2. Opportunities  for  Ca0le
Ăï⯠All cattle dairy production in Canada requires
quota
Ăï⯠1 kg of quota costs $25,000
Ăï⯠1kg allows the farm to sell one Kg of butterfat / day
Ăï⯠Takes 25 liters of 4% butterfat milk to make 1 kg of
butterfat
3. Currently  Own  Quota  Â
& Â
Interested  in  processing  milk
ĂïâŻInitial Considerations:
I.⯠Market
II.⯠Processing
III.⯠Distribution
4. Markets Â
Ăï⯠Number 1 thing to consider
Ăï⯠Do you have a market?
Ăï⯠Can you produce a product for that market with a
margin (profitability)
5. Processing Â
Ăï⯠Will your product be made to Federal or Provincial
health specifications?
Ăï⯠Important not to limit the market right from the start.
Provincial severely reduces your markets
Ăï⯠Do you build a plant or contract it out to an
established processor?
Ăï⯠Before you build get the plan approved by licensing
body
6. Processing
Ăï⯠Any cattle dairy processing requires a license from
the Dairy Farms of your province
Ăï⯠2 types of processing licenses
Ăï⯠On-farm â allowed to process own milk, cannot buy in milk
Ăï⯠Commercial â process milk from other farms
7. Distribution Â
Ăï⯠How will your product be distributed?
Ăï⯠Are other dairy companies willing to distribute your
products?
Ăï⯠Can your product be transported with other foods?
Ăï⯠Is the temperature correct?
8. Distribution
Ăï⯠Very Critical, as it can put you out of business over
night - distribution cost changes can wipe out a
margin
Ăï⯠Important to have these costs nailed down before
starting and have solid contracts
Ăï⯠Distributor may only want to carry some of your
products as others compete with theirs
9. Diversify   -Âââ  Do  Not  Put Â
All   Your  Eggs  in  One Â
Basket Â
Ăï⯠When your product becomes more than 10% of the
product distributed or retailed by a large
cooperation you are in a vulnerable position. If
they drop your product your business could go
broke very quickly.
10. Production  will  be  the Â
easy  part!!
ĂïâŻMilking the cows and making the product
will be the least of the issues around any
dairy production and processing business
and both of these are not for the faint of
heart!!
11. âDog  eat  Dog  Worldâ Â
Keeping  Products  in  the Â
Marketplace Â
Ăï⯠Marketing will be a constant challenge
Ăï⯠Only certain people have good marketing skills
12. A  Successful  Business Â
has  âŠ
Ăï⯠A good product, good accounting system, and
successful marketing plan
Ăï⯠Accounting allows one to continually know if the
business if profitable, very important as well
Ăï⯠Recognize your weakness and be willing to hire to
fill the gaps
Ăï⯠Rare to find someone who is good in all three areas
many are good in 2 of the 3 but very rare for one
person to do all three well. ( I do not like
bookkeeping or I do not like collecting the money)