9 Important Things to Consider When Starting a Dairy Farm (Ultimate Guide)

By Dairy Farming Hut

Cows, Goats, Sheep

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Starting a dairy farm is an exciting time for the fledgling dairy farmer with big dreams. However, like any business, it requires you to do your research. This will help you figure out your potential strengths and weaknesses. It is always good to interact with other dairy farmers to determine what tactics worked or failed for them. So you, too, can learn how to create a dairy farm that will thrive and grow.

Starting a dairy farm has many components, including

  • Picking the right farm animal
  • Deciding how many farm animals you need to purchase
  • Deciding how much land you need to adequately provide for and produce the healthiest animals
  • Whether you are going to rent or buy the land
  • Tools, equipment, and machinery you need
  • Determining which products you will sell to make income from your farm

Even if you grew up or worked on a dairy farm, there is still a learning curve.

Let's take a deeper look at these aspects you need to consider and plan for, as you start your own dairy farm.

1. Choosing the Right Animal for Your Dairy Farm

When it comes to dairy in the US, there are three main sources: cows, goats, and sheep. With each of these animals, there are different breeds that may be more suited to the land and climate in which you live, which can contribute to them producing quality milk and other milk products.

Make sure to research which animal and breed will work best for you and where you live.

Starting a Dairy Farm with Cows

Cows are the most common source of dairy within the US, but even with dairy cows, there are many breeds—two dozen, in fact. The primary dairy cow breeds used in the US are:

  • Brown Swiss
  • Guernsey
  • Ayrshire
  • Milking Shorthorn
  • Red and White Holstein
  • Jersey

The two most common cow breeds used for dairy farms are Holsteins and Jerseys.


The Holstein cow is the most popular and widely used in dairy production in the US and worldwide. They are an excellent option for large farms due to their production level, but they are also popular with small or new farms. They are easily recognized by their appearance of white with black spots. 

The following are a few pros and cons of raising Holstein cows for dairy production:


  • Easy-going and easy to manage
  • Gets along well with other cows; are herd animals
  • Adaptable to a variety of situations such as being left in a stable or grazing for extended periods
  • Produce the most milk of any dairy cow breed
  • Calves tend to be healthy and mature quickly


  • They are more sensitive to heat than other dairy cows
  • Can be more susceptible to diseases such as mastitis, which can lead to a drop in milk production


Jersey cows are the second most popular breed of dairy cows. They are smaller and lighter than their Holstein counterparts, with a light brown, gray, or even black appearance. Their milk is extremely popular due to having more protein and minerals than milk from other dairy cows. 

Here are some of the pros and cons of raising Jersey cows for dairy production:


  • Milk production costs less and is more efficient
  • Their milk is easier to turn into cheese or butter due to the higher fat and protein content
  • Milk can be sold at a higher cost due to demand
  • They are less prone to lameness
  • Good-tempered
  • Very fertile with less time needed between calving


  • Mastitis rate is 22%

You can read more about different breeds of dairy cows here.

2. Inspecting the Cows Before Buying

This is the most critical action when starting a dairy farm as it can lead to an early success or failure.

Make sure you do research where quality dairy cows are bred and sold by reliable organizations before you buy them. It is vital to take your time to inspect cows. Some things you should do before making your final purchase are:

  • Milking tests on the cows. Performing milk tests will ensure that the cows you want to buy are producing high-quality milk. One of the main ways to test for milk quality and detect mastitis is the somatic cell count. Milk tests will also tell you how much milk a cow is likely to produce. If a cow does not produce a lot, buying it could be risky and hurt your ROI in the future.
  • Make sure they have all the necessary vaccinations. Because cows generally live in a herd, if one cow contracts a disease, it is very easy to spread to the rest of the herd.
  • Best to buy the cows right after they have given birth. Soon after giving birth, cows tend to produce the most milk in that period.
  • Don’t buy all your cows at once. Start with half the number of cows you are planning for in total, and then buy the second half of your herd when the first half starts drying up.

3. Feeding Cows on a Dairy Farm

Generally, dairy farmers consider the following three options when feeding their dairy livestock.

  1. 1
    Concentrated feed: This is a combination of foods that are high in energy and protein but low in fiber, such as oats, molasses, corn, etc.
  2. 2
    Foraging: This way, you let your animals get most of their nutrition from roughage, such as plants and grass.
  3. 3
    Combination:  Many farmers choose a combination of the two and sometimes in rotation. This rotation is generally due to the condition of the grazing land or the animal health needs. Feeding in combination is not as expensive as concentrated feed. Further, it also provides the cows with a more balanced diet.

