Dairy Project Report 4h3db

PROJECT REPORT FOR 40 HF COWS INTRODUCTION: Dairy farming is one of the important sources of income both in urban and rural areas. This is because of very high demand and elasticity for milk and milk products. With increase in house hold income, the demand for milk is also constantly raising. With increasing demand for milk, the price of milk is also escalating day by day. Hence dairying will be a profitable enterprise in the present day context. Dairy farming will be also under the technical supervision and guidance of subject specialists. Good management balanced feeding, prompt health cover and efficient marketing of milk will certainly make the project a grand success. Cow’s Milk - The basis of all types of dairy products is cow’s milk. Its history dates back to 6000 to 8000 BC. In older times, cow’s milk was only consumed by people who lived lavishly. However, with changing times, milk came in reach of poor people also. During the beginning of 5th century, cow and sheep milk came to be prized. Cow’s milk became more popular than sheep in the 14th century and in the beginning of 17th century, dairy cows were brought from Europe to the US. Milk is considered to be a highly beneficial food as it is rich in numerous nutrients. The following are a few vital health benefits of cow’s milk: Calcium – One of the most important mineral present in cow’s milk is calcium. This mineral is vital for bones growth and development. Calcium gets ed to phosphorus and forms calcium phosphate, which is an important element of hydroxyapatite. This helps give strength to the bones and their proper structure. Protein – High quality protein is present in cow’s milk, which has ultimate benefits to the body. Vitamins – Cow’s milk is rich in vitamin B2 (riboflavin) and vitamin B12, both of which help produce energy for the body. These vitamins also help protect heart. Vitamin B12 also helps produce red blood cells (RBC’s). It helps prevent anemia and produces nerve cells. Vitamin B12 also aids the cells to use protein, carbohydrates and carbohydrates. Vitamin A present in cow’s milk is needed for development and growth of mucosal and epithelial tissues, which helps protect against microorganisms invasion and their toxic effects. Deficiency of vitamin A leads to frequent cold, rheumatoid arthritis, infection in ear and various other diseases Iodine – Cow’s milk is abundant in iodine, which is an incorporated component of thyroid hormones thyroxine and triiodothyronine. Potassium - A cup of cow’s milk is enough for the body’s daily requirement of potassium. Potassium is needed for proper heart functioning, nerve transmissions and muscles contraction. Because milk is rich in potassium and calcium, they prevent kidney stone formation in the body.

Dung a valuable by–product of animal farming, is used as fertilizer, as fuel for cooking, heating and making biogas, as building material and also for sacred cleaning and decoration of houses in several Asian communities. Dung manure is an excellent source of nutrients for crops and is used all over the world. Approximately 40% of the value of an animal could be the manure it produces .An adult cow produces 4 – 6 t of wet manure per year. Normally, dung is heaped to mature for a few months and spread into fields to maintain soil fertility.

Dung is extensively used as fuel for cooking in India, Pakistan, and Bangladesh and in almost all countries dairy animals populate. The first European pioneers on the Great Plains of the USA also used dried dung called buffalo chips, for fuel because of the lack of wood .Dung cakes, called “Pathee” in India and Pakistan, are made using 200-500 g fresh dung molded round or triangular and dried in the sun. The “Pathee” a major part of cooking and heating materials in almost all villages are also sold to cities. Dung cakes are an essential commodity for cooking and heating, especially with the slum dwellers. Often poor women collect dung from roadsides market places and pastures for selling as fertilizers, dung cakes and fish food.

HF Cows: Holstein cattle (also known as Holstein-Friesian cattle or Friesian cattle) is a breed of cattle known today as the world's highest production dairy animal. Originating in Europe, Holsteins were bred in what is now the Netherlands and more specifically in the two northern provinces of North Holland and Friesland. The animals were the regional cattle of the Batavians and Frisians, two tribes who settled in the coastal Rhine region around 2,000 years ago. Distinguishing Characters:    

Holsteins are large, stylish animals with color patterns of black and white or red and white. Holstein heifers can be bred at 15 months of age, when they weigh about 800 pounds. It is desirable to have Holstein females calve for the first time between 24 and 27 months of age. Milk yield - 7200-9000 kg. This is by far the best diary breed among exotic cattle regarding milk yield. On an average it gives 25 liter of milk per day.

