Missouri 400-Cow Dairy And 690-Cow Dairy Business Plans
Missouri400-Cow Dair y and690-Cow Dair yBusiness PlansFinancial models of integratedmodern dairy systems: Parallel parlor Sand bedded, tunnel ventilatedfreestall housing Passive sand and manure separation Irrigated forage productionNovember 2020
The following report was commissioned by the Missouri Dairy Industry Alliance board to prepareproducers for the next generation dairy business models in the state. Funding was provided by MissouriAgricultural and Small Business Development Authority through its Missouri Value-Added GrantProgram. A special thanks to Steve Bodart with Compeer Financial for his review and feedback to theproject team.Authors of this report:Joe HornerState Specialist, Agricultural Business and Policy, MU ExtensionRyan MilhollinState Specialist, Agricultural Business and Policy, MU ExtensionJoseph ZulovichAssistant Professor, Agricultural Systems Management, MU ExtensionTeng LimProfessor, Agricultural Systems Management, MU Extension
Missouri Dairy Plan – 400 and 690-Cow DairiesContentsINTRODUCTION . 11. PRODUCTION AND OPERATION PLAN . 51.1Production assumptions . 51.2Capital investments . 61.3Markets and prices. 91.4Feed cost and management . 101.5Labor cost and management. 121.6Other operating costs . 141.7Land, crops and nutrient management . 161.8Organizational structure . 182. FINANCIAL STATEMENTS AND ANALYSIS . 192.1Financial analysis for the 400-cow model . 202.2Financial analysis for the 690-cow model . 272.3Risk management . 343. IMPLEMENTATION PLAN . 393.1Timelines . 393.2Site selection . 403.3Permits and regulations . 423.4Consultants . 42
IntroductionThis dairy farm business plan is intended to demonstrate one pathway for the next generation ofMissouri’s dairy farmers. This path involves next generation confinement housing solutions that canimprove cow comfort and cooling while removing barriers to higher milk production.Two dairy herd sizes (400- and 690-cow units) are modeled here to fit differences in farm equity levelsand available land resources. Each plan uses an integrated systems approach to combine capitalinvestments, operating costs, production plans, rations, forage systems, housing systems and manuresystems. Each model serves as a complete template for starting a new greenfield dairy.Currently operating dairies seldom start a greenfield dairy by designing a completely new dairy system.However, this strategy can be an option for dairy farms transitioning to the next generation – especially ifmilking and housing facilities are functionally obsolete, fully depreciated and poorly located for expansion.This report is designed to guide such farms in planning a completely new dairy. The templates in thisreport are also helpful for existing dairy producers evolving on-site in their current facilities as theyexamine possible technologies to use in a dairy’s expansion path.Each economic model evaluates profitability and cash flow potential for each different herd size. This caninform a dairy’s production goals and allow producers to evaluate how various investment andperformance levels impact financial measures. Financial statements show how various components of thedairy operation impact the operation’s cash flow, income statement and the five-year budget. Fitting thesefinancial statements together captures the dairy’s business potential.A comparison of key system components and financial indicators for each model is found in Exhibit A1.Each model assumes the dairy uses 100% equity financing, with no debt. Although unrealistic, thissimplifying assumption allows lenders to quickly analyze the free cash flow to determine how much debtthe operation could service.1
