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Thursday, January 24, 2013

How To Make $58,788 Per Year With 20 Cows

Here's how, with just 20 cows and a few hours a day you can make $58,788 per year.

I'm serious!

My concern is that it is getting more and more difficult for young farmers to get into farming and secondly dairy farming in particular is not an attractive career choice for the youth of today.
This blog is really about alternative ways to go dairy farming. 

The average dairy farmer has millions of dollars in assets made up of land, cows and Fonterra shares. The conventional way to progress is to work on dairy farms and progress up the share farming ladder.

But there are other ways.

I have blogged about using a mobile cowshed to milk 100 cows, but that still requires a significant amount of capital. I've talked about sharemilking 100 cows in conjunction with a sheep or beef farmer and I've talked about how it is possible to milk 50 cows and make a living.

Today I'd like to talk about how it is possible to make a living from milking just 10 cows and selling the milk directly to the public.


You will need:




10 Cows

You will need to have 10 cows in milk 365 days of the year, so its best to assume you will need 20 cows, with 10 being dry at any one time.

A cheap way of building a herd is to buy lame cows or empty cows. Because these cows won't need to walk very far and will be milked once a day. They will be perfectly adequate, cheap and should produce 15 litres of milk per day.

20 cows @$800 = $16,000

Portable milking machine

Milks two cows at a time, runs on mains power. 

Costs $2,795

20" refrigerated container





This is where the cows will be milked and the milk will be processed.
Refrigerated containers are lined with stainless steel, this means they are able to comply with the food saftey standards.

Containers can be modified quite easily and a few simple changes will enable the container to function as both the processing facility and the cowshed.

The addition of a wall, will separate the milk processing part in the front of the container and the cows being milked in the rear of the container.



Cost $7,500 (with a working chiller unit)


Small Pasteuriser

Like the one pictured below which is made in the USA. It is designed for small scale dairies. It will pasteurize approximately 3.5 litres of milk per minute. It is fully automatic and includes full data logging, which keeps a written log of the milk temp so a farmer can be certain the milk was fully pasteurised.


Cost $50,000

Miscellaneous Items

You will need to find some additional items which can be found second hand from milking machine suppliers etc. These items will include:
300L Hot water cylinder
200 L Stainless steel vat (for milk)
200 L Stainless steel vat (chilled water)
Plate cooler/heat exchanger
Mains Power
Water Supply


Cost $20,000

Risk Management Program

Anybody who is processing and selling dairy products needs to have a registered RMP from MPI (Ministry of Primary Industries).
Fonterra dairy farmers operate under Fonterra's RMP.

It's requires a bit of work to get one, I would recommend using a professional consultant to guide you through this.

Cost $5,000-$10,000


Self Confidence & Some Guts


Cost $0



Total Setup Costs 

$106,295


How It All Works

1. Lease 20 Ha

You'll need to lease some land. I would work on a conservitive stocking rate of 1 cow/ha. You need to consider that milk needs to be produced during winter and 10 dry cows need to be fed as well. Although you could grazing the dry cows elsewhere.

1 cow/ha is very conservitive, when you consider the average stocking rate in NZ is 3 cows/ha.

2. Setup The Cowshed

Plant your container next to mains power and a water source. This becomes the cowshed/dairy factory.

The cows are milked,
The milk is put into a holding tank,
From there the milk automatically passes through the pasteuriser,
then through 2 plate coolers, the first circulating bore water and the second chilled water,
then into a refrigerated holding tank, where the milk is kept at 4 degrees.
The milk is then manually bottled

3. Find Some Customers

10 cows producing 15 litres of milk per day equals, 150l/day.
The statistics show that the average New Zealander consumes 1.73 litres per week. (I think thats a bit low)

These 10 cows are producing 1050 litres of milk per week. That equates to 606 people per week, and if you assume that there are 4 people in a family that works out to 151 customers per week buying about 7 litres of milk each.

Most regions have a number of farmers markets, all held on different days. All you need to do is go to every local farmers market and set up a stall there. If you look tidy, professional and assuming you are able to smile and string a sentience together you will have no problems selling 1050 litres of milk in a week.

Its a fact, that it takes 5 days for a litre of milk to go from the cow to the super market shelf. 

So its feasible that you could sell 50% of your milk during the week and store the remaining 50% of your milk and sell it later in the week at the busy farmers market held on the weekend.


Show Me The Money




Currently milk is selling for around $2/litre, but because your milk is special and pure and not homogenised or separated and generally not filtered to all hell and then put back together again. You can charge an extra .50 cents/litre.

The farm working expenses are difficult to budget for as there are no 10 cow farms that I know of to benchmark off. The average farmer has FWE of $4/kgms. I've been conservitive and budgeted $7/kgms or $.50/litre.

I think I have been conservitive with my figures. 

An operating profit of $58,788 from just 20 cows is not too shabby.

For those of you stuck on a 850 cow dairy farm in South Canterbury or elsewhere, working from 3:30 am to 5:00 pm on a roster of 11 days on a 3 off, earning $40,000-$50,000/year, I say kick that crappy job to the kerb and buy yourself 20 cows and choose a lifestyle and freedom. 

Cows offer so much opportunity to the young farmers of today. Opportunity is everywhere if you look.

I hope my post encourages some young farmers to open their eyes and explore the alternatives, question everything you know about farming.

There are far more answers and options out there than you think.

If you want chat about doing something like this, then drop me an email glen at milking on the moove dot co dot nz

21 comments:

  1. Hello!

    I found you on Google.