Promoter’s Address: Pramod Reddy Are, S/o Linga Reddy, (Vill) Hussainabad, (Mandal) Mothey, (Dt) Nalgonda, Andhra Pradesh - 508212 Ravinder Reddy Kundooru S/o Narsi Reddy (Vill) Hussainabad, (Mandal) Mothey, (Dt) Nalgonda, Andhra Pradesh - 508212

II. INFRASTRUCTURE FACILITIES AVAILABLE: 1.

Housing for animals: Loose Housing System shall be used to construct the shed for the proposed 40 animals. It reduces the stress and enhances the milk production of the animal. The cows shall be bought in two lots of 20 each with a time lag of 5-6 months to allow consistent and continuous supply of milk.

2. Land: 9 acres land with irrigation facilities is available to provide for shelter and green fodder for to be purchased animals (40). 3. Technical : A full time manager will be appointed and services of the nearby veterinary doctor (veterinary hospital available within 2km distance from the site) shall be used to look after the health care and management of dairy animals etc.

III. OPERATIONAL DETAILS: 1.

The 40 HF cows of 1st or 2nd lactation with a yield of around 6000-7500 liters of milk (in India) yield over a lactation period of 300 days and a maximum dry period of 90 days (inter-calving period of 390 days) preferably with female calf of less than one month age will be purchased in two batches of 20 each from Bangalore and nearby districts (Kolar, Sale, and Erode), of Karnataka state, which is the home tract for high yielding HF cows and with reasonable price.

2. Care will be taken to maintain at least 75-80% of animals in milk at any given time in the year. 3. Male calves will be disposed off after weaning i.e. at 6 weeks of age. 4. Female calves will be reared on scientific lines as these calves will be used as replacements for animals culled time to time. 5. Sex ratio of calves born will be assumed 50: 50 and average mortality around 5 – 10 per cent. But, high quality semen with female calf yield capacity of 90% will be used during AI. 6. By 30 months of age the female calves purchased along with dams

will give 1st crop.

7. Average lactation period of 305 days, dry period of 60 – 90 days and calving interval of 12-13 months will be maintained in the herd by adopting modern scientific management practices.

8. The milk yield of the cows after calving ranges approximately as follows (Kg. per day):

At this rate the mean lactation milk yield will be between 6000-7000 Kg. for 305 days. The animals which are not producing milk at this rate will be culled to maintain standard production in the herd. The below table depicts the average expected milk yield at different periods during the lactation: Days 0-30 30-90 90-150 150-210 210-300

Milk Yield 23 26.5 24 21.5 17

9. At present the milk is sold raw, un-processed, whole milk at the rate of Rs.20/- per Kg. Every year 10% hike in milk price is expected. 10. With automating the milking of animals, the dependence on labour will be reduced and around 4 people will be enough to look after the herd. Three male and one female worker shall be appointed to look after the herd and their requirements. The male labour shall be paid around Rs 6000/- per month and the female labour shall be paid Rs 4000/- per month. 11. For each adult animal non-legume green fodder @ 30 Kg., legume green fodder @ 15 Kg., straw @ 5 Kg will be offered. 1 Kg. concentrate mixture (20% D and 70% TDN) will be offered for every 3 Kg. of milk production per day. These will be sufficient to meet the maintenance requirement and milk production in the animal. 12. Cost of feed and fodder (10% increased every year): a.

Non-Legume green

: Grown in the farm (maintenance costs)

b.

Legume green

: Grown in the farm (maintenance costs)

c.

Straw

: Rs.8000/- per Truck

d.

Concentrate mixture

: Rs.12000/- per Metric Ton

13. The cost of rearing of each female calf up to 30 months will be around Rs.25,000/14. Loan amount will be completely re-paid by the end of 5th year. Proportionate amount towards principal and interest will be paid every quarter.

Capital Requirement: Animals Cost of HF cow (@75000 per animal) Transportation Charges (@3000 per animal) Insurance (@5% per animal) Shed and other infrastructure Land Lease payment (for 1st 1.5 years) Shed (Loose Housing) (6400 sqft.) Automated Milking Equipment Water Storage (including motor) Rooms - 2 (for feed, equipment and labour) Generator Chaff Cutter 24 hour power supply (Single Phase) Others (fans, lights, wiring etc.) Other Equipment Aluminum Milk Cans (40ltrs) (@2500 each) Zinc Buckets (5), Wheel Barrows (2) Others Fodder Stock and Cultivation Green Fodder (8 Acres) (Legume and Non-legume) Straw (20 trucks)(@8000 per truck) TOTAL