Exhibit A1. Comparison of alternative Missouri dairy business sizes.ComponentMilking centerHousing systemManure handling systemTotal capital investmentsTotal acreage(includes crops, farmstead and waste acreage)Dairy jobs (full-time equivalents)Net income (five-year average)Net cash flow (five-year average)Return on assets (five-year average)400-cow model690-cow modelDouble 10 rapid exit parallel parlorFour-row tunnel ventilated freestall housing facility with sandbedding for cows (milking, dry and special needs)Passive manure/sand separation with manure solids storage basins,earthen lagoon tied to center pivot irrigation systems 7,057,730 11,083,12753391911.2 30,463 196,4210.4%12.9 290,977 514,1572.7%The following key assumptions are included in these models: All heifers are raised on-site by the dairy operation. All corn silage, alfalfa hay and haylage needs are produced on owned, irrigated land operated bythe dairy enterprise; however, planting and harvest are outsourced to custom hire operators. Land investments are based on the minimum acreage required to meet forage production needsplus twenty percent more acres to accommodate farmstead, feed storage, roads and unusable landtypical to Missouri dairy farms. Freestalls with sand bedding in four-row, tunnel-ventilated cow housing barns are used foroptimal cow comfort. Adequate bunk space and water troughs are provided. Head catches andmanure flush systems are included for labor efficiency. Heifer housing includes individual hutches for small calves and a mono-slope heifer barn with afeed alley that can be scraped, a feed rail, and multiple bedded pack pens for precise grouping. Manure handling systems include recycled lagoon water towers flushing first to a sand separationlane and then to manure solids separation basins, where the liquid fraction weeps into an earthenlagoon. Capital investments are adjusted for each model based on the number of cows.2
Well-managed larger dairy operations with tight standard operating procedures have a financial advantageover smaller-sized units. Larger dairies can spread initial investments and fixed costs over more cowsthereby reducing their capital investment per cow, debt per cow and, ultimately, cost of production.Well-managed smaller dairy operations succeed financially when family living withdrawals from thebusiness are modest, capital investments are appropriate and debt levels are low. A dairy producer with astrong equity position, tight operating expense control and family labor committed to high productiongoals helps generates financial sustainability.Exhibit A2. Dairy standard operating procedures (SOPs).3
The future of the Missouri dairy industry depends on how well producers learn to use technology tointensify management on larger-scale operations. Larger operations employ more outside labor andexpertise. The next generation of dairy managers will need to create and manage standard operatingprocedures (SOPs) to effectively use evolving technologies, equipment and intensified managementsystems.While long common in manufacturing industries and other livestock sectors, SOPs on dairy farms werepioneered in this century by emerging larger-scale dairies. Simple but effective SOPs can be quicklydeveloped and customized for a dairy farm by borrowing other farm SOPs while drawing on expertisefrom experienced dairy consultants or specialized veterinarians. SOPs are now common on most largerdairies. The SOPs help management hire labor effectively, develop personnel management skills, createand maintain a healthy and consistent cow environment, and ensure manure management systems areconsistently operated to protect the environment. (Photo: Shutterstock)4
