Project value for 50 Cattles

Investment Rs 52 to 54 Lakhs

Total Profit Minimum Rs 25.00 Lakh per year

Customization: Customized based on investment and also size of Dairy farm. Useful to
new and existing farm owners to increase your profit.

Language: Simple English, Step by Step Procedure with slide presentation.

Introduction to Dairy Farming

Market Survey
Advantages of Dairy Farming
Types of Breed
Dairy and Breed selection
Animal Selection steps with pictures
Cattle selection score card

Land Requirement
Land selection parameters
About Modern Israel Loose house farm
Farm shed layout and material details
Equipment details with local equipment seller

Age Detection steps with picture

Vaccination Schedule
Reproduction cycle with picture
Care of new born calves
De-corning, De-worming and Tagging

Different Types of Feeds

Feeding Ratio based on Age and Litre of milking
Home made Concentrate feed making
Green Fodder cultivation step by step details
Dry fodder preparing method
Calf Replacer
Silage making steps with picture
Feed sellers (Even we teach making concentrate feed at home)

Farm cleaning and Normal Practice in Farm

Workers daily working schedule in farm
Record Maintenance for extra profit
Insurance premium and Company details
Present farms list for free visit
Dairy Farm Training centers
Nabard Contact Details

Economic Report Includes the following

Building cost
Equipment cost
Cattle cost
Insurance cost
Veterinary cost
Green/Dry Fodder cost
Concentrate Feed cost
Salary and Maintenance

Total Project Cost

Total Turnover
Total Profit
Break even point and other economic parameters
EMI and Interest repayment schedule
Finance and subsidy options
Stock value and depreciation
Cash flow and financial projection for 5 years
1. Livestock:
Cow = 50 Cows in milk = 40 Dry Cows = 10

2. Herd Expenses:
Cost of 50 cows @ Rs 50,000 per cow = 50,000 x 50 = Rs 2, 50,000

Annual depreciation:
Assumed value after 7 years of productive life is Rs 20,000 for each cow.

Therefore annual depreciation =2, 50,000-(20,000 x 50) /7 = 25, 00,000-10,

00,000 /7

= 2, 14,286.

3. Building Expenses. Floor Space:

(a) Covered area = 70 sq feet/animal

(b) Un-covered area = 100 sq feet/animal

Therefore total covered area = 70 x 50 = 3,500 sq feet

And un-covered area = 100 x 50 = 5,000 sq feet

Roads and offices @ 10% of total area

= (5,000 + 3,500)/100 X 10 = 850 sq ft.

Total land: 5,000 + 3,500 + 850 = 9,350 sq feet (Isq feet = .0929 m2)
43560.7 sq feet = 1 acre

Therefore 9350 sq feet = 0.2169 acres or say 0.22 acre

Therefore, 9350 x .0929 = 868.61 m2
868.61×2.5 /10,000 = 0.2169 acres or say .22 acres.

(i) Cost of land @ Rs 10,00,000/acre (unproductive land for buildings) So for

0.22 acres = 0.22 x 10,00,000 = Rs 2,20,000
Annual cost @ 10% charged maintenance = Rs 22,000.

(ii) Cost of construction

For covered area @ Rs 250/sq feet for 3,500 + 850 = 4,350 sq ft

= 250 X 4,350 = Rs 10, 87,500

Uncovered Area @ Rs 100/sq feet = 100 x 5,000 = 5, 00,000

Life of covered area = 50 years (assumed), therefore Annual cost of

construction (covered area)

10, 87,500/50 = Rs 21,750 (depreciation)

Life of uncovered Area = 30 years

Annual cost of construction for uncovered area (depreciation)

= 5, 00,000/30 years = Rs 16, 667.

