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Cowsheds – some serious considerations

New cowsheds can be expensive. These days, they can cost up to $10,000 per set of cups with nearly half of that being for plant alone. A number of farmers are also raising the cost of cowsheds by putting in features like feed pads, etc. As well, there is an increasing trend to make cowsheds better and brighter by including more space, viewing rooms, offices and toilets etc. One of the biggest improvements, however, must be the concrete aprons which the tanker sits on whilst taking the milk from the vat.

A new herringbone cowshed of, say 25 sets of cups, is likely to cost around $450,000 as a "green fields" site. A "green fields" site might be better from some points of view because there is the opportunity to get a modern shed with modern layout and design features in the most desirable location. However, the costs of getting power and base services to it can certainly ramp up the final cost. Relocating access and egress for cows is also an expensive issue.

There are many important factors to consider when making decisions about a cowshed, it is the most expensive improvement on the farm. You need to ask yourself how long you plan to use the shed for? Do you want it for just five years to meet your immediate needs or 30 odd years until you retire? Or, is there a strong possibility you will purchase the neighbour's farm and close your shed and use his instead?

Extending your existing cowshed may be a better option than building a new one. When considering whether to build new or renovate the existing one, you need to take into account that a lot of the costs revolve around the site, power, effluent disposal etc., as well as the building and plant. Other factors to consider when comparing your options include staffing issues, job satisfaction, time taken to milk, time taken to clean up.

So, you need to do your homework:
  • Get quotes
  • Take into account all the issues
  • Discuss options with staff
  • Talk to your financier
  • Be practical
  • Cost things out accurately
  • Make the finished result pleasant
  • Look at how long you will use it
  • Get in a consultant
  • Check your compliance issues with Fonterra for the quality assurance programme
  • Consider effluent disposal issues
Remember that 10 to 12 rows per milking is optimum, while 18 to 20 rows is too slow and could lead to staffing problems. Also by bringing the cows into the yard and then turning them round so they face back down the farm can significantly improve cow-flow through the shed.
When a herringbone is at its maximum, which is about 500 cows or more, loading long rows of cows can be slow. A drop rail to aid exit times can be an advantage.

Then, of course, there is the cost of servicing the debt - for example:

1. New cowshed example

a) Herringbone, say $450,000

  • Interest rate @ say 10% = $45,000
  • Annual cost divided by 12 = $3,750 per month
OR

b) 50 Bail Rotary, say $1,000,000

  • Interest rate @ say 10% = $100,000
  • Annual cost divided by 12 = $8333 per month

2. Renovations (say, extend pit and enlarge yard) $200,000

  • Interest rate @ say 10% = $20,000
  • Annual cost divided by 12 = $1666 per month
In this case, renovations would give a saving of $26,250 per annum or $1,354 per month

Remember, the cost of renovations or a new cowshed may not be full added value.

Consider before you make a decision: don't let your emotions run away with you and over-capitalise.

  • How long is the expected life of the shed?
  • Rotarys cost more to run than a Herringbone.
  • Will the staff maintain a Rotary?
  • Do you need 2 medium sized sheds rather than 1 large shed?


 

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