David's going Dairying.

Green&Red

Panch18 wrote: »

Super stuff Gruller and other lads on here. Really interesting to hear yer stories and changes

The big thing in Ireland is tax. With the high rate up at 51% with everything added in people are working a lot of extra hours that are going straight to the government. As Warren Buffet says “As one of the richest men in the world I can buy anything I want, EXCEPT time”. So working all these extra hours and with additional responsibility etc people really need to think to themselves if it’s worth it and are they themselves seeing the benefit of it or is the government the real winner

Now of course lads part time farming have a great opportunity to get great farm set ups and offset the losses against the high rate tax from the job. This is probably the easiest way to get a farm well set up nowadays.

The value of a good accountant can’t be underestimated

The last couple of years I’ve contracted into a couple of local pharmaceuticals, so had a VAT registered company for that. Accountant set up a farm company which ownes the pharma side. Means I can earn off farm but pay straight off the loan without Paschal seeing a cent of it. Will also allow me to save up in the company at a lower rate of tax with the view to buying any land that comes up around me

Stuff I wouldn’t have had a clue about

Pinsnbushings

Bass Reeves wrote: »

I would not be getting into milk in my 50's it's a young man's game. Generally in your 50's you have a huge demand for money as kids go through college and maximising pensions benefits that you can draw when retiring.

Anither consideration is drawing down a few hundred k in debt( if banks will lend it) and maybe investing other available cash in an enterprise that will limit options for retirement or for inheritance.

I am semi retired and farming 60 ish acres, I can finish 60 stores that will leave a net margin of 15k plus add in GLAS(it small 1700 euro) ANC will bring me well up over 25k. I have an an old farm house done up and rented and another rental. Last year I worked 20 hours a week for 6 months that earned over 10k. Only did half that this year.

There is easier ways to retire and farm than being tied to a milking parlour twice a day 6-7 days a week for 10 months of the year.

Yes I can see where your coming from and fair play you have a great setup there something is like to aim for in the future maybe..
but in terms of it being a young man's game for context my father is 70 and lot of the reason we stayed at milk was because as grueller said the cows are lot safer and easier handle. The other thing we've done is milk the cows oad for last 2 years, so it's worked great for us. Like I say with sfp it'll leave 40kish.
On pure financials leasing with the tax benefits would be as profitable or more so, bit its not all about that, dad has his routine which he loves, and Im around to take the pressure off and I enjoy it too, and if land was to come up around us we'd be sorta setup to take it on.

Fair play to all the lads starting up or thinking about it and best of luck to all, ]great to see all the different set ups out there not just the 100+ cow setups which is all you see in the journal etc.

Tonynewholland

Green&Red wrote: »

The value of a good accountant can’t be underestimated

The last couple of years I’ve contracted into a couple of local pharmaceuticals, so had a VAT registered company for that. Accountant set up a farm company which ownes the pharma side. Means I can earn off farm but pay straight off the loan without Paschal seeing a cent of it. Will also allow me to save up in the company at a lower rate of tax with the view to buying any land that comes up around me

Stuff I wouldn’t have had a clue about

Accountants used to advise against buying land through a company but seem to be changing their minds nowadays

Panch18

Pinsnbushings wrote: »

Yes I can see where your coming from and fair play you have a great setup there something is like to aim for in the future maybe..
but in terms of it being a young man's game for context my father is 70 and lot of the reason we stayed at milk was because as grueller said the cows are lot safer and easier handle. The other thing we've done is milk the cows oad for last 2 years, so it's worked great for us. Like I say with sfp it'll leave 40kish.
On pure financials leasing with the tax benefits would be as profitable or more so, bit its not all about that, dad has his routine which he loves, and Im around to take the pressure off and I enjoy it too, and if land was to come up around us we'd be sorta setup to take it on.

Fair play to all the lads starting up or thinking about it and best of luck to all, ]great to see all the different set ups out there not just the 100+ cow setups which is all you see in the journal etc.

How’s the once a day going for ye?

What type of cow are ye running?

Any major problems when you changed over?

