The dairy cattle and milk production business has good potential for profitability

The dairy farming business has good potential for profitability

There’s quite nothing like a tall glass of fresh creamy cow’s milk, and we’ve known this for a very long time. In fact, our species has been gulping down this nutritious drink since 7000 B.C. when cattle herding began in present-day Turkey and East Africa.

Enough of our ancestors’ pioneering feats though; fast-forward to now.

Do you harbor ambitions of getting into the dairy cattle and milk production business?

It’s certainly something worth considering.

For starters, 2014 turned out to be a very profitable year for dairy farmers in the US; the first half of the year saw record-breaking numbers for dairy exports, an average of $653.6 million per month.

This chart provides a detailed summary of industry statistics for 2015.

Industry experts also foresee a positive potential for dairy and dairy-based products going into 2020.

And, even without statistics, and despite all the calls to stop drinking cow’s milk, we all know that there’ll always be a huge demand for milk.

Now, here is an assorted collection of some of the many things you should start thinking about.

1. You’ll need a business plan and SWOT analysis

You must find answers to the most obvious questions such as:

a. the resources you have available

b. the number of cows you’ll need to milk

c. where you’ll sell the milk

d. employee requirements

e. what amount of money you need to live on

Next, start addressing the critical areas in a more detailed manner. Coming up with a business plan and doing SWOT analysis will help you to identify all the critical factors of the proposed business including animal health, dairy production, crop production and business issues.

This sample SWOT analysis framework should be pretty helpful. Find out how to calculate the cost of starting a dairy farm here.

The Holstein is a hugely popular breed of dairy cattle

The Holstein is a hugely popular breed of dairy cattle

2. Consider the type(s) of cow you will rear

You want to choose a breed of cow that is capable of producing sufficiently large quantities of milk rich in protein and butterfat.

Holstein cows are an excellent fit in this regard; it’s little wonder that nine out of every ten dairy cows in America is a Holstein. Their milk’s superb constitution not only enhances drinkability but also makes it a fine base input for other milk products.

Other commonly used breeds include Jersey, Brown Swiss, Ayrshire, Guernsey and Milking Shorthorn. You can find more descriptions here.

Learn as much as you can from industry experts

Learn as much as you can from industry experts

3. Consulting the experts is very important

While you may have already learnt the ropes thanks to growing up on a dairy farm or even working in one, consulting industry experts is a well advised move to ensure your success when you finally get started.

Some of the professionals whose opinions you want to seek include extension educators, bankers, agronomists, veterinarians, nutritionists, etc. They will certainly offer sound advice about various aspects of dairy management.

There is no substitute for practical advice though and this is why you must engage with other dairy farmers. You should find time to attend field days and open farm days hosted in different dairy farms.

Your objective in visiting each farm should be to take note of what has worked and what hasn’t. Of course, it doesn’t mean that what didn’t work on a certain farm won’t work on yours as well, and vice versa.

While having previous experience is vital, lack of it doesn’t mean you can’t succeed in dairy cattle milk production. Attending a formal training program will help you to acquire helpful knowledge and experience.

It's advisable to build herd equity before making land and equipment investments

It’s advisable to build herd equity before making land, building and equipment investments

4. Think about how you will build equity

You should perhaps consider the “herd first” strategy which has been successfully used by most beginning dairy farmers. The idea here is to grow the number of your cattle before making fixed investments in land, buildings and equipment.

There is good sense in doing this; equipment and buildings depreciate but cattle won’t. Being easy to buy and sell, your cows will in fact prove to be a flexible investment. You can indeed use this strategy to earn income while managing debt.

You’ll definitely be at an advantage if you already own land. If you don’t, however, renting land will enable you to build equity at a faster pace.

Generally, the key to fast equity building is to keep your expenses low. A survey of over 300 beginning farmers done between 1996-1999 revealed that 90% of these farmers had less than 75 cows when they got into business; the average size of their initial herds was 46 cows.

5. View dairy farming as a biological system

Expert opinion asserts that a dairy farm’s success depends on the cows’ ability to live healthy lives, produce milk, and bear calves that will become the next generation of herd.

In turn, the health and productivity of your herd will depend on nutrition, comfort and reproduction factors.

With this in mind, make the necessary plans to ensure your dairy farm’s success; you will need to proactively think about herd health, reproduction, and calf care. Consult with reputable veterinarians, genetics representatives and extension agents to see how these three programs will be successfully integrated into your farm’s operations.

The herd must be suitably housed and fed for optimal productivity

The herd must be suitably housed and fed for optimal productivity

6. Figure out how your cows will be housed

The size of your herd and your preferences for management and milking should help you to determine how the herd will be housed. There are basically three options:

  1. Tie stall barns – Here you’ll need to provide individual stalls that are roomy enough for each cow to stand and lie down in comfort. Each cow will also be provided with a comfortable bed made of straw, wood shavings or synthetic mats. The cows should be able to drink water freely around the clock; food will be provided in each stall. The stalls need to be designed well enough to permit effective cleaning and efficient milking.
  2. Open lots – In this system your cows will be allowed to freely graze in the outdoors. You’ll nevertheless need to provide housing during the cold seasons.
  3. Freestall barns – This alternative borrows aspects from the two previous ones. Your cows will basically be able to feed, rest and roam inside the barn, and then retire to individual stalls complete with comfortable beds. The barn will feature a milking parlor that is suitably designed to facilitate efficient milking. Having this type of barn implies that the cows will have free choice feed; you might therefore invest in computerized cattle tags that will help you to monitor each cow’s access to food.

