and the future development scale, the number of funds, the degree of mechanization, and the use of equipment. It must be combined with plans for agricultural and animal husbandry development, farmland infrastructure, and housing construction, and must be adapted to the needs of modern cattle breeding. At the same time, the selection of a cattle farm should comply with the animal husbandry and veterinary health regulations, economical and practical, so as to facilitate the management, improve utilization efficiency, and reduce production costs. The selected site must have room for development.

(1) Topography- Factors to Consider When Selecting Site for Dairy Farm ? Where is the best place to be a dairy farmer?

The cattle farm should be built in a generally flat place with high dry terrain, sunny leeward, low groundwater level, gentle slopes from the north to the south. It must not be built in low recesses or vents to avoid difficulty in drainage, accumulation of water in flood season and difficulty in winter cold protection. The terrain should be open and tidy, ideally square or rectangular, try to avoid narrow and polygonal shapes.

(2) Good soil quality - How to choose land type for dairy farming ?

The soil quality is preferably sandy loam. The soil is soft, with strong water permeability, rainwater and urine are not easy to accumulate, there is no induration after rain, which is conducive to the cleaning and sanitation of the cow house and sports field, and is conducive to preventing the occurrence of hoof disease and other diseases.

(3) Sufficient water source - How to choose a water source for dairy farming?

There must be sufficient water sources that meet sanitary requirements to ensure production and living and drinking water for humans and animals. The water is of good quality and does not contain toxic substances, ensuring the safety and health of humans and animals.

(4) Rich forage - how to choose cattle feeding for dairy farm?

The feed required for cattle feeding, especially coarse feed, requires a large amount and is not easy to transport. The cattle farm should be close to the resources of straw, silage and hay to ensure the supply of forage, reduce freight and reduce costs.

(5) Convenient transportation

The purchase of large quantities of forage, the sale of manure, the transportation of milk, etc., have a large volume of transportation and frequent exchanges, especially the transportation of milk requires rain or shine. Therefore, the cattle farm should be built in a convenient place close to the highway. But it should be more than 200 meters away from traffic roads and more than 300 meters away from main traffic roads.

(6) Sanitation and epidemic prevention - How to provide sanitation for dairy farming?How can we keep dairy farms clean?

Avoid slaughter, processing, and industrial and mining companies that pollute cattle farms, especially chemical companies. It meets the requirements of veterinary hygiene and environmental sanitation, and there is no source of infection around and no destructive infectious diseases of livestock; at the same time, endemic diseases should be avoided. Endemic diseases of humans and animals are mostly caused by the lack of soil and water quality or the excessive content of certain elements. Endemic diseases have a greater impact on dairy cow growth and milk quality. Although they can be prevented, they will inevitably increase costs, so they should be avoided as much as possible.

(7) Other factors

Consider climatic factors; save land and do not occupy or occupy less arable land; when grazing in mountainous areas, we must also consider the convenience of grazing, and at the same time prevent pollution and accidents.

The size of the cattle farm can be according to the required area of ​​16-20 per cattle m2 calculated, combined with long-term planning. The area of ​​the cowshed and house is 10%-20% of the land area.