4. Cost of Equipment:
Chaff cutters (power) one =Rs 50,000 (electrically operated)

Milk cans 4 @ 3,000 = Rs 12, 000

Wheel barrow Trolly 2 @ 5,000 = Rs 10,000 (Wheel barrow for dung disposal)
Tie chains for cows 50 @ 300 = Rs 15,000 Shovel/Spades 5 @ 150 = Rs 750

Trolley 3@ 5,000 = Rs 15,000 (Trolly for milk disposal of milk one)

Miscellaneous = Rs 10,000

Total =Rs 1, 12,750

Assumed that life of equipment’s is 10 years.

Therefore annual depreciation = 1, 12,750/ 10 = Rs 11,275.

5. Interest on Fixed Capital on herd, land, building and equipments costs.

Cost of Herd = Rs 25, 00,000

Cost of land = Rs 2, 20,000

Total cost of Building Rs 5,00,000 (for uncovered area) + 10,87,500 (for

covered area) + cost of Equipments Rs 1,12,750 = Rs 17,00,250

Total capital = 25,00,000 + 2,20,000 + 5,00,000 + 10,87,500 + 1,12,750

= 44, 20,250

Interest on fixed cost @ 12% = 44, 20,250 x 12/ 100 = 5, 30,430

Total annual fixed cost = 2, 14,286 + 21,750 + 1,667 + 22,000 + 1, 12,750 + 5,

30,430 = 9, 02,883.

II. Variable cost:

1. Fodder Expenses:
Green fodder @ 40 kg/day/animal
For a year = 40 x 50 x 365 = 7, 30,000 kg. = 7,300 qt.

Therefore cost of fodder @ Rs 100/per qt. = 7,300 x 100 = Rs 7, 30,000.

2. Concentrate:
Assuming that maintenance requirement is met by green fodder.

The concentrate requirement for production would be as follows:

Average yield of cow = 10 liters/day (assumed)

3 kg milk requires 1 kg concentrate. Therefore:

For 9 kg milk requires 10/3 = 3.3 kg concentrates

For 40 milking cows, for 365 days = 40 x 3.3 x 365 = 48,180 = 482 qt.

For 10 dry cows. For 365 days = @ 1.5 kg per cow per day

1.5 X 10 X 365 = 5475 kg = 54.75 qt = 55 qt.

Total conc. 482 + 55 = 537 qt.

Cost of concentrate @ Rs 1500/qt. = 537 x 1,500 = Rs 8, 05,500

Minerals and salts requirements are commonly met from the standard ready-
made concentrates.

3. Labor Expenses:
(i) Cow needs ½hrs/day man hour labor

Therefore 50 cows needs 25 hours/day = 3 laborers + 1 watchman

Labor cost at the rate of Rs 180/day = 180 x 4 x 365 = Rs 2, 62,800.

(ii) Supervisor (1) @ Rs 15,000/month x 12 months = per year Rs 1, 80,000

Total labor charges = 2, 62,800 + 1, 80,000 = 4, 42,800.

4. Light and Water = Rs 50/animal/month

For 50 animals = 50 x 50 x 12 = Rs 30,000 per year.

5. Medicine and A.I. Exp. = Rs 500/animal/year

= 500 X 50 = 25,000.

6. Miscellaneous = Rs 20,000
Total variable cost = Rs 7, 30,000 + 8, 05,500 + 4, 42,800 + 30,000 + 25,000
+ 20,000 = Rs 20, 53,300.

III. Total Expenditure = (Total fixed cost + Total variable cost)

=Rs 9, 02,883 + 20, 53,300 Rs 29, 56,183

Income:
1. Sale of milk: @ Rs 25/kg
Amount of milk produced 10 x 40 x 365 = 1, 46,000

Price of milk = 1, 46,000 x 25 = Rs 3,65,0000,

2. Sale of Manure:
Total manure = 20 kg/cow/day x 50 x 365 = 3, 65,000 kg.

(@ 20 kg/cow/day) = 3,650 qt. per year

Price of manure @ Rs 100 per qt. = Rs 3, 65,000.

