Dairy Farming in Pakistan
You will know why dairy farming is a good business, and what to look out for when you are starting out, because I am going to share some of my experiences (I was involved directly in dairy farming for three+ years).
Dairy Farming, especially in Pakistan, is a dream business for a lot of people. A lot of seasoned and would-be entrepreneurs have already jumped onto the Dairy Farming bandwagon in Pakistan, and even more so like to talk about getting into dairy farming.
This is the small scale dairy farming that a lot of people in Pakistan want. They arre searching for dairy farming business plans, and dairy farming feasibilities…but before we get to that, have you asked yourself this question, “why start a dairy farm?”
Why Start A Dairy Farm
Why did I start a dairy farm? Now, the simplest answer for many can be, “dairy farming is profitable,” that’s why.
Right?
Well, I started a dairy farm not because it was “profitable” on paper. Too many people simply read the SMEDA Dairy farming feasibility study, and decide that’s what they want to do. That’s now how I started.
Yours truly worked on a dairy farming project starting in June 2009. My interest was pretty much ‘academic’ at first; just knowing how the business and the animals operate. It was after almost a year of travelling in and around Punjab, meeting countless number of people in the field, discussing and debating with some very qualified dairy farming consultants and breeders, that I decided to dip my toes in this project.
I was interested in quite a few facets of Dairy Farming:
- The Dairy Farming Business Model: Dairy farming has a very unique business model, and no other business has the capability of multiplying its assets while still producing revenue. Remarkable.
- The Current Situation: One of many lessons that Richard Branson has taught me is that you should get into a business where you think you can do better. Dairy farming, I knew, had a very, very large room for improvement (it still does!).
- A Very Solid Demand: A lot of businesses and entrepreneurs would consider a ‘demand’ for something a good enough reason to get into any project. But for me, dairy farming is not only the demand of the market, but also a need. People need healthy, quality milk (and meat). It fits in with the idea of for-profit philanthropy where I stand a chance of actually helping people out, and earning prayers as well as profits. Now that’s an inspiration!
- Super Integration: This was not vertical integration as much as it was super integration. I already have two independent projects, one agriculture farming and the other is milk supply within Lahore, Alhumdulillah. The dairy farm has the potential of sitting in very nicely between the two, and providing wholesome integration. Although integration of any two businesses, much less three, is a pain in the neck (amongst other body parts), dairy farming provides me with the perfect long-term inspiration for working on these three projects!
Warning: Know This Before You Start Dairy Farming
Most of the things people say, they just say them without much thought. They’d discourage you from doing anything different. I for one won’t do that. And having said that, following are the main points – so far – that should be considered when starting your own dairy farm:
1. Dairy Farming is a long term project.
There are no two ways about it. The time when you actually start seeing profits, IF a lot of things go right, is at least three years, usually five years. If you start taking out profits from it before three years, be prepared to inject more money in to it afterwards. But the upside to this remarkable business model is best explained by the following example that I frequently give to my friends and would-be entrepreneurs:
- I start a shoe shop, selling shows. You start a dairy farm, selling milk.
- After three years, if both of us do well in our businesses, I’d be richer than you.
- After six years, I’d have five branches all over the city, and will still be richer than you. You’d have great cash flows but you will find it hard to beat my retail outlets.
- Ten years later, it won’t matter how good I am doing, you will be much richer than me, in terms of assets, and most importantly, in terms of cash in hand.
- After 10 years, no business seem to even come close to the almost logarithmic growth of a dairy farm.
So if you can train yourself to actually think slow and steady, rather than fast and wobbly, then dairy farming is definitely something to consider.
2. The Most Important Factor is Currently the Hardest
The hardest part of setting up a dairy farm is the procurement of good-quality, high-yielding, environment-hardened animals. This is also the most important activity for an owner of a dairy farm.
Buying high milk producing cows and milking buffalo is not easy and one of the most difficult things in the dairy business.
You can go for imported cows, but I did not and I recommend that you don’t either.
