My advice is to seriously consider if you really want to actually set up a micro dairy. It makes for very uncertain profitability. If you add two or three farmers also competing against each other. It's hard enough trying to compete against Goodman fielder and Fonterra. There are currently over 135 dairy RMP applications before MPI. I've had calls from multiple people from almost every part of the country. The other thing to consider is competition. You will need to sell your milk at a minimum of $2.50/litre and preferable more than that. I now think you need to sell at least 600 litres per day to be profitable. You are asking them to pay double for that.Īll my budgets had shown that I needed to sell 300 litres per day to make money. When you think about it, milk is the major ingredient in their most popular product.
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You need to convince them to give back the $5,000 worth of fridges that Anchor or Meadow Fresh have provided to them for free and on top of that you then need to convince them to pay twice as much for your milk. You will need to be able to go to a cafe owner and convince them to stop buying milk from the Meadow Fresh or Anchor guy, who they are now friends with because they have seen him every day for the last 5 years. You can't make money at $1.50/litre and in fact you probably won't make much money at $2.50/litre either. Most cafe's are buying their milk at $1.25 to $1.50 per litre. It's a completely different story to actually deliver milk to a cafe. "I've spoken to a few cafes and they all said they'd love to buy my milk" Almost all cafe's will say they want to buy your milk. This type of business is a sales and marketing business with about 10% of your time taken up farming. If you can't rock up to a cafe owner and peddle your milk your self, then no employee is going to be able to do it either.
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"I'm going run the farm and employ someone to do all the sales for me" No. That few hundred litres will consume all your time and will be more work than the rest of your operation. But you don't "just" divert a few hundred litres out of the vat. I thought I could just divert a couple of hundred litres out of the vat and deliver it into our local township" Sounds like a good plan. "With the payout so low, I'm looking for other ways of bringing in more income. "My plan is to just undercut everybody" Well, if you think you can milk 50-100 cows, process, package your milk, deliver it and be cheaper than Fonterra or the budget milk brands. If they don't fail they will get the shock of their lives and scramble to make the changes that are needed. Knowing what I know now, I'd say 90% of the people who call will fail. I enjoy chatting and hearing their plans and I like to offer my advice. Some are thinking about doing a similar thing, some are already under way with the set up. I don't say this lightly, after all this is has been my dream for the past 5 years.īut every week I get calls from people all around New Zealand. It's so much hard work and so much more complex than you would think. I'm very reluctant to encourage anybody to embark on a similar venture. The common theme is, no one is really making any money.