Milk demand fluctuates with multiple market factors, so starting and managing a dairy farm business can quickly become a rollercoaster. As a manager, you have to balance many factors to keep the dairy cattle enterprise profitable, besides ensuring your cows are always taken care of properly. If you’re just starting in this industry, here are some things you should consider (not in order of importance):
- Develop a business plan and SWOT analysis
It is important to remember that a dairy cattle farm is a business. Development of detailed business plan and a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) of your plan and the resources you have available will be critical 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.
- Finding the right location
For your dairy farm business to be profitable, you need to produce at least part if not all forages. So, you need enough land to grow pastures and fodder trees for your herd. Ideally, you want to pick a location where future expansion is possible so you can support long-term growth. At the same time, you need a place to sell your milk quickly and with minimum additional costs to your farm. The shorter the distance between you and your potential customers, the easier it becomes to sell the milk for affordable prices and still have good margins. You will also need a clean water supply that can provide the necessary amounts of water to support all your farm’s needs.