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Project Report on Dairy Farm of 12 Animals

Submitted to:
Sir Sohail Aslam

Submitted by:
Babar Ali
Mudassar Wazeer
Shahid Hussain

Roll no. 107


Roll no. 115
Roll no. 111

Table of Contents
Introduction........................................................................................................... 3
Scope of dairy farming........................................................................................... 3
Work breakdown structure..................................................................................... 4
Description of project and product........................................................................4
Market and project analysis for decision making...................................................4

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Strengths......................................................................................................... 4
Market Entry Timing........................................................................................... 5
Proposed Business Legal Status.........................................................................6
Proposed Capacity and revenue.........................................................................6
Proposed Location.............................................................................................. 6
Target Customers................................................................................................... 6
Stakeholder of dairy project................................................................................... 7
Project Investment (capital, running).....................................................................7
Farms Inputs.......................................................................................................... 8
Land Requirement................................................................................................. 8
Labor.................................................................................................................. 8
Animals............................................................................................................... 8
Feed....................................................................................................................... 9
Controlling........................................................................................................... 10
Animal housing.................................................................................................... 10
Vaccination & Medicine..................................................................................... 10
Artificial Insemination (AI)................................................................................... 10
Risk factors and corrective actions...................................................................11
Communication planning..................................................................................... 12
Important notes................................................................................................... 12
Revenues and cost assumption of project for first year.......................................12
ANNEXURE 1........................................................................................................ 13
Annexure 2.......................................................................................................... 14
Vaccination Schedule........................................................................................ 14
Calving Register................................................................................................ 15
Disposal of Death............................................................................................. 15
Reproduction/Insemination/pregnancy Diagnosis/Fallow up/Treatment............15
Reproducti0n Performa..................................................................................... 15

Introduction
A dairy farm with a herd of 12 animals (6 cows and 6 buffaloes) needs a total
investment estimated at Rs.3.1 million out of which the capital cost of the project
is Rs.2.7 million for animal purchase and building construction. The rest is used
to meet the working capital requirement for six months. The project is expected
to achieve revenue of Rs.3.7 million in the first year. The farm will provide

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employment opportunity to 2 individuals other than the owner /manager. The
cows will cost Rs.200, 000 for each and buffalos cost Rs. 150,000 for each. Each
animal give one calf so the farm will have 12 calves but two of them are
proposed as contingency. The proposed probability is 50% male and 50% female
calves. Each one year old calf will be sold at Rs. 25, 000. Female calfs are kept
and become productive in 3rd year and male are sold. Building and machinery
costs Rs. 600, 000. The milking machine and water pump is required in
machinery which costs Rs. 70,000 and rest amount is used in building shed,
paddocks, store rooms and office room. The major revenue of farm will be dairy
milk. One cow will give 15litre of milk per day which is sold at Rs. 65. Each
buffalo give 10litre per day which sold at Rs. 70. The milk prices are increasing
every year. The direction of shed will be north south. The shed covers area of
120sq.ft. 10sq. ft. shed and 10sq.ft. Paddock is required for one animal. The
project needs two workers as a labor who knows good husbandry of animals. The
animals consume 15 -20kg of silage and 50-80litres of water daily. Dairy farming
is emerging sector of economy and governments focused sector thats why
there is a lot of potential of growth for entrepreneur.
Scope of dairy farming
Dairy farming has a very unique business model, and no other business has the
capability of multiplying its assets while still producing revenue. The dairy
farming has very large room for improvement. In Pakistan, many large MNEs
have invested in dairy sector due to very high demand of milk and milk related
products. Now many companies have launched a lot of dairy products e.g. ice
creams, yogurt, milk packs and lassi brands. The majority of population in
Pakistan is Muslim which required halal food therefore lot of demand for halal
domestic milk. Pakistan is fifth largest milk producer.
Currently dairy sector in Pakistan is running on conventional methods and
technologies resulting low yield that is why, there are very potential and
opportunities for modern entrepreneurs which use modern and latest mains of
running dairy business. The government has taking a lot of steps for
development of live stock by providing free vaccinations, tax exemptions, free
medical consultancies, importing and inventing high yielding breeds. Subsidy is
given to farmers importing dairy machinery. Free bulls are provided for breeding
at government farms.
Therefore dairy farming is one of the very potential and profitable businesses in
Pakistan which required low investment and high returns. The new born animals
become milking animals in 3rd year. Therefore growth in farming is very high and
this growth does not require any further investments normally because farmers
dont have to purchase new animals. The outputs of dairy farming are milk and
meet which are basic needs of human. The basic needs of human are not/less
dependent on economy and other factors. Their demands remain not only
constant but growing due to increase in population.
Along opportunities there are some issue in establishing and managing dairy
farms. The hardest part of setting up a dairy farm is the procurement of goodquality, high-yielding, environment-hardened animals. This is also the most
important activity for an owner of a dairy farm.

