How to Start a Dairy Farm

Do you Want to become one of the nation’s dairy farmers in the location with the most dairy cows? Move to California. They had 1.7 million cows in 2022.

There’s more to starting a dairy farm. This blog will walk you through what you need to know. From the licenses to the land you need to buy or set aside, everything in between.

Dairy Farming in the United States

Dairy farms in California produced 41, 787 million pounds of milk in 2022. New York was in the top 10 states that produce milk at number five. Washington ranked at the bottom but still produced 6,239 million pounds of milk in 2022.

There are 36,064 dairy farms in America. That’s a slight bump (0.2%) from 2022.

Simple Steps to Starting Dairy Farming

Starting a successful dairy production business requires a plan. Farms that last follow these simple steps. Good dairy farms are about more than just healthy cows and animal care.

Make Sure You Have the Necessary Qualifications, Licenses and Knowledge of Dairy Farming

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Potential dairy farmers need practical skills, education, and experience. Workshops and seminars on animal care are a good start. Work on a farm to learn more about what dairy producers do.

A certificate or degree in dairy science, animal welfare, or even next-generation agriculture helps.

Set Aside or Acquire the Pasture Land, Barns and Dairy Farming Equipment

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Dairy farmers need land. Large cattle dairies need more than small family farms. Owning land can create cash flow problems. Leasing it frees up cash to buy milking machines and animals. Plus, other items dairy farmers need.

Plan Your Business and Sort out the Paperwork

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Smaller dairies or bigger operations need a framework. Here are several essential parts of this preparation:

  • Create a dairy farming business plan: There’s a good sample here. The Executive Summary is engaging. Explain the type of farm you want to operate. Here are a few templates covering the median size, marketing, market analysis, and financial projections for hopeful farmers.
  • Do a market survey of the local dairy industry: Even one farm needs to include a competition analysis, dairy producers’ distribution channels, and market trends for dairy farmers.
  • Form a legal entity and register your dairy business: The US Small Business Administration has helped many farmers to register. Legal entity choices for dairy producers include a sole proprietorship, partnership, LLC, and Corporation. Ask a lawyer.
  • Name and brand your dairy farm business: Your farm needs an identity and brand, even for selling at farmers’ markets. Stick to simple names. Successful dairy producers use ones that are easy to pronounce and spell.
  • Open a business bank account: You need healthy cows that produce milk on your farm. And a business bank account if you’re wondering how to start a farm. Plus, an Employee Identification Number (EIN) or an SSN if you’re a sole proprietor.

Choose and Buy The Dairy Cattle

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You’ll need cows on your new farm that produce milk. A dairy cow needs to be tested for diseases like Brucellosis. A cow should be halter broke and stay away from cows that kick.

Milk flow is important, so look for a healthy cow’s udder. Remember, if you’re wondering how to start a goat farm, the livestock costs less.

Hire Employees if Needed

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Look for people who have patience, especially with older cows. Knowledge of animal care practices is critical.

Create a Cropping and Feeding Schedule

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Cows eat up to 14 meals a day to make milk. The feeding schedule needs to consider lactation management.

Keep Healthy Cows and Maximize Milk Production

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Animal care techniques increase milk production. Don’t separate animals from herd mates. Herd health depends on animals raised together staying that way.

Market the Dairy Business

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Your milk needs marketing. A farm market is a good environment for families.

Sell The Milk Produced or Make Dairy Products to Add Value

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Sell the milk from your farm. This other food adds value to your milking pipeline.

  • Cheese: Decide on local and or regional sales. Consider state regulations
  • Butter: Another addition to the milk you sell. Sell this product from your farm to upscale restaurants. You’ll need a churn.
  • Cream: Another in a list of agricultural business ideas. Grocery stores require a UPC Code.

What are The 3 Types of Dairy Farms?

Dairy farming practices can vary significantly depending on factors such as location, size of the operation, and specific management strategies. Broadly, there are three main types of dairy farms: Freestall Dairies, Pasture-Based Dairies, and Drylot Dairies. Here are some expanded details about each:

  • Freestall Dairies:
    • Animal Care: These dairy farms prioritize excellent animal care. They typically feature open housing systems with free stalls, where cows can roam freely. This freedom of movement can contribute to better overall cow health and welfare.
    • Facilities: Enclosures in freestall dairies are generally well-designed, clean, and equipped with comfortable bedding. They can also include amenities like automated fans and sprinklers for cooling the cows during hot weather.
    • Automation: Many freestall dairies may implement robotic milking systems, which allow cows to be milked on their own schedule, further improving animal welfare.
  • Pasture-Based Dairies:
    • Grazing: In this type of farm, cows spend most of their time outdoors grazing in pastures. This can make it easier for the farmer to manage a cow’s nutritional needs since they consume a considerable amount of their diet from fresh grass.
    • Manure Management: Pasture-based systems also simplify manure management, as waste is naturally spread over a large area by the grazing cows themselves, reducing the need for intensive manure management systems.
    • Seasonality: Milk production on these farms can be more seasonal, often peaking in spring and early summer when grass growth is at its best.
  • Drylot Dairies:
    • Outdoor Housing: Unlike the other two types, cows in dry lot dairies are housed outdoors in fenced areas known as dry lots. They walk to milking parlors when it’s time to be milked.
    • Shelter: Even though the cows stay outside, they have access to covered shelters for shade and protection from adverse weather. Bedding is typically provided in these shelter areas.
    • Feed Management: In drylot systems, farmers deliver feed and water to the cows, rather than the cows grazing or finding these resources on their own. This allows for precise control over the cow’s diet.

