Starting a new
 

So my father has decided to step down from the old family farm and i will be taking over. My father never did fully live off the farm he and my mother both had jobs away from the farm.
I now am trying to think of ways so that the farm will be my only income. The farm is 140 acres. About 58 or so acres are tillable. 30 acres of the tillable land is in corn (feed purposes) the rest of the tillable ground is in hay. The 82 acres is all pasture land and timber.
So i am thinking of Organic dairy farming... Now the farm was once used for dairy for a long while. all the way up till the late 1970's when milking was being switched over from Grade B to Grade A. Well my father didn't want to make a large investment switching over to Grade A so they started into the beef business. I have had much experience in dairy though. i worked on one for a few years, i also have the knowledge of my father.
So what would it take to start up a organic dairy? We have the ground and the knowledge, and a barn in great shape. Can i still milk in stanchions? What are some of the codes in Iowa? Is it worth it? What do you think? Sorry for all the questions i have.

I guess I would find out how to sell the milk first and what price it would bring...who will pick it up...how many are you going to try to milk......

I was thinking of starting out with 40 jerseys.

do you have someone that will pick up that small amount of milk

I'm not sure who would pick it up yet. How would i go about finding someone who would pick my milk up?

organic?
3 years before you can ship (unless you can prove certain things haven't been used withing the last 3 years), if (and that's a big if) you can even get on the truck.
Organic companies are really selective on who gets in and to keep prices high they really limit the number of farmers and pounds shipped.

you'd have to check with the big guys..Organic Valley and Horizon, then do some checking to see if there were any smaller local places that might be interested.
Trouble will still be getting on a truck. We have a place nearby that touts its grass fed milk and there are people on their route that still have to ship to a conventional processor (and get paid less)because the grass fed place can't use their milk..not enough demand.

Loose the stanchions...you can still milk in them but why kill yourself? Put in a small cheap parlor. Sounds like you will need to buy equipment anyway. Plans and ideas are freely available from the University of WI and other places. Graze those animals ,raise a bit of corn or make barley baleage, you can reduce your inputs and maybe squeeze a living out of it.

Otherwise do some market research and see if a bottling plant would be a wise investment.......

In WI it is required by law that if your milk touches the paddle of the bulk tank after 1 milking it must be picked up.
Don't know how it is elsewhere...
Our plant likes to cutoff if you can't ship at least 500 pounds every other day...

40 Jerseys isn't too small...at the moment I milk 9 cows 2x a day and 2 once a day out of 23 total and we get picked up...we are just making the 500 pound level....
Have a couple of sweet looking heifers bagging up though :)

Find out what if any organic dairy is in the neighbourhood. Not much use producing organic milk if nobody's buying.

You also need to think about what is available for organic feed and how much it'll cost you. Is the land all organic now or are you going to have to either buy feed during the transition or ship milk in the conventional market while you transition?

If he wouldn't shift to grade A in the late 70's I don't know if his knowledge is worth it...
Hate to lay it out there but this ain't 1978, really.........

You are right sammyd it isn't 1978... But he still knows much about cattle. The equipment has changed, but the way cows still make milk has not. He has knowledge of cattle not the dairy industries. It was because of the cost of switching to Grade A that he did not switch.

Sorry German, the way cows make milk has changed significantly. The advances in nutrition and genetics have been amazing. We milked steadily here up until two months ago and Dad has still been lost for at least 20 years.

I don`t even want to get started about this anymore tonight, so I may chim in later. > Marc

If it was too costly to upgrade to grade A equipment in the late 70's when a 14% loan was common and you could still make really good money with a note that steep, how are you going to make it work in this economy?

