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Dairy Business Farm Planning

Stage 2.3: What will you have to do and how much will it cost?

Every plan will require changes to be made to your farming system. Some changes are operational e.g. calving date; and others are physical e.g. a new roadway. Some have a direct, immediate cash cost e.g. buildings; others affect cash flow throughout the years. Both must be part of your farm plan.

Usually it is the big developments that spring to mind, like a milking parlour, new shed, land purchase, employing labour, when you think about the cost of your plan. These are significant investments and should be costed (with quotes) in advance. To assist you with some of the physical costs use app1 as a guide.

But there are also other costs that a plan needs to take into account. These may not be as large but can have a large impact on cash flow if not taken into account when looking at the overall plan.

These could include:

  • Stock purchases
  • P,K, lime applications where soils are deficient (see Appendix 3)
  • Soil testing (€30/sample)
  • Reseeding (€400-€520/ha)
  • Increased use of AI – extra cost of straws per annum (€22/straw)
  • Renting land
  • Purchasing additional feed
  • Extra variable costs like contractor, vet, etc.

Complete the stage2_3 (55KB, PDF). Specify the cost of each action and whether it is an estimate or actual quote. The easy way is to use estimates but you will be in more control of your plan if you have quotes for your development. Some items may need to be financed by borrowings; indicate which ones.

Many dairy farmers are planning to increase the number of dairy cows on the milking platform. It is important that if this is part of your plan that you are aware of the ability of your milking platform to feed more cows and that you have an outside block (owned or leased) which will provide adequate winter forage for the herd and rear all replacements. The ability of the milking platform and the outside block to produce adequate grass may be constrained by soil P, K or pH levels and the requirement for drainage and/ or reseeding. If this is the case these issues must be addressed in your farm plan. The cost of such improvements should be treated as a capital cost and budgeted accordingly.

>> Go to Stage 2.4