Do you want to know exactly how much it cost to start a dairy farming business? If YES, here is a detailed cost analysis for starting a dairy farm and raising finance.

There are several business opportunities available in the agricultural industry and dairy farming is one of them. One good thing about the agricultural industry is that there is market for all the produce from the industry. Dairy farm is of course a thriving and profitable business because of the usefulness of beef and milk. People eat beef, drink their milk, and use their fur and skin. With cattle milk, cheese can be made along with other dairy products.

Having provided you with a:

  1. Industry Overview
  2. Market Research and Feasibility
  3. Dairy Farm Business Plan
  4. Dairy Farm Name ideas
  5. Licenses and Permits
  6. Dairy Farm Marketing Plan
  7. Cost of Starting a Dairy Farm
  8. Marketing ideas & Strategies

We will consider how much it cost to start a dairy farm from scratch including the operating costs.

Companies in the dairy farm industry primarily raise cattle for milk. Although this industry basically engages in the sale of raw milk and excludes the production of drinkable fluid milk and processed dairy products like butter, cheese and powdered milk, some dairy farms can still go ahead to accommodate other related business within the industry as long as they have the capacity to do so.

  • Industry Overview

In recent time, the price of raw milk has been highly volatile resulting to fluctuations in revenue for the dairy farms industry. For example, in 2011, the price of milk bounced back from recession and pushed up by increasing global demand, resulting to appreciable growth in revenue generation. It was projected that in 2016, an oversupply of dairy products is expected to cause revenue to deep further in the industry.

However, despite all the volatility, the industry is expected to experience appreciable growth going forward. For the time being, the price of cattle feed, which typically makes up about half of the average dairy farm’s total expenses, has been nose diving as far back as 2014, significantly strengthening the industry’s profit margin.

The Dairy Farms Industry is indeed a large industry and pretty much active in countries such as United States of America, United Kingdom, Canada and Australia. There is no single dairy farm that has dominated market share in the industry hence smaller dairy farms businesses can successfully make profit.

As an aspiring entrepreneur who is looking towards leveraging on the agriculture industry to generate huge income, then one of your best bet is to start a dairy farm business. Dairy farm business is all about mass–breeding of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf) for the sole aim of generating raw milk in commercial quantities and of course making profits.

Over and above, there are few barriers to entry into the dairy farms industry. Usually, all inputs are readily available. In the nearest future, players in this industry may face the highest costs associated with accessing technology, especially in relation to genetic modification engineering in livestock breeding.

So also, intellectual property rights protecting new inventions and technology may mean that new entrepreneurs coming into the industry will need to pay license fees and this of course will cause an increase in the start–up fee for a dairy farm cum cattle rearing business.

How Much Does It Cost to Start a Dairy Farming Business?

When starting a dairy farm business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profit, grow the business and perhaps expand the business and start exporting processed meat and milk within your country and other countries of the world.

When conducting costing and economic analysis for your dairy farm business, you just have to critically examine these key factors; place, product, pricing and promotion. As a matter of fact, you would have to review these key factors at regular intervals while running your dairy farm business. As a dairy farm owner, you just have to have proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.

It is important to note that cattle medication/treatment cost is one of the most important factors contributing to the overall cost of a dairy farm business and should be considered as a major factor when carrying out your costing and economic analysis. This is why a standard dairy farm would prefer hiring and in–house vet doctor as against contracting the treatment of their cattle out.

Over and above, the cost analysis as it relates to starting a standard dairy farm in the United States of America, Canada, United Kingdom and Australia can be said to be almost the same except for few variations. For example, the cost of constructing a cattle ranch/dairy farm with the right fencing are same especially when bench–marked against the US Dollars.

Other factors that may be slightly different in terms of costing when it comes to starting a standard dairy farm business in any of the countries listed above are cost of labor, cost of cattle feed, cost of cattle medication, cost of transportation and logistics, local tax, insurance policies, business incorporation fee, promotion and branding cost, rent/leasing amongst other factors.

Over and above, when it comes to starting a medium scale dairy farm business, you should be prepared to either rent or lease a large farm land (cattle ranch) in a good and easy to access location; this is going to be one of the areas where you are expected to spend the bulk of your start–up capital.

How Much Does It Cost to Start a Dairy Farming Business? in the United States

These are the key expenses you are expected to make when starting a medium scale but standard dairy farm business in the United States of America;

  • The cost for the purchase of cattle feed and cattle medication – $65,000.
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The cost for construction of a standard cattle ranch/dairy farm facility with the right fencing – $300,000.
  • The cost for leasing a large farm land – $200,000
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • Marketing promotion expenses for the grand opening of the dairy farm in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • The total fee for registering the business in the United States of America – $750.
  • The amount required for the purchase of the first set of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf) – $150,000.
  • The cost for acquiring the required working tools and equipment/machines (milking machine and milk collector, milk storage tank and container, water trough, rake, shovel, spade, wheel barrow, cart et al)– $150,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost of purchase and installation of CCTVs – $5,000.
  • The cost for building and hosting a website – $600.
  • The cost for opening party – $8,000.
  • Miscellaneous – $5,000.