4. Starting a Dairy Farm with Goats and Sheep

Goat and sheep dairy farms are ideal for those who want to start dairy farming but want to keep it small and relatively inexpensive. Goats and sheep are much smaller animals, which eventually means that you can house many of them in the same amount of space you would need for one cow, and you can buy more of them at one time.

Additionally, there is increased popularity for products that can only be made from goat or sheep milk due to their health benefits and unique flavors. As the competition in sheep and goat dairy products is still less as compared to cattle dairy, this can give you an added advantage.

Though the dietary needs for each dairy animal are different, the techniques applied for goat and sheep farming are similar to cow dairy farming.

Goat and Sheep feeds can also be separate or a combination of forage, roughage, minerals, and supplements. This is to ensure that these animals are properly fed and remain healthy for better milk production.

It is worth noting that sheep and cows both enjoy grass but eat it differently. Cows usually prefer longer grass, while sheep tend to eat closer to the soil. In contrast, Goats are mainly browsers, so they prefer eating head high. How many times we have seen a goat standing tall against a wall or rock and eating?

The main difference in these animals’ diets is the amount of copper they can take. Goats and cows need a similar amount of copper, unlike sheep. Too much copper consumption can be toxic for a sheep.

Goats, sheep, and cows need to be kept in warm and dry spaces. 

It is a good idea to introduce rotational breeding. This way, you can enhance the milk supply to last year-round.

Like cows, sheep and goats should also be milked in a milking parlor and receive vaccinations to prevent disease spread. However, this is all on a much smaller scale.

An apparent difference between goats & sheep dairy farming and cows dairy farming is that the kids and lambs are more gradually weaned from their mothers instead of being separated right after birth. This is more humane but can affect the amount of milk you can sell.

5. Goat and Sheep Breeds for Dairy Production

In the US, there quite a few options to choose from when it comes to goat breeds and which ones will work best for the climate where you are planning to build your farm

The eight goat breeds registered are:

  • Alpine
  • La Mancha
  • Nigerian Dwarf
  • Nubian
  • Oberhasli
  • Saanen
  • Sable
  • Toggenburg

Your options are much more limited to the East Friesian and Lacaune sheep when it comes to dairy sheep breeds in the US.

6. Renting or Buying Land for a Dairy Farm

When it comes to land, you will need a lot of it, even if you plan to start your dairy farm small.


The main reason for acquiring a large land size is that the pasture needs ample time to rest and recover. If you have small land, there is a chance that your pasture gets overgrazed by your animals, which makes your ground weak and prone to erosion. This can further reduce soil organic matter. Eventually, the ruminants will not get enough nutrients for better health and quality of milk production.

There are two options for how to obtain land: renting or buying

Renting the Dairy Farm Land

The rule of thumb is that you will need to have anywhere from 1.5 to 2 acres of land for every cow you own, calves included. Obviously, this can become very expensive quickly.

If you are just starting your dairy farm, it is suggested that you should buy the cows and then rent the amount of land you need depending on the number of cows you purchased.

Renting will give you the flexibility you need. Suppose something unexpected happens, and you are no longer able to continue farming. In that case, you will be able to sell your cows and not have to worry about selling your land or the expense of upkeep.

Buying The Dairy Farm Land

If you can buy the land, try to buy a dairy farm that is already set up with the necessary equipment and facilities. Doing so may cost more upfront, but it will save you the time and effort to search and find quality equipment. Even if an already existing farm might need some repairs, you can have some reassurance that the previous farm owner found it reliable.

7. Dairy Farm Equipment and Facilities

If you are planning on renting land that has not been previously used as a dairy farm, make sure that you have the capital—either of your own or from a loan—to invest in the following necessary items:

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Sterile Storage

Once you have milked your cows, you will need a place to store the milk where it can stay cold and clean. Two options for sterile milk storage are silo tanks and intermediate storage tanks.

Silo Tanks

Silo tanks or Milk Silos are the most common type of storage for milk and can hold anywhere from 25,000 to 150,000 liters of milk.

They are insulated and made of stainless steel or lower quality steel enforced with anti-corrosion paint. The bottom of the tank dips downward to ensure that all the milk drains completely so the tank can be cleaned thoroughly before the next batch of milk is stored.

In addition to being insulated to help maintain proper temperature, silos also have milk agitators and temperature monitors to make sure the temperature stays in the appropriate range. This also ensures the milk is stirred so that the fat does not get separated from the milk.

Intermediate Storage Tanks

Intermediate storage tanks help store extra milk, so if there are hold-ups during the milk-to-distribution process, the milk does not sit for long in warmer than ideal temperatures.