Green&Red

@Siamsa your inbox is full, if you empty it I’ve a message for you

Siamsa Sessions

Green&Red wrote: »

@Siamsa your inbox is full, if you empty it I’ve a message for you

Sorry - didn’t realise there was limits. I deleted a few messages now. Thanks

Birdnuts

Siamsa Sessions wrote: »

In case it’s of any use to anyone, this is my plan:

* Start milking 35 cows in 2022, OAD in shoulders of the year, and continue working part-time (5 half-days/week)

* Expand to 65-70 in 2024 when we unlease land back from current tenant and give up “day job”

Debt starting off will be approx €1.5-2k. I’ll tear into repayments as we can manage the house/kids with just the part-time job. We’ve managed this with the last 2 years as I took no drawings (there weren’t any to take!) from the sheep/calves.

I’m tracking how many hours I’m currently working per day and will continue this for the next while to see what kinda hours I’m spending around the yard

I’m more than happy to share the good, the bad, and the ugly on here in the hope it might be useful to others and maybe help people avoid some of the mistakes I make.

I don’t expect or assume any of our 3 young lads will go farming but I’d like to give them the option and let them see what being a farmer is like. I’ll have nothing to show them from Daddy being an office worker.

If it works out then great. If it doesn’t I’ll change things again. I’ve made a few big changes in my 20 years of working so I don’t mind change!

Would you not need to calculate different scenarios based on different milk prices?? There seems to be alot of assumptions by new Dairy folk that all will be rosy on that front in the future

realtec

Green&Red wrote: »

The value of a good accountant can’t be underestimated

The last couple of years I’ve contracted into a couple of local pharmaceuticals, so had a VAT registered company for that. Accountant set up a farm company which ownes the pharma side. Means I can earn off farm but pay straight off the loan without Paschal seeing a cent of it. Will also allow me to save up in the company at a lower rate of tax with the view to buying any land that comes up around me

Stuff I wouldn’t have had a clue about

Interesting.. i asked my company accountant about that type of scenario a few year ago and he said you could not divert income in such a manner for land purchase, running farm etc or.maybe it was just a case he did not recommend it.

i must revisit.

Pinsnbushings

Panch18 wrote: »

How’s the once a day going for ye?

What type of cow are ye running?

Any major problems when you changed over?

It suits us so far, suppose we were lucky in that neither of us were totally dependent on the farm so could try something different.
We would have a fairly British friesain type cow as we would have always kept the calves to 18.month stores, and still do.
I was afraid they wouldn't be milky enough and dry off very early and a couple did last year. upside They made 900 in the mart straight out of the parlour which is an advantage of them being in great condition.
Couldn't say we had any major problems, this is our 2nd full year now. We were lucky enough we had decent springs and could get them out as we'd be tight enough on cubicle space.
Ya need to be on top of your scc and they can leak a bit with big full udders. So prefer to have them out.
They go back in milk a fair bit quicker and heifers would have peaked around 14 ltrs. But we had a few cows milking 18 ltrs up to about 10 days ago so I think with bit of tweaking we could be in around coop average for solids per cow.They say it takes about 3 years.
Some very impressive oad herds out there that are at it years which kinda gave us inspiration.

Panch18

Pinsnbushings wrote: »

It suits us so far, suppose we were lucky in that neither of us were totally dependent on the farm so could try something different.
We would have a fairly British friesain type cow as we would have always kept the calves to 18.month stores, and still do.
I was afraid they wouldn't be milky enough and dry off very early and a couple did last year. upside They made 900 in the mart straight out of the parlour which is an advantage of them being in great condition.
Couldn't say we had any major problems, this is our 2nd full year now. We were lucky enough we had decent springs and could get them out as we'd be tight enough on cubicle space.
Ya need to be on top of your scc and they can leak a bit with big full udders. So prefer to have them out.
They go back in milk a fair bit quicker and heifers would have peaked around 14 ltrs. But we had a few cows milking 18 ltrs up to about 10 days ago so I think with bit of tweaking we could be in around coop average for solids per cow.They say it takes about 3 years.
Some very impressive oad herds out there that are at it years which kinda gave us inspiration.

Super stuff

Interesting that you have a Br Fr base on the cows, that’s what I was wondering myself if that type of cow would suit and it’s very interesting that it seems to be working fine for you

I assume you’ll be sticking with the Br Fr then if you’re rearing the calves?