Each type of dairy farm has its own unique benefits and challenges, and farmers may choose a particular system based on their resources, environmental conditions, and personal philosophies about animal care and sustainability.

Freestall DairiesPasture-Based DairiesDrylot Dairies
Animal CareHigh priority on animal care with open housing systems and free stalls for roaming.Cows spend most of their time outdoors grazing in pastures.Cows are housed outdoors in fenced areas known as drylots.
FacilitiesWell-designed and clean enclosures with comfortable bedding. May include automated fans and sprinklers for cooling.Pastures for grazing; simplified manure management as waste is naturally spread.Covered shelters for shade and protection from adverse weather, with bedding typically provided.
AutomationOften implement robotic milking systems, allowing cows to be milked on their own schedule.Manure management is more natural due to grazing patterns of cows.Cows walk to milking parlors when it's time to be milked.
Feed ManagementCows are usually provided with additional feed alongside the grazing option.Cows consume a considerable amount of their diet from fresh grass in the pastures.Farmers deliver feed and water to the cows, enabling precise control over diet.
SeasonalityMilk production is more constant throughout the year.Milk production can be more seasonal, often peaking in spring and early summer.Milk production is more constant, similar to freestall dairies.

What Does a Dairy Farmer Do?

Dairy farmers play a crucial role in the agricultural sector and our food system. They are responsible for managing the herd, milking, and selling calves, among other tasks. Here are some details to further expand on these responsibilities:

  • Maintaining the Dairy Herd: This is the primary responsibility of a dairy farmer. It involves ensuring the cows have a clean environment to live in, access to clean water, and are fed a nutritious diet.
    • Dry Cows: Dairy farmers keep track of which cows are dry (not producing milk) and give them a rest period. During this period, these cows aren’t milked and are fed a lower energy diet to help them regain body condition.
  • Producing Milk: This is the core of the dairy farmer’s job, ensuring a steady and consistent production of milk.
    • Hydration: Each cow needs about 14 gallons of water daily to provide milk. This translates into providing the animals with fresh and clean water constantly.
    • Milking Process: A dairy farmer might use a fully automated robotic milking parlor that can milk 50 cows a day in the right environment. These automatic milkers have a take-off system that knows when to release the cow’s udder, ensuring the cow’s comfort and preventing over-milking.
  • Selling Male Calves: Male calves are typically sold by dairy farmers for beef or veal production, which provides an additional income stream for the farm.
  • Growing Feed for the Dairy Cattle: Dairy farmers often grow their own feed for the cattle, such as corn and barley. This allows the farmer to ensure the quality of the feed, as well as to reduce costs.
    • Supplements: Molasses is often used as a supplement in the cattle diet. It provides essential nutrients and can improve the palatability of the feed.
    • Feed Mill: Dairy farmers may rely on feed mills for large amounts of animal feed, especially if they don’t have enough land to grow all the feed they need or want to provide a more varied diet to their animals.

Overall, dairy farming involves a combination of livestock management skills, knowledge of animal nutrition, and a deep understanding of the milking process. It’s a complex role with many challenges and rewards.

Issues That Dairy Farmers May Face

Regardless of the country, there are some negatives to dairy farming.

Greenhouse Gases

Animal waste from this type of farm causes greenhouse gasses. A dairy cow produces manure. About 10% of its own weight every day.

Animal Care Concerns.

Some reproductive management techniques cause concern. Like separating a cow from her calf right after giving birth.

The Bottom Line

Families or groups of people can get involved with the dairy farm. Animal care for each cow is important and you’ll need to work hard. It’s the same with chicken farming, but less space is needed.


How Much Does it Cost to Start a Dairy Farm?

If you’re wondering how to start farming with no money, this environment isn’t for you. One estimate is 1.2 million.

What is The Average Dairy Farming Profit?

The US Department of Agriculture reports the average dairy farm has been profitable twice in the last 20 years. At the end of 2021, that translated into $41.8 billion total.

Is Dairy Farming Intensive or Extensive?

Both. Intensive farms use more resources like barns and stalls. Extensive ones are pasture-based

Are Dairy Farms Bad for The Environment?

Manure runoff hurts the environment. Nutrients can be lost. Other crops can be sacrificed for a dairy farm.

Do Dairy Farmers Make Good Money?

That depends on the market and environment. Bigger farms can make more money if they have other crops. But smaller businesses can offer specialty items like yogurt.

What are The Top 5 Milk Producing Countries?

India tops the list, followed by the USA, China, and then Pakistan and Brazil. Upstate New York is part of the state with over 3,500 dairy farms.

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Rob Starr Rob Starr is a staff writer for Small Business Trends and has been a member of the team for 7 years. He is a graduate of Ryerson University in Toronto with a Bachelor of Journalism degree. His print credentials include employment with various Toronto area newspapers and three works of fiction: The Apple Lady (2004), Creekwater (2006) and Sophistry By Degrees (2008) published by Stonegarden Press In California.