Thinking about getting started as a dairy farmer? Dairy farming has provided a meaningful career to thousands of people, and you may have the desire to follow this path. Individuals who are considering getting started in this field often have a few questions: What kind of initial investment do I need? Will I get a return on that investment? Will I enjoy working long hours with relatively few days off? This 11-step guide was created to help you answer these questions and find the next steps forward.

No matter what your path might look like — whether your family is helping you get your start or you are beginning from scratch — this guide provides 11 starting points and links to industry resources that should help you eventually own and manage your own herd of dairy cows.

Click here to download the free guide. (Note: You do not need a Dropbox account to access this. Simply click “Download” on the top left once you get to the guide.) You can also click on the steps in the Table of Contents below to view the guide.

Table of Contents

Click on each step to find information, advice, and resources about getting started in dairy farming.

  • Step One: Get Some Experience
    • The first step in any career should be to get some experience. For the dairy industry in particular, make sure you like working with cows. While you may eventually be able to hire others to do much of the work, you will always need to know how it is done, so you can effectively train and supervise your team. Get to know some local dairy farmers, and ask for a job. Try to find a farm where animals seem to receive good care and where the owners seem to be satisfied with their career. The pay will probably vary and could be entry-level wages, but the hands-on experience is a necessity.
    • Aim to get at least two to three years of experience working for an established farm before trying to start on your own. Try to get experience in all aspects of managing a herd of dairy cows. This will include milking, feeding, and providing a good environment for all ages of animals. Learn how to care for newborn calves because they are your next generation of milk producers. Lastly, understand how to make high quality forages to help maximize genetic milk production potential.
    • While getting hands-on experience on the animal side of dairy farming is essential, it is also important to grasp the financial aspects. What should it cost to feed a lactating cow per day? How much is a reasonable value for income over feed cost? What is the impact of a one dollar per hundredweight change in the milk price? How much should be paid for hired labor? How much debt is manageable for most farms? Ask the farmer to review their financials with you so you can intimately understand the costs involved with dairying.
    • Finally, after a year or two of doing it, ask yourself if you are still excited about the field. Do you get satisfaction from seeing cows perform well? Are you comfortable with the typical work schedule and does it fit into your lifestyle? If you are married, or expect to be, how will your spouse feel about the long-term commitment as a dairy farmer? If your answers to these questions are positive, then it may be time for you to seriously consider how to start your career as a dairy farmer.
    • View a Dairy Job Opportunities Board
    • View On-Farm Internship Opportunities
    • View List of Apprenticeship Opportunities
    • Access Pennsylvania CareerLink
    • Access PAsmart Resource
    • Join the Young and Beginning Farmers Mid-Atlantic Facebook Group
  • Step Two: Find a Mentor
    • Becoming a dairy farmer and owning your own herd of cows is a huge step. The financial investment, the workload, and the animal care responsibilities are very significant. Don’t try to do it alone! Before proceeding further, try to find a competent mentor who can help guide you and share their experiences. It should be a person who understands all aspects of operating a modern dairy farm and someone who is willing to share their knowledge and experience with you.
    • That person may be the dairy producer you worked with while getting experience. He or she may take some satisfaction from helping you get your own operation established. You may need to find someone else, especially if your new location is not close to your former employer. A recently retired farmer may have more time and be better situated to help you.
    • The following checklist may prove helpful. Your mentor should be someone: Who you respect for their knowledge and experience; With whom you feel comfortable discussing your plans and your concerns; Who understands the animal aspects, the crop aspects, and the financial aspects of dairy farming; Who is respected in the dairy community. Your banker may be interested in where you are getting advice; Who is available and willing to spend time with you.
    • Remember, while someone who has actually operated a dairy farm may be your best mentor, others could also qualify. These might be your banker, veterinarian, nutritionist, or county agent.