Siamsa Sessions

Birdnuts wrote: »

Would you not need to calculate different scenarios based on different milk prices?? There seems to be alot of assumptions by new Dairy folk that all will be rosy on that front in the future

Fair point and to be honest I’m working off a base price of 28c. Above that will mean paying off a lump sum against the loan. Below that for more than 12 months and I’ll be selling the cows, selling the milking machine and bulk tank, converting the parlour to a straw house, and getting back into sheep/calves.

I’m lucky with the off-farm income paying the bills at home. If it wasn’t for that I doubt I’d be trying to go milking again.

Pinsnbushings

Panch18 wrote: »

Super stuff

Interesting that you have a Br Fr base on the cows, that’s what I was wondering myself if that type of cow would suit and it’s very interesting that it seems to be working fine for you

I assume you’ll be sticking with the Br Fr then if you’re rearing the calves?

I'd say there are cow types that are more suitable, but we weren't going to sell the herd and start again.. Our better twice a day cows are still our better oad cows.
I suppose we've been using a bit more high ebi holstein straws the last few years, but like wed definitely be keeping a decent strong base in the herd if we can. Not a big believer in ebi or anything but with small herd we're kinda at the mercy of what the ai man has on the day.

Grueller

Siamsa Sessions wrote: »

Fair point and to be honest I’m working off a base price of 28c. Above that will mean paying off a lump sum against the loan. Below that for more than 12 months and I’ll be selling the cows, selling the milking machine and bulk tank, converting the parlour to a straw house, and getting back into sheep/calves.

I’m lucky with the off-farm income paying the bills at home. If it wasn’t for that I doubt I’d be trying to go milking again.

I based calculations on 27c. Glanbia rep says that 30 will be the average going forward but when I asked him to fix my price at that for 3 years he laughed it off.

Markcheese

How amenable or approachable are most lads to land swaps ? Tractor porn was saying he had 4 blocks away from the home place , 1 block about 12 miles away ... ? You'd know your next door neighbours and who you could deal with , or is it just too akward to do , I suppose as well , a land valuation is only what someone is prepared to pay for it ...
If you're offering well drained ,well fenced land , and the other party's ground isn't then there'd be a lot of horse trading ..

cjpm

Should be easy but in practice everyone over values their own patch

Markcheese

cjpm wrote: »

Should be easy but in practice everyone over values their own patch

True , but how much more is land next to your home place worth ...

Markcheese

Actually if I had a block 12 miles from the yard , and was considering getting into dairy , I think I'd sell off the distant block ,and use that to start off as near debt free as possible. ...

Mooooo

Fortunate here the grandfather/ father did land swaps to get the original bit into one block, actually ended up with heavy ground but worth it. If there isn't far between blocks and it involves dealing with one person there may be a better chance and no harm approaching the matter. Must be done in a good manner and if it doesn't work out to accept it without being angry etc. Maintaining good relations is important as well as things may change in the future.

Bass Reeves

Markcheese wrote: »

How amenable or approachable are most lads to land swaps ? Tractor porn was saying he had 4 blocks away from the home place , 1 block about 12 miles away ... ? You'd know your next door neighbours and who you could deal with , or is it just too akward to do , I suppose as well , a land valuation is only what someone is prepared to pay for it ...
If you're offering well drained ,well fenced land , and the other party's ground isn't then there'd be a lot of horse trading ..

Why the f@@k would your neighbour want land 10-12 miles away from his house instead of his existing place.

Travelling to and from a place 12 miles away is at least 20 minutes each way and often a half hour each way. The cost is at least 2.5k in fuel and wear and tear your car.

Over 10 years you would drain and fence s lot of land for it.

Tonynewholland

Markcheese wrote: »

Actually if I had a block 12 miles from the yard , and was considering getting into dairy , I think I'd sell off the distant block ,and use that to start off as near debt free as possible. ...