3. Sale of empty gunny bags of concentrates:
Total concentrates = 5, 37,000 kg. Amount of conc./bag = 65 kg; No of bags =
5,37,000 65 = 826 bags Price of gunny bags @ Rs 20 per bag = 826 x 20 =
Rs 16,520.

4. Sale of calves:
40 calves (20 males and 20 females).

Price of male calves @ 200 = 20 x 200 =Rs 4,000 000

Price of female calves @ 1,000 =20 x 1,000 = Rs 20,000

Total income = 36, 50,000 + 3, 65,000 + 16,520 + 24,000

= 40, 55,520

Total Expenditure = 29, 56,183

Net income = 40, 55,520 – 29, 56,183 = Rs 10, 99,337

Cost of milk production = Total Expenditure/Total milk yield

= 29, 56,183 / 1, 46,000 = 20.25

Cost/kg = Rs 20.25

Net profit/kg of milk produced = 25-20.25 = Rs 4.75

Net income per month = 10, 99,337/12 = Rs 91,611

Net income/cow/year = 10, 99,337/50 = Rs 21,986.74

Net income/cow/month =Rs 21,986.7 / 12 = Rs 1,832.2.

Economics of A Model Dairy Unit for 10 Cows for One Year Has Been
Worked Out and Presented Here As Follows
I. Assumptions:
1. Cost of cow yielding 12 liters of milk/day is taken at Rs 50,000.

2. Floor space required/cow is 70 sq. ft. Cost of construction of shed is taken

@ Rs150 sq. ft. and cost of equipments is taken @ Rs 1000/cow.

3. Depreciation on building and equipments is taken @ 10% and 20% per

annum respectively.

4. One laborer will be employed and paid @ Rs 40,000 per annum.

5. Insurance charge is assumed as 6 per cent of the value of animals.

6. Each animal will be fed with 4 kg of concentrate which will be reduced to 2

kg during dry period.

7. Lactation length is 300 days.

8. Cost of one kg of concentrate is taken @ Rs 15.00.

9. Intensive cultivation of greens in 2 acres of land will satisfy the necessary

green fodder requirement of the cows.

SI. No. Particulars Amount (in Rs)

II. Fixed Investment:

Cost of 10 cows @ Rs 50,000/cow Rs 5, 00,000
Cost of building @ 70 sq. ft./cow @ Rs 200/sq. ft = 200 x 10 x 70 Rs 1, 40,000

Cost of equipments @ Rs 1000/cow = 1000 x 10 Rs10, 000

Total fixed investment 6, 50,000

III. Fixed Cost:

1. Interest on fixed investment @ 15%/annum : 97,500
2. Depreciation on buildings @ 10%/annum : 14,000
3. Depreciation on equipments @ 20%/annum : 2,000
4. Insurance charges @ 6% of value of animals : 30,000
5. Cost of labor @ Rs 40,000/annum : 40,000
6. Cost of cultivation of fodder : 80,000
Total fixed cost : 2, 63,500

IV. Variable Cost:

1. Cost of concentrate @ 4 kg/cow/day for 300 days and 2 kg/cow/day for 65
days (4 x 300 days x 10 cows) + (2 kg x 65 days x 10) = 12,000 + 1,300

= 13,300 kg @ 15% = 19, 99,500 :1, 99,500

2. Veterinary charges @ Rs 500/cow/year : 5,000

3. Electricity charges @ Rs 100/month : 1,200

4. Miscellaneous cost @ Rs 500/cow/year : 5,000

Total Variable cost : 2, 10,700

V. Total Cost : 4, 74,200

VI. Returns
1. Sale of milk @ 12/liters/cow/day 7, 20,000 for 300 days @ Rs 20/liter (10 x
12 x 300 x 20)

2. Sale of manure @ Rs 500/cow/year : 5,000

3. Sale of empty gunny bags @ Rs20/bag : 7,320

Total returns: 7, 32,320