    • Join the PA Ag Mentorship Program
    • Access SCORE Mentor Resources
  • Step Three: Create a Business Plan
    • Your first step, after getting experience, should be to create a business plan. A business plan is a written document that provides the details of how you expect to operate your business. It must include a budget and it must be realistic. Income will be based on a reasonable estimate of production and milk price, plus cull cows and calves and any other expected income. Expenses will cover all the standard costs of operating a dairy farm based on reasonable values. Loan payments and your own draw must also be covered. You will probably need some help from someone who works with dairy farm finances regularly. An accountant, financial advisor, or dairy consultant may be able to help you get started on a business plan. There are also templates available to use as a starting point.
    • To support your budget, your business plan should explain where forages will come from and their cost. The feeds that will you need to purchase, along with costs, must also be included. Who will do the work, and what will be their salary? How will you obtain replacements?
    • Ultimately, the goal of the business plan is to provide you with direction and ensure your dairy will be financially viable and able to withstand changing market conditions. That’s not to say you can’t change your business plan over time – it should be a living document that evolves with your dairy operation. However, creating an initial written business plan is a good step before forming an advisory team
    • Business Planning Resources: Templates, Handouts and Other Tools
    • View a “How to Calculate Your Cost of Production” Tutorial Video
    • View a “How to Calculate Your Breakeven Costs” Worksheet
    • View a “What to Include in Your Business Plan” Webinar Recording
    • Download a Business Planning App
  • Step Four: Make Sure You Have a Milk Market
    • Before committing to renting a facility, you need to be sure you have the means to sell your milk. If you have more than one choice for a milk market, learn as much as you can about each of them. Talk to producers who ship to any of the options you have. Learn about hauling charges, quality bonuses, and factors that impact the final net price. Make sure you understand how milk is priced and the impact of components.
    • In the current marketplace, access to a market often has a lot to do with your proximity to dairy processing and your proximity to other dairy farmers. If the person renting the facility to you does not already have a market you can take over, you will need to contact other markets that are procuring milk from that area. The best way to start to identify those is to find out who neighboring farms are marketing their milk to and what markets are located near the farm. Then, you will have to pick up the phone and call to find out what your options are.
    • To begin shipping milk, you will also have to get a Premise ID number for your facility so the milk market can take your milk into their Bulk Tank Unit (BTU) for that region. You will need to call the Pennsylvania Department of Agriculture Bureau of Milk Sanitation to find out how to get a premise ID to ship milk.
    • Getting a Premise ID: Email Allie Steck or Call 717-836-3235
    • View the PA Dept. of Agriculture Premises Registration Online Form
    • Download Spreadsheet to Calculate Milk Price
    • View Dairy Markets and Management Weekly Updates
  • Step Five: Form an Advisory Team
    • After you create a business plan, it can be helpful to form a team of advisors. This team should include people with experience in all phases of operating a dairy farm. Nutrition, housing, reproduction, udder health, and replacement animals all need to be represented from the cow side of things. If you plan to do cropping, your team should include experts in that area as well. Finally, a person who understands the financial side of dairy farming is essential for your team. A dairy nutritionist, veterinarian, banker or accountant, agronomist, and perhaps an experienced dairy farmer would be a typical team.
    • You will need to pay at least some members of this team for their services. If they are good, they will not be cheap. Establish upfront how they want to be paid, but expect between 100 and 200 dollars an hour. There are often grants available to help support the costs of an advisory team and help you find experts to be paired with. There are also mentoring programs available to help introduce you to other farmers.
    • Once you have formed your team, it is probably best to have one meeting with all of them present. At that meeting you can describe your vision, share your experience, and list your resources (financial and others). You can also share pieces of your business plan and a broad outline of your ideas for housing and facilities. Do you want to utilize tie stalls, free stalls, or a bedded pack? With loose housing, are you thinking of a parlor or robot? Do you plan to raise replacements, or buy them? Will you raise your own forages or purchase them? Do you have a location in mind? Have you found a milk market?
