How to open a dairy store. Dairy business trends and opportunities

Demand for raw milk in Russia exceeds supply. The profitability of production in the southern regions of the country reaches 37% in 3-5 years after the start of the farm and the repayment of loans.

 

For a long time, milk production in Russia was considered profitable only for large agricultural complexes. The constant shortage of raw materials has forced processors to pay attention to small producers, moreover, they offer goods at competitive prices and of higher quality. The dairy farm as a business for small entrepreneurs and peasant farms has become especially attractive after the introduction of state support.

To assess the prospects of investing forces and resources in this labor-intensive and difficult production, consider:

1. product demand, market trends;
2. FEO of opening a dairy farm;
3. manufacturer support programs;
4. examples of successfully operating peasant farms.

Brief overview: how much milk you need and where to get it

Milk is included in the list of the Doctrine of National Food Security, it belongs to strategically important products. Its consumption in 2015 amounted to 230 kg per person, which is 2 times less than the recommended norm. According to the Russian Food Market magazine, its sales in 2015 grew by 7%, and in general, dairy products increase by 2.5% every year, despite prices.

Almost the only importer today is Belarus, and the total share of imports last year was about 16%. According to Soyuzmoloko, processing capacities are only 60-70% loaded.

Economists always compare current figures with the level of "pre-perestroika" 1990. By comparison, milk consumption fell steadily until 2000, when it reached an all-time high of just 51% of per capita consumption in 1990. After that, the trend has changed, and there is a constant increase. If there is enough milk in stores, then the same cannot be said about other products derived from it. The production of domestic cheese already in 2011 was 65% of the level of the base year 1990, and butter - only 26%.

The bulk of milk for processing is produced by agricultural organizations. Households receive about the same amount of it, it is also consumed there, a small part is sold on the market. The share of peasant farms and small farms is only about 7%, but it is steadily increasing from year to year. In 2015, farmers overtook agricultural enterprises in all indicators: the increase in the herd, its productivity, marketability of products (Fig. 1). The average number of cows is 40 in peasant farms, and about 300 in organizations.

By region, milk production is very uneven (Fig. 2). The leaders are Tatarstan, Bashkortostan, Altai and Krasnodar Territories, Rostov Region. In total, 15 regions of the country provide 50% of the production. In 2015, 91.5% of the planned volume in the country was produced, while the deficit is about 30%.

The distribution of marketable milk is very different from the general picture, for example, in the Siberian district it is only half of the volume. The distribution of state subsidies occurs depending on this indicator. Who received the most public money in 2015 can be seen from the diagram - in these regions there are more chances to receive real support (Fig. 3).

How Much Does a Dairy Farm Cost: Financial and Economic Case

When organizing a farm, it is necessary to focus on modern technologies for keeping and feeding livestock, new means of mechanization. Good profitability is shown by farms that use high quality rough and succulent fodder, robotic installations that provide milk accounting, automatic filtration, and cooling. Such machines are equipped with a washing and disinfection system, which allows you to get high-grade milk. Here are two investment calculations. They are compiled for completely different regions of the country, however, the main indicators are very similar.

Table 1. Vologda region. Korobov family farm, 6 people. Share land allotment of 100 hectares, own production of hay, haylage and silage.

	Basic expenses, rub.		Source of funds, rub.
Purchase of cows	3,000,000 (50 heads)	Credit funds (Rosselkhozbank, 13% for 3 years)
Purchase of milking equipment, mechanization		Subsidy under the program of the Vologda Oblast
Premises construction		Own contribution
Sales of products	Delivery to the processing plant
Loan repayment	2 223 800 per year
Total profit
Profitability
Profit after taxes

Table 2. Krasnoyarsk Territory, Republic of Khakassia. KFH Malykhin, 3 people, 100 hectares of land.

Indicators	Expenses, rub.		Attachment Source
Acquisition of livestock	1,600,000 (30 heads)	Grant of the Ministry of Agriculture of the Republic
Buying a feed truck		Rosselkhozbank loan (14% per annum)
Homemade barn construction		Own funds
Sales directions	Retail: markets, individuals
Planned revenue per year
Net profit
Payback period and profitability	48 months

The level of investment in dairy production is high, so a well-thought-out business plan is needed. It is required for both subsidies and concessional loans. The advantages of small farms are that they produce environmentally friendly products, providing a relatively low cost due to labor efficiency. Profitability increases many times if the entrepreneur himself is engaged in milk processing.

Support and lending to milk producers

1. Programs of the Ministry of Agriculture.

The main types of assistance are provided under the state subprogram "Development of dairy farming".

