Teagasc new entrants training
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Teagasc New Entrants Training. Abigail Ryan Teagasc Moorepark. Overview. Why? Money in Money out Investments Personal Cash flow. Why? Money in Money out Investments Personal Cash flow. Why? – because it will cost a lot of money. Existing farmers

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Teagasc New Entrants Training

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Teagasc New Entrants Training

Abigail Ryan

Teagasc Moorepark


Overview

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Why? – because it will cost a lot of money

Existing farmers

2020 Vision – 50% increase in volumes

ICBF Projections on Cow Numbers - +100k in Glanbia??

Possible Cost of on-farm Investment

€2,000/cow = €200m

€4,000/cow = €400m

New Entrants

50% are currently beef farmers

Average investment €160,000 approx.

Target a yield of 385kg (1,100 gallons) per cow + 10 c/litre profit


  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Average Producer Milk Prices

2 c/litre


 6 c/litre

2 c/litre

Average Producer Milk Prices


Monthly Milk Prices (vat incl.)

Average milk price : 2008 : 33.2 c/litre ; 2007 : 33.5 c/litre

Source: CSO


Aut 07

Spr 08

Monthly Milk Prices (vat incl.)

Average milk price 2008 33.2 c/litre : 2007 33.5 c/litre

Source: CSO


Milk price variation vs milk sales

Variation €60,000 per 100 cows


  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Range in Physical & Financial Performance 2010

Variation €28,400 per 100 cows


Range in Physical & Financial Performance 2010

Variation €24,100 per 100 cows


Range in Financial Performance 2010

Variation €52,500+ per 100 cows


Residual cash(€/cow)- left to pay yourself, taxation and repay the investments


Residual cash (€/cow)- left to pay yourself, taxation and repay the investments


  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


‘Average’ investment costs


Possible investment costs


Possible investment costs


Residual cash (€/extra cow)- left to pay yourself and for taxation


Expansion – a case study


Case study – the investments made


Case study – the investments made

Expansion costs €3,700/cow


Case study – the profit generated


Lessons from Case Study

  • Efficient dairy farms …

  • Can deliver a ‘good’ income independent of SFP

  • Can increase income through expansion

  • But are affected by low milk price


  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Living Expenses for Farm Families

  • A consumption unit needs €11,400

    • A consumption unit = 13+ years

    • Less than 13 years = ½ unit

  • 2 adults and 2 children = €34,200

  • Average farm family (in 2000) 3.56 persons or 3.2 units (€36,400)

  • What is the figure for your family?


  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


The transition to 2015 - Cash flow

  • Pre-2015

  • Cost of rearing extra heifers

  • The milk quota issue

  • Timing of the investment

  • Post-2015

  • Increasing cow number on milk receipts


Dairy cow Suppliers per county


Compound annual growth in milk output %


What % of live heifers calve at 22-26 months?


Cash flow – keeping extra heifers

€65 per cow - 10% more heifers


Cash flow - The milk quota issue


Cash flow - Milk quota options


Cash flow – timing of the investment


Cash flow – effect of expansion on milk yield per cow

Source: CSO


More heifers

Herd getting younger

Cash flow – effect of expansion on milk yield per cow

Herd

maturing

Source: CSO


Cash flow – effect of expansion on milk yield per cow

Milk sales reduced by €300 per cow until herd starts to stabilise again

Source: CSO


Cash flow – ongoing investment costs

€65 per cow - 10% more heifers


Successful farmers – the team approach

  • Adviser

  • AI technician

  • Banker

  • Contractor

  • Co-op person

  • Family

  • Milking machine technician

  • Vet


Risk analysis


Risk analysis – example farm


Risk analysis – example farm


Risk analysis – example farm


Risk analysis – example farm


Your next steps …

  • Establish your position – Profit Monitor

  • Complete the worksheet

  • Update your 5 year plan


  • Login