    • At the end of this first meeting, you should know if the people on your team think your business plan is realistic. If not, what will it take on your part to improve your odds of success? Did they help identify any opportunities for you? A final step at this first meeting is to make sure these people will be available as you move forward and if they will be willing to continue working with you after you begin milking.
    • View Advisory and Profit Team Grants
    • Join the PA Ag Mentorship Program
    • Find Tips for Team Planning and Meeting Management
    • View a Template for Your Team Meeting Agenda
  • Step Six: Find a Facility
    • Finding an appropriate facility is an important step in your dairy farming journey. A good facility provides a high level of cow comfort and allows for efficient use of labor. Ideally, it should also have easy access for the milk truck and delivery vehicles. Obviously, it needs to match how you want to operate in terms of housing and milking facility. Another important consideration is making sure it is in an area where you want to live.
    • In evaluating your options for a facility, there are several options you could consider: renting an existing facility, purchasing an existing facility, partnering as a next generation with another dairy producer in their facility, or building a “greenfield” facility from scratch. For the purposes of this guide, we are going to assume you are starting out by renting an existing facility.
    • After you find an acceptable facility that is available to rent, you will need to work out the rental agreement. This agreement should definitely be in writing. It should include everything you will need for your operation. Silos, calf pens, heifer and dry cow housing may all be needed in addition to housing and milking facilities for lactating cows. Who will provide other equipment you might need such as a skid steer or manure spreader or TMR mixer? Who pays for utilities, repairs, and taxes?
    • Once you have these details worked out, it could be helpful to review them with your advisory team. Have the person with expertise in facilities visit the site with you before making a final agreement. Retain an attorney familiar with the dairy industry to review the lease. He or she may think of issues that have come up on other farms that might not have occurred to you or your advisors. At this point, before you actually sign the lease, you’ll need to take the next three steps.
    • View Dairy Rental and Sharemilking Agreements
    • View a Webinar About Finding, Leasing, and Purchasing Land in Pennsylvania
  • Step Seven: Secure Financing
    • In your initial meeting with your advisory team, you should have received some guidance about how to get the funding needed to buy cows and other capital items. Before signing a lease, make sure you have the needed financing secured. A well-written business plan will help a great deal when you go to a bank or other lending institution.
    • Be sure you clearly understand all the terms of the loan, including interest rate, amount and timing of payments, and the length of the loan. Make sure you find out if the interest rate is fixed or variable. Also determine if there is any penalty for paying the loan off early. This could be important if interest rates drop.
    • Find Beginning Farmer Loans
    • Sign Up for the AgBiz Masters Financial Management Learning Series for Young & Beginning Farmers
    • Learn How to Finance Your Farm Business
  • Step Eight: Find Cows to Purchase
    • This is a crucial step. Many ambitious dairy farmers have had their dreams wrecked because of buying infected animals. You want to be as certain as possible that the cows you buy are free of disease. Three very important ones are Johne’s disease, Bovine Virus Diarrhea, and contagious mastitis. Talk with your veterinarian about screening tests for these diseases. If you can buy an existing herd, or if you can buy all your cows from one or two herds, then you can do some screening tests on cows from those herds before you buy them. If you buy at an auction, it is still important to do some testing to know if your new cows are carrying contagious disease.
    • Making sure the animals are vaccinated before being shipped and again when arriving at the farm can also help against any infectious outbreaks occurring during the transition. Once you have determined the source of your animals, you’ll need to decide how they will be delivered. Make sure all trucks or trailers are clean and disinfected before they carry your cows.
    • View Animal Welfare Resources & Get Free Copies of Record-Keeping Books
    • Download the FARM Animal Care Evaluation Preparation Guide
    • View Animal Care Training Resources
    • Access Biosecurity Educational Resources
    • Learn How to Embrace Antibiotic Stewardship
  • Step Nine: Establish a Records System and Risk Management Plan
    • Good records are essential to managing any business, including a dairy farm. To make good decisions, you need good information, and that information comes from good records. DHIA (Dairy Herd Improvement Association) is the most popular method of monitoring production, reproduction, udder health, and replacement animals. Other programs, such as Dairy Comp 305 or PC Dart, can augment DHIA information. It’s important to begin monitoring dry matter intake for milking cows from the very beginning. When you know this number, you can also monitor income over feed costs, which is a crucial factor to your success.