A lot of people will tell you that you shouldn’t because they are expensive. I want you to know that imported cows are not expensive. If you are paying 140,000 (PKR) for a cross-bred cow, then paying 180,000 for an imported cow does not make the cow ‘expensive expensive’, it just makes it ‘relatively expensive’. And your target is not to increase the number of heads, but to increase the number of liters of milk. So an imported cow averaging 25 to 30 liters per lactation is much better than a cross-bred cow averaging 14 to 18 liters per lactation. The ROI is just plain and simple and you should stop listening to people who tell you otherwise.
But that’s not the reason why you should not get imported cows. The number one problem with imported cows is that they are unable to withstand the blast of heat of the Pakistani summers. Setting up the right infrastructure is essential, but that is not the only thing that you’d have to look into. There is disease and the very little margin of error that the imported cows give to you and your management.
I would suggest you do what I did; find good-quality locally bred cows, make sure that your dairy farm shed and cooling infrastructure is very much in place and then run the farm for at least a year to gauge how well your infrastructure (shed, cooling etc) is handling your locally-bred cows.
But that brings me back to the main point: finding high-quality locally bred cows is the hardest thing you’d have to do. It is also the MOST IMPORTANT thing for any dairy farm. As I have repeated this repeatedly (!!), a dairy farm’s main function is to procure and breed good-quality cows. The milk is a by product of that main function.
A Dairy Farm’s Main Business is to Procure and Breed Quality Cows and Buffalo.
So be prepared to hunt down good cows and buffalo wherever you can find them. I remember travelling a total of 2000 kms plus, by road, all over Punjab, in one week, just to see and meet cow breeders. I didn’t pay half as much attention to the shed that I was constructing, or even the silage pits that were being prepared at the time, because purchasing the right animals is that one 20% activity that gives more than 80% of the result.
3. Finding the right people
Finding the right person to manage your dairy farm is also something to pay VERY close attention to. Stealing milk is very easy. If you do not trust the person who is managing the farm, then that’s a losing proposition. You should pray that God helps you find that person. You can also start with a solid attitude of trust, of reward and of accountability. I can write quite a few things on how to deal with people, because that is ALL of this is about, but suffice it to say for now, that one of the hardest things to do in dairy farming – just like in any other business – is to find the right people to manage and carry your dairy farm forward.
Details of who’s who and how many people should do what activity, those things are not the scope of this article and may be covered/posted later, God willing.
Finding dairy farming technical help like that of vets and professional consults for animal feeding etc is NOT a problem, especially here in Pakistan. That is again one of the benefits of dairy farming, that the infrastructure that only a government can provide, is ALREADY IN PLACE in Pakistan. Sure there are problems, but it is good enough for you to not complain and get some work done.
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This is just a run down of my thoughts on dairy farming and some – just some – of the pitfalls that you should look out for. By God’s Grace, my dairy farm was operational for about 4 months when I first wrote these thoughts and I am happy that I started this dairy business.
God guide and bless us all. Good luck to you in your conquests and queries.
Thanks to the overwhelming response and feedback on this post, I am happy to report that the dairy farming guide is available for download.
You can know more about it and purchase it if you are serious about starting a profitable dairy farm business.
Thanks. And God bless.
NOTE: Some friends and readers think I started selling milk because I had a dairy farm! That’s absolutely not true. Selling milk is different, producing milk is different. Both are completely two separate, very distinct businesses.
I sold milk (built a brand, and we were Alhumdulillah profitable in the first month) in Lahore. This dairy farm – along with crops – were 3 hours away from Lahore, in District Pakpatttan. Two different businesses, two different teams, two different operations.
If you have any confusion about this, don’t hesitate to contact me.
If you are interested in learning more about:
- creative self employment,
- living a life of adventure,
- attaining financial freedom and wholesome living,
…please do subscribe to JustAddVenture.
hi salam,
really appreciate your effort on this topic….its really helpfull and i am really interested in this business but need some more facts and figures about this business…it would be more helpful if i can have a word with you about some ambiguities….it would be great if i can have your contact number or email so i can contact you directly….. you can even send’em at my email add.. [email protected]
many thnx
Hey Danish,
Do ask your questions here so more and more people can benefit from our discussion, God willing.
And thank you for the appreciation. 🙂
Good article
Were you having any experience of diary farming before? I dont have any, still I am interested to do this business
How to diffrentiate between good animal from an average, does it have some in special marking
You travelled 2000Km to get good animals, which area/who has good animals
Regards
Haider
Thanks Haider Yar.