HHHMMMM sounds like the factory he was sending too switched to A only. There still is many places that take grade B milk. ALso I like the visit from the state inspector once every 2 years in stead of the twice a year for A. We end up with a decrease in pay for being B but I can live with it. Ths cost of switching from B to A back then would almost have ment the setup was still in the dark ages.
I would steer away from organic. Its loosing steam now days. The regs can be deceiveing and had to keep up with. You best bet would be look in the hpone book for cheese factories or cheese stores. Then start asking question. Some times it best to deal with small local factories. We had to switch a year ago from one small factory to a even smaller one. We are making more per 100 now then ever at the other place for the same milk.
Bob

I'm not a dairyman, so take this with a grain of salt. Most of those I know who run commercial dairies are pretty miserable. The only one who's not, sells direct off the farm and makes cheese. Basically, be "alternative". There are plenty of people doing it, don't let anyone convince you otherwise. Get educated about it! It's not for someone who simply wants to do physical production and hates marketing.

http://stockmangrassfarmer.net/ will get you started on some reading.

We are not dairy farmers, but we know many, and are in the heart of dairy country. If you want to make a living off your farm, and you still have to buy all the equipment and put in a parlor, etc, it will be many many years before you make anything. My suggestion would be to do something else, if you want suggestions.
However,
if you have your heart set on milking, the amount of premium increase you will make being certified organic will be eaten up in gov't organic fees, milk prices have ran the gamut from ok to suck to suicide to tolerable in the past few years. don't expect it to be any different. China 'milk product' is taking over.
You need to find a niche. Simply selling to the truck wont make you a living. Explore cheese, ice cream, raw milk sales (if legal), something else?

I'd approach it thusly:
First, assume the worst, lowest price for milk possible. This should be easy, since it was just there two years ago. And it will sink again!

Then figure out if you can squeeze your production and input costs down low enough to break even at that number. The dairy farmers who were not wiped out hung in there due to being able to lower their inputs to rock bottom. This means low to no debt, used equipment, less grain more forage, etc. and hardy cows with good legs, etc. Figure your income on conventional milk, as you will probably need to sell there, at least temporarily.

But first, like others said, you gotta know if a truck will pick you up. With no hauler, your options are very limited.
Some guys custom raise replacement heifers for the bigger farmers.

It isn't China milk product. It's New Zealand milk solids and our own farmers zeal to over produce.

:goodjob: :goodjob: :goodjob:

I need to ask some questions germandairy. Where are you located? what type of dairy do you want to run? How old are you? Could your farm be certified organic now? Do you have any organic dairies around to buy your milk? How much do you need to earn? Do you have a good job now? Do you need to buy all your equipment? Are you prepared to starve for awhile? I have more once you answer these. > Thanks Marc

Why not grow feed for the other farmers/hobbyists around you? We have a small herd of Angus cows but sell square baled hay as well. We make probably twice to three times as much profit per acre selling baled hay vs calves. I would think with 58 acres of good hayland, you could make a reasonably good income. Consider this: 4 tons per acre of good hay makes 160 50lb bales per acre. 160 bales times 58 makes 9280 bales. At a low price of $4 a bale that is $37,120 gross. Less operating expenses (fuel, fertilizer,etc) of perhaps $8,000 and you are netting close to $30,000. Now consider IF you have the neccessary equipment to grow silage, you can grow silage and store it, when times get tough in winter let the word get out that you have silage to sell. I would venture to guess that if your land is good enough to run a dairy, you have good enough soil to run a profitable hay business. Granted there are a few downsides, that is, that you have to deal with people, and the labor is high for a few weeks out of the year, but there's no getting up at 4 in the morning, or all the daily labor involved with caring for a herd.

My wife and I put up about 5,000 square bales a year, just the 2 of us. Our total investment was less than $12,000 in equipment starting from scratch. We hay about 30 acres, with the rest in pasture. We sell about 3000 of those bales at prices from 4 to $6 depending on quality and cut. The rained on hay or dusty etc hay gets fed to the 19 cows who in turn both return that otherwise wasted nutrients back to the farm, and also give us a calf profit. We estimate that our per acre labor is the same both for hay, and for the cows. That is, the hay is labor intensive for a short time, but we can forget about it once it's in the barn, the cows take little labor but spread evenly all year. We probably net 3 times more on a per acre basis with the hay. Granted there are some expenses, liming and fertilizing, but when your land is limited you have to maximize $$ per acre.