Price 30,00,000 1,20,000 2,00,000 1,50,000 5,00,000 1,50,000 50,000 35,000 60,000 75,000 25,000 50,000 25,000 20,000 20,000 1,00,000 1,60,000 47,40,000

Working Capital for 20 animals (Calculated for 1st 6 months only): Fodder Non-Legume (22 metric tonnes) Legume (9 metric tonnes) Straw (3 metric tonnes) Concentrate Mixture (5 metric tonnes) Cost of rearing calves Veterinary Aid Salaries (3 Men) Electricity, Telephone Charges etc. Contingent Charges TOTAL

Price 5,000 (Maintenance costs only) 5,000 (Maintenance costs only) Already Stocked 60,000 20,000 5,000 18,000 3,000 25,000 1,41,000

Working Capital for 40 animals (After 6 months): Fodder Non-Legume Legume Straw Concentrate Mixture (8 Metric Tonnes) Cost of rearing calves Veterinary Aid Salaries (3 Men + 2 Woman) Electricity, Telephone Charges etc. Contingent Charges TOTAL

Price 5,000 (Maintenance costs only) 5,000 (Maintenance costs only) Already Stocked 96,000 40,000 10,000 25,000 3,000 10,000 1,94,000

Total Capital Required: Initial Capital Operational Expenditure per month Total Cost of the Project

47,40,000 1,41,000 48,81,000

Finance Required: Promoter’s Investment Finance Required

12,81,000 36,00,000

YEAR-WISE PROJECTED PROFITABILITY STATEMENT A) Anticipated Receipts (Rs. In Lakhs): S No. 1 2 3 4

Description Sale of Milk Sale of Manure Sale proceeds of culled animals Sale of surplus breed able females Total Income

1 37.87 1.6 0.2 39.67

2 41.18 2.1 3.7 2 48.98

Years 3 41.18 2.1 3.7 3.5 50.48

4 41.18 2.1 3.7 3.5 50.48

5 41.18 2.1 3.7 3.5 50.48

Note: 1. 2.

3. 4.

5.

6.

For calculation purpose, the sale price of milk used is Rs 20/- per kg to dairy co-operative societies. But, the milk can be marketed privately to hotels, sweet shops and households at around Rs 25/- per kg. 100% utilization ratio for the 1st batch of 20 animals is calculated for the 1st 6 months (avg. 24 kg of milk/day) and 65% utilization is calculated for the remaining 6 months of the year (avg. of 22 kg of milk/day). 75% utilization ratio of 40 animals is calculated for the remaining 4 years (avg. of 22 kg of milk/day). It is expected that the price of milk and the costs associated with the maintenance of the herd are expected to grow in proportion. Hence, the receipts and expenditures are calculated constant (not adjusted to inflation) for all the 5 years. Even though high quality semen with 90% female calf yield ratio will be used, the sex ratio of the calves for evaluation purpose is calculated at 1:1 and a mortality rate in the calves is expected to be at around 5-10%. So, 9 female calves in the 1st year and 17 female calves (lactation cycle is a little more than 1 year, so 17 instead of 19) for the remaining 4 years is used for calculation. The female calves shall be sold after they are pregnant (1.5 years of age). Only a percentage of the female calves are sold. The remaining shall be used to replace the existing animals in the herd. 20-30% of the herd shall be replaced every year after the 2nd year to make sure the performance of the herd is optimal.

B) Expenditure Year-wise (Rs. In Lakhs): S No. 1 2 3 4 5 6 7

Description

Working Capital Insurance (@5%) Straw (20 trucks) Land lease Re-cultivation of fodder Repayment of loan Payment of interest (14.5%) Total Expenditure Estimated Net Profit (A-B)

1 20.1 1.6 7.2 5.22 34.12 5.55

2 23.28 2 3 1 7.2 4.18 40.66 8.32

Years 3 23.28 2 3 1 1 7.2 3.13 40.61 9.87

4 23.28 2 3 1 7.2 2.09 38.57 11.91

5 23.28 2 3 1 7.2 1.05 37.53 12.95

Note: 1.

Monthly working capital requirement of Rs 1,41,000/- is calculated for 1st 6 months and Rs 1,94,000/- is calculated for the remaining 4.5 years.

Expected total Net Profit in 5 years is Rs 48.6 Lakhs. At the end of the 5th year, Rs 30 Lakhs worth of animals will also be available in the farm.