I did not have any experience in dairy farming before starting this project. But like I mention above, I did spend ‘more than usual’ time in meeting people from different farms etc.
In all the travels in the last odd two years (!!), I have found a great resource for buffalos in Mr Malik Hanif (he is a five time Presidential award winner in buffalo breeding!). He was very helpful in teaching me the attitude towards dairy farming. And he is an unconventional as they come (You can read more about Malik Hanif by clicking here).
There are few things to look out for in a good animal, and most of them are visual. For cows, for example, I’d look at the height of the animal, the bone structure, and udder placement. There are other factors as well, depending on which breed you are looking at, is the animal high-blood etc. And also to note, I don’t know much about breed identification.
In terms of areas for good animals, there are famous areas, but that doesn’t mean you’d get good animals from there. You’d have to search. I have a cow in my herd that I bought from a ‘travelling salesman’, and the cow was very cheap and gives a good average of milk. But for cross-bred cows, Sargodha is somewhat famous, but I still have to find a good cow there! :/
Hey I was wondering if you can answer my question. If some one had 50 cows/buffalos and they were producing 12-14 litres of milk how much profit would a person have in hand at the end of the year, just give me a round figure
To give you a ‘very’ round figure, let’s factor in two months of dry period in a year. So that’s 10 months (around 310 days) of lactation.
And that’s 310 (days) x 13 (liters) x 35 (Rupees per liter) x 50 (cows). That’s a lot of money. 🙂
Also note, buffalo do not give 12 – 14 liters average over a lactation. The average is around 7 to 8 liters. That’s why no one suggests keeping buffalo. But then there are people who have focused on ‘breed’ and gotten an average of ABOVE 18 liters over a lactation, from Buffalo! Read my post on the Unicorn Breeder to read about people already living the unconventional lifestyle! 🙂 (and reaping the benefits mashAllah)
i want to start a new business with 2500000 amount please guide me because i cant understand what we doing.
if u want to start business in Dairy farming in partnership ,i offer you to participate with me having own land and yard (catles Haveli ) toward Kasur City near ferozepur road.
assalamo alaikum:
I found your blog a great resource as I develop my dairy farm in my mind.
As far as land for housing the cows goes, did you lease or buy the land ?
Do you think this business serves itself to an investor-worker model i.e. where the investor provides funding and the worker setups the farm? I ask because I live overseas ?
Thanks,
Irfan
Thank you for appreciating the blog! Hope you share it with your friends on Facebook etc…
No, I don’t own any land :/ I have leased it out. But Alhumhulillah, I have been involved in farming for quite some time now (see my projects to get an idea).
And yes, the business can work on the model that you so eloquently defined. In fact, to a large extent, that is how I recommend doing any business (owning it instead of running it). I have written an article on the business model that I recommend (read it by clicking here). A lot of things need to be looked into, but it is very much possible, and much, much more profitable (not only in terms of ‘more money’, but in terms of ‘more time’ as well!)
Assalamo alaikum,
Thanks for your succinct response.
I tried to contact Racchna consultants (mentioned by you in one of your blogs), but did not get a response.
Do you have any other recommendations ?
Irfan
The reason I don’t have any other recommendations for ‘locally bred’ cows is that I have tried a few ‘mandees‘ (open markets). I wouldn’t recommend going through the markets, especially for someone who is new. I learned the hard way that it is very easy to be fooled by the ‘experts’ that are dime a dozen at these markets/’mandees‘…
For imported cows, I’d suggest ProFarm. Ask for Joachim (he is the owner, from Netherlands). Great guy – he gave me a good 15 minute presentation on cow management that was pure gold! I have not used their services as of yet though. Good luck!
Check Out this dairy farming in Pakistan section for regularly updated lists of dairy farms and vendors… you can share your experience there too. (that section is a work in progress right now, but I am working on it inshAllah).
assalamo alaikum,
I did receive a response from Mr Naeem, thanks.
1) Could you share your thoughts on the concept of ‘turn-key’ dairy farms ? I think this may have to do with ‘owning’ vs ‘running’ a farm.
I apologize if my questions are taking too much of your time.