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Work breakdown structure
dairy farm

planning

purchasig

establishi
ng

controllin
g

procurem
ent

animals

building

animal
housing

controllin
g

machiner
y

machiner
y
installatio
n

deceases
control

communic
ation

feed

risk
manangm
ent
schedule

Description of project and product


Market and project analysis for decision making
Dairy production is all-inclusive activity, related to animal care, reproduction,
feeding, and management. It is defined as all those aspects and activities
relating to rising of dairy animals during their various phases of life to get
wholesome milk. Before making the decision, whether to invest in the dairy and
livestock farming or not, one should carefully analyze the associated risk factors.
A SWOT analysis can help in analyzing these factors, which can play important
role in making the decision.
Strengths

Back bone and main stay of economy. Provides raw material for food &

Leather industry.
Major source of food, i.e. Milk& Meat.
Sizeable foreign exchanges earning through exports.
Wide scope of Milk Production, ranking 5th in the world.
Human resource employment sector.
Stationed, Permanently located secured loaning sector.

Contended nature. Low cost living standard.


Full family involvement, Devoted & Hardworking Sector.

Weakness

Low or lack of interaction with farmers. Poor information about each other.
Unorganized sector, unaware of basic farm management practices.
Remote area, lack of farm to market approach & transportation.
Non-availability of communication services.
Lack of farm/ market infra structures & marketing information.
Lack of record keeping on farm.
No or low application of research work.
Management of dairy farm is a challenging job.
Enormous production losses due to endemic diseases every year.

Opportunities

Govt. of Pakistan & Sate Bank of Pakistan priority sector.


Dairy products needs are much higher than supply.
Value added dairy products are in demand.
Massive migration of labor to cities can be checked / stopped.
Free vaccination facilities available from livestock department.
Free insemination provided by government livestock farms.
Subsidies provided by government in feed, machinery and animals.

Threats

Implementation of WTO will result in open & competitive commodity

pricing.
Due to fear of default, banker community has reluctance for lending loans.
High risks of diseases in livestock.
Defective and unorganized markets.
Imbalance between prices of inputs & outputs.
Lack of community organizations and out dated farm practices.
Low demand in summer.

Market Entry Timing


The demand of milk in summer is high as compared to winter. Thats why the
animals in summer are sold at a bit higher prices as compared to winter. So the
proposed business can be started before the onset of summer season. At the
commencement of the proposed business, it is important that the entrepreneur
must have good knowledge of the production and have contacts with the
livestock breeders and farmers. The ability to work with people and animals, and
efficient use of resources are important aspects in modern and commercial dairy
farming.

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Proposed Business Legal Status
The proposed legal structure of the business entity is sole proprietorship. The
capital required is totally funded by owner and no bank loan is needed at start of
project or during life of project.
Proposed Capacity and revenue
The feasibility study suggests an initial herd size of 12 animals, which is
economical to justify the overhead cost. The cattle of first year become milking
animals in third year.
Herds mix of 50% cows and 50% buffaloes are recommended to get the
maximum milk production/animal per year as following:

Animals
Cow
Buffalo
Male cattle

Liters/ day
15
10

Rate(Rs.)
65
70
25,000

Annual
355,875
255,500
25,000

Proposed Location
The dairy farms projects are profitable both in cities as well as in small towns due
to equal demand of dairy products. Suggested location is near cities or major
towns.

Target Customers
This study suggests that milk will be sold on farm door through contractors,
gawalas or people around that area or may be pasteurized at farm by the farmer
and then deliver it to the nearby city. Following are some of the target clients for
a dairy farmer.

Local people
Gawalas
Milk collection companies
Contractors
The cost of production per liter of raw milk should be lower than its sale
price so that farmer could feel it economical.

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Stakeholder of dairy project

Owner
Labor
Gawalas
Milk contractors
Vaccinators
Silage supplier
Concrete feed (ingredients ) supplier

Project Investment (capital, running)


The total cost of the project is Rs.3, 157,500, out of which capital cost of the
project is Rs. 2,700,000 for purchasing the animals and constructing the building
and the rest is used to meet the working capital requirement.
Building consists of shed, one store room and office room. Useful of building is
(15) years.
In machinery, one water pump is needed for water need and one milking
machine for milking animals.