• Subsidy per liter of commercial milk sold. Provided to all producers, since 2015 only the highest grade is subsidized. It is determined by the processor. Regional authorities can introduce their own conditions: the number of calves, the percentage of fat and others. To receive a subsidy, you need to apply with an application to the local administration department, head of agrarian issues.
• Subsidized interest on loans. Support is provided through accredited banks. The state repays part of the interest in the amount of 100% of the refinancing rate, regional authorities up to 3% of the amount taken. Due to this, banks reduce interest for agricultural producers, and the loan is cheaper.
• Reimbursement of part of the costs of business projects. The application is made through the administration of the district, region. Provides for the return of funds for new investment projects, the cost of modernization and re-equipment - up to 40%, for the purchase of highly productive dairy breeds - up to 50%. The money is transferred to the account of the commodity producer not earlier than 2 years after the start of the project, provided that it reaches its design capacity. When buying animals - not earlier than the 5th year.

Three examples of successful work of "dairy" peasant farms

In 2002, he organized his own farm, took a loan from the Russian Agricultural Bank, in 2012 he registered a peasant farm and received a grant for development. Now he keeps 70 cows, cultivates 150 hectares of land, delivers 150 tons of marketable milk per year for processing. In comparison with a large farm located in the neighborhood, the cost of milk is several times lower due to complete autonomy (own feed), labor efficiency (2 people).

Alexander is only 25 years old. He set up his business in 2012. There are 38 dairy cows on the farm, 100 hectares of land are leased. Milk is sold fresh through its own outlets in the markets of the city of Abakan. He receives 300 liters per month from one cow, and 3,900 in revenue. He dreams of changing the herd, buying a Simmental breed of cows, and dramatically increasing milk yield. He believes that without his own feed base, milk production will be unprofitable.

Established in 1992, in 2004 there were 50 heads of cattle, now there are 122 cows on the farm. In 2006, they reconstructed the farm, purchased German milking machines, a mini milk processing plant. They produce 10 tons of milk per day, pack it on their own equipment, deliver it to the shops of their city and Yekaterinburg, supply the catering plant, schools, kindergartens.

conclusions

There is a demand for milk, it is growing, and exceeds the supply. Especially, given the course to increase the production of their cheeses and butter. Accordingly, a dairy farm as a business looks like a profitable business in the long run.

The risks are also high: crop failure leading to feed shortages, rising prices for seeds, breeding animals, seasonality in milk production, delays in subsidy payments - they must be taken into account when planning.

The dairy business is a good way to generate income. People always.

But such earnings also have “pitfalls”. There is competition. Therefore, you need to approach the opening of a business wisely: come up with an idea, draw up a business plan, find premises and suppliers, calculate all costs and risks, and future profits.

How to start a business

From the choice of the type of main activity. It is unlikely that you will be able to open a dairy.

Dairy products are a niche that is firmly occupied and held by competitors. Think carefully about the idea. There are several options for selling goods:

• Sale of milk for bottling;
• Milk farm;
• Special shop.

The farm is suitable for residents of country houses, “milk on wheels” will bring a small income, but a dairy store is a cost-effective business idea, albeit a complicated one.

The future entrepreneur will need knowledge of the basics of trade and communication skills: you need to establish contacts with the plant, which will not only be the main supplier, but will also be able to cover part of the costs by agreement.

Paperwork

To open a small business, you need to register as an individual entrepreneur, obtain the following documents and permits:

• Select the type of economic activity - OKVED. This option is possible - Retail sale of dairy products and eggs;
• Access to work from SES;
• Certificate from the fire service that the premises are suitable for trade;
• It is obligatory to have a book of complaints and suggestions;
• Preparation of health records for staff.

Room search

The premises of the future store must comply with the standards of the SES and the fire inspection. Otherwise, there will be problems with these services.

The outlet must be passable. Suitable market rows, shopping centers, schools, kindergartens, central streets of the city. Although here you can make a "knight's move": sleeping areas are advantageous if they are new. The lack of competition will play in your favor.

Selling milk from a car as a business is one of those areas where an entrepreneur can be a rural resident who does not have his own household. This niche will also be profitable for an entrepreneur from the city. Pros - you can start with a small amount of money, a minimum of equipment and a quick payback.

Starting investments:	145 000 rubles	The number of employees:	1
Planned income per month:	300 000 rubles	Market competition:	Low
Estimated monthly expenses:	240 000 rubles	Payback:	6 months

The income of such a business is based on the sale of milk for bottling, they buy it from private individuals or a farmer. Next, you need to take the goods for inspection and receive a certificate of quality and compliance with food standards. After that, you can carry milk for sale.