Sell and buy closer to home would be a better idea or else you’d be paying CGT

wrangler

Tonynewholland wrote: »

Sell and buy closer to home would be a better idea or else you’d be paying CGT

Is there still roll over relief available, CGT isn't that much on land, Only paid 12% here on a CPO where the price was 50000/ac so can't be much on €10000/ac Stamp duty and solicitors are probably a bigger pain

Tonynewholland

wrangler wrote: »

Is there still roll over relief available, CGT isn't that much on land, Only paid 12% here on a CPO where the price was 50000/ac so can't be much on €10000/ac Stamp duty and solicitors are probably a bigger pain

Yes still there. Isn’t CGT 33% not sure about CPO rates nowadays.

wrangler

Tonynewholland wrote: »

Yes still there. Isn’t CGT 33% not sure about CPO rates nowadays.

33% of the difference between the value the land had when you took it over or paid for it and the price you got for it, CPOs are taxed the same way.
As I said It worked out here at 12% of the price, I'd say that at 10 -20000/acre there'd be very little CGT to pay

wrangler

Just looked it up there, there's farm restructuring relief, it's basically the same as ROR with Ts and Cs

Pinsnbushings

Markcheese wrote: »

Actually if I had a block 12 miles from the yard , and was considering getting into dairy , I think I'd sell off the distant block ,and use that to start off as near debt free as possible. ...

An option i was considering was selling the land we have 10 miles away and setting up debt free on a leased block of 100 acres. Use the two blocks at home for heifers, silage.
Didn't go ahead as I suppose hadn't the balls and my father was dead against the idea so didn't push it.
Loads of lads with land intertwined and fragmented here but nobody seems to ever swap. Suppose maybe the legal fees or just general hassle puts lads off too.

Tonynewholland

wrangler wrote: »

33% of the difference between the value the land had when you took it over or paid for it and the price you got for it, CPOs are taxed the same way.
As I said It worked out here at 12% of the price, I'd say that at 10 -20000/acre there'd be very little CGT to pay

Don’t you also have to own and farm the land yourself for 10 years if inherited or you pay CGT if you sell.

wrangler

Tonynewholland wrote: »

Don’t you also have to own and farm the land yourself for 10 years if inherited or you pay CGT if you sell.

Maybe you're referring agriculture relief on Capital Aquisition Tax

If you're gifted/willed land, your Capital Aquisition Tax is reduced by 90% if you farm or lease it to a qualified farmer for six years, sell it before that and you pay the full tax
There's other terms and conditions too

Tonynewholland

wrangler wrote: »

Maybe you're referring agriculture relief on Capital Aquisition Tax

If you're gifted/willed land, your Capital Aquisition Tax is reduced by 90% if you farm or lease it to a qualified farmer for six years, sell it before that and you pay the full tax
There's other terms and conditions too

Yes. Most farmers thinking of getting into dairy are young and mightn’t own these outside blocks long enough I think it’s 10 years but I could be wrong.
In most cases selling an asset such as land to finance a dairy setup wouldn’t appeal to me

davidk1394

A little update for everyone. It was a busy couple of weeks between taking slates of roofs and emptying the old dwelling house, putting in the tank for the collecting yard and getting sheds ready for winter.

The slowest part was emptying the house, I wanted to do it right and ensure nothing was left behind. I bought a container to store furniture, book and an old rocking horse. My aim is to get everything restored. Anything that I didn't want was sold or given away. I salvaged all the red bricks, kitchen flag stone and slates. Parts of the house have went all over the Ireland to play a part in a new home instead of being tipped into a hole and forgotten about forever. Parts of the house went to Cork, Donegal, Kilkenny, Kerry and Clare.

Knocking and cleaning out all the buildings probably added a month to everything but I'm glad I done it. I don't think I'd feel happy in my new parlor knowing all the history that went before it was bulldozed out of the way.

Markcheese

Tonynewholland wrote: »

Yes. Most farmers thinking of getting into dairy are young and mightn’t own these outside blocks long enough I think it’s 10 years but I could be wrong.
In most cases selling an asset such as land to finance a dairy setup wouldn’t appeal to me

You wouldn't give it up lightly , but if you had big borrowings and the interest to pay to get set up properly you could think about it .. lands a tool - it's there to make you a living , it's not a goal in itself ..
I'd be slow to buy machinery or something with the money , but cows ,sheds maybe even roadways or land improvement ... ( Within reason )
I think I'd be checking with every farmer between you and the block half a mile away ..
If it ended up mutally beneficial then happy days .. if not you tried ..