1. Production and operation plan1.1 Production assumptionsMilk productionAnnual milk production estimates and estimated rolling herd average are depicted in Exhibit 1.1.1. Milkproduction levels are based on a herd of purchased Holstein cattle. Gradual improvement in milkproduction per cow is seen as the herd matures and improved systems implemented and refined. Only 2.5percent of total milk production is not being sold and used to feed calves. Dairy producers can increasecash flow and improve the farm’s profitability by focusing on improving milk production.Exhibit 1.1.1. Milk production assumptions.Year 1Daily milk production per cow, poundsRolling herd average, pounds of milk per 365 daysYear 276.023,75080.025,000Year 381.025,313Year 4Year 582.025,62583.025,938Turnover and reproductionCows will leave the herd based on involuntary factors (death,disease, problem breeders, etc.) and voluntary factors (low milkproduction). A 28.5 percent annual cull rate is assumed in therobotic dairy models. Annual death loss is estimated at 6 percent.Together, these represent 34.5 percent yearly herd turnover. OtherAssumptionsCull rate: 28.5 percentDeath loss: 6 percentCalving interval: 12.8 monthsAverage days dry: 56 daysassumptions include a calving interval of 12.8 months and a 56-dayaverage days dry period for the herd. These calving intervals require tightly managed reproductiveprotocols and animal health SOPs. Heifers born on the farm would be raised as replacements or soldwhen heifer numbers exceed the number of replacements needed.5
1.2 Capital investmentsDairy investments are categorized as real estate, machinery and equipment, and livestock. Exhibits 1.2.1and 1.2.2 detail investments for the 400- and 690-cow models.Exhibit 1.2.1. Capital investments for the 400-cow model.ItemREAL ESTATE:LandFree stall (tunnel ventilation, loops with sand)Double 10 rapid exit parallel parlorOffice, milk house, utilities, conf. roomHeifer barn (post-hutch to pre-calving)Sand separation apron and padPassive manure separation/storage basinsAnaerobic lagoon (365 days of storage)Calf hutch dry manure and bedding storage (7 days ofstorage)Dry manure/bedding storage (7 days of storage)Hay and equipment storageSilage pad baseCommodity shedSupplement binsTruck scaleSite preparationAll-weather driveway (gravel)Wells and/or water impoundments, linesElectric connection (three-phase power)Units# of units /unitCostacrestallstallsquare foothead capacitycubic yardcubic footcubic footsquare foot533364202,50030023340,6403,029,5252,400 3,530 2,750 25,000 50 750 200 2 0.123 12 1,879,932 1,001,000 500,000 125,000 225,000 46,667 81,280 372,632 28,800square footsquare footcubic footbaysbins2,40010,00043,56055 12 10 2 15,000 15,000 28,800 100,000 87,120 75,000 75,000 50,000 60,000 50,000 110,000 110,000 5,006,230SUBTOTALMACHINERY & EQUIPMENT:Bulk tankSkid steer loaderMixer wagon and automatic feed pushersTractor 1, 150 horsepower, usedTractor 2, 100 horsepower, usedTractor 3, 100 horsepower, usedStandby generatorFlush towersRecycle pump & pipeLiquid manure pumpIrrigation (160 acre - machine, generator and pad)Solid manure spreaderLivestock chute with scaleCalf hutchesgallonseach4,0002 14 35,000eacheacheacheacheacheach111162 150,000 100,000 50,000 12,000 12,000 8,250pivoteach21 169,500 45,000each22 400 56,000 70,000 90,000 150,000 100,000 50,000 12,000 72,000 16,500 10,000 339,000 45,000 3,500 8,8006
Exhibit 1.2.1 (continued). Capital investments for the 400-cow model.MACHINERY & EQUIPMENT (continued):Livestock trailer, usedFlatbed trailer and miscellaneous rolling stockPickup truck, usedSilage rakeLawn-care equipmentHigh-pressure washerOffice equipmentOffice furnitureLIVESTOCK:Dairy cowsHeiferseach1 17,500eacheach11 20,000 15,000headhead400320SUBTOTAL 17,500 22,500 20,000 15,000 2,500 500 1,500 2,000 1,104,300 1,600 960SUBTOTAL 640,000 307,200 947,200TOTAL INVESTMENTSINVESTMENT PER COW 7,057,730 17,644Exhibit 1.2.2. Capital investments for the 690-cow model.ItemREAL ESTATE:LandFree stall (tunnel ventilation, loops with sand)Double 10 rapid exit parallel parlorOffice, milk house, utilities, conf. roomHeifer barn (post-hutch to pre-calving)Sand separation apron and padPassive manure separation/storage basinsAnaerobic