The other benefit with selling a commodity such as hay that stores well, you are the price setter, not taker. All the above posts confirm the fact that, if you start a dairy, you have absolutely no control over the price you get. As a farmer I see a serious shortfall in the concept that you cannot pass on your costs to the buyer. IF you have a dry year, will you still be profitable if the milk buyer doesn't increase his price for you? As a direct seller to individuals selling a commodity that keeps, you set the price after you consider your costs. I can make my own price, given my knowledge of the quality of that batch of hay and what it cost me to make it. We rarely sell hay in the summer, as there are many cheap sellers out there that don't know the value of their hay. I sell most hay in the winter after the cheapskates have sold out, and people are willing to pay the price I want. It cost me the same to make the hay, whether I sell it for $4 a bale in summer or $6 a bale in winter. Since my product can keep, I am not at the mercy of the buyer. Farmers as a whole have bought into the misconception that it is our only option to take what is given us. Most of us know the labor and expenses that go into our products. Why do we just knucle under and bow down to those who offer such low wages for our work? With a little extra footwork and some advertizing we can sell our commodities direct to consumers for what we believe they are worth, not the pittance that the industrialized AG system wants us to have.

those prices are about twice what "good" hay is getting in Iowa at the moment.
http://www.extension.iastate.edu/taylor/news/hay.htm



try
http://www.farmers.coop/
we ship to Organic Valley. Don't know how they are in IA but worth checking into. Prices are usually better than you'll get with Horizon.

That is if they will buy their milk Sam, They wanted mine also, till I was ready then it`s the old song and dance," We have to much milk, we don`t need yours". Get a contract if you do. Other than labor, I think hay is a good way to go, not many make small squares anymore. We have a few hay auctions around here, and man does good hay sell well, horse buyers like good hay. > Thanks Marc

Seen the mistake made by neighbor starting up milking. You do not need all new equipment. He made a walk through parlor. His wife had to have take offs, new screw vacuum pump, and a fancy setup in the milk house. Yeap they are not sending milk anymore. They lasted 4 yrs. You can milk cows and make money with a low over head. Surge bucket milkers are the cheapest route to start with. Easy to fix and maintain. No electronics to worry about. Then next step is the delaval floor units. Also vacuum pulsation. Very easy to get along with too. This is what the amish use in this area. A milk transfer from teh barn to the milkhouse will save you a bunch of lifting and walking. Also a good old green surge Alamo vacuum pump. Parts still can be had for these on line or a rebuilt one online goes for about a $1000. They last for ever.

What part of Iowa are you in?
Bob

You hit the nail on the head Bob, when we started we bought equipment from and older dairymen that had just retired. He sold us stancions, barn cleaner, pipeline, pump, cow mats, bulk tank, milker claws, water heater,SS sink, and a buch of Misc. all for under 2000.00, He said it wasn`t worth much to him, he sold his farm and the new guy didn`t want it. So you can start out rather inexpensive. Just explore all your options before you jump in with both feet. > Thanks Marc

Yeah what works out great is the amish moving into a area. For the most part a person can get a pretty good deal on a smaller bulk tank unit. We bought a 500 gallon surge with a 5 hp compressor for 450. The compressor was only 4 yrs old. Really didn't need the tank but had to replace our old compressor. I guess they were not designed to run 54 years.
Also the surge milkers can usally be bought for 20-25 each. I seen alot of the smaller alamos in teh 50-100 range.
Bob

"...at the moment..." Your statement is exactly what I was meaning. If you sell a commodity that is spoiled in 3 days, you have to take the 'at the moment' price. If you try to sell your product when the market is flooded, you will be stuck with the 'at the moment' price. My whole point was that by making the transition from a perishable product to a easily stored product, you bypass the 'at the moment' price and can set your own price when demand goes up.

