Dairy Farm Business Plan: Calculation Example

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Opening a dairy farm is much more attractive to many entrepreneurs than organizing other classic projects in this area. After all, this does not require large areas, and huge investments will not be needed either. Maintenance costs may well be realized by the work of one family of the owner. A modern dairy farm will allow you to introduce new products to the market without huge initial investments.

Plot of land

The creation of such an enterprise must begin with the acquisition of land. Even if the farm is small, you still need an area of at least 1000 square meters. Such a territory is needed for livestock, a warehouse, utility rooms. It is best to organize everything in such a way that there are meadows and pastures nearby. Otherwise, forage harvesting will be expensive. To purchase a land plot, you will need to interact with the district administration.

Investments

The investment cost of a dairy farm will be determined by many factors. The most important of them is the volume of production. For example,building an enterprise for 100 cows will be more expensive than building a farm for 50. There are firms in the Russian Federation that organize the construction and design of turnkey dairy farms. According to a standard order, the creation of such an enterprise will cost only 5-6 million rubles.

The cost includes the installation of a livestock shed with an area of approximately 1,000 square meters. If a dairy farm is built according to the owner's own project, less investment will be needed. But even in this case, at least 2 million rubles will be required.

Afterwards it will be necessary to conduct communications to the buildings. We are talking about electricity, water supply, gas. Approximately 200 thousand rubles are spent on this stage. The duration of installation work is, as a rule, not less than six months.

Equipment

According to the business plan of the dairy farm, the purchase of equipment still follows. It will be necessary to arrange racks, install drinkers, floor coverings, partitions. It will be necessary to install milk coolers, a maternity ward. Hangars need to be insulated. It will also be costly. If a hangar is built for 50 cows, 2.5 million rubles will need to be invested in it.

This is followed by the purchase of special equipment, household equipment. For a full-fledged farming, you need to purchase at least one tractor. It will be needed for the delivery of feed, garbage disposal, waste. This special equipment will be indispensable when you need to mow the grass. The MTZ-80 model with additional equipment is quite suitable. At the same time, it is quite acceptable to purchase used equipment. It is important that shewas in need of repair. At this stage, the business plan of the dairy farm provides for approximately 500-900 thousand rubles.

Animals

Obviously, you will need to spend money on buying animals. The cost of this item can be very different. It all depends on what kind of livestock the owner of the enterprise chooses: whether it will be dairy cows or reared heifers. If two or three dairy cows cost at least 60,000 rubles, then three-month-old heifers will cost 10,000 rubles each, but they will need to be reared. If you buy young animals, the savings will be significant. However, the development of a dairy farm will have to be postponed in this case for at least a year. Investments for the purchase and delivery of 50 cows will amount to 6 million rubles.

Tax systems

After purchasing equipment for a dairy farm, you will need to register a business. If the enterprise is a family one, it is recommended to register it as a peasant farm. One member of the family will be proclaimed the head of the household, and the rest - his members. The registration procedure will last 5 days and will cost 1,000 rubles.

The system of taxation will be ESHN. This is the most profitable option for such an enterprise. In this case, the farm owner will pay 6% of the profits to the state.

Products

When compiling a business plan for a dairy farm, it is necessary to decide in advance on the products to be produced. Neglecting this point can lead to the collapse of the project at the initial stages. The best thingdairy farm technology to focus on the production of various products in large volumes. The customers will be processing companies. It is enough to acquire a few such partners, and life will become much easier.

The installation of a processing plant contributes to the increase in income. It will be possible to carry out the production of cottage cheese, sour cream, kefir, cheese. The advantage of such production is that the cost of the final products will be much higher than milk.

But only milk production is acceptable. Indeed, in the processing and production of other products, you will need to use more equipment for a dairy farm, you will have to invest a lot of money.

Revenue

The income of the enterprise directly depends on how productive the livestock is and how high the initial price of milk is. It should be borne in mind that on average one cow gives 5000 liters annually. In the most successful firms, this figure doubles. Consequently, 50 cows will bring about 250 thousand liters to the farm. However, when forming a business plan for a dairy farm, you need to rely on averages. The wholesale cost of 1 liter of milk is approximately 23 rubles. The revenue in this case is 5 million 750 thousand rubles.

Costs

The most important item of expenditure will be the payment of salaries to employees. Four people will spend 60 thousand rubles a month. It will be 720 thousand rubles a year. Due to official employment, it will be necessary to additionally pay deductions to the FIU,FSS. The cost of this will be 30% of the salary. That is, about 216 thousand rubles will be spent on insurance premiums.

