Starting a Dairy farm (business of milking cows) is a profitable business but there are few things you should need to know before considering this business.
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| 10 Steps to take before starting a dairy farm |
SWOT Analysis and Devise a Business Plan
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal to you—things that you have some control over and can change. SWOT is a situational assessment to handle a business after taking in account your strengths and weakness.
It is important to remember that a dairy farm is also a business, a very successful business for many. Development of detailed business plan and a SWOT analysis of your plan and the resources you have available will be very important to the success of your business. How many cows will you milk? Where will you market your milk? Will you hire employees? How much money do you need to live on after the dairy bills are all paid? Your business plan should include a cash flow plan that will help you set reasonable expectations for your expenses and cost of production.
Consult Dairy 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. Other dairy producers are also great resources. It's better to learn from other's experience. Attend field days and open houses on dairy farms in your area and other parts of the state or country. When visiting other farms find out what has worked well on those farms and what has not worked, but keep in mind that just because something worked on one farm does not mean it will work for you on your farm. In addition to farmers, talk to veterinarians, nutritionists, agronomists, bankers, extension educators, and others that can provide different perspectives on management of your dairy.
Market Analysis
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation.
Homework is required in every business. Before taking start for dairy farming, first you need to assess market demand. You may also need to understand demand supply system of the market.
Create a Cropping and Feeding Plan
Whether you are going to feed a TMR (total mixed ration), graze your cattle, or some combination of both; 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 and dry cows and heifers if these animals are to be raised on the farm. Many dairy farms in Pennsylvania produce most if not all their own forages and many of their concentrate (grain) needs. Raising all your own feed takes land and time, not to mention equipment for planting and harvesting the crops. Hiring custom operators to plant and harvest crops, or making arrangements with neighbors to share equipment and labor can reduce your capital investment as you get started with your dairy business and are building capital. Double cropping systems, with small grain crops following corn silage, are used successfully on many Pennsylvania farms.
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. Manure management will be tied closely to your cropping and feeding program. If you are able to use a double cropping system on your farm it will not only allow you to produce more feed but will also allow you to apply more manure to your land.
Alternatives to direct land application of manure include composting and anaerobic digestion of manure, while these options may provide additional revenue and other benefits to your dairy they will also increase the capital investment required to get your dairy started.
Anaerobic Digestion Biogas is produced on dairy farms through the process of anaerobic digestion (AD), where organic material is digested or broken down in an environment lacking oxygen.
Biogas from cow manure with 1 kg may produce as much as 40 liters of biogas.
Every farm will need a manure management plan, but depending on the size of your farm a nutrient management plan may also be required.
Build Your Equity 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 business. Many beginning farmers begin by purchasing their cows first and renting the farm and land. These initial animals are your farms equity.
Dairy Farming is a Biological System
The dairy farm is dependent on the cow's ability to live a healthy life, produce milk, and have calves that can become the next generation of the farm. Dairy farming requires detailed programs for herd health, reproduction and calf care in addition to the nutrition and financial aspects on the farm. Working with your veterinarian, genetics representatives and extension agents can help you develop comprehensive farm plans to create a positive future.
One Size Does Not Fit All
All dairy farms are different based on the producer's wishes, resource requirements, market needs and more. Multiple systems exist and can be profitable. Some producers contract out their replacements to a custom heifer raiser while others diversify by selling crops, raising steers or creating a home-bottling plant. How you farm will depend on your desires, resources, and drive.
You are a Manager First
All these previous items are just pieces of the puzzle. In order to succeed you will need to combine each aspect of management into a whole farm plan. However, you don't need to do it all. Work with trusted consultants to help you build a plan, and stick with your strengths. If you love milking cows but hate planting corn, find someone to work with who does, or contract that work out to a third party. Consider creating a farm management team or profit team that engages your consultants to be active participants in the farm's progress.
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dairy farming