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

Teagasc New Entrants Training

Abigail Ryan

Teagasc Moorepark


Overview

Overview

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Teagasc new entrants training

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Why because it will cost a lot of money

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


Teagasc new entrants training

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Average producer milk prices

Average Producer Milk Prices

2 c/litre


Average producer milk prices1

 6 c/litre

2 c/litre

Average Producer Milk Prices


Monthly milk prices vat incl

Monthly Milk Prices (vat incl.)

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

Source: CSO


Monthly milk prices vat incl1

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

Milk price variation vs milk sales

Variation €60,000 per 100 cows


Teagasc new entrants training

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Range in physical financial performance 2010

Range in Physical & Financial Performance 2010

Variation €28,400 per 100 cows


Range in physical financial performance 20101

Range in Physical & Financial Performance 2010

Variation €24,100 per 100 cows


Range in financial performance 2010

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


Residual cash cow left to pay yourself taxation and repay the investments1

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


Teagasc new entrants training

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Average investment costs

‘Average’ investment costs


Possible investment costs

Possible investment costs


Possible investment costs1

Possible investment costs


Residual cash extra cow left to pay yourself and for taxation

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


Expansion a case study

Expansion – a case study


Case study the investments made

Case study – the investments made


Case study the investments made1

Case study – the investments made

Expansion costs €3,700/cow


Case study the profit generated

Case study – the profit generated


Lessons from case study

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


Teagasc new entrants training

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


Living expenses for farm families

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?


Teagasc new entrants training

  • Why?

  • Money in

  • Money out

  • Investments

  • Personal

  • Cash flow


The transition to 2015 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

Dairy cow Suppliers per county


Compound annual growth in milk output

Compound annual growth in milk output %


What of live heifers calve at 22 26 months

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


Cash flow keeping extra heifers

Cash flow – keeping extra heifers

€65 per cow - 10% more heifers


Cash flow the milk quota issue

Cash flow - The milk quota issue


Cash flow milk quota options

Cash flow - Milk quota options


Cash flow timing of the investment

Cash flow – timing of the investment


Cash flow effect of expansion on milk yield per cow

Cash flow – effect of expansion on milk yield per cow

Source: CSO


Cash flow effect of expansion on milk yield per cow1

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 cow2

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

Cash flow – ongoing investment costs

€65 per cow - 10% more heifers


Successful farmers the team approach

Successful farmers – the team approach

  • Adviser

  • AI technician

  • Banker

  • Contractor

  • Co-op person

  • Family

  • Milking machine technician

  • Vet


Risk analysis

Risk analysis


Risk analysis example farm

Risk analysis – example farm


Risk analysis example farm1

Risk analysis – example farm


Risk analysis example farm2

Risk analysis – example farm


Risk analysis example farm3

Risk analysis – example farm


Your next steps

Your next steps …

  • Establish your position – Profit Monitor

  • Complete the worksheet

  • Update your 5 year plan


  • Login