The next item of expenditure is the purchase of feed. According to official data, 15,000 rubles of feed is spent per cow annually. But much will depend on the characteristics of the particular region in which production is carried out. As a rule, for dairy farms, it is necessary to provide 750 thousand rubles for the purchase of feed for 50 cows annually.

Animals will also need the services of veterinarians. Otherwise, the sale of products will become impossible. The cost of veterinary services per cow will amount to 2,000 rubles per year. If there are 50 animals, you will need to spend 50-100 thousand rubles.

If the site was not purchased, you will need to pay a fee for its lease. It will take at least 100 thousand rubles a year. You should also take into account utility bills - at least 100 thousand rubles a year will go to 50 heads.

Among other expenses, they list expenses for minor repairs of hangars and equipment. It is worth considering the possibility of unforeseen expenses. It is better to set aside about 150 thousand rubles for this article for a year.

If we summarize this information, approximately 2,136,000 rubles will be the cost of maintaining the dairy farm per year. Net profit will be about 3.3 million rubles, excluding taxes.

Government support

It should be taken into account that the state provides support to industries related to agriculture. Regulations for dairy farms applynon-strict. There are also opportunities for financial assistance - subsidies. So, in Ulyanovsk, an entrepreneur who organizes an enterprise in the field of agriculture can count on gratuitous assistance from the state in the amount of 1.8 million rubles.

In recent decades, the authorities have shown more and more interest in the development of agriculture in the country. Some regions receive more subsidies than others. Financial assistance is issued based on the results of competitions for entrepreneurs. To participate in them, the farmer must have an enterprise that has been operating for more than three years.

Step by step plan

It is recommended to start creating a business plan for a dairy farm by registering an individual entrepreneur and collecting all the necessary documentation. After that, the construction of a hangar is allowed. It is best to provide several compartments in it, designed for different needs. After that, you need to purchase all the necessary equipment, food, animals.

You will need to get permission from the veterinary service. It will also be necessary to regularly undergo product quality checks. If the business owner plans to supply products to outlets, a permit will be required to prove their quality.

Production technology

Production technologies mean the care, feeding, breeding and maintenance of livestock. If each element of the technology is performed in an optimal way, as a result, labor costs for the production of the maximum amountproducts will be minimal.

Production technology is divided into three varieties. Firstly, we are talking about tethered production with milking in stalls. Secondly, this is an enterprise with a separate hall for milking. Thirdly, these are tetherless production technologies.

The last option is the hardest to implement. However, this will eventually reduce the share of manual labor in production. Most often on the territory of the Russian Federation, a tethered option is implemented, when milking is carried out in a stall.

Subtleties

It should be borne in mind that cows can also be bred in a ready-made building of a former farm. And it will be much more profitable than building even small workshops for a dozen cows. To start construction, you will need to get the appropriate documentation. A much easier way would be to rent a former farm and then renovate the premises.

To keep livestock, you will need to maintain the temperature in the hangar at least 12 degrees. Also, cows will need a grass stock. It is fodder for livestock for the winter. During the summer, it can actually be free if there are fields and pastures around the farm.

In many ways, the income of the farm will depend on the breed of livestock. It is known that some cows have a high milk yield. Due to this property, their payback periods become much shorter. Profit at the same time is steadily growing. If there is not too much initial capital, it is quite possible to start with just 10 cows. For in the futureit will not be difficult to increase the number of livestock by forming a whole workshop for 100 animals.

Milk is considered a strategically important product in the country. Its main importer in the Russian Federation is Belarus, it accounts for 16%. For the most part, the production of this product is established in Tatarstan, Bashkortostan, Krasnodar, Rostov. It should be taken into account that importers used to be a very serious competitor to Russian farmers. The development of production in the latter was largely slowed down.

However, after that, the state launched large-scale support for domestic farms. The policy in this area was revised, and the road for Russian dairy farms was open. The range of dairy products on the shelves is now increasingly represented by domestic products. Beginning entrepreneurs should take into account that competition will be carried out with large monopolists. They produce products in special packaging, which allows them to be stored for a long time.

However, the equipment for such production is expensive. For full-fledged competition, for this reason, significant investments will be required. It is important to take into account the fact that there is a tendency to increase milk yield in domestic farms.

However, the process of organizing an enterprise of this kind is quite creative, and there is room for non-standard moves. Beginning entrepreneurs who are looking for their niche in this business segment can take advantage of this.