Milk is sold directly from the barrel in the sleeping areas of the city. This can be done either in the morning or in the evening. Remember that in the morning the goods are purchased from about 5 to 6 in the morning, and for sale in the evening it is better to purchase milk from lunch milk.

In addition to milk, you can buy other dairy products produced by suppliers. It can be: sour cream, cottage cheese, ryazhenka.

Instructions on how to open and what is needed for this

At the very beginning, you should not expect a crowd of people who want to. For some time, perhaps, there will be few buyers and revenue, respectively, too. In the future, you will acquire your regular customers and the milk business will flourish. The main thing is to always stick to the work schedule so that people know when to expect you and at what place.

Stage 1 - registration and preparation of documents

Registration of individual entrepreneurship and the following documents will be required:

• certificate from the tax service;
• a certificate from the SES that the barrel is suitable for storing milk;
• certificate of milk quality (obtained at the SES or the veterinary service, each batch needs its own certificate, i.e. this procedure is daily);
• a medical book from the seller (regardless of whether it is an employee or the entrepreneur himself).

Stage 2 - finding a room

You do not need a room to open a dairy business, only a place to store milk containers. You can conduct all business and manage IP at home. You don't need a store to sell either. You will sell products directly from the barrel on the street, you need to choose an asphalted place with a convenient approach.

Stage 3 - purchase and installation of the necessary equipment

If you don't have a car, you'll have to buy one. But when calculating finances, its cost will not be taken into account.

Necessary equipment:

• a barrel for milk of 500 liters (this is the optimal volume) - 100,000 rubles;
• plastic bottles (to pour milk there, not everyone will come with their own container) - 5,000 rubles.

Barrel (100,000 rubles)

Plastic bottles (5,000 rubles)

Stage 4 - recruitment

When running a dairy business, you can do without employees and work on your own. This will save you money on wages. Plus, at first it is better to trade on your own:

1. to "stuff" customers;
2. at first, there will still be few people, and the seller, seeing a low flow of buyers, can quickly quit;
3. working independently, you can gradually choose the best place for the point.

In the future, you can hire a seller and simply “take out” him to the point along with the goods. For 1 car, one employee will be enough. Salary can be fixed or piecework (% of sales).

Stage 5 - promotion and advertising

As such, you do not need advertising. In your case, it will be - good quality goods and a positive attitude towards the buyer. Always arrive at the same time and on the same days to the place. Then people themselves will learn about you from others and will come. Be sure to place the inscription "Milk" on the barrel to attract attention.

Financial plan

Basic expenses for starting a business:

• equipment - 105,000 rubles;
• purchase of 1 batch of goods - 7,500 rubles;
• other costs - 10,000 rubles;
• reserve amount, for 3 batches of milk 500 liters each - 22,500 rubles.

Total: 145,000 rubles.

Please note that most of these costs will be daily. To protect yourself from losses, find a reseller, and at first sell the remaining goods to him, this will reduce the loss. Always keep a reserve amount for the purchase of several batches of goods.

Possible risks

At first, you will have few buyers, therefore, not all goods may be sold. In addition, you may choose the wrong place for the point. The location must be in a walkable place. Another risk is that the batch may not pass the sanitary inspection, be more attentive to the suppliers.

Unfortunately, in Russia and other CIS countries production not very tuned up. Only some categories of goods are in such a huge demand that entrepreneurs and businessmen are ready to invest in the production of a product. We are now talking not about the industry, with which everything is more or less normal, but exclusively about consumer goods. Now the CIS countries produce, in the vast majority of cases, only essential goods such as bakery products, sausages, dairy products, as well as alcoholic beverages (probably one of the most "selling" goods, unfortunately).

In this article, we will show a typical dairy farm business plan that you can implement on your own, as well as give information on how much money and effort you will need to organize such a business and what is the average profitability.

It is worth saying that dairy products are very popular with us, milk is not just a “drink”, or the “first” goods made from it (cheese, cottage cheese, yogurt, etc.), today it and dairy by-products are used in most industries. For example, the so-called milk powder, without which no bread-factory can do, as well as ice cream and many other types of products.