Description
Cows
Buffalos
Building
Machinery

Rate
200,000
150,000

(Water pump)

10,000

(Milking Machine)

60,000

Working Capital*
Feeds
Labor
Utilities
*First six months

Farms Inputs

150/animal
20,000/month

Total
1,200,000
900,000
530,000
70,000

657,000
120,000
9,000

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Land Requirement
Proposed project required acres. The land rented at Rs. 50,000 annually. Land
is utilized in shed, paddocks, store and office room, water tub and fodder
bunkers.
Description
Shed
Open paddock
Store Room
Office Room
Stores for fodder, concentrate &

Sq. ft.
120
120
15
15
25

machine room

Labor
For a dairy enterprise, manpower is required for performing different animal
husbandry practices at the farm e.g. feeding, watering, and milking and care of
animals etc. One mature person can handle eight milk animals easily. Each
employ is paid Rs.10, 000 per month.
Animals
Six cows and six buffalos are recommended for project. These animals can be
purchased locally or from markets (government mandies and farms and private
farms). Some nominated markets are:

Arifwala
Gangu
Jogaitpir
Okara
Sahiwal

Each cow costs Rs.200, 000 and each buffalo costs Rs.150, 000 on average.
Buffaloes (Nili-Ravi, Kundi) with second lactation (calving)
Cows (Crossbred Sahiwal-Friesian, Cholistani-Friesian).
12 big animals have 12 small cattles in equal ratio of male and female but due
two diseases and lower medical facilities, 10 out of 12 are estimated as surviving
and 2 as contingencies. Cattle become productive in 3 rd year. Male cattle are
sold at end of each year while female are kept as assets. Cattle consume feed
equal to of productive animals in 1st year and 2nd year they consume of food
of mature animal. In 3rd year they become mature consume maximum feed.

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The proposed animals are productive for next four calving periods after that they
are culled and replaced with new young animals. If due to some reasons animals
before projected time become uneconomical it must be sold.

replacing
with high
yeld
animals

purchase

culling
low yeild
animals

high
yield

decresin
g yeild

Feed
The projects animals consume two types of feeds. Feed (A) is concrete feed and
feed (B) is silage. Concrete feed is prepared at farm which cost about Rs.20 per
kg and each animal consume 8 kg per day.
The silage is purchased from large farms and supplier costing Rs. 3-5 per kg.
Major suppliers of Silage are located in Okara and Sahiwal. Each animal consume
20 kg of Silage per day.
Raw material for self-made concrete feed

Material
Cottonseed cake(khal)
Maize
Corn gluten
Wheat
Rice polish
mustard oil
Molasses
Millet(bajra)
Salt

Quantity(kg)
2

1
1/8
1
1/8

Very small

10
mustard (khal)

Controlling

Animal housing
Sheds of the animals should be airy with protection of the animals from extreme
temperatures and strong winds. The animal housing should be facilitated with
drinking water for animals. There should be proper drainage system to keep
hygiene at the farm. It consists of a built up animal shed, a brick soling paddock
for animals, calving pens in which pregnant animals are kept separated from
other animals before calving, one room for storing farm equipment and one for
compound feed storage.
The animals can be dehorned, as they are easier to handle and cause less
accidental injury to neighboring animals, handlers, walls, and trees.
Vaccination & Medicine
Vaccination & medicine is required to prevent any disease outbreak in the animal
herd.
Each new animal will be vaccinated before entering the farm. These vaccinations
are provided by Government for both cow and buffalo per year. Vaccines are
produced at Veterinary Research Institute, Ghazi Road, Lahore. Technical
guidance is also provided to the farmers. Farmers can have their animals
vaccinated from the field Veterinary Hospitals and Centers free of cost.

Artificial Insemination (AI)


Artificial Insemination (AI) charges will be Rs 1000 per animal for both cow and
buffalo. There are four Semen Production Units (SPU) in Punjab, which works
under Directorate of Breed Improvement, Livestock & Dairy Development
Department Government of Punjab.
ii) SPU, Karaniwala District Bahawalpur
iii) SPU, Kallur Kot District Bhakkar
iv) SPU, Kherimurat District Attock.
Besides use of semen at the Provincial level, it is also supplied to the sister
provinces and abroad. Semen of various breeds is also sold to the Private
practitioners.