We get a lot of craigslist buyers, probably 80% of our hay buyers are craigslist. They are interested in cheap hay, but often are willing to pay more for good hay because they are tired of dealing with bad hay that their horses won't eat. We were anticipating a fall cutting, but due to lack of sufficient rainfall in time, we didn't get enough growth. So we went up on price from $4 a bale to $5. Yep, we lost a few customers who only bought from us because our hay was good and cheap, but we retained several customers who were willing to pay the extra to get the better hay. There are lots of hay sellers trying to rip off ignorant horse people by selling hay full of broomstraw or other stuff they won't eat. I cannot compete with the $3 a bale crowd, don't intend to. I know the value of my hay and set my price accordingly. You like the hay, you pay the price. If I don't sell it, it can sit in the barn for a few more months til March and no one else has hay to sell, folks are always happy to pay if that's what it takes to keep their babies (horses) fed!

I don't mean that hay is the only option, I'm just saying don't be a price taker, be a price setter, and to do this you have to have a commodity that keeps. The grain farmers are learning this: Many around are investing in their own storage facilities so they can sell when the price is higher (which never seems to be around harvest time) instead of having to take whatever is offered so they can unload and get back to the field. Cattle also 'keep' somewhat but you have to feed them while you're waiting on price. This seems to me a 2 edged sword!

I'm fine and dandy with the idea of anyone getting into farming provided they don't think they're gonna get rich. However, the whole "organic" idea is to me as much a fad or niche as emus, pot-bellied pigs, or miniature horses. In order for it to be worth the trouble to go through all the steps to become organic I'd make sure there's a market for it. I've seen the organic demand rise and fall like bulk milk prices in the last few years and the cost and pain of producing it hasn't dropped one single little bit.

If you want to make an honest, humble living and enjoy hardwork, jump into it with both feet and don't look back. If you want to get rich, go rob a bank! (just kidding on that one.)

I used to think organic was a fad as well. But there are guys that have been on the truck around here for over 12 years. Every quarter for years has shown an increase in growth. Even last year when everything else was tanking, organic was still growing at 6%. Not quite the 20% it had been at but it was growing.
Organic Valley has just allowed lots of producers to bump up their base.
I don't think organic will go the way of the emu.

I don't know how hay is everywhere but here I have never paid more than 2.50 a small square at any time for dairy quality hay.

"Where are you located? what type of dairy do you want to run? How old are you? Could your farm be certified organic now? Do you have any organic dairies around to buy your milk? How much do you need to earn? Do you have a good job now? Do you need to buy all your equipment? Are you prepared to starve for awhile?"
Sorry i have not posted in awhile i have been VERY busy. Calving has started here on the farm! :)
To answer your questions springvalley, I am located near Kalona Iowa. I would like to get in to some small dairying. I think i have a place that will pick up my milk. There is a cheese factory in town that i have been told (don't know for sure) would pick the milk up. Or for Organics there is a organic co op that will take milk. I plan on milking Jerseys. I am 28 years old. I would need to buy new (well used but new to me) milking equipment as all the equipment we had was sold 20 years ago. The barn is like a usual old style milking barn with stanchions and a gutter. I do have a good job. in a year or so (do not have a date yet) im going to be married. My girl has a extensive farming background, and she to has a good paying job.

Is your young bride-to-be interested in being married to you as well as some jerseys? "to milk, or not to milk..............that is the question"

Well I havn`t posted back yet, I think your in a good area to start a small dairy. I know Kalona well, nice Amish community there, wonderful sale barn (know the owner), small elevators and feed stores, and yes they do have a cheese plant. Another question is, are you going to have to barrow the money??? Banks are not to hip on the dairy thing right now. You could use DeLaval buckets in your barn to milk and a wheel barrow to clean the gutter. Could do that for a while till you can buy better, don`t think you have to have new to milk cows. At your age I would go for it, and if you need some good cows to start, I`m only a two hour drive to the east.> Thanks Marc

haa haa - isn't that the truth!