Major reasons why most “Modern Dairy farms” fail to make profits
BY: Khalid Mahmood
There has been huge interest in dairy farming as a business in last 3-5 years. Hundreds of dairy farms were opened with most modern design, equipment and best breed animals. But not even 20% of those dairy farms are “profitably operational” now….. Frankly speaking, professional dairy farming has gone through a crisis in the last 3 years.
Below are a list of reasons for failures for new dairy farms:
1. Started by people who did not have any knowledge on dairy farming.
There were 4 groups of people who started modern dairy farms.
- First group were the local people who suddenly became rich (by whatever means) and had surplus cash.
- The second group were the NRI’s who pumped in their hard earned money.
- The third group were the software professionals who were frusted with their jobs and wanted to get back to their farming roots.
- The fourth group were the unemployed educated youth from upper middle-class families.
All the four groups of people never had any kind of dairy farming experience. (some never touched a cow or a buffalo before!!!) All of them had good intentions and wanted to apply modern design and technology. But nothing works, if you don’t know how to differentiate a male and a female buffalo.
2. People got into dairy farming for money. As the name (dairy farming) suggests, dairy farming is a type of farming and farming is not business (in pure sense).
Dairy farming is not a business but a passion. Primarily, new dairy farmers failed to understand that they were “dealing with live animals” and not with some machines. Farming requires extensive knowledge and tons of patience. Many of the failed dairy farms were started by highly educated people. Most of these people built castles in the air. These people used excel sheets and project management principles into dairy farming. This is not bad but that alone is not good enough. Many new dairy farmers stupidly calculated that a buffalo will give 12 liters of milk for 365 days.
3. Big bang formula. Most of the hitech farms went for a bing bang formula. They constructed huge sheds and bought large number of animals at one go. When you are new to dairy farming and have a large herd, it is very difficult to manage problems. The procurement of animals should have been staggered to maintain consistent monthly milk yield. Some even made the mistake of setting up high end processing plants when their farm did not even produce a single drop of milk.
4. Not understanding reproductive cycle. Many new farmers after procuring the animals were only focussing on milking. Most of them did not have the knowledge that the animal should conceive by 4th or 5th month after calving. They did not know how to detect heat and surprisingly even those farms that had large number of lactating buffaloes did not have a bull in the farm. Some times, depending on AI, may lead to missing heat cycles. By the time these new dairy farmers realised the mistake, the animals were already in their 8th or 9th month of milking.
If you have 50 animals and if most of them are not pregnant and are in 8th month of milking – it means they have to feed 50 non-milking animals for next 9 to 10 months which obviously resulted in huge losses.
5. Not taking care of calves. Many of these failed farms did not take proper care of the “female calves”…. Proper care of female calves is very very important for being successful in the long term. I have seen farms with 100 lactating buffaloes but only with 20 to 30 calves. Rest of the calves were already dead. This might not be a big issue in the short term but huge loss in the long term. All successful dairy farmers will tell you the value of female calves because these will start giving milk in 3 to 4 years.
6. Major issue is….”improper feed and fodder management” Many farmers provided good feed and fodder(grass, hay) during initial phase. When milk yield reduced after 5 or 6 months, these guys reduced the feed and fodder. Some people cut down the feed so drastically .. Feeding should be according to body weight and yield of the animal. During dry months you can cut down feed a bit, but, should not reduce it drastically. Due to nutritional imbalanes, the animals had health and reproductive issues.
7. Failure of automation and labour problems. Most new farm owners wanted to fully automate the farms.
It’s difficult to adapt the hand-milked cow to milking machines which requires time and patience. When it did not work the way they planned they just discarded the milking machines and other machinery. I have seen farm after farm with unused milking machines. And when suddenly workers who milk quit, it’s a nightmare situation.
8. Another issue is… “Depending on others”….Many owners depend on others to take care of the farm who themselves did not have much knowledge on dairy farming.
But, dairy farming requires owners attention 24 hours a day, 7 days a week and 365 days a year. Others will not be able to do that for you. If you can’t spend time on your farm (atleast till the farm operations stabilises), please do not get into dairy farming.
9. Easy exit paths…. Since the farms were mostly started by people with surplus cash or had the capability to go back to their original professions, when things did not go well, they just shut down the farms. ….
But, the most “sad part” was that they created a bad name for dairy farming and even worse was that the best breed animals were sent for slaughtering (cutting). If these people did not have easy exit paths, they would have hung around and made it successful.
One should have the will-power to stick around for the long-term when things are not going your way.
The intent of this message, is “not to frighten” people who want to get into dairy farming ..but, to learn from other’s failures. Dairy farming is only for people who are passionate about it. It requires time and lots of patience to be successful in dairy farming.
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