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High quality breeder Bulls for buffaloes can be provided free of cost on
government dairy farms.
Risk factors and corrective actions
Dairy farming is business of living animals so it is on higher risk. Risk of dairy
project is divided into different categories ranging from avoidable to unavoidable
and from critical to minor. Followings are risk factors with categories and
corrective actions.
Factor

Symptoms

Categories

Reasons

Preventive
measure/
corrective

Death
Foot and

Excessive

Unavoidable
Avoidable

mouth

salivation,

Critical

Natural
Infections

actions
Nil
FMD vaccine
every 4 month

pustules on
Anthrax/red

lips
Fever, grinding

Avoidable-

short

of teeth,

Critical

Bloating

Infection

Vaccination in
Feb. Dead

release of

animal should

blackish blood

not buried in

from naturals

farm

opening
Difficult

Avoidable

Fodder with

Mustard oil

breathing

Critical

dewdrops

with choral
hydrate in
water

Low

Minor

demand of

Low

Contract with

consumption

milk

milk in

processing

summer

companies

All diseases mentions above are major if known in its starting stage. But if
corrective measures are not taken immediately within a few hours these become
critical and case death of animals.

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Communication planning
Communication is critical fact in project success. Dairy farming also need a
communication with labor and others stakeholders. The owner communicates
instructions to labor in morning and get results of all day progress in evening.
Whenever owner is not available to communicate instructions to labor face to
face he uses cell phone to communicate with labor. He also meets gawalas every
week to solve any issue present. With milk companies owner communicate
through email monthly.
Reason
Instructions
result
Payments
Contracts

When
In morning
In evening
Weekly
monthly

How
Face to face
Face to face
Face to face
Phone/email

Responsible
Owner/pm
Owner/pm
Owner/pm
Owner/pm

Audience
labor
labor
Gawalas
Milk
companies

Important notes
1. Dairy farm project profitability is directly proportional to quantity of
animals and life of project.
2. It is highly advised that in South Punjab pure foreign animals especially
cows are not suitable due to very warm weather.

Revenues and cost assumption of project for first year


Revenue:
Animals

No. of

Daily milk

Rate

Total Annual

Cows
Buffalos
Male cattle

animals
6
6
5

15
10

65
70
25,000

2,135,250
1,533,000
125,000

sold
Total Revenue

3,793,250

Costs:
Description
Silage
Concrete feed
Total
Cattles feed

No. of animals
12
12

Usage/day
20 kg
8

10

of milking

Rate
5
20

Total Annual
438,000
700,800
1,138,800
284,700

1500/month

18,000

animals
Utilities bills

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ANNEXURE 1

Australian Friesian Sahiwal

Nili ravi

Kundi

14

Holstein

Jersey
Annexure 2

Vaccination Schedule
Name of
(ml)
Measures

Disease
Time for

Name of
Vaccination

Vaccine
Duration of

Qty
Immunity

administered
Preventive

Foot & Mouth


4 months prior

Disease
to the expected

(FMD)
symptoms of

Foot & Mouth


disease.

Vaccine
Anthrax Anthrax
spore

monsoon season

should be done

(Bowla Pun)

One year Every


year
Anti rabies

vaccination

every year.

0.5 ml MarchApril or
Rabies

vaccine

be used right

after

preparation.

Hemorrhagic

Septicemia (HS)

10 ml According
to need One year
Vaccine should
HS vaccine 5-10
ml Start of Spring
4 months Should
be given

4 months prior

to the expected

symptoms of

disease.

5 ml Start of
spring 4 months
Should be given
Vaccine

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Calving Register
Sr.
no
1
2
3

Dam No.

Sire No.

Disposal of Death
Sr. no
Animal/da
m
1
2

No.

Date of
calving

Date of
birth

Sex of calf

sex

Wt .of
calf

mode

Remarks

cost

remarks

Reproduction/Insemination/pregnancy Diagnosis/Fallow up/Treatment


Sr. no
Animal
Date of
No. of
Last
Sire no.
result
remarks
no.
last
services date of
calving
service
1
2
3

Reproducti0n Performa
Brand No.......................Date of birth.................Dam No...............Date of 1st heat...........................
History sheet--------------------

Sr. no.
1

Particular
s
Service
(Date/Sir
e No.)

1st
calving

2nd
calving

3rd
calving

4th
calving

5th
calving