lagoon (365 days of storage)Calf hutch dry manure and bedding storage (7 days ofstorage)Dry manure/bedding storage (7 days of storage)Hay and equipment storageSilage pad baseCommodity shedSupplement binsTruck scaleSite preparationAll-weather driveway (gravel)Wells and/or water impoundments, linesElectric connection (Three-phase power)Units# of Units /UnitCostacrestallstallsq. fthead capacitycubic yardcubic feetcubic feetsq. ft.919627202,50052031168,8304,937,3893,600 3,530 2,750 25,000 50 750 200 2 0.123 12 3,242,436 1,724,250 500,000 125,000 390,000 62,222 137,660 607,299 43,200sq. ft.sq. ft.cubic feetbaysbins3,60010,00087,12055 12 10 2 15,000 15,000 43,200 100,000 174,240 75,000 75,000 50,000 110,000 50,000 110,000 110,000 7,729,507SUBTOTAL7
Exhibit 1.2.2 (continued). Capital investments for the 690-cow model.MACHINERY & EQUIPMENT:Bulk tankSkid steer loaderMixer wagon and automatic feed pushersPayloaderTractor 1, 150 horsepower, usedTractor 2, 100 horsepower, usedTractor 3, 100 horsepower, usedStandby generatorFlush towersRecycle pump & pipeLiquid manure pumpIrrigation (160 acre - machine, generator and pad)Solid manure spreaderLivestock chute with scaleCalf hutchesLivestock trailer, usedFlatbed trailer and miscellaneous rolling stockPickup truck, usedSilage rakeLawn-care equipmentHigh-pressure washerOffice equipmentOffice furnitureLIVESTOCK:Dairy cowsHeifersTOTAL INVESTMENTSINVESTMENT PER COWgallonseach8,0002 14 35,000eacheacheacheacheacheacheach1111182 140,000 150,000 100,000 50,000 12,000 12,000 8,250pivoteach41 169,500 45,000eacheach381 400 17,500eacheach11 20,000 15,000headhead690552SUBTOTAL 112,000 70,000 140,000 140,000 150,000 100,000 50,000 12,000 96,000 16,500 10,000 678,000 45,000 3,500 15,200 17,500 22,500 20,000 15,000 2,500 500 1,500 2,000 1,719,700 1,600 960SUBTOTAL 1,104,000 529,920 1,633,920 11,083,127 16,0638
1.3 Markets and pricesMilk pricingA farm level milk price of 18.25 per hundredweight (cwt) is used across all years in the financialprojections. This is considered a realistic price level estimate and is based on a Class III milk price of 16.50, plus a farm specific basis of 1.50 per cwt and a 0.25 per cwt cell count premium. This longterm basis is consistent with the basis observed on other Missouri dairy operations. Additional milk pricepremiums, although not included in this analysis, may be obtained from milk buyers.Signing a marketing agreement with a financially secure marketing cooperative is critical to long termsustainability and profitability. Opportunities in the future may, or may not, exist to sell milk at a higherprice into Southeast Order plants, Central Order plants, other milk cooperatives or directly to noncooperative processors.Beef pricingDairy herds produce approximately the same quantity ofbeef as beef herds by selling culls and young stock. Securinghigher prices for cull cows, bulls and surplus heifers hasbecome an important driver of dairy farm profitability. Thiseconomic model assumes selling three-day to seven-day oldbull and surplus heifer calves for an average of 200 perCalf and cull value assumptions, by ageBull/heifer calves: 200 per head2-6 months: 225 per head6-12 months: 485 per head12-24 months: 850 per headMilking/dry cows: 500 per headhead. Pricing assumes a percentage of the cows are bred to beef sires (Angus, Limousin, etc.) to improvecalf salability. Cull values, ranging from 225 to 850 per head, depend on animal size and age.Hauling costsMilk hauling costs vary tremendously across Missouri depending on location, distance hauled, volumeproduced and pickup frequency. The 400-cow and 690-cow plans were designed for daily pickup with atransport trailer truck with a transportation rate of 50 cents per cwt. Hauling sustainability and cost areimportant considerations when deciding the location and ultimate scale of a dairy.9