They are very similar to silos in ways that they also have agitators and other temperature monitoring equipment.

However, there are two notable differences between the two.

  • First, Intermediate storage tanks tend to be smaller than silos—able to hold as little as 1,000 liters or as much as 50,000 liters. 
  • Second, both the inside AND the outside are made of stainless steel.

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Tools, Equipment and Machinery

Even if you are starting small, you will need the help of tools, equipment, and machinery for a smooth day-to-day operation. The list of items you can include initially are as follows:

Explore our most popular list of equipment

Additionally, you will need other accessories such as ropes, chain pipes, and tagging equipment.

Additional Equipment

In addition to proper storage and equipment, other necessary equipment that you will need include:

Milking parlors

According to the definition of  milking parlor, it is either an entirely separate building from the rest of the farm or an isolated room allocated for milking only. Having a separate area for milking will help make sure no contaminants, such as manure, dirt, or hay enter the milk.

There are several milking parlor systems referred to as “milking parlors” only. You can read more about some of the best milking parlors here.


Stanchions can be frames, bars, or steel collars that help keep the cows in place while being milked. These can help prevent injuries and restrict cow’s sudden movement during milking that can cause milk wastage.

Feed storage

Cows eat a lot of food, so it’s essential to have plenty stored up. It is also vital to ensure that this food stays dry and free of pests or other contaminants. The two main types of feed storage are commodity sheds, which have front openings, or upright bins, that open from the bottom.

Manure and Waste Management

Some farmers choose to spread manure out as it is, but another choice is to store it for a later time. Properly stored waste can be highly beneficial to a dairy farm as you can sell it, adding an alternative income stream. Some options to manage manure and waste for dairy farmers include stockpiling, dry stack, composting, liquid storage, or hauling away.

Separate building for the calves

It may seem unkind to separate calves from their mothers, but by doing so, dairy farmers can ensure that they are getting the right amount of milk from the cows. Also, this can help make sure that calves are not exposed to any disease spreading inside the herd and prevent accidents that can occur due to larger animals.

Water well and a water transport system

In addition to needing lots of water to keep things clean around a dairy farm, cows also consume a large amount of drinking water—anywhere from 30 to 50 gallons per cow per day. Therefore, it is essential to have both a well and a transport system to replenish the water supply as soon as needed.

8. Establishing Your Dairy Farm as a Business

Once you have figured out the things mentioned earlier, you may need to think about making your dairy farm a lucrative business. As with any business, you need to write down your business plan with your projections of your dairy farm's operational expenses and profits for the first few years.

When calculating future profits, it is best to err on the side of caution. Milk is a product, and like any product in the market, there is a chance of price fluctuation according to supply and demand. The best thing to do is look at its varying prices over the last few years and calculate your future profits based on the lower side of the average.

Some additional expenses to consider are the cost of veterinary care (from $108-126 per cow) and the cost of farmhands (one person for every 10-20 cows, paid an average of $14.37/per hour).

Sources of Funding for Your Dairy Farm

Unless you can buy a farm upfront, you will need a loan. Though most people first think of going to a bank for a business loan, other options may be worth exploring. Consider and do your research into government loans or subsidies. Some of the benefits are lower interests, flexible payment plans, and quicker approval.

Getting the Right Permits for Your Dairy Farm

The primary license you will need as a dairy farmer is a milk producer license.

However, you will also need other permits covering health, irrigation, the number of workers you can have, the number of cows you can buy, etc.

These permits and requirements tend to vary from state to state, so it is essential to research specific to your farm location.

9. Market Your Dairy Farm's Products

Once you have your farm is up and running, network with other dairy farmers in your area to see what tactics they use to sell their products. Introduce yourself and build relationships with local stores in your area.

If you produce enough milk, you may make an agreement with a distributor to sell and distribute your product for you.


Starting a dairy farm can be a daunting task. Still, by deciding what your ultimate goal is and whether you want to grow large or stay small, you will be able to choose the type of dairy farm. The main thing to remember for dairy animals is that they need to be adequately fed, housed, and milked.

When starting a farm, other things to consider are how to keep the milk fresh, figuring out where your funding will come from, and how you will market your product. Be sure to interact with your local dairy farmers community. That will help you to gain first-hand knowledge and avoid some basic mistakes.

This is not an Investment Advice

The Ideas and Strategies presented on this website and the information are based on our research and experience. These strategies are not intended to be a source of financial or business advice concerning the material presented. The information and/or documents contained on this website do not constitute investment advice. Any business idea or investment plan with financial risk should never be used without first assessing your own personal and financial situation or consulting a financial professional.

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