
HomeBiogas 2021 Impact & ESG Report
With a wide portfolio of products, HomeBiogas helps businesses achieve Environmental, Social, and Governance (ESG) Criteria, enabling them to demonstrate their commitment to safeguard the environment.
Read MoreMilk demand fluctuates with multiple market factors, so managing a dairy farm business can quickly become a rollercoaster. As a manager, you have to balance many factors to keep the company profitable, besides ensuring your cows are always taken care of properly. If you’re just starting in this industry, here are some things you should consider.
A dairy farm is a company that specializes in the long-term production of milk, which can then be processed on-site or at a dairy plant.
Like any other business, a dairy farm is successful when managers and/or owners focus on sustainable growth, specifically on elements like:
The pandemic has influenced the global dairy market generating a significant increase in the demand for dairy produce. After the initial growth, the global dairy market is expected to slow down in 2022, as milk prices struggle to keep up with production costs.
However, predictions for the next five years look promising for dairy farmers. The market is expected to register a compound annual growth rate of 5.2% between 2022 and 2027 as consumers become more aware of the importance of healthy nutrition and how dairy products can contribute to a balanced lifestyle.
Asia-Pacific continues to be the largest market for milk and milk-based products, but growth is expected to occur at similar rates in North American and European markets.
It depends on a series of factors, of which one of the most important seems to be the herd’s size. For example, the University of Minnesota revealed the following stats for 2019:
It’s the result of how milk production costs vary with the business’s size. Large farms can negotiate better prices for food, medicine, and other materials than small farms, which means they can halve their costs. They’re more profitable because they manage to keep expenses down in ways that aren’t accessible to a farm with a herd of 50 cows.
Keeping costs down is an ongoing challenge in this industry, but they’re the key to successfully countering the changes in demand, unpredictable weather, and milk price fluctuations. Between labor costs, equipment, and estate management, keeping your eyes on cash flows is the game-changer when looking to build a profitable dairy farm.
Advantages:
Disadvantages:
For your dairy farm business to be profitable, you need to produce at least part if not all forages. So, you need enough land to grow grains and other food for your herd. Ideally, you want to pick a location where future expansion is possible so you can support long-term growth.
At the same time, you need a place to sell your milk quickly and with minimum additional costs to your farm. The shorter the distance between you and your potential customers, the easier it becomes to sell the milk for affordable prices and still have good margins.
Last but not least, you need a clean water supply that can provide the necessary amounts of water to support all your farm’s needs.
Dairy cattle require clean and dry resting spaces. Freestalls or bedded packs provide comfortable housing solutions for cows that need to lie or rest without limiting mobility. As a rule of thumb, you can calculate how much space needs to be allocated to each cow with a simple rule: you want to provide enough room so your biggest animal can freely enter the stall, lie down, rest comfortably, and get back to its feet.
On average, this rule translates into about 50 square feet of room for each animal in the freestall. If you build a close-up facility, you should provide approximately 100 square feet of space for each cow.
Ideally, you can build a separate space for calving for health and safety reasons.
Finding the right dairy cows to grow can be challenging and depend on your location and freestall capacity. You must run market and competitor research to understand what breeds are already growing in the area and how profitable they are by farm size.
The best dairy cow breeds are Holstein, Red and White, Jersey, Brown Swiss, Milking Shorthorn, and Guernsey. You can narrow your options and make the best decision when selecting the breeds for your dairy farm by talking to a veterinarian and other experts in your area.
Dairy cattle require specific nutrients to produce high-quality milk and reproduce, so you need to work with an expert to establish the proper diet for each category of cows you keep on the farm.
When you know how much food you need for your herd, you get to make better decisions around how much food to cultivate or buy, and depending on production costs, it can also influence the size of your herd in any given year.
Waste management is one of the most challenging parts of managing a dairy farm business, as dairy cattle produce impressive amounts of manure each day. The numbers speak for themselves:
Without an effective waste management system, you risk producing too much waste and creating major disruption to the local environment, with significant consequences on the life and health of your entire community.
The good news is that cow waste can be put to good use. With the right waste management system in place, you can quickly turn cow dung into biogas, positively impacting your business and the environment. This way, you can produce energy from renewable sources on-site and fertilizer so nothing goes to waste, and you get to produce more with fewer resources for increased efficiency.
Paying for land, construction, equipment, crops, and dairy cattle can quickly become a considerable expense, and profits don’t always come easily in this business. You need to budget wisely and be ready for unpredictable outcomes, such as reduced productivity due to climate change, milk price decline, or medical expenses.
Your business plan should include the following chapters:
Writing the business plan is just the tip of the iceberg. After you have cleared what your business will look like, you need to put together a tactical plan to turn your business idea into practice.
Start with making a list of activities you and your employees need to perform to keep the business running. This list must include everything that needs to happen every day, what equipment you will use, and how many people are necessary to perform each task.
Start with the daily activities:
Continue with other regular activities:
Set clear goals and milestones to measure your progress and evaluate your performance. This way, you can identify what works and what needs to be changed to increase profitability and improve conditions on the farm.
HomeBiogas systems provide an effective method for managing cow waste using anaerobic digestion. This natural process enables dairy farmers to use cow dung to produce biogas that can be used as cooking gas, with multiple extra benefits:
The system includes a digester where bacteria break down the organic waste, produce fertilizer, and supply gas from organic matter. It’s a zero-waste process that reduces your business’s impact on the environment while permitting you to have cleaner energy than by using fossil-fuel sources.
Starting and managing a dairy farm business requires a good plan and a willingness to embrace the challenges of growing dairy cattle. It’s hard work, rewarding and demanding, especially as some of the elements that can influence your bottom line are out of your control.
It’s hard to make accurate long-term predictions between global dairy market fluctuations and climate change. However, taking risks can also pay off, and the more you learn how to manage the farm without increasing your production costs, the higher your chances of building a profitable business in this industry.
With a wide portfolio of products, HomeBiogas helps businesses achieve Environmental, Social, and Governance (ESG) Criteria, enabling them to demonstrate their commitment to safeguard the environment.
Read MoreAt HomeBiogas, we are taking responsibility for our planet together with our customers. They are visionaries, changemakers and inspiring people creating a positive future for us all. We are thankful to our wonderfully courageous customers, and we are proud to share their stories.
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Read MoreAfter two years of Covid, the hotels are experiencing a revival and all of us are already fantasizing about a pampering vacation that includes tanning at the poolside and a rich buffet. But what happens to all the food that is left in the buffet after we're done piling it up on our plates? The hotel industry is responsible for 37% of the food waste in Israel, this is how the environmental and economic damage can be reduced.
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