Milk assessments or other marketing costsSeveral price deductions for marketing costs affect the net price received by dairy producers. Deductionsin this analysis include: National milk promotion/checkoff: 15 cents per hundredweight of milk Cooperative capital retain: 20 cents per hundredweight of milk Cooperatives Working Together (CWT) assessment: 4 cents per hundredweight ofmilk1.4 Feed cost and managementFeed is traditionally about 50 percent of milk production costs. A ration cost of 0.11 per pound of drymatter fed is used in these models for the total mixed ration (TMR).Controlling feed costs, shrink, and efficiency is the single biggest driver of dairy farm profitability.Rations developed for the dairy models use homegrown corn silage and alfalfa hay and haylage as theforage base. Additional feedstuffs, such as soybean meal, distillers dried grains, corn gluten feed, andpremixes with vitamins, mineral, and energy supplements, are common feedstuffs readily available toMissouri producers.The assumptions for dairy herd rations and cropping plans are presented in Exhibits 1.4.1 to 1.4.3.10
Exhibit 1.4.1. Rations for the 400-cow and 690-cow dairy models.Lactating rationsYear 1Year 2Year 7.530.917.529.9Pounds of milk per dayFeedstuffsCorn silage (35 percent dry matter)Alfalfa hayAlfalfa haylageGrass hayCorn grainSoybean meal (47.5 percent)Distillers dried grainsCorn gluten feed (dry)Vitamin, mineral & minoringredientsTotal pounds, as fedRation profileDry matter intake (pounds per day)Ration dry matter (percent)Metabolizable energy balance(megacalories)Crude protein (percent)Neutral Detergent FiberDigestibility (percent)Year 4Dry cow rationsAverageDryHeifer rationsClose .518.913.147.482As fed, pounds per head per 2.505.06.405.54.60.33111.5Exhibit 1.4.2. 400-cow dairy cropping plan.
This dairy farm business plan is intended to demonstrate one pathway for the next generation of . plus twenty percent more acres to accommodate farmstead, feed storage, roads and unusable land typical to Missouri dairy farms. Freestalls with sand bedding in four-row, tunnel-ventilated cow housing barns are used for .
This dairy farm business plan demonstrates one path forward for the next generation of Missouri’s dairy farmers. This path involves producing milk in Missouri with a 3,500-cow single site dairy , a capital and . (includes crops, farmstead and waste acreage) 4,660 Dairy jobs (full-time equivalents) 43.0 Annual net income (five-year average .
600 x 300 350 1260 50 6 14 600 x 300 669 2409 50 21 9 600 x 300 1137 4094 50 60 6 600 x 300 1750 6300 50 142 5 400 x 400 400 1440 50 9 12 400 x 400 674 2425 50 27 8 400 x 400 1170 4212 50 80 6 400 x 400 1750 6300 50 179 4 500 x 400 360 1296 50 5 15 500 x 400 715 2574 50 19 9 500 x 400 1330 4787 50 66 6 500 x 400 1800 6480 50 122 5 600 x 400 450 1620 50 5 15 600 x 400 958 3448 50 24 9 600 x 400 .
2021/SOM1/SCE‐COW/019 EPWG Work Plan 2021/SOM1/SCE‐COW/020 PPSTI Work Plan 2021/SOM1/SCE‐COW/021 EGILAT Work Plan 2021/SOM1/SCE‐COW/022 SMEWG Work Plan 2021/SOM1/SCE‐COW/023 TELWG Work Plan 2021/SOM1/SCE‐COW/024 TWG Work Plan 18. The SCE approved the document classification list as amended.
May 05, 2021 · belle fourche livestock , belle fourche sd 1 black-cow 1250 71.00 rod or janis steele , nisland sd 1 red-cow 1355 71.50 1 red-cow 1320 70.50 joe gantz , alva wy 1 black-cowette 1295 87.00 chad nelson , bowman nd 2 black-cowette 1183 78.50 3 black-cow 1267 72.50 1 bwf-cow 1800 71.00 bryn brown , buffalo sd 1 black-cowette 1125 78.00 3 black-cow .
DAIRY (1 oz. cheese OR 4 oz. yogurt/day) Buffalo butter Buffalo mozzarella and other cheese Cow butter (A2 from France, Italy or Switzerland) Cow cheese (A2 from France, Italy, or Switzerland) Cow milk (A2 only; creamer or cooking; not for drinking) Cow ricotta (A2 only) Cow yogurt (A2 only, unsweetened) Cream cheese (Organic) Ghee Goat Butter
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