Thanks,
Irfan
Hey, you are not taking my time, Irfan! I’d like nothing more if I could help you in starting a business off the ground!
Personally, I think turn-key type projects ‘can’ work. It does depend a lot on the team you employ.
For example, I used my own team to set up the small dairy farm. That in a way can be thought of as turn-key (i.e. I outsourced it ‘within’ my tiny organization)…
Am I making sense? :/
P.S. Do check out the Dairy Farming section that I have put up … some interesting conversation/discussion going on there. 🙂 God bless and Good luck man!
Asslam U Alaiqum:
Your blog is awesome and very helpful for them who are much interested in this business, i also like it very much can u tell me how much money we need to start dairy farming? and plz do tell me if i need to meet a person who give all information about dairy farming how can i meet that person?
Regards
Dear Friends,
This is our official contact point… Please free to contact…
Dear Ashraf,
Small world? I have visited your dairy farm twice, near Baseerpur, right? Have met with Saif there… you’ve really done up the place!
Welcome to LifeETC! Your contributions towards dairy farming in Pakistan will more helpful at the special section (click here).
And do also “Like” the Mohammad Khan – Momekh page on Facebook, Click here
I have established one dairy farm at Chunian. just added 35 Crossed fresian heifers. want to go for more 75+100 heifers +50 cow. i have added two 100% fresian male two months old but these just died 15 days back. i want some guide lines to reconstruct dairy shed. it is concluded shed is not supporting to tackle heat effects on the fresian breed. your kind advise will be highly appreciated
Dear Friends,
This is our official contact point… Please free to contact…
Regards,
MAK Dairy Farms
mr irfan you can contact me on my email address if ur interested in investing your money in dairy.
my email address is [email protected]
thanks for your message.
according to my calculations, I still am short of capital and will have to wait some time before diving in to this business. I think it is critical to have the funding aspect well covered before starting up, because otherwise the chances of success are less.
Irfan
Asslam U Alaiqum:
I Asked u Something 2 or 3 days ago that can u tell me how much money we need to start dairy farming with 30 or 40 Cow or buffalow? and plz do tell me if i need to meet a person who give all information about dairy farming how can i meet that person?
Regards
A detailed breakdown of the cost of a dairy farm can be found at SMEDA’s website. Small and Medium Enterprise Development Authority (SMEDA) has a very well-received PDF document on dairy farm feasibility (for 25 and 50 animals). But there are some problems with SMEDA that I will try to address in my future posts, God Willing.
Hope this helps, Abubakar.
More information regarding dairy farming etc will be uploaded soon, inshAllah. Your question is also noted.
Dear Momekh
Well done!
This is such a brilliant blog and I am glad that you have provided a platform for educated to-be dairiers in Pakistan…
I have already setup a farm in Punjab with a capacity to house 50 animals. I am planning on farming 70% bufs. and 30% cross bred cows (This will approximately give me a milk-mix ratio of 55% and 45%). To date I have already procured 7 buffalos from Punjab (vehaRi, Gujrat and Sargodha). Since this is going to be my parent herd so I am super careful in animal selection and have paid extra to obtain high-yielders (average 14-20 liters for Nili Ravis–Panj Kalyani). I am taking my sweet time in not rushing into buying bad-bred animals and paying special attention to each and every animal I purchase for my farm. InshaAllah by December this year, the size would exceed 50 and by June next year the yielding animals would exceed 100. I am going slowly with this in accordance with pace this business demands; what do you think?
As you have mentioned in your blog, I had to face a lot of resistance at family and friends level. I am 28 now and studied investment banking from England and Alhamdulillah am working as an investment banking consultant abroad. But farming has always been my passion and I want to run it like a corporate inshaAllah with all the management systems in place; to make that happen I might need your advice from time to time as most of my time I am absent from the country.
I had a chance to watch the video of your farm and to my surprise it is just opened-up farm crafted to cater the simmering heat in Pakistan but as we know that winter in Pakistan is harsh too, so what would your arrangements be in the cold season to protect the animals? If I am satisfied then maybe I can build my 50+ extension on your model, inshaAllah. Currently its more of a mix of the traditional and modern model with good ventilation arrangements.