You will need an estimate of one million, two hundred thousand dollars ($1.2 million) to successfully set up a medium scale but standard dairy farm business/cattle ranch in the United States of America with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers and calf and mass produce milk for the United States of America market. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard dairy farm business with the capacity to raise minimal cattle and produce minimal milk at a community level in the United States of America will cost from ten thousand dollars to twenty five thousand Dollars ($10,000 to $25,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale dairy farm business in the United States of America with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers and calf) and the capacity to mass produce milk both for the United States of America market and also to export milk to other nation plus a standard milk processing plant, then you should look towards budgeting well over three million dollars ($3 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Dairy Farming Business in the UK?

These are the key expenses you are expected to make when starting a medium scale but standard dairy farm business in the United Kingdom;

  • In the United Kingdom, online applications are usually registered within 24 hours and cost £12 (paid by debit or credit card or PayPal). Postal applications take 8 to 10 days and cost £40 (paid by check made out to ‘Companies House’). There’s a same day service costing £100.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – £13,300.
  • Marketing promotion expenses for the grand opening of the dairy farm in the amount of £3,500 and as well as flyer printing (2,000 flyers at £0.04 per copy) for the total amount of £3,580.
  • The cost for hiring business consultant (including writing business plan) – £2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – £28,400.
  • The cost for leasing a large farm land – £187,000.
  • The cost for the construction of a standard cattle ranch/dairy farm facility with the right fencing – £285,000.
  • Other start-up expenses including stationery (£300), phone and utility (gas, sewer, water and electric) deposits (£1,500).
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – £60,000.
  • The cost for the purchase of cattle feed and cattle medication – £57,000.
  • The amount required for the purchase of the first set of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf) – £138,000.
  • The cost for acquiring the required working tools and equipment/machines (milking machine and milk collector, milk storage tank and container, water trough, rake, shovel, spade, wheel barrow, carts et al)– £148,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – £9,500.
  • The cost of purchase and installation of CCTVs – £4,500.
  • The cost for building and hosting a website – £600.
  • The cost for opening party – £6,300.
  • Miscellaneous – £8,000.

You will need an estimate of one million Pounds Sterling (£1 million) to successfully set up a medium scale but standard dairy farm business/cattle ranch in the United Kingdom with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers and calf, and mass produce milk for the United Kingdom market. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard dairy farm business with the capacity to raise minimal cattle and produce minimal milk at a community level in the United Kingdom will cost from nine thousand to eighteen thousand five hundred Pounds Sterling (£9,000 to £18,500). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale dairy farm business in the United Kingdom with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers and calf) and the capacity to mass produce milk both for the United Kingdom market and also to export milk to other nations plus a standard milk processing plant, then you should look towards budgeting well over two million, eight hundred Pounds Sterling (£1.8 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Dairy Farming Business in Canada?

These are the key expenses you are expected to make when starting a medium scale but standard dairy farm business in Canada;

  • For federal incorporation of business in Canada, the cost to incorporate is $200 if filed online through Corporations Canada’s online Filing Centre ($250 if filed through other means).
  • Legal expenses for obtaining licenses and permits (Health department license and business license)and permits (Fire department permit, Air and water pollution control permit, Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the dairy farm in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a large farm land – $200,000.
  • The cost for construction of a standard cattle ranch/dairy farm facility with the right fencing – $300,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for the purchase of cattle feed and cattle medication – $65,000.
  • The amount required for the purchase of the first set of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf) – $150,000.
  • The cost for acquiring the required working tools and equipment/machines (milking machine and milk collector, milk storage tank and container, water trough, rake, shovel, spade, wheel barrow, carts et al)– $150,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost of purchase and installation of CCTVs – $5,000.
  • The cost for building and hosting a website – $600.
  • The cost for opening party – $8,000.
  • Miscellaneous – $5,000.

You will need an estimate of one million, two hundred thousand dollars ($1.2 millionCAD) to successfully set up a medium scale but standard dairy farm business/cattle ranch in Canada with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers and calf and mass produce milk for the Canadian market. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard dairy farm business with the capacity to raise minimal cattle and produce minimal milk at a community level in Canada will cost from ten thousand dollars to twenty five thousand dollars ($10,000CAD to $25,000CAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale dairy farm business in Canada with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers and calf) and the capacity to mass produce milk both for the Canadian market and also to export milk to other nations plus a standard milk processing plant, then you should look towards budgeting well over three million dollars ($3 millionCAD). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

How Much Does It Cost to Start a Dairy Farming Business in Australia?

