Wednesday, February 21, 2024

Behind the money: Hidden dark side of dairy farming that nobody will tell you

Dairy farming is a challenging occupation that plays a significant role in various regions worldwide.

The practice of raising animals, particularly cows, for the purpose of selling their milk is prevalent in these areas.

Essentially dairy farms ensure that milk, which serves as a primary source of calcium and minerals for humans, is available in the market.

As such, the dairy industry is considered one of the most flourishing sectors across the global economy.

But it’s not just about cows and milk. Like any other industry that deals with business, there must be proper cashflows; sales, expenses, profits etc.

To ensure the prosperity of your dairy farming business, creating a comprehensive business plan and conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) of your resources will be crucial.

Your business plan should address essential factors such as the number of cows you plan to milk, your preferred milk market, and whether or not you intend to employ staff.

Additionally, it’s important to determine your living expenses after all dairy-related bills have been paid.

Including a cash flow plan in your business plan can help you accurately forecast your expenses and production costs, which can assist in setting reasonable expectations for your dairy farming business.

You might have been told dairy farming is the goose laying golden eggs. To some extent, you’re right! But have you considered the challenges in the dairy industry? They are a bunch. But do not fret.

Many dairy farmers have booming businesses, especially with the high demand for tea in Kenya. Dairy farming is definitely a lucrative business.

If you are considering embarking on a career in agribusiness, specifically as a dairy farmer, it is important to anticipate and prepare for the potential obstacles you may encounter.

Here are the hidden dark sides of you may encounter as a dairy farmer in Kenya:

1. Economic Pressure

Starting and running a dairy farming business can be financially challenging. This is due to the costs associated with producing and selling a product.

Dairy farmers need to plan and budget carefully to manage the overhead expenses that come with the business.

Opting to bootstrap your dairy farming business or taking a lower income than your previous corporate job can strain your finances.

It’s crucial to adapt to a new lifestyle as a dairy farmer and establish a financial plan to avoid stressful situations.

2. Heavy Workload

Dairy farming involves milking cows twice a day, seven days a week. If a farmer cannot afford to hire help, they must work all seven days themselves.

This requires long hours, with farmers starting before dawn and ending after sunset.

Furthermore, they may not have the luxury of taking holidays unless they can afford to hire someone to manage the farm.

READ: Kenyan politicians raking in millions with their dairy farming businesses

3. Time consuming

Launching a Dairy Farming Business requires the farmer to bear all responsibilities and make all the decisions.

While this can be empowering, it may also result in significant time and effort, which could strain personal relationships and add to the stress of starting a new business.

4. High Employee Turnover

The Dairy Farming Business is notorious for experiencing a high rate of employee turnover.

This can be a significant burden on the business in terms of time and money.

As a dairy farmer, it is essential to prioritize measures to help reduce turnover rates, such as offering attractive compensation packages, benefits and fostering a positive workplace culture.

5. Low Margins

One of the main reasons for the low margins is the high cost of production. Dairy farmers in Kenya face a number of challenges, such as high input costs, including feed, veterinary services, and labour.

In addition, fluctuations in milk prices can further affect profitability, as farmers may not be able to sell their milk at a profitable price.

Incurring new expenses and maintaining profitability can be challenging for your dairy farming business. Another factor contributing to low margins is inefficiencies in the value chain.

As a dairy farmer, it is essential to curb low margins by implementing cost-saving measures, increasing efficiency, and exploring new market opportunities.

6. Competitive Market

As a dairy farmer, it’s important to note that competition in the industry is high.

Therefore, conducting a thorough market analysis is crucial to identify demand areas and stay competitive.

7. Identifying the right supplier

Going the supplier/manufacturer route is a common practice in this industry.

Still, it’s important to note that finding the right supplier can be a time-consuming and challenging task for any dairy farmer.

However, a well-executed supplier selection process can lead to significant time and energy savings in the long run.

8. Dangerous nature of the job

Farms in Kenya are considered highly hazardous workplaces due to the numerous tasks and unpredictability of animals.

Unfortunately, farm injuries and fatalities also include children since farms are also homes.

Lack of funds to pay for assistance may lead to unskilled people attempting jobs that professionals should handle.

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