    I am a young farmer from Slovenia, Europe. I have a very small farm with up to 15 cows and to 10 heifers for remont of my herd. I also process milk into dairy products as yoghurt, cheese, quark etc.

    This year I want to start grazing. I have to make mobile milking parlour, i want to make it 4x1 side by side.

    Do you have any pictures or descriptions of maybe smaller parlours than that one in your blog? I have the whole idea how to build it, but there are a lot of details that matter.

    Thank you for your answer and i send you greetings from a tiny country Slovenia.

    I have blog, but it is in Slovenian. If you want to, you can translate it with google translate. It is on kmetija-kukenberger.blogspot.com.

    Bye, Toni

    ReplyDelete
    Replies
    1. Check out this from Lithuania:

      www.milkingsystem.com

      I am planning to import one to the US this year. Currently milking three cows, plan to go to 20. similar numbers here as suggested by the article.

      follow our progress here www.benediktdairy.com
      or here facebook.com/benediktdairy

      Cheers,

      Max

      Delete
    2. Cheers max

      Thanks for the link to your blog. I'll be following.

      Please post pictures and video when you get it running.

      Cheers
      Glen

      Delete

    3. Hi .
      Thanks for Your great
      planning .I am ruhul amin from Bangladesh ,I have
      plan , But I have no money .I have two cow ,but its come some milk ,but no high Quality,I need money, would you help me to lend money or lone money that i can start big cow farm this from i can earn money let me please as early
      Thanks

      RUHUL AMIN
      +8801712998548
      Ruhul 2084@ gmail .com

      Delete
  2. Hi Toni

    Thanks for your comment and thanks for the link to your blog too. I've emailed you a photo of a small mobile cowshed operating here in NZ. It has 7 sets of cups.

    The link below also shows a simple mobile parlour.

    http://www.europedairysystems.com/english/milking-parlour-type/alias-2/

    Please keep in touch, and please send us some photos of your completed parlour.

    Cheers
    Glen

    ReplyDelete
  3. Hi Glen,
    Fantastic article, the NZ dairy sector is becoming so bland. I am a proponent of low input biological systems and have been thinking about mobile milking myself for a few years. It just seems so inefficient to make cows do so much walking especially when you add in the time and money spent on maintaining races and effluent containment and dispersal systems. Huge savings to be had on those two points by going mobile. The time that is freed up could be used to diversify the farming system into agro-forestry, free range poultry or pork etc, thus stacking other income sources making the farm more resilient and interesting. Could you please send me the picture of the 7 cup set mobile parlor mentioned above.
    Cheers
    Matt

    ReplyDelete
    Replies
    1. I'll do a quick blog post with a picture of the 7 cup cowshed I will be using.

      Glen

      Delete
  4. Hi Glen,
    How are you getting on with the 7 cow trailer/dairy. Did you have to get the design approved before or after it was made? and with a cowshed like this for 10 cows, do you think you would still need an effluent sytem?
    Thanks, Roli

    ReplyDelete
  5. Hi Roli
    I'm just getting it all sorted now. I will begin building the cowshed over the Christmas holidays. I want to get the design concept approved before I spend any money.
    I'll be doing a post about it shortly and will blog the build including all the food saftey issues.

    Hope it will be helpful.

    Cheers
    Glen

    ReplyDelete
    Replies
    1. That will be great, looking forward to it.
      Thanks

      Delete
  6. I put this on the mobile milking thread , but maybe it's better her; more activity.

    http://www.youtube.com/watch?v=QXtk-AJnpNY

    Any comments on applicability?

    ReplyDelete
  7. Hi Glen
    Nice article about small scale dairy herd.
    I'm thinking of setting up a small dairy in Fiji, just 2 cows to start and maybe build it up to 10.
    Thanks for your blog, how do I get on your mailing list.
    Thanks Simon

    ReplyDelete
  8. Hi,
    There are many people wanting to buy milk raw ie unpasturised. If you tap into this market it would make your set up cost $50k less. The going rate for raw milk in the Waikato is $2 litre if the buyers are bringing their own bottles or buckets. It helps if where you are is close to town so people don't have to drive too far as they are factoring in petrol cost. I'm not sure if you can sell raw milk at farmers markets but you can do gate sales.

    ReplyDelete
  9. Do Raw Milk and make some money, save money by not buying pasteurizer. make some people healthier. Reduced health care costs for your customers. The Communites health care costs come out of YOUR pocket too!

    ReplyDelete
  10. all very interesting . i see why you have to have pasteurizing machine is this because it is illegal to sell raw milk at a market , out side of farm ?????

    ReplyDelete

  11. Hi Glen Herud..
    Thanks for Your great
    planning .I am ruhul amin from Bangladesh ,I have
    plan , But I have no money .I have two cow ,but its come some milk ,but no high Quality,I need money, would you help me to lend money or lone money that i can start big cow farm this from i can earn money let me please as early
    Thanks

    RUHUL AMIN
    +8801712998548
    Ruhul 2084@ gmail .com

    ReplyDelete
  12. Hi thank you for your idea.
    Too Stressed ??
    Money can brings the “PEACH”
    Get this 100% free method which brings the moeny 24*7 even when you sleep money making

    ReplyDelete
  13. Hello mate, i want cows because they are good, not because they are profitable. When i become their friends then i eat them.. See that's the smart way:)

    ReplyDelete
  14. Hi what are costs involved in setting up a RMP, and what are the steps ??

    ReplyDelete
    Replies
    1. It doesn't need to cost much if you do it your self, but it'll take lots of time going through all the regulations. I'm going to do a post about the RMP & whats involved soon.

      Cheers
      Glen

      Delete
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