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Previously, due to the shortage of “native” production in Russia and other neighboring countries, a lot of dairy products were sold from abroad, this is a huge minus for the entire economy, because such products are much more expensive than “our own” ones - this time, the profit from the sale does not go to the treasury ( in the form of taxes), as well as to our residents (who would be engaged in production), and, for the most part, to an imported manufacturer. But due to the high foreign exchange rate in recent years (and especially months), imports of dairy products have significantly decreased and there is a need for “our own” milk. So now you can make good money by opening a dairy farm, the only difficulty for most people is absolute ignorance of this topic, because cows are living creatures and they need careful, special care.

Despite many difficulties, do not be afraid to start a business. Recently, the conditions have changed and now technology helps on such farms in most processes. And by drawing up a competent business plan for a dairy farm, or by finding an existing one, you can calculate in advance how much money you will need to purchase cows, build premises, as well as all the necessary equipment and livestock maintenance (this is also a significant part of the costs, especially at the initial stage when the money flies away for everything-everything).

How to open your own dairy farm and what to look for

Now we are moving directly to the business plan of the dairy farm - how, what and how much, and also in what terms it is carried out. It is worth saying that there are 2 main directions in this field of activity and you, depending on financial capabilities, should immediately decide what you will pull. In most cases, newcomers want to “rise” in this type of business, so:

The first is the opening of an industrial farm of a huge scale (starting from 100 heads you can have huge incomes, with a competent organization of production, of course), which requires millions of investments (in rubles) at the initial stage. The second - "part-time work", or not the main type of activity, is suitable for those people who have money to organize their own business and live in rural areas (well, or near it, in order to be able to control all processes personally).

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In the case of the first option, a huge plot of land is purchased, on which a modern farm is being built, taking into account the latest trends in this market (in other words, very expensive), the equipment is taken as automatically and best as possible, so that the least number of people take part in milk production. To do this, they buy "milking machines" that are available to cows around the clock, when they want - they come up to them and "give" milk, respectively, the "organizers" of this process, which are needed on small farms, can not be involved and their wages can not be paid, but the equipment such a plan will cost oh so expensive. The same applies to the direct purchase of livestock, a cow costs, on average, from 40 to 100 thousand rubles, depending on the breed, “condition” (how and where it was grown, whether it has the necessary vaccinations and stuff like that) and size, so 100 heads will pull at least 5-10 million rubles.

The second option is suitable for most of our audience, as it can be implemented even with a small amount to start. In some not very progressive village, buying land or a barn, as well as reconstructing it, will not be too expensive, especially if you are an entrepreneur, you can save money at all stages and do some types of work yourself, or with the help of local residents, those who want to earn money, who will take much less money for the object than the "urban". For the purchase of 10-15 cows, you will need an amount of ~ 600-800 thousand rubles (or about 17-20 thousand dollars), you need a minimum of equipment, there is also not too much feed at first (namely, about growing cows and the nuances associated with this business, read on in our dairy farm business plan).

So decide for yourself whether you have enough strength and money to start such a business. At the initial stage, it will be very difficult, but in the future, when work will improve, it will be possible to have additional income without any problems and increase the livestock, becoming richer over time, which will allow you to modernize the farm and increase production even more.

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Features of this type of business as a dairy farm

Russia's demand for milk is huge - today the required volume is much more than 60 million tons per year, so many will be able to squeeze into this business, ultimately there are still imported goods that can be displaced if you try hard (due to the conditions business, importers simply will not be able to compete with local manufacturers on price). For the right start of this, and any business, it is worth deciding on all the stages of action and gaining knowledge about each of them, because any little thing at the initial stage can be for you both an opportunity to save extra money, and lose it if you are in the dark. We offer a basic business plan for a dairy farm, which allows you to get an overall picture of such a business as the production and subsequent sale of milk to buyers.

The most important thing here, as you already understood, is the cows, which are the producers of the main product - milk, therefore, providing them with everything necessary and properly caring for them, you will have a good milk yield and sales, otherwise it will be difficult even to return the initially invested money spent for the construction of a dairy farm and the purchase of livestock.

There is a close relationship between productivity and "live" weight of a cow. The larger the animal, the higher the efficiency, for example - a cow weighing 450 kg gives milk, more than its own weight, only 6.5 times, while having a mass of 750 kg (not even 2 times higher than the previous one), we will get "milk" 14 times the mass of a cow. And this is just one of the nuances, so it’s not worth saving on the necessary care and food, because the larger the animal, the more milk you get and the less the cost of one liter will be for you, as a producer.

The same applies to feed consumption - the more productive a cow, the less she consumes "per unit of product", or, more simply, a liter of milk. And this means the following - at the initial stage, you will need a maximum of cash injections in order to “feed” the cows to their best form, when they give a lot of milk, the cost of which will remain the lowest possible for you.