Someone has recommended me to purchase a cross of HF-Jersey-Sahiwal; since this breed has the highest lactation period and does not drop the milk yield towards its pregnancy. What is your view on that?
Finally, the Silage; is it necessary to chop maize with the special cutter you mentioned? How much does that cost?
Appreciate your time and effort for the wider social good in Pakistan. It would be actually great if you could kindly post some more photos and videos of your farm.
Regards,
Zubair K
Excellent post, Zubair.
You are spot on with the “slow and steady”approach. Dairy Farming is built that way. I really understand you ‘sweet time-taking’ 🙂 towards buying the cows; I am doing exactly the same. I am planning to buy 2 every month, so the lactation cycles are in sync and there is some money coming in every month.
There are two advantages to this approach: one, I get to select relatively better cows, and second, I don’t have to put up a large capital to buy 10 to 15 cows in one hit.
My farm can house around 25 (that is just half of the farm; the other half will be built inshAllah when we reach around 20 animals).
About Winters: I have been through one Winter season with these animals, and I seriously doubt you’d need much protection from Winters. There may be some animals (depending mostly on breed and health) that may – just may – show signs of ‘cold’ stress. But not that I know of. Most of the ‘village people’ will tell you that in Winters you need to wrap the whole gawddamned shed to protect wind chill, and burn a small fire to keep the animals warm and what not; that’s not the case. Not in my experience at least, and not with what other dairy farmers say. (It may be a bit different for buffalo though, something to check).
About Buffalo: Have you read my “Unicorn Breeder” post? About Malik Hanif? He is 5 time presidential award winner for Buffalo breeding. Something you should definitely check out if you are keep buffalo.
About Silage: Well, my friend, I can not stress enough the importance of Silage. Read this post I have on Silage Preparation.
About posting more photos and videos: I have tried to consolidate my efforts on one section at https://momekh.com/dairy-farming-pakistan/
I appreciate your input Zubair, and Investment Banking sounds cool. 🙂 I love it when two completely unrelated projects are managed – by choice – by one single person. 🙂
Thanks for the feed banck Momekh!
Actually investment banking has helped me a lot in apprasing quite a few businesses in Pakistan and at the end of the appraisal; I was really hooked in to dairy farming because of stable cash flows, minimal working capital investment and almost assured revenues.
I would appreciate if you could kindly put up some pictures of your farm. I was meaning to ask you that how much did your shed cost you? Actually mine costed me around PKR 11,025/- per animal. I believe this is on the higher side; I would like to compare this with yours to be cautioned in my extion phase.
I am facing trouble in procuring skilled labourers at my farm. I have a temporary arrangement in place but would like to make it permanent in with right people for the right job. I am not sure, what the market rate is in term of salary for skilled labour. My idea is that it ranges from 7-10 thousands per month. What is your view on this and where can I procure such skill?
I have an off-take agreement for my whole milk productino which assures revenue in advance and minimizes my working capital requirement. This contract requires me to supply a certain mix of cow and buf milk and I get to charge a much higher price than the normal 35. I havn’t had a chance to see the Unicorn Breeder article. I will do that tonight at home and will talk more on that issue. For the meantime I would appreciate if you could kindly adress my two questions here.
Cheers
Zubair
That’s the best way of starting any new project.
My skills on ‘business appraisal’ are anecdotal at best, and yet I agree with your appraisal; cash flow (the life blood of any enterprise) and the current demand are both very favorable for dairy farming business in Pakistan.
Your cost breakdown of ~ 11,000 rupees per animal sounds fair. Nestle gives the figure at 20k per animal, but that is for the ‘airport’ they want you to make for keeping animals.
I have not done the ‘per animal cost’ of the shed, purely because it is a work in progress at the moment. I have only made half of the proposed shed, had only one silage pit ready (the second one is being completed for the July Maize harvest, inshAllah)… from the beginning, I knew that I can not afford to go ‘all aboard’ with this, and I had to slowly (but surely) build the farm… God be with us all! 🙂
About Skilled Labor for Dairy Farming: That is the number one concern here, as I have also mentioned in this article as well. Nestle, for example, do have some vocational training courses on farm management and Artificial Insemination etc, and they do help in procuring skilled labor… The University of Veterinary and Animal Sciences (UVAS) in Lahore is another good bet. Now that I mention it, I did go there quite some time ago to find such labor (I was/am looking for a farm manager). I wish there was a sure shot answer to this question, but there is not. Maybe down the line, people like us can get together and inshAllah do something about it? 🙂
Hope all is well.
