If you are considering what kind of business to open in the agricultural sector, then consider our dairy farm business plan. This is a great option for beginners, which does not require large investments, but at the same time will bring stable profits in the context of constant growth in demand and product prices.
After the introduction of counter-sanctions against the EU countries, the import of a large number of agricultural products was banned in Russia. Cheese, milk and dairy products were banned, resulting in an acute shortage in Russia. The government, announcing the import substitution program, did not take serious steps to implement it, so a shortage is also observed in 2019. According to experts, even if the consumption of dairy raw materials drops, and the number of farms begins to grow, the country will be able to close the deficit no earlier than 2025. To close the shortage of raw materials, Russia imported more than 1 million tons of palm oil in 2018, increasing imports immediately by 20%.
The current situation should be used: today the country lacks millions of liters of milk, so its value is constantly growing. Processing plants cannot buy milk from the population, because it does not meet the standards, so they are looking for small farmers who comply with laws and requirements for product quality. To organize a mini-farm, multimillion-dollar investments and dozens of hired workers are not needed: many entrepreneurs organize the process as a family business, working together as a four-four.
Which plot is needed
To organize your own farm you will need land. On this earth should be located:
- the barn itself
- feed storage warehouse,
- storage rooms for inventory
- living room.
The minimum piece needed to start is 1000 m2. Such a piece can be obtained without any problems in almost all villages in Russia. You will also need to consider where the fodder will be harvested. It is optimal that your site is located near pastures and meadows. In this case, the animals will be on their own grazing, and the procurement and transportation of feed will not hit the budget.
Attention: in order to get land, you need to contact either the district administration or the administration of a specific settlement. Choose sites that are remote from residential buildings so as not to provoke conflicts with local residents.
Estimating the size of investments in a business is quite difficult, because a lot depends on your capabilities, the availability of land and farm buildings on them, the selected number of animals and their breed. In general, you can start a microbusiness with even 5 cows. With good care, they give up to 15 liters of milk per day, that is, 75 liters per day, or about 2 tons per month. For a full farm you will need about 50 cows, for large-scale production - 100 or more heads of cattle.
The size of investments directly depends on whether there is an outbuilding on the site. If you rent a former collective farm barn, then you will spend 100-200 thousand rubles on its repair and insulation. If you order a ready-made hangar for keeping 50 head of cattle, then it will cost 4 million rubles, and if you build it yourself, you can reduce costs to 2 million rubles.
In addition to the hangar itself and the buildings adjacent to it, you will need to connect to utilities (at least electricity). Here, too, the costs cannot be called in advance. If the site already has electricity, then the costs will be small. If you have to pull a few kilometers of cable, then this will cost a substantial amount. Separately, you need to calculate the laying of the water supply system and gas pipeline. It is often cheaper to take water from a well or well, and use solid fuel instead of gas for heating. Some entrepreneurs install bioreactors on farms in which methane is formed. The resulting gas is used for heating, improving the ecology of the region. In total, you need to lay from 100 to 600 thousand rubles for connecting to communications, creating a project, etc., but here everything is purely individual.
After you pick up the land and decide on the construction of the hangars, you will need to think about purchasing equipment for a dairy farm. You will need to think over and equip the stall places, place floor protection, put drinking bowls, purchase brushes for combing cows, install partitions and fences. You also need to consider high-quality ventilation, blinds on the front doors, a cooler for raw materials and much more. Separately, you need to think about how the room will be heated, both the barn itself and the administrative rooms.
Practice shows that to equip a hangar with 50 goals, approximately 2 million rubles will be needed. And this is not counting the tractor with a trailer that will be needed for transporting feed, manure, grass mowing, sowing and other agricultural work. The best option for this would be the classic MTZ-80, which you can buy together with attachments for 600-800 thousand rubles (used). That is, the total cost of equipment will amount to 3 million rubles.
When calculating the profitability of a dairy farm, you need to understand how much livestock you will work with. You can buy a dairy cow for about 50-70 thousand rubles, a young heifer for 10 thousand rubles. Decide on the breeds that you will acquire: it is often more profitable to overpay and buy a little dairy breed than the usual “mongrels”. In total, you will need about 3 million rubles to buy 50 cows, and 6 million to buy 100 cows. This is provided that you will take animals after 2-3 calving.
Attention: Wholesale purchase will allow you to get a good discount. You can buy animals at large farms that breed certain breeds.
If you take young animals with the aim of growing them, you can invest in the amount of 1-1.5 million rubles, but in this case you will need to spend money on food and delay profit making until the cows begin to bring milk. Natural cattle loss due to illness or accident is also possible. In total, you will need approximately 8–9 million rubles to start a full-fledged farm.
