Small Scale Dairy Production Farm

Location:

The farm will be located in Northeastern Texas, outside of Dallas. The climate in this area is

classified as a humid subtropical climate. The temperature of this region typically varies

between 35°to 96° fahrenheit. This area receives approximately 39.1 inches of precipitation per

year and has an average daily humidity of 60%-70%. Most precipitation occurs during the spring

while precipitation is least during the summer months of July and August.

Animal Type and Type of Operation:

The main goal of this operation is to produce grass-fed raw milk. The dairy cow that will be used

on this farm is the Jersey cattle. There will usually be a total of 11 head of cattle on the pasture

(7 cows, 3 heifers, and 1 bull). I chose jersey cows for this farm because they are a smaller

breed that is easier to handle and they are commonly used on smaller farms. Jersey cows

typically weigh 1,200 lbs. According to the Encyclopedia Britannica the Jersey cattle is very

efficient in its production of milk mainly due to its size and its lower “beef value”. Even though

the Jersey cow produces less milk than a Holstein, when comparing body weight the Jersey is a

more efficient producer. Since the farm's location is in Northeast Texas where temperatures can

reach above 100° Fahrenheit choosing an animal that is somewhat heat tolerant is important.

Jersey cattle are considered to be heat tolerant which is a reason as to why I choose them over

Holsteins. The pasture will also have 30 laying hens, this will help with reducing the number of

cow flies because the chickens will eat the fly larva in the manure. Having chickens will also

contribute to a better distribution of manure due to them spreading it out when they eat the

larva.
Forage/Pasture Plant Species:

First the pasture will be mowed down very low to allow for the new seedlings to be exposed to

sunlight. The pasture will be seeded with Bermudagrass, Tall Fescue and a legume forage mix.

40% of the pasture will be Bermudagrass, 40% will be Tall Fescue, and 20% will be a legume

forage mix (60% Leader Alfalfa / 20% Timothy / 15% Medium Red Clover / 5% Alsike Clover).

The pasture will be seeded using a no-till drill that would be attached to a tractor. Fertilizers

would be added to the soil 6-12 months before seeding but testing would be done to find out

what type of fertilizer would be needed. After seeding the pastures will rest and be ungrazed for

at least six months. Most seed companies state that 20 lbs of seeds should be planted in a seed

drill per acre. Since the pasture is 13.75 acres, the pasture will require around 250 lbs of seed.

This means that the pasture will require 100 lbs of Bermudagrass, 100 lbs of Tall Fescue, and

50 lbs of legume forage mix. The prices of these forages totals to $1,050.

One of the main forage species that will be used on the pasture will be Tifton 44. Tifton

44 is a variety of bermuda grass that is popular in Northern Texas. According to the Texas A&M

Extension Tifton 44 is a warm season grass that was bred with winter hardy grasses from

Germany making it well adapted to the cold. Tifton 44 has a slightly higher nutritional value and

greater cold tolerance when compared to coastal bermudagrass. Since Tifton 44 is more cold

tolerant, it stays green for 20 more days throughout the year than Coastal Bermudagrass. One

negative of this variant of Bermudagrass is that it takes longer to establish in pastures. Kentucky

31 is the variety of Tall Fescue that will be used in the pasture. Although Tall Fescue is a

perennial cool-season grass, it is commonly used in pastures in Northeast texas. A potential

problem with Tall Fescue is endophyte which is a fungus that lives on Fescue. Endophyte and

Fescue have a symbiotic relationship which creates alkaloids that cause adverse effects to

grazing cattle. Using good pasture practices can minimize the risk of endophytes. The legume

forage mix contains legumes which have a high crude protein content and fix nitrogen into the

soil.
Area and Grazing Management System:

The total land area of the farm will be 15 acres this includes a pasture, barn, house, and small

shop. The pasture will take up a total of 13.75 acres. These 13.75 acres will be split up into 11

different paddocks which will be used for a rotational grazing system. The cattle will be moved

approximately every 3 days depending on the stubble height this will allow for the animals to

avoid parasites. Each paddock will be able to rest for around 30 days since there are a total of

eleven paddocks.

Cost of Startup:

Land and building Costs:

According to the Texas A&M Real Estate Center an acre of land in Northeast Texas currently

sells for $7,527. Multiplying this by 15 acres, will give you $112,905 for total land costs. Building

a smaller house on the property will approximately cost $300,000 and a Large Pole barn will

cost around $100,000.

Fencing and Water Lines:

After calculating the total perimeter the total permanent fencing needed is 5,743.5 ft. There will

also be a total of 410 ft of movable electric fencing needed. The permanent fencing will be 2

lines of electric wire, while the movable lines will just consist of one line. This equals to 6,153 ft
of total wire which is 5 rolls which are 2,640 ft per roll, this costs a total of $229. According to an

electric fencing company, I will need a total of 174 posts, 63 brace posts, and 38 brace cross

members, this will cost $2,542. Clips, Stretcher Bars, Stretcher Bar Puller, etc.. will also be

needed to complete the fence and this would approximately cost another $1,000. All of this

added up equals a total of about $3,771.

Water will be another expense, the price of a well installation is approximately $8,000.