You should bear in mind that within the barns there must be designated spaces where cows at different stages of the dairy process (read reproductive cycle) will be housed.

This is vital because in the different stages where cows are not milked you will need to provide appropriate food and nutrients supply.

These designated spaces will include sections for dry cows (those in the last two months of pregnancy during which milking is halted), maternity pens, and a calving area.

Calves will need to be housed in designated spaces or hutches

Calves will need to be housed in designated spaces or hutches

Calves can be kept in pens within the barn or you can decide to place them in a separate building called a hutch.

Efficient milking must be at the core of your operations

Efficient milking must be at the core of your operations

7. Select an appropriate milking parlor design

There are several types of milking parlors you can go for including the rotary, walk through (aka step-up or flat barn) and parallel.

The herringbone design is nevertheless the most popular in the US. Here the cows stand next to each other and the milking equipment is attached from behind. This parlor design allows for milking efficiency in dairies that have large herds.

Other parlor types that you may consider depending on your requirements include: side opening (tandem) parlor, parallel parlor, swing-over parlor, and rotary parlor.

You'll need huge amounts of cow feed

You’ll need huge amounts of cow feed

8. Think about what your cows will eat and drink

For optimal milk production dairy cows need to eat huge quantities of protein and carbohydrates.

You can expect each of your dairy cows to consume a daily average of 29 Kg (75-100 lbs) of feed which may include clover, alfalfa hay, alfalfa or grass silage, ground oats, barley, ground or high-moisture shelled corn, corn silage, soybean meal, fuzzy whole cottonseed, plus mineral and vitamin supplements.

Many dairy farmers grow corn, alfalfa and grass for their herds, and also mix their own feed i.e. TMR (total mix ration).

Your herds will need an adequate supply of water

Your herds will need an adequate supply of water

Each cow can drink between 80-180 liters of water daily.

Herd grazing is suitable for organic milk production

Herd grazing is suitable for organic milk production

Management Intensive Rotational Grazing (MIRG) is an option you can consider as well. Here your herd will be frequently moved through pasture paddocks with the aim of providing them with optimal forage quality and quantity.

Using this system can allow you to cut down on building and equipment expenditure.

How will your herd's calving cycles affect milk production?

How will your herd’s calving cycles affect milk production?

9. Know about dairy cows lifecycle

A cow must first give birth to a calf in order to start producing milk. Cows are typically bred at the age of 15 months. 9 months later they give birth to their first calves; cows therefore first give birth at the age of two years or thereabouts.

Breeding for dairy cows is typically done via artificial insemination. You can therefore buy semen from anywhere in the world.

A cow will typically give birth to a single calf weighing approximately 40 Kg. You will need to feed the calf individually while its mother joins the milking herd and continues to produce milk for about 10 months. Milk production will then cease for the two months (dry period) preceding the birth of the next calf.

Most cows’ average productive lifespan is 4-5 lactations; others can do 10 or more lactations.

Each cow produces an average of 70 lbs. (30 liters) daily and can be milked 2-3 times per day. You’ll need to milk your cows each day of the year, typically starting at 5 a.m. and again at 5 p.m.

 

There is increasing demand for organic milk

There is increasing demand for organic milk

10. Organic or conventional milk production?

Organic milk production is significantly different from conventional production.

Organic milk is antibiotic-free. This means you can’t treat any of your cows with antibiotics should they fall ill; selling them to a farm that does conventional production may be your best option.

Organic cows are fed on organic feed i.e. feed that doesn’t contain additives and which has been grown without pesticides, unlike conventional feeds.

You may consider going into organic milk production seeing as many people are increasingly warming up to the health benefits organic milk offers i.e. higher percentage quantities of healthy fatty acids, vitamins and antioxidants.

The fact that organic milk doesn’t contain bovine growth hormones (BGH) which are considered to be disease-causing for humans is another reason why people will be willing to pay a higher price for your milk.

11. Strategies for improving early lactation performance leading to higher peak milk yield

These include the following:

  • Ensuring proper dry period nutrition and postpartum health management
  • Reducing the risk of subclinical milk fever
  • Optimizing feed intake immediately after calves are born
  • Maximizing cow comfort
  • Maintaining good rumen health
  • Identifying cows with metabolic or health problem(s) histories
  • Evaluating body condition score (BCS)
  • Positioning feed additives
  • Avoiding anti-nutritional factors
  • Feeding the required amount of antioxidants

Learn about these strategies in more detail here.

12. You’ll need a waste management plan

Your dairy cows will produce a lot of waste (read manure), around 14 gallons of urine and feces daily, for which you will need to develop an effective management plan. Proper use of the manure will result in benefit for your cropping and feeding programs.

You can perhaps make use of the double cropping system i.e. growing two crops per year on the same piece of land. This will allow you to use a huge volume of manure on the land and consequently result in increased feed production.

Alternatives to applying manure on the land that you can consider include composting and anaerobic manure digestion.

13. Find out about all the regulations for dairy farming production

All of the following aspects of your dairy farming small business will have to comply with industry regulations and stipulations for:

  • The farmyard
  • Barn construction
  • Barn water supply
  • Milking parlor construction
  • Milk house construction
  • Bulk milk tank specifications
  • Milk handling equipment
  • Milking operations hygiene requirements
  • Animal health requirements
  • Bulk milk handling and transportation
  • Milk transportation vehicles
  • Milk transfer
  • Criteria for raw (unpasteurized) milk

This document is the FDA dairy farm inspection report checklist.

 

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