These are the key expenses you are expected to make when starting a medium scale but standard dairy farm business in Australia;

  • In Australia, the fees to register your business name with ASIC include: $34 for 1 year. $80 for 3 years.
  • Legal expenses for obtaining licenses and permits (Health department license and business license) and permits (Fire department permit, Air and water pollution control permit, and Sign permit et al) as well as accounting services (CRM software, Payroll software, P.O.S machines and other software) – $15,300.
  • Marketing promotion expenses for the grand opening of the dairy farm in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The cost for hiring business consultant (including writing business plan) – $2,500.
  • The cost for insurance (general liability, theft, workers’ compensation and property casualty) coverage at a total premium – $30,400.
  • The cost for leasing a large farm land – $200,000.
  • The cost for construction of a standard cattle ranch/dairy farm facility with the right fencing – $300,000.
  • Other start-up expenses including stationery ($500), phone and utility (gas, sewer, water and electric) deposits ($6,500).
  • The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000.
  • The cost for the purchase of cattle feed and cattle medication – $65,000.
  • The amount required for the purchase of the first set of cattle (cows, oxen, bulls, bullocks, steers, heifers and calf) – $150,000.
  • The cost for acquiring the required working tools and equipment/machines (milking machine and milk collector, milk storage tank and container, water trough, rake, shovel, spade, wheel barrow, carts et al)– $150,000.
  • The cost for store equipment (cash register, security, ventilation, signage) – $13,750.
  • The cost of purchase and installation of CCTVs – $5,000.
  • The cost for building and hosting a website – $600.
  • The cost for opening party – $8,000.
  • Miscellaneous – $5,000.

You will need an estimate of one million, two hundred thousand dollars (AUD$1.2 million) to successfully set up a medium scale but standard dairy farm business/cattle ranch in Australia with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers, calf et al and mass produce milk for the Australian market. Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Starting a small scale but standard dairy farm business with the capacity to raise minimal cattle and produce minimal milk at a community level in Australia will cost from ten thousand dollars to twenty five thousand dollars (AUD$10,000 to AUD$25,000). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

When it comes to starting a standard and large scale dairy farm business in Australia with the capacity to raise cattle such as; cows, oxen, bulls, bullocks, steers, heifers, calf et al) and the capacity to mass produce milk both for the Australian market and also to export milk to other countries plus a standard milk processing plant, then you should look towards budgeting well over three million dollars (AUD$3 million). Please note that this amount includes the salaries of all the staff for the first 3 months of operation.

Estimating Start–Up Cost for Dairy Farm Business Based on the following factors

  • Specific Location

Starting a business such as dairy farm comes with its own challenges; it is a business that cannot be started in any location of your choice. As a matter of fact, you will not be allowed to start a dairy farm in a residential estate in the United States of America, Canada, the United Kingdom and Australia. The only location you can be allowed to start a dairy farm business is a farm land designated for dairy farming.

  • Staff/Manpower

When it comes to starting a standard dairy farm business on a large scale, you would need the services of the following professionals;

  • Chief Operating Officer
  • General Farm Manager
  • Veterinary Doctor (optional because it can be contracted)
  • Human Resources and Admin Manager
  • Accountant/Cashier
  • Sales and Marketing Executive
  • Field Employees
  • Cleaners
  • Security Guard

Can a Dairy Farm Business be Bootstrapped on a Lean Budget Right from Home?

If you a looking for a small scale business that you can successfully bootstrap on a lean budget right from your home, then you should consider starting a dairy farm business.

This is possible if you have enough space in your compound. The truth is that people that live in rural communities find it pretty easy to either start a dairy farm or a poultry farm or start a small garden or all of the above, at their backyard.

All you have to do is to construct portable cattle ranch with the right fencing, purchase minimal cattle (it could be cow or ox), fairly used milking machine, milk collector, milk container/storage tank, cattle feed and cattle medication. As a matter of fact, you can start a dairy farm with as low as five thousand dollars or even less depending on how small you want the business to be.

The challenge here is that you must be ready to take on more than half of the available roles in the business. You should be able to serve as the general farm manager, milk collector, accountant, security guard, and sales and marketing officer.

How Much Does It Cost to Buy a Dairy Farming Franchise?

From available research conducted, there are no known fully operational dairy farms in the United States of America, United Kingdom, Canada and Australia that are into franchising. Most players in this line of business are adopting strategies that will help them sell their milk and meat beyond the city, state or country where their dairy farm in domiciled to other parts of the world as against selling franchise.

Besides, it is easier to start and run a dairy farm from scratch to profitability without leveraging on a known brand name. People will patronize your milk or cattle or meat based on accessibility and pricing as against relying on a brand name.