Dairy Farm Loan
Currently, according to the United States Department of Agriculture, milk is now produced in all 50 states. Most of these states are in the west or north, and generally these farms are family-owned and managed.
Over the last several years, the industry has seen a decline in the number of farms, but an increase in the number of cows per operation. The dairy industry in America is the backbone of several other industries, including large and small operations for cheese, ice cream, butter, and yogurt.
In its original inception, dairy farming looked nothing like it does today. It was originally a small portion of a larger type of farm. Farmers realized they could make money by having cows outside of what they needed for their own families.
However, in the earliest inception of dairy farming large-scale dairy farming was only successful in areas where a large amount of milk was required for other industries such as cheese or butter making or where there was a dense enough population with cash to purchase the milk. It wasn’t until refrigeration and the ability to transport refrigerated milk that the industry thrived.
In the early days, due to a lack of grazing land, many families were unable to have their own cows and this helped spur on centralized dairy farms as we know them today.
It developed primarily in villages and cities where farmers, near the town, would keep additional animals and sell the milk in town. However, until the late 19th century, all of the milking was done by hand. It wasn’t until the early 20th century that milking machines were introduced to dairy farming.
It is substantially easier in modern day to make a successful run at dairy farming and because of this banks, brokers, and other lenders offer dairy farm loans.
With technology, refrigeration, and modern veterinary medicine, it’s easier to keep a herd healthy and productive, making your and the lender’s investment a bit sounder.
Throughout time, dairy is an industry that has ebbed and flowed, and currently the number of farms has decreased but dairy is by no means, a slowing industry. If you are looking to become a dairy farmer there are a few things you will want to consider.
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Dairy Farm Financing
First, is
financing. Regardless of whether you are taking over a family farm, or looking to start a new dairy farm, chances are you will need a dairy farm loan to help you fund your operation.
Before you get a dairy farm loan though you will need to do a lot of research. Even if you were born and raised on a dairy farm, and are used to the day-to-day operations, you will want to consult with experts in the dairy industry to help you produce a business plan. This will include a SWOT analysis (strengths, weaknesses, opportunities, and threats) for your farm.
You will want to decide how are you going to raise your livestock. Are you going to grain or grass-feed your cows – or a combination of both? How will you get water to your cows? The average cow drinks 30-50 gallons of water each day which helps stimulate milk production.
They will also need a well-rounded set of nutrients to facilitate their milk supply. You will want to work with a nutritionist to help you develop the best plan for your lactating and non-lactating cows.
Modern Dairy Farms
Many modern dairy farms divide their cows into different units to help manage their care more effectively. This can help drive down costs and waste, as well as help ensure the health of the entire herd.
Typically, lactating cows and the milking portion of the herd is managed the closest ensuring that they can produce the highest quality milk possible. Heifers, which are females who have yet to birth their first calf, are also closely watched as they are the ones who grow to replace the older animals in the milking herd.
With feeding your cows comes waste. What are you going to do with it? Cows produce a lot of waste, and this manure could actually be utilized on your farm as a great resource with the right planning.
Because of the massive amounts of waste that cows produce, on average 5,000 cows has a similar output of a municipality of 70,000 people, certain farm sizes must follow EPA guidelines.
Currently, the industry is trending to more economically and environmentally sustainable practices. Innovators in this space may find a dairy farm loan easier to get in order to start or update their farms.
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Dairy Farm Costs
With a dairy farm comes a lot of cost. When planning for a
dairy farm loan you will want to consider how much capital you will need to borrow.
The types of costs a dairy farm loan can help you cover are land, buildings, equipment, and the cows themselves. If you don’t want to borrow for all of this at once, you can oftentimes purchase your cows and rent the land to pasture and raise them.
In order to secure any kind of capital or financing in the form of a dairy farm loan you will need to work with a broker, bank, USDA, or other lender. The Dairy Farmers of America also has financing options through their subsidiaries.
Managing costs is an important part of running a successful dairy farm. It is an absolute necessity in today’s economic environment, so making sure you are working with groups that can get you competitive pricing not only on your financing, or dairy farm loan, but also on the crops, supplies, and veterinary costs for your farm and animals is crucial to the well-being and success of your operation.
Currently the United States ranks second in the world, behind India, in milk production. Though most of that production is located in California, Wisconsin, New York, Idaho, and Pennsylvania there are opportunities around the country for a dairy farm.
Currently the average herd size in the United States is approximately one hundred cows per farm. The median herd size is 900 cows with 49% of those residing on farms of 1000 or more cows.
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Types of Dairy Cows
There are several different types of cows that you can use your dairy farm loan to purchase when starting your farm. The most popular and productive breeds according to the Dairy Farmers of Washington are
Holsteins (which are the stereotypical black and white cows commonly thought of), Jerseys, Guernseys, Ayrshires, Brown Swiss, Milking Shorthorns, and Dutch Belted.
All of these cows make great milk, with the Jersey cows having the richest of milk because it is highest in butterfat. This makes it perfect for the production of butter and cheese.
No matter what type of cow, how large your herd, what you feed them, or what you do with the waste from your animals, it is possible to have a successful dairy farm in the United States. If you do your research and have your business plan ready, securing a dairy farm loan will give you the capital you need to get your operation off the ground, and get your milk on the table in no time.
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