2. Opportunities for Ca0le
Ø All cattle dairy production in Canada requires
quota
Ø 1 kg of quota costs $25,000
Ø 1kg allows the farm to sell one Kg of butterfat / day
Ø Takes 25 liters of 4% butterfat milk to make 1 kg of
butterfat
3. Currently Own Quota
&
Interested in processing milk
Ø Initial Considerations:
I. Market
II. Processing
III. Distribution
4. Markets
Ø Number 1 thing to consider
Ø Do you have a market?
Ø Can you produce a product for that market with a
margin (profitability)
5. Processing
Ø Will your product be made to Federal or Provincial
health specifications?
Ø Important not to limit the market right from the start.
Provincial severely reduces your markets
Ø Do you build a plant or contract it out to an
established processor?
Ø Before you build get the plan approved by licensing
body
6. Processing
Ø Any cattle dairy processing requires a license from
the Dairy Farms of your province
Ø 2 types of processing licenses
Ø On-farm – allowed to process own milk, cannot buy in milk
Ø Commercial – process milk from other farms
7. Distribution
Ø How will your product be distributed?
Ø Are other dairy companies willing to distribute your
products?
Ø Can your product be transported with other foods?
Ø Is the temperature correct?
8. Distribution
Ø Very Critical, as it can put you out of business over
night - distribution cost changes can wipe out a
margin
Ø Important to have these costs nailed down before
starting and have solid contracts
Ø Distributor may only want to carry some of your
products as others compete with theirs
9. Diversify -‐‑ Do Not Put
All Your Eggs in One
Basket
Ø 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
easy part!!
Ø Milking 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. “Dog eat Dog World”
Keeping Products in the
Marketplace
Ø Marketing will be a constant challenge
Ø Only certain people have good marketing skills
12. A Successful Business
has …
Ø A good product, good accounting system, and
successful marketing plan
Ø Accounting allows one to continually know if the
business if profitable, very important as well
Ø Recognize your weakness and be willing to hire to
fill the gaps
Ø 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)