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Who is the best dairy farm business plan for?

Of course, everyone can open their own dairy farm, but there are a huge number of nuances that make it much easier and more profitable to do it in a rural area (and living in it) than being a resident of a metropolis. If we consider a dairy farm as a business for beginners, then it will be most productive to build (or buy from neighbors an abandoned, if any) barn, after which it is enough just to buy a dozen heads of cows. With the most efficient approach to raising livestock, in the near future you will be able to make good money selling milk to buyers.

Speaking of efficiency, we return to the topic of the mass of a cow - the more it is, the more milk it can give, so it’s definitely not worth holding on to money for feeding livestock - the larger it becomes, the less your costs for the production of one liter of milk become, accordingly, you can earn more on a dairy farm. The business plan for a dairy farm is quite simple - especially when it comes to a small farm near your own home. It will be enough just to have a room and a few heads of livestock (for starters), after when the money appears, the business can be scaled up, it’s just that initially you are unlikely to pull a large farm (for example, to open a dairy farm for 250 heads, you will have to spend tens of millions of rubles, which they can afford very few).

Today, an entrepreneur who decides to engage in dairy farming has the opportunity to build a standard farm for 2 thousand heads of dairy cattle, while renting the necessary and obligatory areas for growing fodder crops associated with dairy cattle breeding.

Building a new one or renovating an old one?

Above, we said that any entrepreneur has the opportunity to “build” a farm ... However, in this case, the word “build” should not be understood as a literal guide to action. The fact is that almost all experts and market players advise unanimously: it is better to buy out an old farm (even if it is in very poor condition!) than to create a brand new livestock complex from the ground up.

It's all about the paperwork associated with obtaining the necessary permits. If the construction is carried out from scratch, obtaining documents will take two (!) Years. If you limit yourself to the reconstruction of the old "cow barn", you will receive the necessary package of documents within two months!

By the way, it is not necessary to immediately think about a farm of 2 thousand heads - a farm with only 300 or 500 head of cattle can already become profitable.

However... The specifics of a modern cowshed is such that both three hundred and a thousand cows are “walked”, however, by the same number of workers. Now calculate how much money you will save and earn if you load one worker with, say, fifteen cows instead of five. This fair calculation is called "savings in the wage bill."
And yet...

There is still a peculiar risk of building mega-complexes... (True, a mega-complex is already 2-3 thousand heads of cattle).

In our haste to adopt the experience of the West (where all dairy cattle breeding is based precisely on such mega-complexes), we forget about Russian realities...

And these realities are such that we do not have the necessary strict veterinary control - both the animals themselves and the food products received from them ...

By importing animals and feed for them according to “gray” schemes (and we still have almost no other schemes), the entrepreneur risks... And if, with a small number of herds, some kind of internal control is possible (and the damage as a result of an error will ), then with the number of heads in the herd - three thousand, the entrepreneur runs the risk of completely ruining.

Dairy cows: domestic or imported breeds?

All over the world, milk producers prefer to use the so-called Holschitz cow for this, which produces a record amount of milk - from 10 to 12 thousand liters per year. However, it also has its pitfalls...

Like any breeding, thoroughbred animal, the dairy Holstein cow is very whimsical and requires not only the constant presence of a qualified veterinarian, but, frankly, completely different conditions of detention than those that we are able to offer her today.

And besides, the “service life” of such a cow (the term of its “productive use”) is very short - on average, it is 2.5 years. Whereas the less thoroughbred, domestic cow remains productive, that is, it is perfectly milked and twice as long - as much as four years!

How do entrepreneurs deal with this issue?

The place to buy “foreigners” and try to create conditions for them (which is unrealistic and can lead to loss of livestock, and, therefore, to ruin), entrepreneurs go the other way. They prefer:
a) import genetic material (namely: semen) from pedigreed bulls of the respective breeds,
b) with which (genetic material) and fertilize local "hardened" cows belonging to local residents living in private farmsteads.

c) in order to then redeem from this local population already grown calves, which have in their veins an admixture of “noble” blood and a tendency to large milk yields ...

Farm staff

According to all players in this market, the most difficult thing today is to find not even investors and investments, but personnel! A young responsible specialist for work on a farm is now worth its weight in gold. And the thing is that dairy cattle breeding (despite direct international programs aimed at its development) is now in decline even in the European Union, not to mention Russia. However, there is an opportunity to train a specialist abroad, the players also name the average amount that will have to be paid for the training of one specialist - 5 thousand euros.

Nazarenko Elena
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