There will need to be 1,677 ft of piping and according to the University of Missouri it costs

approximately $1-$1.50 per foot of piping thus totaling around $2,000 and another $1,000 for

other materials. There will be 5 water troughs, a 300 gallon trough costs around $300 thus

totaling to $1,500 for all the troughs needed. The total cost for all water systems will be

estimated at $12,500.

Animal/Seed costs:

Typically Jersey Heifer’s cost around $700 and a bull costs $1,000, totaling $8,000 for

the herd. 30 chicks and a portable tractor coop will cost a total of $3,000. According to the Penn

State Extension the average cattle vet costs $108/per cattle every year, this would end up

costing us $1,000 per cattle each year. The cattle will need a mineral block and mineral blocks

cost $15 and will last for 2 months equaling a yearly cost of $90. Chickens will consume pests in

the pasture and will be fed scraps but they will also be fed chicken feed, this will cost around

$500 a year for all of the chickens. Cattle might receive hay during the winter months or during a

drought when the pasture is less productive. In Texas hay costs around $300/ton assuming the

cattle will need 20 tons of hay this will cost $6,000 annually.

Seed costs have already been calculated above to be $1,050. Fertilizers would most

likely be needed; this would approximately cost $500 yearly.

Equipment cost:

A small used tractor will be needed and this will cost around $30,000. Miscellaneous equipment

like shovels, hammers, no-till drill, electric milkers, chute and squeeze etc.. will approximately
cost $20,000. Thus equipment will total $50,000. There will also be need for repair and new

equipment yearly; this will be an expense of $5,000 every year.

Business Expenses:

There will be a small store at the front of the property which will cost $50,000 to build. There will

also need to be two large commercial refrigerators to store the milk which will cost $10,000. The

electricity bill will be around $1,000 a month because of the refrigerators and a generator will be

needed to keep refrigerators on during a power outage this will cost $3,500. An employee will

also be needed to work at the store for around $100 a day. The Bottles for the milk will be

bought wholesale for 1$ a quart bottle, since bottles will be brought back by consumers we will

purchase 500 bottles for $500. Another $500 for advertising and $5,500 for miscellaneous

expenses, totaling $1,500 in yearly expenses.

Start-Up Costs Operation/annual costs

Item Price Item Price

Land $112,905 Feed $6,590

House $300,000 Fertilizer $500

Pole Barn $100,000 Vet $1,000

Fencing $3,771 Repair/new $5,000

equipment
Water $12,500
Miscellaneous $5,000
Animals $11,000
Business $1,500
Equipment $50,000
Employee $22,500
Seed $1,050
Total: $42,090
Generator $3,500

Total: $594,726
Marketing/income generation:

The farm will sell grass-fed raw milk directly to the consumer from the farm, the farm will also

sell chicken eggs. Sales of raw milk are legal in the state of Texas but a permit is needed and

the milk must be sold directly from the farm. This milk will be sold by the quart for $7.00 if you

return the bottle it will cost $6.00. When I researched the price of grass fed raw milk online, the

price was around $7.00. According to various small farm websites a grass fed jersey cow

produces around 5 gallons of milk a day for 300 days out of the year. This would mean that one

cow will produce 1,500 gallons of milk a year, multiply this by 7 cows and that equals 10,500

gallons of milk a year for the whole farm. 10,500 gallons is 42,000 quarts and this multiplied by

the selling price of $6.00 equals $252,000. The farm will also sell chicken eggs for $6.00/dozen.

Assuming the hens will lay 250 eggs then by multiplying this by 30 hens you get 7,500 eggs

yearly. Divide 7,500 eggs by 12 to get 625 cartons of eggs, since we are selling a carton of eggs

for $6 the farm will make $3,750 off of egg sales. Assuming that the farm will sell all of the milk

and eggs, the farm will make $255,750. After subtracting the annual costs of $42,090 from

$255,750 the net profit will be $213,660. After taxes and personal expenses it is likely that you

will be left with $140,000 per year meaning that it will take around 4.25 years to pay off the initial

investment.

This estimate is assuming the best case scenario so it is unlikely that it will only take

4.25 years to pay off the initial investment. For this reason and the risk of someone getting sick

or changes in laws regarding the selling of raw milk, I would not start this business.
 Citations:

Don't skimp on health costs. Penn State Extension. (n.d.). Retrieved May 3, 2023, from
https://extension.psu.edu/dont-skimp-on-health-costs

Encyclopædia Britannica, inc. (n.d.). Jersey. Encyclopædia Britannica. Retrieved May 3,

2023, from https://www.britannica.com/animal/Jersey-breed-of-cattle

Pasture seeding timeline. Penn State Extension. (n.d.). Retrieved May 3, 2023, from
https://extension.psu.edu/pasture-seeding-timeline#:~:text=Prepare%20pasture%20for%20plant
ing%3A%20mow,your%20best%20chance%20of%20success

Pumps and watering systems for managed beef grazing. University of Missouri
Extension. (n.d.). Retrieved May 3, 2023, fromhttps://extension.missouri.edu/publications/eq380

Rural Land - Real Estate Center. (n.d.). Retrieved May 3, 2023, from
https://www.recenter.tamu.edu/data/rural-land/#!/state/Texas/region/Northeast_Texas