Business Plan for Dairy Farm

(30 Animals)

By: Syed Masood Ali

 Project Definition

• Build up a Small level Dairy farm to produce

and sale Fresh milk without any kind of
Adulteration in cost effective and scientific
way to maximize profit.
 Market Feasibility
• Fresh Milk demand is growing day by day and always is
higher than supply, So business entry is not restricted to
create demand or to go for price war.

Annual Production Annual Consumption

Year
(Million Liters) (Million Liters)
08-09 35,495 36,361

2009-10 37,669 38,188

Source: Ministry of Livestock and Dairy Development

 Market Entry Timing

• The demand of milk in summer is high as

compared to winter. That’s 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
 Proposed Capacity
• Initial herd size will be of 30 animals, which is
economical to justify the overhead cost.
• Herd mix will be with ratio of 3:2 for buffaloes and
cows with second Lactation (Calving) to get
maximum profit.

• Buffaloes (NiliRavi / Kandi) 18 Heads

• Cows (Crossbred / Local) 12 Heads
 Project Investment
• The total cost of project is Rs. 5,251,000
Description Total
Cattle (30) 3,000,000
Construction 1,456,100
Equipments 416,000
Total Capital Cost (Rs) 4,872,100
Fodder 2 Months 164,094
Operational Exp. 2 Months 143,000
Working Capital (Rs) 307,094

Total Investment (Rs) 5,179,194

 Infrastructure Cost
Description Sq.ft Rate/Sq.ft Total Cost

Shed for Cows /Buffalos 2,400 300 720,000

Open Paddock for Cows / Buffalos 2,400 15 36,000
Shed for Calves 540 300 162,000

Open Paddock for Calves 540 15 8,100

Stores for fodder, concentrate & machine
300 300 90,000
room
Office, Servant Room, Wash room 400 500 200,000
Silage Bunker 1600 150 240,000

Total     1,456,100
 Machinery & Equipments
Description Qty Price Total
Chopper 1 25,000 25,000

Water pump 1 32,000 32,000

Calf Feeder 5 1,800 9,000

Freezer 2 35,000 70,000

Waist Trolley, Cart, Utensils & other Tools 1   180,000

Computer, Printer, wiring and other
1   100,000
equipments
Total     416,000
 Fodder Cost

Description Monthly

Green Fodder 18,597

Dry 22,950

Concentrate 40,500

Total 82,047
 Man Power Requirement
Description Qty Salary Total

Supervisor 1 1,5000 15,000

Labor 3 7,000 21,000

Food 4 2,500 10,000

Total Salary     46,000

 Operational Expenses
Description Total

Electricity 15,000

misc. Exp 10,500

Total Operational Expenses 25,500

 Land Requirement
• Total 5 Acer Land will be leased @ Rs.15,000 /
Acer Annually costing total Rs. 75,000

• One Acer will be required for Cattle shed,

Store, Office and living room for workers.

• 04 Acer will be used for cultivating Fodder.

 Fodder Production
Description Maize Sorghum S.S hybrid Berseem Lucerne Oats

Land preparation 1,876 1,948 1,948 1,750

1,750
1,500

Seed & Sowing 2,400 1,376 4,000 2,500

2,500
2,500

Fertilizer 3,500 3,500 10,000 5,000

5,000
4,500

Irrigation 1,500 1,500 2,000 2,200

1,500
1,000

Land Revenue 3,500 3,500 9,000 12,500

12,500
3,750

3,750 3,500 7,000 6,000 6,000

Harvesting/Transport 7,500

Total expenditure 16,526 15,324 33,948 29,950 30,750 19,250

Yield(Kilos) 38,462 38,341 76,923 49,279 49,880 55,288

Price/kg(Rs) 0.43 0.40 0.44 0.61 0.62 0.35

Source: Livestock & Dairy Development Department, Lahore & FAO Statistical Databases
 Production
Monthly Milk Production
Avg. Daily Lactation
Description Qty Total Production
Milk Days
Cow 12 300 12 3,551
Buffalo 8 300 18 3,551
Total Production (liters) 7,101
Yearly Claves Production
Total Calves Mortality Rate Death Qty Total Calves for Sale
30 20% 6 24
 Revenue
Milk Revenue
Total Milk for sale Average Price Total Sale
7,101 42 298,258

Claves Revenue
Calves for sale Avg. Rate Yearly Monthly
22 9,000 198,000 16,500

Total Monthly Revenue 314,758

 Profit & Loss
Revenue
Milk Sale 298,258
Calves Sale 16,500
Total Revenue 314,758

COGS
Fodder 82,047
Medicine 1,950
Land Lease 6,250
Total COGS 90,247

GROSS Profit 224,511 71%

Indirect Expense
Salary 46,000
Operational Exp. 25,500
Total Indirect Expenses 71,500

Net Profit 153,011 49%

 Accounts Summary

Description Amount
Investment 5,179,194
Net Profit (Yearly) 1,837,384
ROI 35%
Payback Period 2.8
Net Profit (Monthly) 153,115
Revenue per cattle 5,103