    • You also need to know your cost of production in order to utilize risk management programs. Risk management programs help you protect yourself and your dairy operation when milk margins fall. Risk management goes hand in hand with a solid records system and dairy management plan. Here are a few risk management options to consider as you are getting started:
    • Dairy Margin Coverage (DMC) — Dairy Margin Coverage is a voluntary risk management program for dairy producers administered by the Farm Service Agency. DMC was designed to be most cost-effective and beneficial for dairies milking about 250 cows or less.
    • Dairy Revenue Protection (DRP) —Dairy Revenue Protection is a quarterly revenue protection insurance program administered by the USDA’s Risk Management Agency. It is a highly customizable way to protect quarterly revenue due to unexpected drops in milk prices.
    • Livestock Gross Margin for Dairy —This program is similar to DRP but is more restrictive. It provides dairy producers with protection when feed costs rise or milk prices drop.
    • Milk Price Contracting — Most cooperatives will allow dairy farmers to contract a certain milk price for a certain volume of production for each month.
    • Hedging with Futures/Options — Dairy farmers can forward contract milk through the Chicago Mercantile Exchange by working through a private broker. There are some cooperatives that allow their members to do forward contracting through the cooperative rather than a private broker.
    • Work with your advisory team to develop a practical and useful records system, and come up with a general idea of how you want to incorporate risk management into your operation in the future.
    • Visit the National DHIA Website
    • Access Risk Management Resources
    • View Protecting Your Profits Resources and Industry Scorecards
    • Learn About Planning and Record Keeping for Beginning Farmers
  • Step Ten: Get Things in Place
    • Before taking delivery of your cows, make sure you are completely ready. Do you have all the feed ingredients and the means to get them mixed and in front of your cows? Is your manure handling system all set? Do you have towels, soap, teat dip, etc. for the milking process? Are the basic drugs that you need on site? Have you made arrangements for professional veterinary services if you have an emergency? Consider doing a walk through with an experienced advisor to be as confident as possible that you are fully prepared.
    • You’ll also need to establish and determine vendors who will provide these different supplies for your dairy. Who will be the nutritionist you will depend on to balance your ration? Who will be your veterinarian? What feed mill will you purchase feed from? What dairy supply company will you get supplies from? Reaching out to local vendors supplying these items is important so you can get bids for the different products you will need and determine what company will work best for you. It is also important to meet with them to see who you seem most compatible with in forming a working relationship. Some of these vendors, especially your veterinarian and nutritionist, may be good to add to your advisory team as well.
  • Step Eleven: Take Delivery and Start Your New Career
    • This is the end of the beginning! You are now a dairy farmer! Continue to work with your advisory team. Monitor the crucial aspects of your operation to know if you are on track and always reference your business plan. Get help early on for anything not going as planned. Pay attention to the cows. Are they clean, dry, and comfortable? Are most laying down when they are not actively eating or being milked? Are half of them chewing their cud? Do you see any lameness? Are your calves and heifers thriving? Do fresh cows start strong? Is feed intake in line with your ration? These and many other animal care factors need to be well understood and addressed promptly if needed.
    • Remember to leverage your advisory team along the way to give you ongoing feedback. Have monthly meetings the first year you are getting started and encourage them to walk through the barns with you to identify bottlenecks or areas to troubleshoot. Share your financial and production records with them, and encourage them to provide feedback and input on helping your dairy be successful. Remember, it is up to you to decide what advice you will take and how you will put it into action.

If you have questions about this free resource or trouble accessing it, please email Emily Barge.