1. Brief Investment Memorandum
At present, organizing a business in the agricultural sector is a promising and profitable business. There are a number of prerequisites for this. Firstly, it is government support in the form of the possibility of issuing subsidies and soft loans. Secondly, this is an increase in domestic dairy consumption. Thirdly, it is an import substitution policy in the field of agriculture. As a result, the payback period of the project is 20 months, the breakeven point of the project is 2 months after the start of work.
To organize a dairy farm, it will be necessary to purchase 120 heads of cattle (hereinafter - cattle). It is also necessary to hire 16 employees. When starting a business, you will need a land plot, which must be acquired into ownership. The minimum plot area is 3,200 m2, hangar (barn) - 2,000 m2.
The monthly farm output is 60,000 liters of milk. It is necessary to purchase an adult cattle, which will give milk immediately. There is no pronounced seasonality in this business, as milk is consumed daily. However, in winter, the cost of milk is higher. Farm products are perishable. The wholesale price of milk is 32 rubles per 1 liter. Thus, the financial indicators of the project are as follows:
Amount of initial investment - 16 930 000 rubles
Average monthly profit - 900 000 rubles
Payback period - 20 months
Break even - 2 months
Return on sales - 130%.
2. Description of the business, product or service
Today, an increasing number of people want to consume fresh milk and dairy products. At the same time, it is desirable that these products be of domestic production. Also, many people like to buy products directly from farmers. All this testifies to the great prospects for the development of this business.
The main products of the dairy farm is raw milk. Also, as the business develops, you can open a dairy production workshop.
For the operation of the farm will require a land area of 3,000 m2. On the territory of the site should be located:
- hangar / barn
- summer paddock
- warehouse for storage of inventory and equipment
- feed base
Please note that the hangar should be located next to the pasture. In case of opening a farm in winter, one-time purchase of hay for livestock is necessary. Further, the farm itself can provide hay for animals. In addition to hay, animals need to provide special nutrients in the form of feed. Feed must be purchased once a year.
The next step is to build and prepare a hangar / barn for placing cattle. You can build a cowshed from different materials. The flooring can be either wood or concrete. From the equipment in the barn you will need:
- Storage tank
- Engineering Communication
- Stall seats
- Milking machine with milk line
- Barriers and partitions
- Additional equipment for feeding animals
In addition to technological equipment, hay and other tasks will require:
Also, for the successful functioning of the farm, you will need to choose one of the following milk production technologies:
- tethered with stall milking
- tethered with milking in a special area
For this business plan, stall milking technology was used, as well as an automated milk collection system.
In addition to the purchase of equipment, the purchase of a land plot and the construction of a hangar, the farmer will need to obtain permission to commission the hangar from the fire inspection and permission from the veterinary service. You will also need to pass checks for compliance with the quality of the products and obtain the appropriate certificate.
To obtain high results according to the results of the audit, it is necessary to study the following regulatory framework:
- GOSTs (e.g. 3625-84, 51451-99 and others)
- Federal Law No. 8 “Technical Regulations for Milk and Dairy Products”
- Federal Law No. 184 “On Technical Regulation”
- Decisions of the Government of the Russian Federation
As a result of compliance with all requirements and producing high-quality products, your company will be able to successfully develop and bring constant profit.
3. Description of the market
For a dairy farm, the main success factors are both the quality of the products and the speed of their implementation, since this product is among the perishable ones.
The main consumers of raw milk include dairies, processing plants, retail outlets and federal chains. Sales to these customers account for the largest share in farm revenue. Also, your dairy products can be purchased by residents of neighboring houses and villages.
With the development of production, you can purchase an additional installation for the production of dairy products, as well as carry out product packaging on their own.
The most effective way to load production capacity is to conclude long-term contracts with enterprises. This will avoid downtime, as well as spoilage of products.
4. Sales and marketing
Given the long preparatory and short production cycle, an advertising campaign and ways to promote products to the market must be approved long before the opening.
This business is characterized by sales through offline channels. Consequently, most of the budget of the advertising campaign will need to be directed to this direction. Advertising can be placed in city newspapers, on television, as well as on advertising banners. To increase brand awareness, be sure to take part in industry exhibitions.
Online sources can be used to collect a database of potential consumers, as well as information about decision makers in client companies.
Also, be sure to collect information about the effectiveness of various promotion channels. This will help you identify the least profitable ways and adjust your campaign in the future.
5. Production plan
To open a dairy farm, you will need the following:
- Register a legal entity - IP
- Pick up land
- Own land
- Build a hangar / barn and conduct communications
- Purchase equipment and machinery
- Pick up staff
- Carry out commissioning
- Buy cattle
- Start work and product sales