Dairy Farming Business

dairy farming business

In this article, we are going to look into the dairy farming business in-depth. Topics of the article are

– What is dairy-farming and where is it more dominant?
– Financial scale in which dairy farming is pursued all across the world.
– How to build a business plan to start your dairy?
– Costs and expertise required for dairy-farming.
– Problems and solutions.
– Is dairy farming profitable? Profit estimation with a real life example.

Business: Dairy farming
Type of business: Traditional, farm management.
Suitable For: Farmers, anyone with land.

Farmers often look for ways to earn an extra buck apart from their farming activity. Dairy farming is the best business for such people who have a decent piece of land and a bit of knowledge about it. There are so many families in the Indian state of Punjab and Gujarat who have become millionaires just by selling milk.
Dairy farming is the practice of raising cows for the purpose of milk production which is often used in making cheese, yogurt, ghee, and other dairy products.

Dairy industry is a multi billion dollar industry growing at 5% annually. In India, the industry contributes about 1,16,000 crores ($25,800 million) every year. More than 10 million dairy farmers belonging to 96000 local dairy cooperatives, sell their products all across India. In fact, cow dairy farm business is one of the most dynamic and profitable businesses for many farmers.

A Step By Step Guide to start a Dairy Farm Business
– First step is to study the climatic condition of your area and understanding which breeds do well and give better yield.

– Visit nearby dairy farms and learn more about their farm operations first hand.

– Have a rough sketch of the scale of your dairy farm operation so that you can start listing the things you might want to buy to run your farm.

– There are so many things to know before you start your dairy farm.
Find answers for questions like

How much time and money does it take to raise a calf to milk-producing age?
What is the most profitable product you can produce using your cow’s milk? 
Is it more profitable to sell milk directly to the nearby milk societies? or
How much can you sell the male calves for?

– Setting up a dairy farm costs you a lot of upfront investment and it needs consistent maintenance. So start setting aside some of your investment money for things like feeding, waste management, medical cost, infrastructure maintenance, etc…

– Start calculating your income. Calculate how much time you need to break even. For each breed, divide annual upkeep cost by annual milk production to find production cost per unit of milk. If your model is not profitable, start over again with a new model.

– Select the breed according to your plan because every cow breed has its own unique properties and fat content, so it is essential to know which cow’s milk is suitable for the products that you are trying to produce.

– Have an innovative mindset while building your plan. For example, instead of just using cow dung for manure, build vermicomposting beds so that you can fully cash in on the waste management system. Vermicompost and compost tea sell for a lot of money. There are people who make thousands of dollars a month just from vermicompost business.

How to feed your cows?

Feeding is THE most crucial part of the dairy farming business. Everything including yield, fat content, health of the animal and the expenditure of the farm operation depends on it. So be extra careful and research extensively on how and when to feed your cows to be more efficient.

Cows need about 4%-5% of their weight in forage each day. Your pasture should produce more than this at peak season, so you can stockpile the surplus for winter. This is how it is normally done all across the world to feed the livestock more economically.


In countries like India, breeding has been made very easy using artificial insemination. Although many people in the rural area still use dairy bulls to inseminate their cows, this practice is slowly decreasing due to potential harm to their cows as bulls have a reputation for their dangerous behavior. The safer options are paying for a bull’s service at breeding time, or practicing artificial insemination . AI is almost always the cheapest option, and has equal or higher success rates when performed correctly.

Problems and solutions

There are many problems associated with dairy farming business. Let’s discuss them one by one.
– It is easy to run out of money. Please make sure that you have enough capital left to keep up, expand and improve your dairy farm. Try not to go all in with your money. It is wiser to expand your farm operations gradually once you get hold on the know how of the business.
– Cows often get sick from various diseases. It is always good to have a veterinary doctor in contact so that you can call them up when your livestock need a health checkup.
– Nutrition deficiency is another big problem. Normally farmers get their livestock’s blood tested and look for deficiencies and add the missing nutrients in their feed.
– Identification is also a big problem when you have a lot of livestock to maintain. Tagging them with unique ID cards with a name and their health conditions can make things easier.
– If some of your cattle get bugs and other infections, then it is better to have a quarantine section where you can separately keep them and treat them to curb the spreading of the disease.
– Consistency is key. It is crucial that you are always there if any complications arise. It is better to keep a dedicated staff to make sure the cows are fed regularly. Health and hygiene of the cattle should be one of your top most priority.

Dairy farming project report with an example. Is dairy farming profitable?

– A dairy of 10 cows with a shed of at least 400 sq ft area will cost 700000 rs-900000 rs (10000$-12000$) as an upfront investment. This estimation includes 5 lactating cows with 5 calves, insurance for the cows, building, and other expenditures.
– Typically, profits will be low in the first two to three years. But, when the business starts to settle you may expect profits in the range of 800000 rs-1000000 rs($9000-$11000 ) from the fourth year.
– You may also expand your income stream by creating vermicompost production, cow urine, organic manure supplies, or selling other products like cheese, yogurt, ghee etc…

So the conclusion is that the dairy farming is a profitable business as long as you try to innovate, maintain and improve your farm over the year.

Hope this article helps you. Please checkout other awesome business ideas mentioned in our blog. If you want to know about starting a plant nursery, click here . You can also checkout our other agriculture related posts here.

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