God bless and good luck!
Mr. Zubair,
It was good to see people like you entering in this field. I am also working on establishing dairy farm and collecting some information. These blogs have surely helped me a lot. However, no financial details on feasibility of any such project has been discussed and I am depending only on feasibility prepared by SMEDA. Appreciate if you could share your project details with me. Moreover, also if you could give me some details of options/arrangements available for sale of milk like the one you are having.
my email is [email protected] please drop me your contact. i would love to talk to you on this.
appreciate your reply in this regard.
Regards
Sohaib
assalamo alaikum,
Is 11,000 per animal the cost of constructing the shed. Does that mean the cost of a 100-animal shed would be approximately 11,00,000 (11 lacs) ?
One other question I had is: If I have 1 acre (44,000 sq ft) of land, my guess is around 7000 sq feet will be needed for the shed. Will the remaining land be able to produce fodder/silage for the 100-animal herd or are other means needed to procure that ?
Thanks,
Irfan
My apologies
I rechecked my calculations and figured that I was wrong earlier and confused the measurement of the farm; however I used the correct construction rate–300 per sq. foot. Now the construction cost has gone up to 21,ooo per animal.
My shed is 35×100=3500 sq. feet–enough to house 50 animals. Each animal requires 4 feet wide space and I have two tail-to-tail rows of 25 animals on each side of the shed.
My estimate is that you need 20-25 acre of land with abundant supply of water to cater for a 100 strong herd. If you grow maize; use pioneer seed. The operational issue with using this seed is that it may require as much water as rice or cotton crop but the results are phenomenal. What area are you based at? because you would need to check the suitablity. If you cannot produce it, you can purchase silage at the rate of 7-8 ruppes per kilo. Even in this scenario you save on costs by PKR 30-35 per animal. If you produce silage yourself the cost per kg drops to atmost PKR 2 per kilo.
I am looking to get started.
When I do start insha Allah, I would probably have to go with purchasing silage because I would look to buy just 1 acre of land (enough to house the cows comfortably)
Do you know the going rate of 1 acre of agricultural land around Lahore (raiwind area would be perfect)?
irfan
Hi everybody,
I am new on this blog, just doing initial study to setup dairy form near lahore.
Firstly, great job momekh, really informative.
i have few very basic question.
1 – Price of good cross breed animal
2 – Milk Production ( kg/ day )
3 – Cost of feed ( per day / animal )
Is there any other feasibility study available apart from SMEDA.
Please keep posting your comments
Good Luck for everybody
i think smeda have it but they talked about millions. why the hell if i have 20 millions i would start a business based on SMEDA thing anyways
Still waiting for reply..?
Did i asked very confidential info.
🙂 will reply soon brother. Sorry, I am typing this from a hotel in Phuket, Thailand. But yai bhee aik experience ho ga, answering questions about dairy farming in Pakistan while sitting on a beach in Thailand. 😀
Dear ,
I have constructed a dairy farm based on modern system which you may call state of the art dairy farm specially to cater buffaloes. I would like to get some advice to make it a successful venture. Pls post your number on ma Email “[email protected] and let me know when we can talk.
Thank You
Oshan Amin.
Good luck and God bless in your attempts at making this venture successful!
It would be great if you can ask the questions directly, using the Dairy Farming in Pakistan page.
Hi
we are into farming we grow crops of various kind cash crops and food crops. If we want to step in to dairy farming , how much finance do you think required to by pass the thresh hold ?
How many buffalo / cows good to start with
AOA mehmod kh
dear i email u but u dont reply me. i have no experience in dairy farming but i want to start dairy farm.My friends do that bussines i see them and my interest starts from here. I have no agri land i m basically in sargodha city.Here r too may good dairy animals. i have only 1 million rupees to invest.Is there any way from where i educate in this field like digree or diploma programe. i m also interested in goat farming because they increase very much. plz guide me .i think u understand my mind. also write about Boer goats a special meat breed not present in pakistan but in india………..